<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 2000.
REGISTRATION NO. 333-91665
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 5
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
SEQUENOM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 8731 77-0365889
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
---------------
11555 SORRENTO VALLEY ROAD
SAN DIEGO, CALIFORNIA 92121
(858) 350-0345
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
DR. HUBERT KOSTER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SEQUENOM, INC.
11555 SORRENTO VALLEY ROAD
SAN DIEGO, CALIFORNIA 92121
(858) 350-0345
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
<TABLE>
<S> <C>
FAYE H. RUSSELL, ESQ. ALAN F. DENENBERG, ESQ.
THOMAS E. HORNISH, ESQ. SHEARMAN & STERLING
ROBERT H. CUTLER, ESQ. 1550 EL CAMINO REAL, SUITE 100
BROBECK, PHLEGER & HARRISON LLP MENLO PARK, CALIFORNIA 94025
550 WEST C STREET, SUITE 1300 (650) 330-2200
SAN DIEGO, CALIFORNIA 92101
(619) 234-1966
</TABLE>
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED (1) PER UNIT OFFERING PRICE(2) FEE(3)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value.......... 5,817,826 shares $25.00 $145,445,650 $39,378(4)
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes 750,000 shares of Common Stock that the Underwriters have the
option to purchase to cover over-allotments, if any, and 67,826 shares of
Common Stock to be sold by selling stockholders. Also shall cover any
additional shares of the Registrant's common stock which become issuable
with respect to the securities registered hereunder by reason of any stock
dividend, stock spilt, recapitalization or other similar transaction
effected without the Registrant's receipt of consideration which results
in an increase in the number of the Registrant's outstanding shares of
common stock.
(2) The proposed maximum offering price per share is estimated solely for the
purpose of computing the amount of the registration fee.
(3) Calculated pursuant to Rule 457(a).
(4) Previously paid.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
EXPLANATORY NOTE
This registration statement covers the registration of 5,000,000 shares of
common stock, $.001 par value per share, of Sequenom, Inc. ("Sequenom") to be
issued to the public (the "Offering Registration"). This registration
statement also covers the registration of up to an additional 67,826 shares of
common stock, $0.001 par value per share, of Sequenom to be resold by selling
stockholders to the public from time to time (the "Shelf Registration"). The
complete prospectus (the "Offering Prospectus") relating to the Offering
Registration immediately follows this explanatory note. Following the Offering
Prospectus are certain pages relating solely to the Shelf Registration
(together with the remainder of the Offering Prospectus as modified as
indicated below, including an alternate front cover and an alternate page
"Shares to be sold by selling stockholders" to be inserted in place of the
section entitled "Offering"), (the "Shelf Prospectus"). The Shelf Prospectus
will not include the information in the prospectus summary under the section
of the Offering Prospectus entitled "Use of Proceeds," but includes a "Selling
Stockholder" section and a "Plan of Distribution." All other sections of the
Offering Prospectus will be used in the Shelf Prospectus. Each of the
alternate or additional pages for the Shelf Prospectus included herein has
been labeled "Alternate Page for Shelf Prospectus." If required, each of the
prospectuses in the forms in which they are used after the registration
statement becomes effective will be filed with the Securities and Exchange
Commission pursuant to Rule 424(b) of the General Rules and Regulations under
the Securities Act of 1933, as amended.
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY +
+NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN +
+OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE +
+SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PRELIMINARY PROSPECTUS Subject to completion
January 28, 2000
- --------------------------------------------------------------------------------
5,000,000 Shares
[LOGO OF SEQUENOM INDUSTRIAL GENOMICS]
Common Stock
- --------------------------------------------------------------------------------
We are selling 5,000,000 shares of our common stock. This is our initial public
offering of shares of our common stock. No public market currently exists for
our common stock. We expect the public offering price to be between $23.00 and
$25.00 per share.
We have applied to have our common stock listed on the Nasdaq National Market
under the symbol "SQNM."
Before buying any shares you should read the discussion of material risks of
investing in our common stock in "Risk factors" beginning on page 7.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
<TABLE>
<CAPTION>
PER
SHARE TOTAL
- -------------------------------------------------------------------------------------
<S> <C> <C>
Public offering price $ $
- -------------------------------------------------------------------------------------
Underwriting discounts and commissions $ $
- -------------------------------------------------------------------------------------
Proceeds, before expenses, to Sequenom $ $
- -------------------------------------------------------------------------------------
</TABLE>
The underwriters may also purchase up to 750,000 shares of common stock from us
at the public offering price, less the underwriting discounts and commissions,
within 30 days from the date of this prospectus. The underwriters may exercise
this option to only cover over-allotments, if any. If the underwriters exercise
this option in full, the total underwriting discounts and commissions will be
$ , and the total proceeds, before expenses, to Sequenom, Inc. will be
$ .
The underwriters are offering the common stock as described under
"Underwriting." Delivery of the shares will be made on or about .
WARBURG DILLON READ LLC
ROBERTSON STEPHENS
SG COWEN
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY +
+NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN +
+OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE +
+SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PRELIMINARY PROSPECTUS Subject to completion
January 28, 2000
- --------------------------------------------------------------------------------
67,826 Shares
[LOGO OF SEQUENOM INDUSTRIAL GENOMICS]
Common Stock
- --------------------------------------------------------------------------------
Two of our stockholders, Alpha Beteiligungsverwaltungs GbR and Halford
Enterprises Ltd. are selling up to 67,826 shares of our common stock under this
prospectus. The selling stockholders may sell the shares at the then prevailing
market price for the shares at the time of the sale, or at other prices. We
will not receive any of the proceeds from the sale of these shares by the
selling stockholders.
In addition, we are selling 5,000,000 shares of our common stock in our initial
public offering of shares of our common stock under a separate prospectus. No
public market currently existed for our common stock prior to that offering. We
expect our initial public offering price to be between $23.00 and $25.00 per
share.
We have applied to have our common stock listed on the Nasdaq National Market
under the symbol "SQNM."
Before buying any shares you should read the discussion of material risks of
investing in our common stock in "Risk factors" beginning on page 7.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
<TABLE>
<CAPTION>
PER
SHARE TOTAL
- -------------------------------------------------------------------------------------
<S> <C> <C>
Public offering price $ $
- -------------------------------------------------------------------------------------
Underwriting discounts and commissions $ $
- -------------------------------------------------------------------------------------
Proceeds, before expenses, to Sequenom $ $
- -------------------------------------------------------------------------------------
</TABLE>
The selling stockholders are offering the common stock as described under "Plan
of Distribution." Delivery of the shares will be made on or about .
WARBURG DILLON READ LLC
ROBERTSON STEPHENS
SG COWEN
<PAGE>
PERSONALIZED MEDICINE
DRUG DEVELOPMENT
AGRICULTURE
DIAGNOSTICS
SEQUENOM ADDRESSES MARKETS WITH AN IMMEDIATE OR EMERGING NEED FOR LARGE-SCALE
ANALYSES OF SNPS, THE MOST COMMON GENETIC VARIATIONS.
<PAGE>
- -------------------------------------------------------------------------------
[PICTURES OF COMPONENTS OF MASSARRAY SYSTEM]
THE TOTAL
SNP
SOLUTION
ACCURACY
Direct measurement of molecules with a high level of accuracy
HIGH THROUGHPUT
20,000 samples per day; multiple tests per sample
FLEXIBILITY
Rapidly reconfigure tests based on new genetic information; analysis of DNA
and other molecules of medical relevance
AUTOMATION
Highly automated; no manual data interpretation
COST-EFFECTIVENESS
Low labor, reduced quantities of reagents or chemicals; minimal data
processing
INDUSTRIAL GENOMICS
Large-scale commercial use of the knowledge of DNA variations for improving
health, agriculture and livestock
[REPRESENTATION OF DNA SEQUENCE; PHOTOGRAPH OF COMPONENTS OF MASSARRAY
SYSTEMS]
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
Until , 2000 (25 days after the date of this prospectus), all
dealers selling shares of our common stock, whether or not participating in
this offering, may need to deliver a prospectus. This delivery requirement is
in addition to the obligation of dealers to deliver a prospectus when acting
as underwriters and with respect to their unsold allotments or subscriptions.
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Prospectus summary........................................................ 3
The offering.............................................................. 5
Summary consolidated financial and operating data......................... 6
Risk factors.............................................................. 7
Forward-looking information............................................... 17
Use of proceeds........................................................... 18
Dividend policy........................................................... 18
Capitalization............................................................ 19
Dilution.................................................................. 21
Selected consolidated financial data...................................... 23
Management's discussion and analysis of financial condition and results of
operations............................................................... 25
</TABLE>
<TABLE>
<S> <C>
Business.................................................................... 32
Management.................................................................. 48
Related party transactions.................................................. 60
Principal stockholders...................................................... 63
Description of securities................................................... 65
Shares eligible for future sale............................................. 70
Underwriting................................................................ 72
Selling stockholders........................................................ 74
Plan of distribution........................................................ 75
Legal matters............................................................... 76
Experts..................................................................... 76
Where you can find more information......................................... 77
Index to Consolidated Financial Statements F-1
</TABLE>
Sequenom, MassArray, Industrial Genomics, SpectroCHIP, SpectroJET,
BiomassPROBE, BioMASS and Genolyzer are trademarks of Sequenom, Inc. This
prospectus also refers to trade names and trademarks of other organizations.
- -------------------------------------------------------------------------------
<PAGE>
Prospectus summary
This summary highlights information contained elsewhere in this prospectus. You
should read the entire prospectus carefully, especially the risks of investing
in our common stock discussed under "Risk factors." Our principal executive
offices are located at 11555 Sorrento Valley Road, San Diego, CA 92121. Our
telephone number is (858) 350-0345. Our web site is http://www.sequenom.com. We
do not intend the information found on our web site to be a part of this
prospectus.
OUR BUSINESS
We are a pioneer in the new field of industrial genomics. Industrial genomics
is the large scale commercial use of the knowledge of DNA variations for
improving health, agriculture and livestock. These variations are the origin of
most differences between individuals, including disease predispositions and
variations in drug responses. Single nucleotide polymorphisms, or SNPs, are the
most common variations. SNPs represent the smallest possible genetic change,
and occur where the DNA molecules of different persons vary at a single
location. We believe that SNP analysis will play an essential role in the
development of drugs, diagnostics and other life science applications in the
immediate future. Our goal is to be the leader in the commercialization of
industrial-scale SNP analysis.
We have developed the MassArray system, a highly accurate, cost-effective
technology that is capable of high throughput SNP analysis at high speeds. Our
strategy is to capitalize on the quickly emerging demand for SNP analysis in
the areas of drug discovery and development, DNA diagnostics, patient
stratification by genetic traits, clinical trials, seed development and
livestock breeding. Six centers, including several academic and governmental
sites, diagnostic laboratories and a leading biotechnology company, are using
our MassArray system, assessing its performance in the field, and providing us
with information regarding its performance.
THE SNP ANALYSIS MARKET
The SNP analysis market represents a significant portion of both the biochip,
or miniaturized chips containing DNA or other substances, and the DNA
sequencing markets and can be divided into three segments:
. confirmation of new sites of genetic variation in DNA, which typically
requires the analysis of a SNP in up to a hundred people;
. determination of the medical importance of SNPs, which typically requires the
analysis of a SNP in a few thousand diseased and healthy people; and
. utilization of SNPs in genomics-based drug development, disease
predisposition determination and diagnostic test development, which could
eventually require the analysis of multiple SNPs in millions of people.
Current methods of SNP analysis are inaccurate, non-automated, inflexible,
expensive or slow and are therefore primarily effective only as research tools.
To compensate for deficiencies in accuracy, current methods require either
repetitive testing of each sample or the use of a larger test population, which
makes current methods impractical for most commercial applications.
OUR SOLUTION
Our MassArray system directly analyzes SNPs by improving on a technology called
mass spectrometry. By using mass spectrometry to measure molecular weight, our
MassArray system is capable of characterizing molecules with a high level of
accuracy. This is done at a competitive price and in a single reading. Our
technology is also extremely versatile and can be rapidly reconfigured for
different types of analyses. In addition, the MassArray system is capable of
reading up to 20,000 SNPs per day, which we believe is a throughput that can
meet commercial needs.
3
<PAGE>
Our MassArray system has three components--hardware, software and disposables.
The hardware components include a mass spectrometer and liquid dispensing
units, which are off-the-shelf instruments modified to accommodate our
MassArray technology. Our proprietary Genolyzer bioinformatics software
automatically calculates, records, compares and reports genotypes at a rate of
three seconds per sample. Our disposables consist of MassArray kits for SNP
sample preparation, including the proprietary SpectroCHIP on which we place
samples in a 96 spot array for reading by the mass spectrometer.
COMMERCIALIZATION PLAN
We are seeking to penetrate the SNP analysis market by identifying areas of
potential widespread interest and establishing commercial relationships with
opinion leaders. We have initiated this effort by selecting six highly visible
academic, government and commercial centers as collaborators to validate our
MassArray system in pre-launch testing. These centers are Genzyme Corporation,
the US Department of Agriculture, the National Institutes of Health, the
National Cancer Institute, the University of Munster and GLE Medicon in
Germany. In October 1999, we contracted for the first sale of a MassArray
system. We commenced a commercial launch of our MassArray system during the
fourth quarter of 1999.
We intend to develop proprietary disposable SNP tests, called assays, and
software products that are useful initially as research tools to confirm the
association of particular SNPs with particular diseases and subsequently as
diagnostic kits that can be sold for SNP profiling. In addition, we will seek
to retain commercial rights to assays that we develop on behalf of or together
with our customers. Over time, with our customers, we intend to develop
knowledge-based genomic products that combine pharmaceutical, medical and
genetic information, such as validated SNP sets for specific diseases. Also, in
addition to DNA, we believe our MassArray technology can serve as a platform
for the analysis of many other biomolecules. We therefore intend to develop new
products for applications other than DNA and SNP analysis.
4
<PAGE>
The offering
The following information assumes that the underwriters do not exercise the
over-allotment option we granted to them to purchase additional shares in the
offering.
<TABLE>
<C> <S>
Common stock we are offering............... 5,000,000 shares
Common stock to be outstanding after the
offering.................................. 22,601,477 shares
Proposed Nasdaq National Market symbol..... SQNM
For general corporate purposes,
including hiring additional sales
and customer support personnel,
expansion of our facilities,
continued development and
manufacturing of existing
products, research and
development of additional
products, expenses for filing and
pursuing patent applications,
working capital and potential
acquisitions of products,
technologies or companies and
repayment of long-term debt of
approximately $3.3 million.
Use of proceeds............................ Please see "Use of proceeds."
</TABLE>
Except as otherwise indicated, you should assume the following when analyzing
information in this prospectus:
. the conversion of 14,842,757 outstanding shares of our preferred stock into
14,842,757 shares of our common stock on a one-for-one basis upon the closing
of this offering;
. the sale of approximately $1,560,000 in shares of common stock to two German
consulting firms in a private sale to be completed immediately prior to this
offering, or 65,000 shares assuming an initial public offering price of
$24.00 per share;
. the conversion of debt owed to Technologie Beteiligungs Gesellschaft, or TBG,
in the amount of DEM4 million, approximately $2.1 million, into 272,108
shares of our common stock upon the closing of this offering at an assumed
price of $24.00 per share;
. the issuance of 24,792 shares of our common stock upon the closing of this
offering in satisfaction of accrued interest of approximately DEM1.7 million
or $930,625 payable to TBG; and
. no exercise of the underwriters' over-allotment option.
We have an obligation to issue shares of common stock upon exercise of options
and warrants outstanding at December 27, 1999, in addition to the shares of
common stock to be outstanding after this offering. These shares, when issued,
will include:
. 750,000 shares issuable upon exercise of the underwriters' over-allotment
option;
. 1,287,049 shares issuable upon the exercise of options outstanding as of
December 27, 1999, at a weighted average exercise price of $1.66 per share.
This share amount consists of 2,475,250 shares issuable upon the exercise of
options outstanding at September 30, 1999 and 335,250 shares issuable upon
the exercise of options granted during October 1999, less 1,523,451 shares
issued upon exercise of options during the period October 1, 1999 through
December 27, 1999;
. 176,503 shares issuable upon the exercise of warrants outstanding as of
December 27, 1999 at a weighted average exercise price of $2.10 per share;
and
. 248,750 additional shares available for future grant as of December 27, 1999
under our 1998 stock plan, and an additional 850,000 shares made available
for future grant under our stock plans to be adopted at the close of this
offering. For a description of our stock option and stock purchase plans,
please see "Management--Employee benefit plans."
We base our calculation of the number of shares of common stock outstanding
after the offering on shares outstanding as of December 27, 1999. Please see
"Capitalization."
5
<PAGE>
Summary consolidated financial and operating data
The pro forma balance sheet data reflects the conversion of long-term debt into
common stock, which will occur upon the closing of this offering, and stock
option activity from October 1, 1999 through December 27, 1999. The pro forma
as adjusted balance sheet data reflects the receipt of the net proceeds from
the sale of 5,000,000 shares of our common stock at an assumed price to the
public of $24.00 per share, after deducting the underwriting discounts and
commissions and estimated offering expenses, and the repayment of long-term
debt and accrued interest.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
1994 1995 1996 1997 1998 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF (In thousands, except per share
OPERATIONS DATA data)
- ----------------------------------------------------------------------------------------------
Research and development
grants................. $-- $-- $893 $527 $351 $126 $81
Costs and expenses:
Research and
development.......... 922 1,274 3,136 3,532 6,188 3,550 7,138
General and
administrative....... 230 420 1,032 1,861 4,218 2,640 5,363
Amortization of
deferred stock
compensation......... -- -- -- -- -- -- 3,615
----------- ------- ------- ------- -------- ------- --------
Total costs and
expenses............... 1,152 1,694 4,168 5,393 10,406 6,190 16,116
----------- ------- ------- ------- -------- ------- --------
Loss from operations.... (1,152) (1,694) (3,275) (4,866) (10,055) (6,064) (16,035)
Other income (expense):
Interest income....... 3 2 73 57 397 291 1,225
Interest expense...... -- (28) (275) (308) (613) (230) (576)
----------- ------- ------- ------- -------- ------- --------
Net loss................ $(1,149) $(1,720) $(3,477) $(5,117) $(10,271) $(6,003) $(15,386)
=========== ======= ======= ======= ======== ======= ========
Net loss per share,
basic and diluted...... $(1,149,498) $(65.87) $(23.45) $(22.62) $(33.33) $(20.12) $(39.41)
Shares used in computing
net loss per share,
basic and diluted...... -- 26 148 226 308 298 390
Pro forma net loss per
share, basic and
diluted................ $(1.02) $(1.03)
Shares used in computing
pro forma net loss per
share basic and
diluted................ 9,749 14,714
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA (In thousands)
- ------------------------------------------------------------------------------
Cash, cash equivalents and short-term invest-
ments.......................................... $28,069 $29,562 $136,742
Working capital................................. 24,771 26,264 133,444
Total assets.................................... 34,632 36,125 143,305
Total long-term obligations..................... 7,690 5,512 1,313
Total stockholders' equity...................... 22,967 21,633 133,017
</TABLE>
Please see Note 2 to our consolidated financial statements for an explanation
of the method used to calculate the net loss per share and the number of shares
used in the computation of per share amounts.
6
<PAGE>
- -------------------------------------------------------------------------------
Risk factors
You should carefully consider the risks described below together with all of
the other information included in this prospectus before making an investment
decision. If any of the following risks actually occurs, our business,
financial condition or results of operations could be harmed. In that case,
the trading price of our common stock could decline, and you may lose all or
part of your investment.
RISKS RELATED TO OUR BUSINESS
WE ARE AT AN EARLY STAGE OF DEVELOPMENT AND MAY NOT SUCCEED OR BECOME
PROFITABLE.
We commenced operations in 1994 and are at an early stage of development. We
have incurred significant losses to date and our revenues have been limited to
grants from governmental bodies. Our initial products are in testing at a
number of sites and will not be commercially launched until late 1999. As a
result, our business is subject to all of the risks inherent in the
development of a new business enterprise, such as the need:
. to obtain substantial capital to support the expenses of developing our
technology and commercializing our products;
. to develop a market for our products;
. to successfully transition from a company with a research focus to a company
capable of supporting commercial activities; and
. to attract and retain qualified management, sales, technical and scientific
staff.
Our operations also may be affected by problems frequently encountered with
the use of new technologies and by the competitive environment in which we
operate, as well as the risks detailed below.
IF WE INCUR LOSSES IN THE FUTURE, AS WE EXPECT TO DO, THE VALUE OF OUR STOCK
COULD DECREASE.
Since inception, we have recognized no revenue from product sales. Our
expenses have exceeded revenue in each of the years since our inception. It is
uncertain when, if ever, we will become profitable. As of September 30, 1999,
our accumulated deficit was $37.1 million. Our expenses have consisted
principally research and development and of general and administrative
expenses incurred while building our business infrastructure. We expect to
continue to experience significant operating losses in the future as we
continue our research and development efforts, further develop our
manufacturing capabilities and expand our marketing and sales force in an
effort to commercialize our products. Our net operating loss and credit
carryforwards may be limited due to a cumulative change in ownership of more
than 50%, which occurred during 1998 and which is anticipated to occur with
the offering.
IF WE ARE UNABLE TO OBTAIN ADDITIONAL FUNDS, AS WE EXPECT, WE WOULD HAVE TO
REDUCE OR CEASE OPERATIONS, ATTEMPT TO SELL SOME OR ALL OF OUR OPERATIONS OR
MERGE WITH ANOTHER ENTITY.
Based on our current plans, we believe our existing cash, cash equivalents and
short-term investments, together with the net proceeds of this offering will
be sufficient to fund our operating expenses, debt obligations and capital
requirements through at least the next 24 months. However, the actual amount
of funds that we will need during or after the next 24 months will be
determined by many factors, some of which are beyond our control, and we may
need funds sooner than currently anticipated. These factors include:
. the level of our success in selling our MassArray system and associated
technologies;
- -------------------------------------------------------------------------------
7
<PAGE>
RISK FACTORS
- -------------------------------------------------------------------------------
. our progress with research and development;
. our ability to introduce and sell new products;
. the level of our sales and marketing expenses;
. the level of our expenses associated with unforeseen litigation;
. the costs and timing of obtaining new patent rights; and
. regulatory changes and competition and technological developments in the
market.
If additional funds are required and we are unable to obtain them on terms
favorable to us, we may be required to cease or reduce further
commercialization of our products, to sell some or all of our technology or
assets or to merge with another entity. If we raise additional funds by
selling additional shares of our capital stock, the ownership interest of our
stockholders will be diluted.
WE MUST DEVELOP AND COMMERCIALIZE OUR NEXT GENERATION PRODUCTS AT REDUCED
COSTS FOR US TO BE PROFITABLE.
Our current products do not provide sufficient gross margin for us to become
profitable. We intend to develop and manufacture our next generation products
at a lower cost than the cost of our current products. We may not be
successful in doing so. In addition, our gross margin and profitability may be
negatively impacted if we are unable to achieve market acceptance or
appropriate pricing for our next generation products.
WE MAY NOT BE ABLE TO SUCCESSFULLY ADAPT OUR PRODUCTS FOR COMMERCIAL
APPLICATIONS.
We have completed the initial development of our MassArray technology for
applications in the genetic aspects of drug development and life science
research. We may not be able to successfully adapt our products to the
commercial requirements of these fields. A number of potential applications of
our technology in these fields will require significant enhancements in our
core technology, including adaptation of our software and further
miniaturization. In addition, we need to enhance our population-based DNA
bank, establish databases for determining the medical importance of SNPs and
rapidly design assays for SNP analysis in sufficient quantity to meet the high
throughput that we expect our future customers will require. If we are unable,
for technological or other reasons, to complete the development, introduction
or scale-up of the manufacturing of any product, or if any product does not
achieve a significant level of market acceptance, our business, financial
condition and results of operations could be seriously harmed. Market
acceptance will depend on many factors, including demonstrating to customers
that our technology is superior to other technologies and products which are
available now or which may become available in the future. We believe that our
revenue growth and profitability will substantially depend on our ability to
overcome significant technological challenges and successfully introduce our
products into the marketplace.
OUR SYSTEM AND RELATED DISPOSABLE SALES MAY BE LIMITED IF OUR MASSARRAY SYSTEM
IS USED BELOW ITS CAPACITY AS A RESULT OF THE SPEED OF SAMPLE PREPARATION AND
THE NEED FOR ASSAY DESIGN.
The need to design a unique assay for each newly discovered SNP can
substantially delay the commencement of the analysis of that SNP. In addition,
the extraction of DNA from biological material is time consuming. MassArray
system users who need to develop assays or who lack sufficient sample
preparation resources therefore may be unable to use our system to its full
capacity. Customers who are unable to use our MassArray system to full
capacity may share MassArray systems, which would result in lower system
sales. Therefore, customers may not purchase sufficient quantities of
disposables for us to become profitable.
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WE DEPEND ON OUR CUSTOMERS TO PURCHASE SUFFICIENT QUANTITIES OF SPECTROCHIPS
AND OTHER DISPOSABLES FOR US TO BE PROFITABLE.
Our customers may not generate sufficient throughput using our MassArray
system. This may limit their purchases of SpectroCHIPs and other disposables.
Factors which may limit the use of SpectroCHIPs and other disposables include:
the acceptance of our technology by our customers, the ability to analyze more
than one SNP simultaneously on a single spot and the training of customer
personnel. If our customers are slow to, or never, achieve sufficient
throughput, we may never achieve profitability.
IF OUR CUSTOMERS ARE UNABLE TO ADEQUATELY PREPARE SAMPLES AS REQUIRED BY OUR
SYSTEM, THE OVERALL MARKET DEMAND FOR OUR PRODUCTS MAY DECLINE.
Before using our MassArray system, customers must prepare samples by following
several steps that are prone to human error, including DNA isolation and DNA
segment amplification. If DNA samples are not prepared appropriately, our
MassArray system will not generate a reading. If our customers experience
similar difficulties, they may achieve lower levels of throughput than those
for which our system was designed. If our customers are unable to generate
expected levels of throughput, they may not continue to purchase our
disposables, they may express their discontent with our products in the
marketplace, potentially driving down demand for our products, or they may
collaborate with others to jointly use our products. Any or all of these
actions would reduce the overall market demand for our products.
IF ETHICAL AND OTHER CONCERNS SURROUNDING THE USE OF GENETIC INFORMATION BE-
COME WIDESPREAD, WE MAY HAVE LESS DEMAND FOR OUR PRODUCTS.
Genetic testing has raised ethical issues regarding confidentiality and the
appropriate uses of the resulting information. For these reasons, governmental
authorities may call for limits on or regulation of the use of genetic testing
or prohibit testing for genetic predisposition to certain conditions,
particularly for those that have no known cure. Any of these scenarios could
reduce the potential markets for our products, which could seriously harm our
business, financial condition and results of operations.
WE DEPEND ON THIRD-PARTY PRODUCTS AND SERVICES AND SOLE OR LIMITED SOURCES OF
SUPPLY TO DEVELOP AND MANUFACTURE SOME COMPONENTS OF OUR PRODUCTS.
We rely to a substantial extent on outside vendors to manufacture many of the
components and subassemblies used in our products. Some of these components
and subassemblies are obtained from a single supplier or a limited group of
suppliers. Our reliance on outside vendors generally, and a sole or a limited
group of suppliers in particular, involves several risks, including:
. the inability to obtain an adequate supply of required components due to
manufacturing capacity constraints, a discontinuance of a product by a
third-party manufacturer or other supply constraints;
. reduced control over quality and pricing of components; and
. delays and long lead times in receiving materials from vendors.
WE HAVE LIMITED COMMERCIAL MANUFACTURING CAPABILITY AND EXPERIENCE AND MAY EN-
COUNTER MANUFACTURING PROBLEMS OR DELAYS WHICH COULD RESULT IN LOWER REVENUE.
We have not yet produced our SpectroCHIP in commercial quantities. We may not
be able to maintain acceptable quality standards while producing commercial
quantities. Our customers also require that we comply with current good
manufacturing practices that we may not be able to meet. To achieve the
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production levels necessary for successful commercialization of our products,
we will need to scale-up our manufacturing facilities, establish more
automated manufacturing capabilities and maintain adequate levels of
inventory. We may not be able to manufacture sufficient quantities to meet
market demand. If we cannot achieve the required level and quality of
production, we may need to outsource production or rely on licensing and other
arrangements with third parties who possess sufficient manufacturing
facilities and capabilities. This could reduce our gross margins and expose us
to the risks inherent in relying on others. We may not be able to successfully
outsource our production or enter into licensing or other arrangements with
these third parties, which could adversely affect our business.
WE HAVE A LIMITED SALES FORCE AND LIMITED EXPERIENCE IN COMMERCIALIZING OUR
PRODUCTS WHICH MAY CAUSE SIGNIFICANT DIFFICULTIES IN COMMERCIALIZING OUR PROD-
UCTS.
Our direct sales force may not be sufficiently large or knowledgeable to
successfully penetrate the market. We may not be able to expand our direct
sales force to meet our commercial objectives. In addition, our sales force
may not be able to address complex scientific and technical issues raised by
our customers. Our customer support personnel may also lack the broad range of
technical expertise required to adequately service and support our products in
the field.
OUR ABILITY TO COMPETE IN THE MARKET MAY DECLINE IF WE LOSE SOME OF OUR INTEL-
LECTUAL PROPERTY RIGHTS DUE TO BECOMING INVOLVED IN EXPENSIVE LAWSUITS TO PRO-
TECT OR ENFORCE OUR PATENTS.
Our success will depend on our ability to obtain and protect patents on our
technology and to protect our trade secrets. Our patents, which have been or
may be issued, may not afford meaningful protection for our technology and
products. Others may challenge our patents and, as a result, our patents could
be narrowed, invalidated or unenforceable. In addition, our current and future
patent applications may not result in the issue of patents in the United
States or foreign countries. Competitors may develop products similar to ours
that do not conflict with our patents. In addition, others may develop
products for use in the MassArray system in violation of our patents that may
reduce sales of disposables. In order to protect or enforce our patent rights,
we may initiate patent litigation against third parties, such as infringement
suits or interference proceedings. These lawsuits could be expensive, take
significant time and divert management's attention from other business
concerns. We may also provoke these third parties to assert claims against us.
The patent position of biotechnology firms generally is highly uncertain,
involves complex legal and factual questions, and has recently been the
subject of much litigation. No consistent policy has emerged from the US
Patent and Trademark Office or the courts regarding the breadth of claims
allowed or the degree of protection afforded under biotechnology patents. In
addition, there is a substantial backlog of biotechnology patent applications
at the US Patent and Trademark Office, and the approval or rejection of patent
applications may take several years.
THE RIGHTS WE RELY UPON TO PROTECT OUR INTELLECTUAL PROPERTY UNDERLYING OUR
PRODUCTS MAY NOT BE ADEQUATE, WHICH COULD ENABLE THIRD PARTIES TO USE OUR
TECHNOLOGY AND WOULD REDUCE OUR ABILITY TO COMPETE IN THE MARKET.
We require our employees, consultants and advisors to execute confidentiality
agreements. However, we cannot guarantee that these agreements will provide us
with adequate protection against improper use or disclosure of confidential
information. In addition, in some situations, these agreements may conflict
with, or be subject to, the rights of third parties with whom our employees,
consultants or advisors have prior employment or consulting relationships.
Further, others may independently develop substantially equivalent proprietary
information and techniques, or otherwise gain access to our trade secrets.
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OUR SUCCESS WILL DEPEND PARTLY ON OUR ABILITY TO OPERATE WITHOUT INFRINGING ON
OR MISAPPROPRIATING THE PROPRIETARY RIGHTS OF OTHERS.
We may be sued for infringing on the patent rights of others. Intellectual
property litigation is costly, and, even if we prevail, the cost of such
litigation could adversely affect our business, financial condition and
results of operations. In addition, litigation is time consuming and could
divert management attention and resources away from our business. If we do not
prevail in any litigation, in addition to any damages we might have to pay, we
could be required to stop the infringing activity or obtain a license. Any
required license may not be available to us on acceptable terms, or at all. In
addition, some licenses may be non-exclusive, and therefore, our competitors
may have access to the same technology licensed to us. If we fail to obtain a
required license or are unable to design around a patent, we may be unable to
sell some of our products, which could have a material adverse affect on our
business, financial condition and results of operations. From time to time, we
receive letters from companies regarding their issued patents and patent
applications alleging possible infringement. For example, we have received
correspondence from a company informing us of its recently issued patent
concerning a diagnostic method relying upon a specific manner for comparing
mass spectra, upon which it believes we may be infringing. We do not believe
that we infringe this patent.
IF WE DO NOT SUCCEED IN OBTAINING DEVELOPMENT AND MARKETING RIGHTS FOR SOME OF
THE ASSAYS DEVELOPED IN COLLABORATION WITH OUR CUSTOMERS, OUR REVENUE AND
PROFITABILITY COULD BE REDUCED.
Our business strategy includes the development of assays in collaboration with
customers, and we intend to obtain commercialization rights for those assays.
If we are unable to obtain rights to those assays, our revenue and
profitability could be reduced. To date, we have not initiated significant
activities with respect to the exploitation of any commercialization rights or
products developed in collaboration with third parties. Even if we obtain
commercialization rights, commercialization of products may require resources
that we do not currently possess and may not be able to develop or obtain.
WE MAY BE UNABLE TO OBTAIN LICENSES TO PATENTED SNPS WHICH COULD PREVENT US
FROM OBTAINING SIGNIFICANT REVENUE OR BECOMING PROFITABLE.
The US Patent and Trademark Office has issued at least one patent to a third
party relating to a SNP. If important SNPs are patented, we will need to
obtain rights to those SNPs in order to develop, use and sell related assays.
Required licenses may not be available on commercially acceptable terms, or at
all. If we fail to obtain licenses to important patented SNPs, we may never
achieve significant revenue or become profitable.
BECAUSE OUR PRODUCTS CURRENTLY DEPEND ON COMPONENTS LICENSED FROM THIRD PAR-
TIES, A BREACH BY US OF ANY OF THE TERMS OF THESE LICENSES COULD RESULT IN THE
LOSS OF ACCESS TO THESE COMPONENTS AND COULD DELAY OR SUSPEND OUR COMMERCIAL-
IZATION EFFORTS.
Some aspects of our technology have been acquired or licensed from third
parties. A failure by us to maintain the right to use these components could
seriously harm our business, financial condition and results of operations. In
addition, changes to or termination of our agreements with these third parties
could result in the loss of access to these aspects of our technology and
could delay or suspend our commercialization efforts.
Our grants from the government give the government certain license rights to
inventions resulting from funded work in the event that we fail to
commercialize the technology developed using government funds. Our business
could be harmed if the government exercises those rights.
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OUR ACADEMIC ARRANGEMENTS ARE AN IMPORTANT PART OF OUR BUSINESS AND FAILURE TO
MAINTAIN EXISTING RELATIONSHIPS OR ESTABLISH ADDITIONAL RELATIONSHIPS COULD
ADVERSELY AFFECT OUR RESEARCH AND PRODUCT DEVELOPMENT EFFORTS.
We have relationships with scientists and consultants at academic and other
institutions who conduct research at our request. Our existing relationships
may not be successful. These researchers are not employed by us and may have
commitments to, or consulting or advisory contracts with, other entities that
may limit their availability to work on our projects. As a result, we have
limited control over their activities and, except as otherwise required by our
agreements with these persons, we can expect only limited amounts of their
time to be dedicated to our projects. Our ability to make new discoveries and
to commercialize products based on those discoveries may depend in part on
continued arrangements with researchers at academic and other institutions. We
may not be able to negotiate acceptable arrangements with academic or other
institutions or individuals.
FAILURE TO EXPAND OUR INTERNATIONAL SALES AS WE INTEND WOULD REDUCE OUR ABIL-
ITY TO BECOME PROFITABLE.
We expect that a significant portion of our sales will be made outside the
United States. A successful international effort will require us to develop
relationships with international customers and partners. We may not be able to
identify, attract or retain suitable international customers and partners. As
a result, we may be unsuccessful in our international expansion efforts.
Furthermore, expansion into international markets will require us to continue
to establish and grow foreign operations, hire additional personnel to run
these operations and maintain good relations with our foreign customers and
partners.
International operations involve a number of risks not typically present in
domestic operations, including:
. currency fluctuation risks;
. changes in regulatory requirements;
. costs and risks of deploying systems in foreign countries;
. licenses, tariffs and other trade barriers;
. political and economic instability;
. difficulties in staffing and managing foreign operations;
. potentially adverse tax consequences; and
. the burden of complying with a wide variety of complex foreign laws and
treaties.
Our international operations will also be subject to the risks associated with
the imposition of legislation and regulations relating to the import or export
of high technology products. We cannot predict whether tariffs or restrictions
upon the importation or exportation of our products will be implemented by the
United States or other countries.
WE MAY LOSE MONEY WHEN WE EXCHANGE FOREIGN CURRENCY RECEIVED FROM INTERNA-
TIONAL SALES INTO US DOLLARS.
A significant portion of our business is expected to be conducted in
currencies other than the US dollar. We recognize foreign currency gains or
losses arising from our operations in the period incurred. As a result,
currency fluctuations between the US dollar and the currencies in which we do
business will cause foreign currency translation gains and losses. We cannot
predict the effects of exchange rate fluctuations upon our future operating
results because of the number of currencies involved, the variability of
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currency exposure and the potential volatility of currency exchange rates. We
do not currently engage in foreign exchange hedging transactions to manage our
foreign currency exposure.
THE SALES CYCLE FOR OUR PRODUCTS IS LENGTHY. WE MAY EXPEND SUBSTANTIAL FUNDS
AND MANAGEMENT EFFORT WITH NO ASSURANCE OF SUCCESSFULLY SELLING OUR PRODUCTS
OR SERVICES.
Our ability to obtain customers for our products and services depends in
significant part upon the perception that our products and services can help
accelerate efforts in genomics. The sales cycle is typically lengthy. Our
sales effort requires the effective demonstration of the benefits of our
products and services to and significant training of many different
departments within a potential customer. These departments might include
research and development personnel and key management. In addition, we may be
required to negotiate agreements containing terms unique to each customer. We
may expend substantial funds and management effort with no assurance that we
will successfully sell our products or services.
OUR INDUSTRY IS HIGHLY COMPETITIVE AND WE MAY NOT HAVE THE RESOURCES REQUIRED
TO SUCCESSFULLY COMPETE.
The biotechnology industry is highly competitive. We compete with companies in
the United States and abroad that are engaged in the development and
production of products that analyze genetic information. They include:
. biotechnology, pharmaceutical, chemical and other companies;
. academic and scientific institutions;
. governmental agencies; and
. public and private research organizations.
Many of our competitors have much greater financial, technical, research,
marketing, sales, distribution, service and other resources than we do.
Moreover, our competitors may offer broader product lines and have greater
name recognition than we do, and may offer discounts as a competitive tactic.
In addition, several development stage companies are currently making or
developing products that compete with or will compete with our products. Our
competitors may develop or market technologies or products that are more
effective or commercially attractive than our current or future products, or
that may render our technologies and products obsolete.
WE ARE HIGHLY DEPENDENT ON PRINCIPAL MEMBERS OF OUR MANAGEMENT AND SCIENTIFIC
STAFF, THE LOSS OF WHOM WOULD IMPAIR OUR ABILITY TO COMPETE.
We are highly dependent on the principal members of our management and
scientific staff. The loss of the services of any of these persons could delay
or reduce our product development and commercialization efforts. In addition,
we will require additional personnel in the areas of scientific research,
diagnostic testing, manufacturing and marketing. We may not be able to attract
and retain qualified personnel, which could seriously harm our business,
financial condition and results of operations.
WE MAY NOT HAVE ADEQUATE INSURANCE AND IF WE BECOME SUBJECT TO PRODUCT LIABIL-
ITY CLAIMS, WE MAY EXPERIENCE REDUCED DEMAND FOR OUR PRODUCTS OR BE REQUIRED
TO PAY DAMAGES THAT EXCEED OUR INSURANCE LIMITATIONS.
Our business exposes us to potential product liability claims that are
inherent in the life science field. Any product liability claim in excess of
our insurance coverage would have to be paid out of our cash-
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reserves which would have a detrimental effect on our financial condition. It
is difficult to determine whether we have obtained sufficient insurance to
cover potential claims. Also, we cannot assure you that we can or will
maintain our insurance policies on commercially acceptable terms, or at all.
RESPONDING TO CLAIMS RELATING TO IMPROPER HANDLING, STORAGE OR DISPOSAL OF
HAZARDOUS CHEMICALS AND RADIOACTIVE AND BIOLOGICAL MATERIALS WHICH WE USE,
COULD BE TIME CONSUMING AND COSTLY.
We use controlled hazardous and radioactive materials in our business. The
risk of accidental contamination or injury from these materials cannot be
completely eliminated. If an accident with these substances occurs, we could
be liable for any damages that result, which could seriously harm our
business. Additionally, an accident could damage our research and
manufacturing facilities and operations, resulting in delays and increased
costs.
IF OUR MANUFACTURING FACILITY IS DAMAGED, WE COULD EXPERIENCE LOST REVENUE AND
OUR BUSINESS WOULD BE SERIOUSLY HARMED.
Our only manufacturing facility is located in San Diego, California. Damage to
our facility due to fire, natural disaster, power loss, communications
failure, unauthorized entry or other events could cause us to cease
development and manufacturing of our products. We have limited insurance to
protect against business interruption; however, there can be no assurance this
insurance will be adequate or will continue to be available to us on
commercially reasonable terms, or at all.
IF WE OR OUR SUPPLIERS FAIL TO BE YEAR 2000 OR Y2K COMPLIANT IT COULD CAUSE
INTERRUPTIONS IN OUR SUPPLY OF PRODUCTS AND GENERATE SUBSTANTIAL EXPENSES FOR
OUR BUSINESS.
The Y2K issue is a situation that results from computer systems and software
products being coded using two digits rather than four digits to define the
applicable year. Computer systems and software products often utilize embedded
technology that is time-sensitive and may recognize a date falling in the year
2000 as falling in the year 1900 which could cause computer system failures
and errors leading to a disruption of our business operations. The Y2K issue
could affect not only our operations but also the operations of our business
partners, customers and suppliers among others. If we or our suppliers fail to
be Y2K compliant, our business, financial condition and results of operations
could be materially disrupted. Please see "Management's discussion and
analysis of financial condition and results of operations--Impact of the year
2000" for additional information regarding the Y2K issue.
IF WE DO NOT EFFECTIVELY MANAGE OUR GROWTH, IT COULD AFFECT OUR ABILITY TO
PURSUE BUSINESS OPPORTUNITIES AND EXPAND OUR BUSINESS.
Growth in our business has placed, and will continue to place, a significant
strain on our management systems and resources. We will need to continue to
improve our operational and financial systems and managerial controls and
procedures and expand, train and manage our workforce. We will have to
maintain close coordination among our technical, accounting, marketing, sales
and research departments. If we fail to effectively manage our growth and
address the above concerns, it could affect our ability to pursue business
opportunities and expand our business.
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RISKS RELATED TO THIS OFFERING
CONCENTRATION OF OWNERSHIP OF OUR COMMON STOCK AMONG OUR EXISTING EXECUTIVE
OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS MAY PREVENT NEW INVESTORS FROM
INFLUENCING SIGNIFICANT CORPORATE DECISIONS.
Upon completion of this offering, our executive officers, directors and
beneficial owners of 5% or more of our common stock and their affiliates will,
in aggregate, beneficially own approximately 50.4% of our outstanding common
stock or 48.8% if the underwriters' over-allotment option is exercised in
full. As a result, these persons, acting together, will have the ability to
determine the outcome of all matters submitted to our stockholders for
approval, including the election and removal of directors and any merger,
consolidation or sale of all or substantially all of our assets. In addition,
such persons, acting together, will have the ability to control the management
and affairs of our company. Accordingly, this concentration of ownership may
harm the market price of our common stock by:
. delaying, deferring or preventing a change in control of our company;
. impeding a merger, consolidation, takeover or other business combination
involving our company; or
. discouraging a potential acquirer from making a tender offer or otherwise
attempting to obtain control of our company.
Please see "Principal stockholders" for additional information on
concentration of ownership of our common stock.
THERE MAY NOT BE AN ACTIVE, LIQUID TRADING MARKET FOR OUR COMMON STOCK.
We cannot assure you that an active trading market for our common stock will
develop following this offering. You may not be able to sell your shares
quickly or at the market price if trading in our stock is not active. The
initial public offering price will be determined by negotiations between us
and the representatives of the underwriters based upon a number of factors.
The initial public offering price may not be indicative of prices that will
prevail in the trading market. Please see "Underwriting" for more information
regarding our arrangement with the underwriters and the factors considered in
setting the initial public offering price.
OUR STOCK PRICE COULD BE VOLATILE AND YOUR INVESTMENT COULD SUFFER A DECLINE
IN VALUE, WHICH IN TURN COULD AFFECT OUR ABILITY TO RAISE ADDITIONAL CAPITAL
TO FUND THE COMMERCIALIZATION OF OUR PRODUCTS.
The trading price of our common stock is likely to be highly volatile and
could be subject to wide fluctuations in price in response to various factors,
many of which are beyond our control, including:
. actual or anticipated variations in quarterly operating results;
. announcements of technological innovations by us or our competitors;
. new products or services introduced or announced by us or our competitors;
. changes in financial estimates by securities analysts;
. conditions or trends in the biotechnology, pharmaceutical and genomics
industries;
. changes in the market valuations of other similar companies;
. announcements by us of significant acquisitions, strategic partnerships,
joint ventures or capital commitments;
. additions or departures of key personnel; and
. sales of our common stock.
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In addition, the stock market in general, and the Nasdaq National Market and
the market for technology companies in particular, has experienced extreme
price and volume fluctuations that have often been unrelated or
disproportionate to the operating performance of those companies. Further,
there has been particular volatility in the market prices of securities of
biotechnology and life sciences companies. These broad market and industry
factors may seriously harm the market price of our common stock, regardless of
our operating performance. In the past, following periods of volatility in the
market price of a company's securities, securities class-action litigation has
often been instituted against that company. Such litigation, if instituted
against us, could result in substantial costs and a diversion of management's
attention and resources, which could seriously harm our business, financial
condition and results of operations.
WE MAY HAVE TO RETURN THE MONEY WE RECEIVE FROM THE SELLING STOCKHOLDERS AFTER
THEY COMPLETE THE PURCHASE OF APPROXIMATELY 65,000 SHARES BECAUSE OF A
POSSIBLE VIOLATION OF SECTION 5 OF THE SECURITIES ACT OF 1933.
In March 1999, we entered into a consulting agreement with two German
consulting firms for services to be provided to us in connection with our
initial public offering. Under this agreement we offered and committed
ourselves to sell an equivalent of DEM3 million worth of shares, based on our
initial public offering price, to these consulting firms. This equates to
approximately 65,000 shares of our common stock, assuming an initial offering
price of $24.00 per share, or a total of approximately $1.6 million worth of
shares. At the time we offered and committed ourselves to issue these shares,
we did not deliver a preliminary prospectus to these consulting firms. We may
have a contingent liability arising out of a possible violation of Section 5
of the Securities Act of 1933 in connection with the offer and commitment to
sell these shares being made in March 1999. If we violated Section 5 of the
Securities Act of 1933, these consulting firms may have the right to have us
repurchase any shares sold to them at the initial public offering price for up
to one year from the date the consultants discovered any such violation. In no
event could this right extend beyond three years.
THE LARGE NUMBER OF SHARES ELIGIBLE FOR PUBLIC SALE AFTER THIS OFFERING COULD
CAUSE OUR STOCK PRICE TO DECLINE.
Sales of substantial amounts of our common stock in the public market after
this offering could seriously harm prevailing market prices for our common
stock. These sales might make it difficult or impossible for us to sell
additional securities when we need to raise capital. The number of additional
shares available for sale in the public market will be affected by
restrictions imposed by:
. the Securities Act and related rules, including the volume and other
restrictions of Rule 144; and
. lock-up agreements between us and selected stockholders or between
stockholders and the underwriters.
Please see "Shares eligible for future sale" for a description of the number
of shares which may be sold by existing stockholders in the future.
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD MAKE
A THIRD-PARTY ACQUISITION OF US DIFFICULT. THIS COULD LIMIT THE PRICE INVEST-
ORS MIGHT BE WILLING TO PAY IN THE FUTURE FOR OUR COMMON STOCK.
The anti-takeover provisions in our certificate of incorporation, our bylaws
and Delaware law could make it more difficult for a third party to acquire us
without approval of our board of directors. As a result of these provisions,
we could delay, deter or prevent a takeover attempt or third party acquisition
that our stockholders consider to be in their best interests, including a
takeover attempt that results in a premium over the market price for the
shares held by our stockholders. Please see "Description of securities" for
more information on these anti-takeover provisions.
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Forward-looking information
This prospectus may contain forward-looking statements. When used in this
prospectus, the words "anticipate," "believe," "estimate," "will," "intend"
and "expect" and similar expressions identify forward-looking statements.
Although we believe that our plans, intentions and expectations reflected in
any such forward-looking statements are reasonable, we can give no assurance
that these plans, intentions or expectations will be achieved. Actual results,
performance or achievements could differ materially from those contemplated,
expressed or implied, by any such forward-looking statements contained in this
prospectus. Important factors that could cause actual results to differ
materially from our forward-looking statements are set forth in this
prospectus, including under the heading "Risk factors." All forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements set forth in this
prospectus. We are under no obligation to update any forward-looking
statement, whether as a result of new information, future events or otherwise.
You should rely only on the information contained in this prospectus. Neither
we nor the selling stockholders have authorized anyone to provide you with
information different from that contained in this prospectus. We are offering
to sell and seeking offers to buy shares of Sequenom, Inc. common stock only
in jurisdictions where offers and sales are permitted. The information
contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any
sale of Sequenom, Inc. common stock.
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Use of proceeds
We estimate that the net proceeds from the sale of the 5,000,000 shares of
common stock that we are selling in this offering will be approximately $110.3
million, or approximately $127.0 million if the underwriter's over-allotment
option is exercised in full, based on an assumed initial public offering price
of $24.00 per share and after deducting the underwriting discounts and
commissions and estimated offering expenses payable by us. We will not receive
any proceeds from the sale of shares by the selling stockholders.
We anticipate using the net proceeds from the offering for general corporate
purposes, including hiring additional sales and customer support personnel,
expansion of our facilities, continued development and manufacturing of
existing products, research and development of additional products, expenses
for filing and pursuing patent applications, and working capital. We expect,
if the opportunity arises, to use an unspecified portion of the net proceeds
to acquire or invest in products, technologies or companies. While we
periodically engage in preliminary discussions with respect to acquisitions,
we are not currently a party to any agreements or commitments and have no
understandings with respect to any acquisitions.
We expect to use approximately $3.3 million of the proceeds of this offering
for the repayment of long-term debt and accrued interest owed to TBG. This
debt, which originated in 1995 and 1997, is denominated in German deutsche
marks, DEM, and totals DEM6 million or approximately $3.3 million as of
September 30, 1999. Interest is payable semi-annually on the loans. The 1995
loans began accruing nominal interest at a rate of 6% per year on March 31,
1997 and payments commenced in June 1997. The effective nominal interest rate
over the life of the 1995 loans is 4.8%. The 1997 loan bears interest at 7%
per year and payments commenced in 1998. We are also required to pay
additional interest equal to 9% of our German subsidiary's annual profits, to
the extent that such profits exceed DEM100,000 per year. The combined annual
interest rate, consisting of nominal interest and additional interest, may not
exceed 7% per year through December 31, 2000. Commencing January 1, 2001 and
January 1, 2003, any amounts still outstanding will accrue additional interest
at the rates of 6% and 7% per year for the 1995 loans and the 1997 loan,
respectively. In addition, at the end of the loan term, which is the earlier
of repayment or December 31, 2005 and December 31, 2007 for the 1995 loans and
the 1997 loan, respectively, our German subsidiary is obligated to pay
terminal interest equal to 25%, 30% and 35% of the amounts loaned under DEM1
million, DEM3 million and DEM2 million agreements, respectively, estimated to
be $1.2 million at the end of the loan term. We have accrued interest of
$930,625 relating to the terminal interest representing approximately 75% of
the terminal interest to be paid at the end of the loan term. TBG has elected
to accept 24,792 shares of our common stock upon the closing of this offering
in total satisfaction of the terminal interest. The number of shares are based
on an assumed initial public offering price of $24.00 per share, and will
increase or decrease based on the final price.
The amounts and timing of our actual expenditures depend on several factors,
including future sales growth, the progress of our product development efforts
and the amount of cash generated or used by our operations. Other than the
$3.3 million debt repayment, we have not determined the amount or timing of
the expenditures in the areas listed above. Pending utilization, we will
invest the net proceeds in short-term, investment grade, interest bearing
instruments.
Dividend policy
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain all available funds for use in our business, and do
not anticipate paying any cash dividends in the foreseeable future. Any future
determination relating to dividend policy will be made at the discretion of
our board of directors and will depend on a number of factors, including
future earnings, capital requirements, financial condition and future
prospects and other factors the board of directors may deem relevant.
- -------------------------------------------------------------------------------
18
<PAGE>
- -------------------------------------------------------------------------------
Capitalization
The following table shows our capitalization as of September 30, 1999:
. On an actual basis; and
. On a pro forma basis to give effect to:
. the automatic conversion of 14,842,757 shares of our preferred stock
outstanding as of the date of this prospectus into 14,842,757 shares of
our common stock on a one-for-one basis;
. the sale of approximately $1,560,000 in shares of common stock to two
German consulting firms in a private sale to be completed immediately
prior to this offering, or 65,000 shares assuming an initial public
offering price of $24.00 per share;
. the conversion of debt owed to TBG in the amount of DEM4 million,
approximately $2.1 million, into 272,108 shares of our common stock upon
the closing of this offering assuming an initial public offering of
$24.00 per share, including a charge to interest expense of $4.2 million
for the beneficial conversion price of such debt and the recognition of
$107,000 of foreign translation losses on such debt from October 1, 1999
through December 27, 1999;
. the issuance of 1,523,451 shares of common stock upon the exercise of
stock options from October 1, 1999 through December 27, 1999;
. the increase in notes receivable for common stock of $1,545,185 from
October 1, 1999 through December 27, 1999 related to the exercise of
stock options by our executives; and
. the net increase in deferred compensation related to stock options of
$1,451,440 resulting from $2,212,650 from deferred compensation recorded
in connection with October 1999 grants less $761,210 in amortization from
October 1, 1999 through December 27, 1999.
. On a pro forma as adjusted basis to give effect to:
. the receipt of the estimated net proceeds from this sale of 5,000,000
shares of stock offered by this prospectus at an assumed initial public
offering price of $24.00 per share;
. the repayment of debt owed to TBG in the amount of DEM6 million,
approximately $3.3 million, upon the closing of this offering, and the
recognition of $148,000 of foreign translation gains on such debt from
October 1, 1999 through December 27, 1999; and
. the issuance of 24,792 shares of our common stock upon the closing of
this offering in satisfaction of accrued interest of $930,625, including
recognition of a $336,000 gain on the transaction.
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
- -------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
Current portion of capital lease
obligations................................. $441 $441 $441
====== ====== ======
Capital lease obligations, less current
portion..................................... $1,313 $1,313 $1,313
Long-term debt commitments................... 5,446 3,268 --
Accrued long-term interest payable........... 931 931 --
------ ------ ------
Total long-term obligations................ 7,690 5,512 1,313
Convertible preferred stock, par value
$0.001;
Authorized shares--14,842,757 actual,
5,000,000 pro forma and pro forma as
adjusted
Issued and outstanding shares--14,842,757
actual, none pro forma and pro forma as
adjusted................................... 15 -- --
Common stock, par value $0.001;
Authorized shares--19,500,000 actual,
75,000,000 pro forma and pro forma as
adjusted
</TABLE>
- -------------------------------------------------------------------------------
19
<PAGE>
CAPITALIZATION
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Issued and outstanding shares--873,369 actual,
17,576,685 pro forma and 22,601,477 pro forma
as adjusted................................... 1 18 23
Additional paid-in capital...................... 62,533 70,069 180,964
Notes receivable for common stock............... (511) (2,056) (2,056)
Deferred compensation related to stock options.. (2,167) (4,380) (4,380)
Accumulated other comprehensive income.......... 216 108 257
Deficit accumulated during the development
stage.......................................... (37,120) (42,126) (41,791)
------- ------- --------
Total stockholders' equity.................... 22,967 21,633 133,017
------- ------- --------
Total capitalization.......................... $30,657 $27,145 $134,330
======= ======= ========
</TABLE>
The table above excludes:
. 1,287,049 shares issuable upon the exercise of options outstanding as of
December 27, 1999 at a weighted average exercise price of $1.66 per share.
This share amount consists of 2,475,250 shares issuable upon the exercise of
options outstanding at September 30, 1999 and 335,250 shares issuable upon
the exercise of options granted during October 1999, less 1,523,451 shares
issued upon exercise of options during the period October 1, 1999 through
December 27, 1999;
. 176,503 shares issuable upon the exercise of warrants outstanding as of
December 27, 1999 at a weighted average exercise price of $2.10 per share;
and
. 248,750 additional shares available for future grant as of December 27, 1999
under our 1998 stock plan, and an additional 850,000 shares made available
for future grant under our stock plans to be adopted at the close of this
offering. For a description of our stock option and stock purchase plans,
please see "Management--Employee benefit plans."
To the extent that these options or warrants are exercised, there will be
further dilution to new investors. Please see "Management--Employee benefit
plans" for further information regarding our stock option plan and stock
purchase plan.
- -------------------------------------------------------------------------------
20
<PAGE>
- -------------------------------------------------------------------------------
Dilution
Our historical net tangible book value as of September 30, 1999 was
approximately $23.0 million, or $26.30 per share, based on the number of
common shares outstanding as of September 30, 1999. Historical net tangible
book value per share is equal to the amount of our total tangible assets less
total liabilities, divided by the number of shares of common stock outstanding
as of September 30, 1999.
Our pro forma net tangible book value as of September 30, 1999 was
approximately $21.6 million, or $1.23 per share, based on the pro forma number
of shares outstanding as of September 30, 1999 of 17,576,685, calculated after
giving effect to:
. the automatic conversion of 14,842,757 shares of our preferred stock
outstanding at September 30, 1999 into 14,842,757 shares of our common stock
on a one-for-one basis;
. the sale of approximately $1,560,000 in shares of common stock to two German
consulting firms in a private sale to be completed immediately prior to this
offering, or 65,000 shares assuming an initial public offering price of
$24.00 per share;
. the conversion of debt owed to TBG in the amount of DEM4 million,
approximately $2.1 million, into 272,108 shares of our common stock upon the
closing of this offering assuming an initial public offering price of $24.00
per share; and
. the issuance of 1,523,451 shares of common stock upon exercise of stock
options from October 1, 1999 through December 27, 1999.
Dilution in pro forma net tangible book value per share represents the
difference between the amount per share paid by purchasers of shares of our
common stock in this offering, and the private sale and the net tangible book
value per share of our common stock immediately afterwards, after giving
effect to the sale of 5,000,000 shares in this offering, the issuance of
24,792 shares of our common stock in satisfaction of accrued interest of
$930,625, and the repayment of $3.3 million of long-term debt from the net
proceeds. This represents an immediate increase in pro forma net tangible book
value of $4.66 per share to existing stockholders and an immediate dilution in
pro forma net tangible book value of $18.11 per share to new investors. The
following table illustrates this per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share..................................... $24.00
------
Historical net tangible book value per share as of September 30, 1999............. $26.30
Decrease attributable to conversion of preferred stock, debt and accrued interest,
and exercise of stock options subsequent to September 30, 1999................... (25.07)
------
Pro forma net tangible book value per share as of September 30, 1999.............. 1.23
Increase attributable to the offering and private sale............................ 4.66
------
Net tangible book value per share after the offering and private sale............... 5.89
------
Dilution per share to new investors................................................. $18.11
======
</TABLE>
The following table summarizes, on a pro forma basis as of September 30, 1999,
after giving effect to this offering, the total number of shares of common
stock purchased from us and the total consideration and the average price per
share paid by existing stockholders and by new investors:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Existing stockholders... 17,601,477 77.9% $62,776,356 34.3% $3.57
New investors........... 5,000,000 22.1 120,000,000 65.7 $24.00
---------- ----- ------------ -----
Total................... 22,601,477 100.0% $182,776,356 100.0%
========== ===== ============ =====
</TABLE>
- -------------------------------------------------------------------------------
21
<PAGE>
DILUTION
- -------------------------------------------------------------------------------
The tables and calculations above assume no exercise of outstanding options or
warrants. At December 27, 1999, there were:
. 1,287,049 shares issuable upon the exercise of options outstanding as of a
weighted average exercise price of $1.66 per share. This share amount
consist of 2,475,250 shares issuable upon the exercise of options
outstanding at September 30, 1999 and 335,250 shares issuable upon the
exercise of options granted during October 1999, less 1,523,451 shares
issued upon exercise of options during the period October 1, 1999 through
December 27, 1999;
. 176,503 shares issuable upon the exercise of warrants outstanding as of
December 27, 1999 at a weighted average exercise price of $2.10 per share;
and
. 248,750 additional shares available for future grant as of December 27, 1999
under our 1998 stock plan, and an additional 850,000 shares made available
for future grant under our stock plans to be adopted at the close of this
offering. For a description of our stock option and stock purchase plans,
please see "Management--Employee benefit plans."
To the extent that these options or warrants are exercised, there will be
further dilution to new investors. Please see "Management--Employee benefit
plans" for further information regarding our stock option plan and stock
purchase plan.
If the underwriters exercise their over-allotment option in full, the
following will occur:
. the number of shares of our common stock held by existing stockholders will
decrease to approximately 75.4% of the total number of shares of our common
stock outstanding after this offering;
. the number of shares of our common stock held by new public investors will
increase to 5,750,000, or approximately 24.6% of the total number of shares
of our common stock outstanding after this offering; and
. an increase in pro forma net tangible book value to $5.18 per share to
existing stockholders and an immediate dilution in pro forma net tangible
book value of $17.59 per share to new investors.
- -------------------------------------------------------------------------------
22
<PAGE>
- -------------------------------------------------------------------------------
Selected consolidated financial data
The following selected consolidated financial data should be read in
conjunction with the consolidated financial statements and the notes to such
statements and "Management's discussion and analysis of financial condition
and results of operations" included elsewhere in this prospectus. The
consolidated statement of operations data for the years ended December 31,
1996, 1997 and 1998 and the nine-month period ended September 30, 1999, and
the consolidated balance sheet data at December 31, 1997 and 1998 and
September 30, 1999, are derived from our consolidated financial statements
which have been audited by Ernst & Young LLP, independent auditors, and are
included elsewhere in this prospectus. The consolidated statement of
operations data for the years ended December 31, 1994 and 1995 and the
consolidated balance sheet data at December 31, 1994, 1995, and 1996 are
derived from audited consolidated financial statements not included in this
prospectus. The consolidated statement of operations data for the nine-month
period ended September 30, 1998 is derived from our unaudited financial
statements included elsewhere in this prospectus. These unaudited financial
statements have been prepared on the same basis as our audited financial
statements, and, in our opinion, include all material adjustments, consisting
only of normal recurring adjustments necessary to present fairly this
unaudited financial information. Historical results are not necessarily
indicative of the results to be expected in the future.
The pro forma net loss per share is calculated as if our convertible preferred
stock and DEM4 million long-term debt owed to TBG as of September 30, 1999,
both convertible into common stock upon the closing of this offering, were
converted into shares of our common stock on the date of their issuance.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
1994 1995 1996 1997 1998 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF (In thousands, except per share data)
OPERATIONS DATA
- -------------------------------------------------------------------------------------------------------------
Research and development
grants....................... $-- $-- $893 $527 $351 $126 $81
Costs and expenses:
Research and development.... 922 1,274 3,136 3,532 6,188 3,550 7,138
General and administrative.. 230 420 1,032 1,861 4,218 2,640 5,363
Amortization of deferred
compensation............... -- -- -- -- -- 3,615
----------- ------- -------- -------- -------- -------- --------
Total costs and expenses...... 1,152 1,694 4,168 5,393 10,406 6,190 16,116
----------- ------- -------- -------- -------- -------- --------
Loss from operations.......... (1,152) (1,694) (3,275) (4,866) (10,055) (6,064) (16,035)
Other income (expense):
Interest income............. 3 2 73 57 397 291 1,225
Interest expense............ -- (28) (275) (308) (613) (230) (576)
----------- ------- -------- -------- -------- -------- --------
Net loss...................... $(1,149) $(1,720) $(3,477) $(5,117) $(10,271) $(6,003) $(15,386)
=========== ======= ======== ======== ======== ======== ========
Net loss per share
attributable to common
stockholders, basic and
diluted...................... $(1,149,498) $(65.87) $(23.45) $(22.62) $(33.33) $(20.12) $(39.41)
Shares used in computing net
loss per share attributable
to common stockholders, basic
and diluted.................. -- 26 148 226 308 298 390
Pro forma net loss per share,
basic and diluted............ $(1.02) $(1.03)
Shares used in computing pro
forma net loss per share
basic and diluted............ 9,749 14,714
</TABLE>
- -------------------------------------------------------------------------------
23
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA
- ------------------------------------------------------------------------------
Cash, cash equivalents
and short-term
investments............ $168 $1,877 $1,326 $833 $28,497 $28,069
Working capital......... (455) 1,379 820 (125) 26,014 24,771
Total assets............ 230 2,911 2,714 2,273 32,777 34,632
Total long-term
obligations............ -- 891 2,872 3,772 7,408 7,690
Total stockholders'
equity (deficit) ...... (397) 1,354 (1,206) (2,747) 22,635 22,967
</TABLE>
- --------------------------------------------------------------------------------
24
<PAGE>
- -------------------------------------------------------------------------------
Management's discussion and analysis of financial condition and results of
operations
The following discussion of our financial condition and results of operations
should be read in conjunction with the financial statements and the notes to
those statements included elsewhere in this prospectus. This discussion may
contain forward-looking statements that involve risks and uncertainties. As a
result of many factors, such as those set forth under "Risk factors" and
elsewhere in this prospectus, our actual results may differ materially from
those anticipated in these forward-looking statements.
We are a pioneer in the new field of industrial genomics. Since we began
operations in 1994, we have been primarily involved in the research and
development of high definition DNA analysis tools for industrial biomedical
and life science applications.
We are a development stage company. Since our inception, we have incurred
significant losses and, as of September 30, 1999, we had an accumulated
deficit of $37.1 million. To date, our revenues have been solely from research
grants. We began placing MassArray systems at beta sites and with pre-launch
users in July 1999. Information received from these sites is being used to
optimize our product offerings. We expect revenues generated from our
commercial launch to begin during the first quarter of 2000.
We expect to recognize revenues from the sale of both MassArray systems at the
time of placement and disposable products, including SpectroCHIPs. We expect
that each system placed in the field will generate a recurring revenue stream
from the sale of disposables. We also expect the volume of disposables
purchased from each site will increase over time as the customer becomes
familiar with the technology and incorporates MassArray into a broad range of
SNP analysis programs. In addition, we may generate revenue from the sale of
proprietary assays and software products and other services provided to the
customer. In some cases we may retain some rights to assays developed in
collaborations with third parties. This may allow us to offer an expanded line
of products to a broader market. Our sales will be initially driven by the
need for SNP validation and later could expand into the areas of genomic drug
development, diagnostics and agricultural genomics.
Our expenses have consisted primarily of costs incurred in research and
development, manufacturing scale-up, business development and from general and
administrative costs associated with our operations. We expect our research
and development expenses to increase in the future as we continue to improve
and develop products. Our selling expenses will increase as we commercialize
our products. Expansion of our facilities and the additional obligations of a
public reporting entity will also add to our expenses. As a result, we expect
to incur losses for the foreseeable future.
Our current products do not provide sufficient gross margin for us to become
profitable. To become profitable, we will need to develop and introduce new
higher margin products and generate significant sales of disposables.
We have a limited history of operations and we anticipate that our quarterly
results of operations will fluctuate for the foreseeable future due to several
factors, including market acceptance of current or new products, patent
conflicts, the introduction of new products by our competitors, the timing and
extent of our research and development efforts, and the timing of significant
orders. Our limited operating history makes accurate prediction of future
operations difficult or impossible.
- -------------------------------------------------------------------------------
25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OP-
ERATIONS
- -------------------------------------------------------------------------------
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
REVENUE
Research and development grant revenue decreased to approximately $81,000 in
the first nine months of 1999 from approximately $126,000 in the first nine
months of 1998. As we have approached the commercial launch of our products,
we have not actively pursued grants, and accordingly, revenue from grants has
decreased.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses increased to $7.1 million in the first nine
months of 1999 from $3.6 million in the first nine months of 1998. These
expenses consist primarily of salaries and related personnel costs, materials
costs and costs related to completion of our product development. The increase
resulted from the expansion of our research and development efforts and was
comprised of a $1.6 million increase in salaries & related personnel costs,
additional material costs of $1.2 million and approximately $700,000 of
additional costs directly related to the scale-up of manufacturing for our
SpectoCHIPs.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased to $5.4 million in the first
nine months of 1999 from $2.6 million in the first nine months of 1998. These
expenses consist primarily of salaries and related costs for executive,
finance and other administrative personnel, general and patent related legal
expenses, and business development expenses. Expenses relating to filing and
pursuing patent applications represented the single largest increase at
approximately $800,000, while continued expansion of administrative resources
to support our growth accounted for the remainder.
AMORTIZATION OF DEFERRED STOCK COMPENSATION
Deferred stock compensation represents the difference between the estimated
fair value of our common stock and the exercise price of options at the date
of grant. During the nine months ended September 30, 1999, we recorded
amortization of deferred stock compensation totaling $3.6 million, including
$1.6 million related to a remeasurement of options originally granted to an
officer in 1997. We anticipate that additional deferred compensation totaling
$3.8 million will be recorded for options granted in October 1999. These
amounts are being amortized over the vesting periods of the individual stock
options using the graded vesting method. We expect to record amortization for
deferred compensation approximately as follows: $761,000 during the quarter
ended December 31, 1999, $3.7 million during 2000, $924,000 during 2001,
$459,000 during 2002, and $214,000 during 2003.
INTEREST INCOME
Interest income increased to $1.2 million in the first nine months of 1999
from approximately $291,000 in the first nine months of 1998. This increase
resulted from higher average balances of cash and cash equivalents and short-
term investments in 1999 from investment of the proceeds from the sale of
Series D Convertible Preferred Stock in late 1998 and early 1999.
INTEREST EXPENSE
Interest expense increased to approximately $576,000 in the first nine months
of 1999 from approximately $230,000 in the first nine months of 1998. The
increase was due to higher average debt levels resulting from additional
indebtedness under our capital lease financing arrangement.
- -------------------------------------------------------------------------------
26
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OP-
ERATIONS
- -------------------------------------------------------------------------------
INCOME TAXES
As of September 30, 1999, we had federal and state net operating loss
carryforwards of approximately $24.8 million and $13.1 million. We also have
federal and state research and development tax credit carryforwards of
approximately $410,000 and $200,000 and German net operating loss
carryforwards of approximately $7.2 million. The federal and state net
operating loss and credit carryforwards expire on various dates through 2018.
The German net operating losses may be carried forward indefinitely. Pursuant
to Internal Revenue Code Sections 382 and 388, our net operating loss and
credit carryforwards may be limited due to a cumulative change in ownership of
more than 50%, which occurred during 1998 and which is anticipated to occur
with the offering. However, we do not believe these limitations will
materially impact the use of the net operating loss and credit carryforwards.
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
REVENUE
Research and development grant revenue decreased to $351,000 in 1998 from
approximately $527,000 in 1997 and from $893,000 in 1996. As we have
approached the commercial launch of our products, we have received funding
from private equity financings and have not pursued grant funding.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses increased to $6.2 million in 1998 from $3.5
million in 1997 and $3.1 million in 1996. The $2.7 million increase from 1997
to 1998 resulted from an additional $1.3 million in personnel costs and
approximately $1.4 million in additional supplies related to the development
of our MassArray system. The increase from 1996 to 1997 resulted primarily
from an increase in the number of personnel and their related costs.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased to $4.2 million in 1998 from
$1.9 million in 1997 and $1.0 million in 1996. Expenses relating to filing and
pursuing patent applications represented the single largest increase in 1998
at approximately $800,000. These expenses increased because a higher number of
patents were filed worldwide. Expenses related to employing more personnel
represented the remainder of the increase. The increase from 1996 to 1997
resulted primarily from increases in the number of personnel and expansion of
facilities.
INTEREST INCOME
Interest income increased to approximately $397,000 in 1998 from approximately
$57,000 in 1997. The increase was due to higher average balances of cash and
cash equivalents and short-term investments in 1998, resulting from the
investment of the proceeds from the sale of Series C convertible preferred
stock in February 1998. Interest income decreased to $57,000 in 1997 from
$73,000 in 1996 due to slightly lower average cash and cash equivalents during
1997.
INTEREST EXPENSE
Interest expense increased to approximately $613,000 in 1998 from
approximately $308,000 in 1997 and $275,000 in 1996. Interest expense
increased in 1998 due to an increase in borrowings under a capital lease
agreement and from proceeds received from convertible debt funding. The 1997
increase in interest expense resulted from DEM2 million of additional debt
funding.
LIQUIDITY AND CAPITAL RESOURCES
We have funded our operations with $55.6 million of private equity financings,
$6.0 million in loans and convertible loans, and $2.2 million from equipment
financing arrangements. At September 30, 1999,
- -------------------------------------------------------------------------------
27
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OP-
ERATIONS
- -------------------------------------------------------------------------------
cash, cash equivalents and short-term investments totaled $28.0 million
compared to $28.5 million at December 31, 1998. Our cash reserves are held in
a variety of interest-bearing instruments including high-grade corporate
bonds, commercial paper and money market accounts.
Cash used in operations for the nine months ended September 30, 1999 was $9.4
million compared with $5.5 million for the same period in 1998. A net loss of
$15.4 million for the first nine months of 1999 was partially offset by non-
cash charges of $3.6 million for amortization of deferred compensation, $1.3
million for depreciation and amortization expense and an increase of $1.2
million in accounts payable and accrued expenses. Investing activities, other
than the changes in our short-term investments, consumed $3.3 million in cash
during the first nine months in 1999 due to leasehold improvements and
equipment expenditures.
Cash provided by financing activities was $12.5 million for the nine months
ended September 30, 1999 compared to $14.2 million for the same period in
1998. Financing activities included the receipt of net proceeds of $11.8
million from the sale of preferred stock to investors in the nine month period
ended September 30, 1999 and $11.0 million in the nine month period ended
September 30, 1998.
Working capital decreased to $24.8 million at September 30, 1999 from $26.0
million at December 31, 1998. The decrease in working capital was due to our
use of cash in operations, higher accounts payable and accrued liabilities as
a result of increased product and business development, expenses, and payment
of capital lease obligations, offset in part by higher inventory and prepaid
expenses.
As of September 30, 1999, we had an aggregate of $7.2 million in future
obligations of principal payments under capital leases and long-term debt, of
which $0.4 million is to be paid within the next year. We expect to use
approximately $4.2 million of the proceeds of this offering for the repayment
of long-term bank debt and accrued interest. This debt, which originated in
1995 and 1997, is denominated in German deutsche marks, DEM, and totals DEM6
million. For a more detailed description of this bank debt, please see "Use of
Proceeds."
We believe our existing cash, cash equivalents and short-term investments,
together with the net proceeds of this offering will be sufficient to fund our
operating expenses, debt obligations and capital requirements through at least
the next 24 months. Our future capital uses and requirements depend on
numerous factors, including:
. our success in selling our MassArray system and associated technologies;
. our progress with research and development;
. our ability to introduce and sell new products;
. our sales and marketing expenses;
. expenses associated with unforeseen litigation;
. costs and timing of obtaining new patent rights; and
. regulatory changes and competition and technological developments in the
market.
Therefore, our capital requirements may increase in future periods. As a
result, we may require additional funds and may attempt to raise additional
funds through equity or debt financings, collaborative arrangements with
corporate partners or from other sources.
We have a $5.0 million bank line of credit, all of which is available for
borrowing. We have no commitments for any additional financings, and we cannot
assure you that additional funding will be available to finance our operations
when needed or, if available, that the terms for obtaining such funds will be
favorable or will not result in dilution to our stockholders.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OP-
ERATIONS
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We could possibly be required to repurchase approximately 65,000 shares sold
to two German consulting firms in a private sale scheduled to close
immediately prior to this offering, and repay the purchase price of their
shares of approximately $1.6 million if we are deemed to have violated Section
5 of the Securities Act of 1933.
IMPACT OF THE YEAR 2000
The computer systems and software programs of many companies and governmental
agencies are currently coded to accept or recognize only two digit entries in
the date code field. These systems may recognize a date using "00" as the year
1900 rather than the year 2000. As a result, these computer systems and/or
software programs may need to be upgraded to comply with such year 2000
requirements or risk system failure or miscalculations causing disruptions of
normal business activities.
STATE OF READINESS
We have made an assessment of the year 2000 readiness of our technology
systems, including our hardware and software in our products and our non-
information technology systems. We were informed by our vendors who provide
the hardware in our products that the hardware we use is year 2000 compliant.
We believe that substantially all of our applications, databases and
infrastructure are year 2000 compliant. We were informed by many of our
vendors of material hardware and software components of our information
technology systems that substantially all of the products we use are currently
year 2000 compliant.
COSTS
As of September 30, 1999, we have expensed approximately $25,000 for assessing
our state of readiness and making upgrades for year 2000 compliance. To date,
we have not experienced any material adverse effect on our business or
operating results as a result of any year 2000 problems. In addition, we have
not deferred any material information technology projects or equipment
purchases, as a result of our year 2000 compliance activities.
RISKS
We are not currently aware of any year 2000 compliance problems relating to
our proprietary software and other products or our information technology or
non-information technology systems that would have a material adverse effect
on our business. We cannot assure you that we will not discover year 2000
compliance problems in our proprietary software and other products that will
require substantial revisions. In addition, we cannot assure you that third-
party software, hardware or services incorporated into our material
information technology and non-information technology systems will not need to
be revised or replaced, all of which could be time consuming and expensive.
Our failure to fix our proprietary software and other products or to fix or
replace third-party software, hardware or services on a timely basis could
result in lost revenues, increased operating costs, the loss of customers and
other business interruptions, any of which could have a material adverse
effect on our business. Moreover, the failure to adequately address year 2000
compliance issues in our proprietary software and other products and our
information technology and non-information technology systems could result in
claims of mismanagement, misrepresentation or breach of contract and related
litigation, which could be costly and time-consuming to defend.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OP-
ERATIONS
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CONTINGENCY PLAN
In the event that year 2000-related problems materialize, we maintain
relationships with several suppliers of services and products to mitigate the
risks associated with using suppliers which are not year 2000 compliant.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
SHORT-TERM INVESTMENTS
The primary objective of our investment activities is to preserve principal
while at the same time maximizing the income we receive from our investments
without significantly increasing risk. Some of the securities that we invest
in may have market risk. This means that a change in prevailing interest rates
may cause the fair value of the principal amount of the investment to
fluctuate. For example, if we hold a security that was issued with a fixed
interest rate at the then-prevailing rate and the prevailing interest rate
later rises, the fair value of the principal amount of our investment will
probably decline. To minimize this risk in the future, we intend to maintain
our portfolio of cash equivalents and short-term investments in a variety of
securities, including commercial paper, money market funds, government and
non-government debt securities. The average duration of all of our investments
has generally been less than one year. Due to the short term nature of these
investments, we believe we have no material exposure to interest rate risk
arising from our investments. Therefore, no quantitative tabular disclosure is
required.
LONG-TERM DEBT
Our long-term debt is denominated in German deutsche marks. We intend to
convert approximately half of this debt into common stock upon the closing of
this offering, and to repay the rest of this debt in cash from the proceeds of
the offering. If the German deutsche mark increases in value relative to the
US dollar before the conversion or repayment, we will have to issue more
shares or cash to retire the debt. A 1% increase in the value of German
deutsche marks relative to the US dollar would result in a $55,000 unrealized
foreign translation loss.
FOREIGN CURRENCY RATE FLUCTUATIONS
The functional currency for our German subsidiary is the deutsche mark. The
German subsidiary's accounts are translated from the German deutsche mark to
the US dollar using the current exchange rate in effect at the balance sheet
date, for balance sheet accounts, and using the average exchange rate during
the period for revenues and expense accounts. The effects of translation are
recorded as a separate component of stockholders' equity. Our German
subsidiary conducts its business with customers in local European currencies.
Exchange gains and losses arising from these transactions are recorded using
the actual exchange differences on the date of the transaction. We have not
taken any action to reduce our exposure to changes in foreign currency
exchange rates, such as options or futures contracts, with respect to
transactions with our German subsidiaries or transactions with our European
customers. The net tangible assets of our German subsidiary, without regard to
the long-term debt, were $4.6 million at September 30, 1999. A 1% decrease in
the value of German deutsche marks relative to the US dollar would result in a
$46,000 unrealized foreign translation loss.
INFLATION
We do not believe that inflation has had a material adverse impact on our
business or operating results during the periods presented.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OP-
ERATIONS
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RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
changes the previous accounting definition of derivative--which focused on
freestanding contracts such as options and forwards, including futures and
swaps--expanding it to include embedded derivatives and many commodity
contracts. Under the statement, every derivative is recorded in the balance
sheet as either an asset or liability measured at its fair value. The
statement requires that changes in the derivatives fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. SFAS
No. 133 is effective for fiscal years beginning after June 15, 2000. We do not
anticipate that the adoption of SFAS No. 133 will have a material impact on
our financial position or results of operations.
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Business
BACKGROUND
DNA, GENES AND THE HUMAN GENOME PROJECT
Deoxyribonucleic acid, or DNA, is present in all living cells and is
responsible for determining the inherited characteristics of all living
organisms. Each DNA molecule contains two complementary strands comprised of
four different types of nucleotide bases, commonly known as G, C, A and T. The
order of these letters is called the DNA sequence. Each G on one strand pairs
with a C on the complementary strand, and similarly each A pairs with a T. The
entire DNA content of an organism is called its genome.
The human genome is organized into 46 chromosomes, or two sets of 23
chromosomes, one set inherited from each parent. Each chromosome is one
continuous double-stranded DNA molecule. The DNA contributed by one parent is
called the haploid genome. The DNA content of one haploid genome is
approximately 4 billion bases, which is organized into more than 100,000
distinct genes. Genes are segments of DNA located throughout the chromosomes.
Since parents are not identical, each individual has two similar but slightly
different copies of each chromosome and therefore two copies of each gene.
Genes comprise approximately 5% of the DNA in a human cell. Some additional
amount is used to regulate DNA function. More than 90% of the DNA has no known
function.
All cells contain a full copy of DNA, but each cell type expresses only those
genes necessary for its specific function. When a gene is expressed, a copy of
its DNA sequence, called messenger RNA, is used as a template to direct the
synthesis of a protein. Proteins are composed of 20 different constituents
called amino acids. Three adjacent letters of DNA, known as a codon, direct
the position and identity of one amino acid in a protein. Cells use proteins
to carry out their functions. For example, blood cells use the protein
hemoglobin to transport oxygen and muscle cells use the protein myoglobin to
store oxygen. Likewise, pancreatic islet cells secrete the protein insulin to
regulate blood sugar levels. DNA sequences referred to as regulatory elements
help to determine where a protein is made and in what quantities. For an
individual to be healthy, the correct proteins must be produced at the right
time in the appropriate amounts in the correct cells. DNA variations can
change the properties of a protein, or where, when or how much of a protein is
produced.
In order to develop new medical treatments and diagnostics based on genetic
information, efforts to sequence human DNA began in the mid-1980s when the
technology for sequencing became available. Efforts funded by governments and
foundations began in earnest by the end of the 1980s. These efforts came to be
known as the Human Genome Project. This project is expected to produce a rough
draft of the human DNA sequence by March 2000, with a complete draft expected
in several years. The overall public sector expenditure is expected to
approach $3 billion. In parallel with the public sector effort, a large
private sector effort emerged in the early 1990s. Unlike the public effort
that targets the entire genome, commercial efforts have focused on sequencing
the genes themselves. This private effort claims to have identified many human
genes some of which have been made available for a variety of biological and
biomedical studies.
GENETIC VARIABILITY AND SINGLE NUCLEOTIDE POLYMORPHISMS, OR SNPS
Each individual has two identical copies of many genes, but some genes
inherited from the mother will be different from their counterpart inherited
from the father. A difference in one or more letters of a DNA sequence,
referred to as a genetic variation, can modify the way a gene functions.
Genetic variations lead to a spectrum of observable differences, such as eye
and hair color. Genetic variations are
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also a major component of nearly all diseases, including cancer, diabetes and
cardiovascular disease. Many chronic diseases are affected by multiple genetic
variations.
Single nucleotide polymorphisms, or SNPs, are the most common type of genetic
variation. SNPs are a change in a single letter of DNA text, such as replacing
a G with a T in one location and on the complementary DNA strand replacing a C
with an A. Another common variation is the insertion or deletion of one or
several letters. A third common variation is an increase or decrease in the
length of simple repeating DNA sequences. Nearly every person carries numerous
examples of each of these three kinds of variations, some of which can result
in disease.
GENETIC ANALYSIS OR GENOTYPING
The process of determining the SNPs present in an individual is called
genotyping. It is estimated that there are 3 million to 10 million SNPs
inherited from each parent. Some SNPs are a major cause of inherited diseases
and are responsible for most individual differences in drug responsiveness;
however, most SNPs are of no medical consequence. For example, if the third
letter of a codon varies, the result is usually to produce the same amino acid
or one with similar properties. However, to date, thousands of SNPs have been
identified as medically relevant. Many genes exist in highly redundant sets so
that even if one is totally removed, there are no functional consequences. We
believe that only one SNP in a thousand may be medically relevant to disease
susceptibility or responsiveness to disease therapy. To capture this
information, tens of thousands of SNPs will have to be measured in each
individual.
Existing DNA sequence databases with samples from multiple individuals contain
many clues about potential sites in the human genome where SNPs occur.
Sequence variation between these individuals may suggest the presence of a
SNP. Ongoing sequencing efforts promise to increase the amount of available
sequence data tremendously and should discover most human SNPs within the next
few years.
After a SNP is discovered, its potential relevance for human health must be
validated by determining how common the variation is in different segments of
the population. To identify the small subset of SNPs that occur with the
greatest frequency in human disease or are responsible for variations in drug
responsiveness, hundreds of millions of SNP measurements must be made and
correlated with health and other physical and mental features of interest.
SNPs with a validated medical relevance may be used for drug development and
human medical diagnostics. Identification of these SNPs will require a highly
accurate, high throughput DNA analysis technology at a competitive cost.
PERSONALIZED MEDICINE OR PHARMACOGENOMICS
It has long been known that people respond differently to the same drug. The
field of pharmacogenomics studies these variations in drug response based on
genetic differences. The emerging ability to correlate drug responses with
SNPs promises to enable doctors to prescribe appropriate drugs to patients
with the goal of maximizing drug response and minimizing side effects. For
example, a test that could distinguish poor responders from good responders to
drugs in which more than one therapeutic alternative exists could
significantly reduce health care costs. In addition, pharmacogenomics may
allow pharmaceutical companies to include a genetic component in the design of
clinical trials so that the candidate drug is targeted to individuals with a
specific genotype. Genetic variations shown to correlate with poor efficacy
could be used as a basis for excluding non-responders from clinical trials
thereby potentially improving results and reducing the costs of clinical
trials.
SNPS IN AGRICULTURE AND LIVESTOCK
As living organisms, plants and animals are composed of cells that contain
DNA. As with humans, genetic variations in plants and animals result in
differences in species characteristics. For example, plants
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may have SNPs responsible for differences in resistance to insects and
herbicides or agricultural yields. Likewise, animals may have SNPs responsible
for traits such as variations in milk production, fat content of meat or
fertility. Plant and animal SNPs can be exploited through selective breeding
to develop plants and animals with desired quality traits.
SNP MARKET
The SNP genotyping market represents a significant portion of both the biochip
market and the DNA sequencing market. The SNP genotyping market can be divided
into three segments:
. confirmation of new sites of genetic variation in DNA, which typically
requires the analysis of a SNP in up to a hundred people;
. determination of the medical importance of SNPs, which typically requires
the analysis of a SNP in a few thousand diseased and healthy people; and
. utilization of SNPs in genomics-based drug development, disease
predisposition determination and diagnostic test development, which may
require the analysis of multiple SNPs in millions of people.
Several companies claim to have identified, in the aggregate, more than 50,000
SNPs, and The SNP Consortium, comprised of drug companies and public entities,
has announced a group effort to discover 300,000 more. If The SNP Consortium
successfully identifies 300,000 SNPs and seeks to discover the associated
disease genes, they would have to conduct a case study involving several
thousand people, which would require the analysis of hundreds of millions of
SNPs.
CURRENT GENOMICS ANALYSIS TOOLS AND LIMITATIONS
Current DNA analysis technologies have been developed primarily to conduct DNA
research including DNA sequencing and expression profiling. Presently, the two
leading methods are gel electrophoresis and hybridization.
Gel electrophoresis measures how far a DNA fragment migrates through the pores
of gels in response to an applied electrical field over a fixed time interval.
DNA can be sequenced by using enzymes to copy a DNA sequence. The enzymes
begin at a fixed point and then terminate at all positions where an A occurs.
Gel electrophoresis is then used to measure the lengths of the terminated
sequences and thereby the location of all As. When this process is repeated
three more times for C, T and G, the resulting information can be lined up to
generate a complete sequence. In order to make this method totally accurate,
the same experiment must be repeated multiple times. In a single run,
commercial DNA sequencers using this gel-based method can measure up to 600
bases with a statistically significant error-rate.
Hybridization arrays, or biochips, use single stranded DNA fragments
immobilized on a flat surface in known positions. These are powerful tools for
the analysis of gene expression, but can also be used for gene sequencing.
When used for gene sequencing, DNA fragments of varying lengths labeled with a
fluorescent tag are washed over the surface of the biochip. These DNA
fragments then specifically interact, or hybridize, with a complementary
sequence immobilized on the biochip and can be detected using a fluorescent
microscope. Because the position of the complementary sequence on the biochip
is known, the sequence of the target DNA fragment can be determined by reading
the biochip. However, because DNA fragments sometimes bind to strands that are
not fully complementary, hybridization arrays do not correctly detect all of
the sequence information in a target sample.
Gel electrophoresis and hybridization play an interim role in determining SNP
function and analysis as these methods are well accepted and established for
research applications. However, neither of these two
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methods is ideally suited to the analysis of sequence variations. In both
cases, the analytical process examines many nucleotides of a sequence even
though the target variation may occur at a single site. This increases the
cost, complexity and time involved in the analytical process. In order to be
able to measure thousands of SNPs in thousands of samples, one must focus on
the SNPs themselves with methods that are cost-effective, accurate and fully
automated.
At the site of any SNP, one must analyze simultaneously the variant inherited
from each parent. If each parent has a different SNP at the same position, the
difficulty of detecting those variations is magnified because only one-half of
the DNA from each parent is available to generate a signal. In addition, in
practice, one SNP variant may be present at a lower concentration than the
other and therefore may be undetectable or generate an ambiguous signal using
conventional methods. Using gel electrophoresis and hybridization, the
detection of these multiple SNP variants is therefore often unreliable.
To reduce costs, many users of SNP assays are trying to perform two or more
assays in a single tube and read the results simultaneously. This may involve
different SNPs in the same individual or the same SNP in different
individuals. Current gel technology limits this process to four available
dyes, and simultaneous assays involving multiple individuals are impossible on
biochips. However, biochips are theoretically capable of simultaneously
analyzing many SNPs for a single individual, but their utility is limited by
low accuracy. The large quantity of reagents and labor-intensive data
processing needed to achieve useable results are also cost limitations when
using current technologies for large-scale genotyping. Reagent costs represent
most of the sample preparation costs. Data analysis costs associated with
current gel or hybridization-based assays using fluorescent detection are
estimated to be most of the overall costs.
Errors in SNP analysis have serious consequences. In studies to correlate
identified SNPs with disease conditions, it has been estimated that to
compensate for a 1% error rate in individual measurements, the study
population would have to increase by a factor of three. This significantly
increases the cost of a SNP study. In addition, in order to accurately
identify a real SNP from a sequencing error when the sequencing error occurs
with a frequency of 1%, a suspected SNP has to be verified through repetitive
sequencing. When identifying 10,000 SNPs in an individual, 100 SNPs may be
incorrectly determined using gel electrophoresis, with no ability to determine
where the errors occurred. Therefore, the value of using gel electrophoresis
as a SNP analysis tool is dramatically reduced unless the test is repeated
several times. As a result, when genotyping SNPs on an industrial scale, a 1%
error rate becomes cost-prohibitive.
THE SEQUENOM SOLUTION--INDUSTRIAL GENOMICS
We are a pioneer in the new field of industrial genomics. To draw conclusions
from huge data sets associated with genotyping, we have developed a highly
accurate, high throughput and cost-effective technology that addresses the
demand for large-scale SNP analysis. Our MassArray system represents a novel
approach to genotyping by combining our proprietary enzymology and software
processing of biological data, or bioinformatics, in a miniaturized chip-based
format with the proven technology of mass spectrometry. The accuracy, high
throughput, miniaturization and automation to minimize labor represent major
cost savings potentials.
ACCURACY
The MassArray system analyzes molecules directly and accurately by determining
their molecular weight, an intrinsic property. Our technology eliminates the
use of labels, such as fluorescent labels, which is an indirect way of
analyzing molecules and is a common source of ambiguous results. Therefore,
because
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we capture direct information about molecules, we are able to obtain a high
level of accuracy and eliminate the need to do repetitive testing of each
sample.
THROUGHPUT
Our MassArray system can analyze a sample in three seconds, which is
significantly faster than currently available gel electrophoresis and
hybridization processes. These processes can require minutes to hours to
analyze a sample. In addition, our system eliminates the need for repetitive
testing of every sample, thereby increasing throughput, or the number of
different samples that can be analyzed in a given time period. Throughput
using the MassArray system can be further enhanced by full automation and also
by running more than one experiment simultaneously.
FLEXIBILITY
MassArray can be rapidly reconfigured for new analyses. A test to analyze a
newly discovered SNP can be designed in several days. In addition to SNPs,
simple sequence repeats, short DNA sequencing reads, and the analysis of
proteins and metabolites can all be carried out using the same MassArray
technology.
COST
Our MassArray system significantly reduces the costs associated with SNP
analysis by reducing reaction volume and reagent requirements, enhancing data
processing and eliminating repetitive testing of every sample to verify
results. Our proprietary SpectroCHIP is capable of working with nanoliters,
which is one thousandth of the sample volume generally used with other
technologies. This ability to miniaturize the sample volume significantly
reduces reagent costs. Our proprietary bioinformatics reduce expensive data
interpretation time and labor by rendering raw data points directly
interpretable without extensive data processing and allowing for significant
data compression.
SEQUENOM STRATEGY
Our goal is to become the leader in the emerging markets of industrial
genomics and diagnostics by making our MassArray system the market standard
for industrial scale SNP analysis. Our strategy is to capitalize on the
quickly emerging demand for genotyping in the areas of drug target discovery,
drug development, DNA diagnostics, patient stratification by genetic traits,
clinical trials, seed development and livestock breeding. Key elements of our
strategy consist of the following:
DEVELOP RECURRING REVENUE STREAM THROUGH DISPOSABLE PRODUCT SALES
We seek to establish an installed base of instruments that require the use of
various disposables, including our BiomassPROBE kits and single-use
SpectroCHIPs. As our installed base of MassArray systems grows, we expect the
majority of our ongoing revenue stream will consist of sales of these
disposables.
FOCUS ON KEY ACCOUNTS AND PRODUCT AREAS
We are seeking to penetrate the genotyping market by establishing commercial
relationships with opinion leaders and identifying areas of potential
widespread interest. We have initiated this effort by selecting highly visible
academic, government and commercial centers to validate our MassArray system
in beta site testing. In addition, we intend to develop proprietary disposable
assays and software products that are useful for popular areas of scientific
investigation--first as research tools to confirm the association of
particular SNPs with particular diseases and subsequently as diagnostic kits
that can be sold for basic SNP profiling.
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RETAIN COMMERCIAL RIGHTS
We will seek to retain commercial rights to tests that we develop on behalf of
or together with third parties in exchange for providing our assay development
capacity and expertise. By obtaining commercial rights to assays that we
initially develop for key accounts, we will seek to develop a broad product
offering that will appeal to a large group of potential customers. We intend
to identify in collaboration with these customers SNP sets for which genetic
function has been determined and validated to enable the multi-dimensional
understanding of the medical and environmental components of disease. Together
with our customers, we intend to develop knowledge-based genomic products that
combine pharmaceutical, medical and genetic information, such as validated SNP
sets for specific diseases.
ADDRESS MULTIPLE MARKET SEGMENTS
We are introducing our technology into existing markets that have an immediate
need for SNP validation and high throughput genotyping. We will seek to expand
our marketing efforts as additional SNP analysis becomes necessary for genomic
drug development, clinical DNA diagnostics, pharmacogenomics and agricultural
genomics.
EXPAND APPLICATIONS FOR MASSARRAY TECHNOLOGY
Because molecular weight is an intrinsic property of all molecules, our
MassArray technology can serve as a platform for the analysis of many
biomolecules, such as proteins, carbohydrates and metabolites. This leads to
the understanding of the multidimensional aspects of genetic diversity,
including how DNA, RNA, proteins and resulting metabolites contribute to
traits, such as drug response and disease susceptibility. We intend to use
this flexibility to develop new products for applications in areas other than
DNA and SNP analysis.
MASSARRAY TECHNOLOGY
The starting point for SNP analysis using the MassArray system is genomic DNA
that is easily accessed in a sample of biological material such as blood. A
small amount of blood provides sufficient material to allow tens of thousands
of SNPs to be analyzed in one individual. DNA is prepared by standard
procedures that break open the blood cells, release the DNA and discard other
material. Next, specific DNA regions, about 200 base pairs in length, are
amplified by enzymatic reactions into multiple copies to produce more
concentrated samples for easier analysis. The amplified fragments are then
attached by one strand to a solid surface and the non-immobilized strands are
removed by standard denaturation conditions. The immobilized single strand
then serves as a template for additional automated enzymatic reactions that
produce the analytical samples. The products of these reactions are removed
from the solid surface prior to mass spectrometry. All these steps are
performed in the same reaction tube lending the entire process to full
automation. Very small quantities of the products, typically five to ten
nanoliters, are transferred with the SpectroJET nanoliter dispensing system
onto the SpectroCHIP for subsequent automatic analysis with the SpectroSCAN
mass spectrometer. Because the four different text letters have different
weights, measuring the weights reveals the identity of the letters. The
Genolyzer software then calculates, records, compares and reports the
genotypes at the rate of three seconds per sample.
Our fundamental proprietary technology is based on the integration of four
components:
. mass spectrometry;
. chips as miniaturized launching pads;
. MassArray applications and assays; and
. bioinformatics.
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MASS SPECTROMETRY
Our MassArray system has enabled the use of mass spectrometry for high
throughput automated SNP analysis. Using mass spectrometry to measure
relatively small molecules is a proven technology because it directly and
accurately determines molecular weight. While mass spectrometry has existed in
many variations for several decades, it could not be used for larger
biomolecules because they were fragmented during the process and therefore
could not be measured as whole molecules.
Our MassArray system uses technology called MALDI-TOF, or Matrix-Assisted-
Laser-Desorption/ Ionization-Time-of-Flight, mass spectrometry. Through the
combination of MALDI-TOF and our proprietary SpectroCHIP and enzymology, we
are now capable of effectively analyzing biomolecules in an automated mode. In
the MALDI-TOF process, the target molecules are mixed with light-absorbing
molecules to form a crystalline matrix on the surface of our SpectroCHIP. In a
process known as desorption, this matrix is hit with a pulse of laser beam.
The laser energy vaporizes the matrix molecules that then carry the target
molecules aloft. During the process, some of the molecules acquire a charge,
or become ionized. Next an electrical field pulse launches the charged
molecules down a flight tube toward a detector. The time between the
electrical field pulse and collision with the detector is measured, and is
referred to as time-of-flight. Time-of-flight is directly correlated to
molecular weight because large molecules fly slower than small molecules. All
the steps in the MALDI-TOF process are accomplished in less than a thousandth
of a second.
CHIPS AS MINIATURIZED LAUNCHING PADS
SpectroCHIPs are flat silicon wafers with an array of 96 small, evenly spaced
water-attracting spots surrounded by water-repelling surface areas. Because
biomolecules are water soluble, they migrate to the water-attracting spots.
These spots are treated with the light-absorbing matrix that makes the mass
spectrometry of biomolecules possible. As such, our proprietary SpectroCHIPs
serve as a launching pad for vaporizing a variety of biomolecules
appropriately prepared for use with the MassArray system. In addition, the
SpectroCHIPs are essential for the miniaturization and automation of the
MALDI-TOF process. A SpectroCHIP's high precision surface structure allows
very small samples to be accurately positioned and distributed uniformly into
an array format which serves as an effective launching pad for the automated
MALDI-TOF process.
The DNA samples are transferred from a microtiter plate to the spots on the
chip using our SpectroJET nanoliter dispensing unit. Ten chips then can be
positioned on a cartridge and transferred to the SpectroSCAN array reading
mass spectrometer. The mass spectrometer utilizes our proprietary Genolyzer
software and sequentially scans the positions on the array in a fully
automated mode, completing each scan within three seconds. This proprietary
technology to shrink the scale of samples from microliter to nanoliter volumes
is the key element for highly accurate and automatic data acquisition.
ASSAYS AND ENZYMATIC REACTIONS
A key element of the MassArray system is the BioMASS assay. An assay is a test
that provides analytical information about a reaction of interest, such as the
weight of a biomolecule. In order to use our MassArray system, the user must
prepare the sample using the BioMASS assay. The central components of any
BioMASS assay are ingredients such as beads for immobilization and buffer
solutions for conditioning the sample necessary for mass spectrometry
analysis. Every SNP analysis using our MassArray system requires the use of a
BioMASS assay. Prior to the BioMASS assay, DNA must be extracted from cells
and a specific segment must be amplified using commercially available kits.
The BioMASS assay includes all of the ingredients required to prepare a DNA
fragment for SNP analysis, except the enzymes and nucleotide building blocks
which are necessary for the primer extension reaction. The primer extension
reaction known as a BiomassPROBE assay is the step where a known sequence of
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DNA, known as a primer, binds to a specific region of DNA in which a SNP is
located. Users of the MassArray system can prepare their own primer extension
reaction, or we can collaborate with customers to develop a customized primer
extension reaction by way of assay design. When we develop primer extension
reactions for the analysis of specific SNPs, customers can purchase a specific
BiomassPROBE assay from us that contains the customized primer extension
reaction for the SNP of interest. We currently offer a generic BiomassPROBE
assay kit and are collaborating with our beta site and pre-launch users on a
variety of SNP-specific BiomassPROBE assays. In the future, we intend to
develop chips that allow the performance of BiomassPROBE reactions in a
miniaturized format on the surface of the chip.
BIOINFORMATICS
The Genolyzer software calculates, records, compares and reports the genotypes
at the rate of three seconds per sample. It includes advanced digital signal
processing, data compression and interpretation to achieve full automation of
the analysis and archiving of molecular weight signals as SNP genotypes. This
software distinguishes between signal and noise, identifies patterns that
correspond to assays and interprets the signals as SNP genotypes without
labor-intensive data processing.
PRODUCTS
We have developed a suite of products that we collectively call the MassArray
system. The MassArray system consists of the SpectroSCAN array-scanning mass
spectrometer, SpectroJET nanoliter-dispensing unit, a MassArray kit and the
Genolyzer MassArray workstation. The MassArray kit contains the BiomassPROBE
assay including the SpectroCHIP, buffer solutions and enzymes. The hardware
components, including the mass spectrometer and the dispensing unit, are off-
the-shelf instruments modified to run our MassArray technology.
We are currently in beta site testing of our system for high throughput,
highly accurate SNP analysis. We commenced a commercial launch during the
fourth quarter of 1999. To date, our MassArray system has been installed at
six sites, all of which are beta testing our product. Current sites include
Genzyme, USDA, National Institutes of Health and National Cancer Institute in
the United States and University of Munster and GLE Medicon in Germany.
MASSARRAY SYSTEM
Our MassArray system consists of hardware, software and disposable components:
HARDWARE COMPONENTS
The MassArray system is a series of integrated hardware components that
processes prepared DNA samples for SNP reading and analysis. The 96-well
microtiter plates contain prepared samples of extended DNA fragments. Samples
from each well are then transferred by the dispensing unit onto an array of
individual water-attracting spots that are located on the surface of the
SpectroCHIPs. The SpectroCHIPs are then run through the mass spectrometer for
SNP reading and analysis.
Sample preparation system and automation
The MassArray system has been designed to be either partially automated using
a customized 96-channel microliter dispenser or fully automated with the
addition of our automated process line for users with industrial-scale
throughput needs. Our process line links several liquid-handling modules using
a robot to fully automate the DNA sample preparation process including
amplification, enzymatic extension and conditioning for SNP analysis. The
process line has been designed for a capacity of up to 100-microtiter plates
per 24 hours.
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SpectroJET nanoliter-dispensing unit
The SpectroJET nanoliter-dispensing unit is a liquid-handling module that
transfers samples from microtiter plates to the SpectroCHIP. The SpectroJET
dispenses nanoliter volumes of DNA samples onto precise locations on the
SpectroCHIP's surface.
The reading system
The SpectroSCAN array mass spectrometer is the analytical component of the
MassArray system adapted specifically for the analysis of our SpectroCHIPs. We
have adapted the mass spectrometer to analyze interchangeable cartridges
holding 10 SpectroCHIPs in the SpectroSCAN. This dramatically improves the
automation and throughput of our MassArray system because all the positions on
the 10 chips can be analyzed in a single, automated, unattended run. The
SpectroSCAN separates, detects and characterizes the SNPs according to their
different molecular weights.
SOFTWARE COMPONENT
Interpretation software
Our suite of software products, called the MassArray Genolyzer, incorporates
proprietary modules for molecular weight recognition and data compression and
interpretation. The software correlates a reading from the SpectroSCAN with a
genotype in the SNP sample. The MassArray technology allows the Genolyzer
software to interpret raw data without extensive processing. This reduces the
amount of time and computer resources necessary and increases the reliability
for SNP analysis. The MassArray Genolyzer runs on Windows NT and uses an
Oracle database.
DISPOSABLE COMPONENTS
The SpectroCHIP
The key component of our MassArray system is our SpectroCHIP, a small,
approximately 2x3 cm, silicon chip. The SpectroCHIP allows for reliable and
automated scanning of samples of the array and substantially increases the
capacity of MALDI-TOF mass spectrometry. Additional throughput can be obtained
by simultaneously preparing DNA fragments for multiple SNP analysis, a process
referred to as multiplexing. Samples are placed on the surface of the
SpectroCHIP using our SpectroJET nanoliter- dispenser. SpectroCHIPs are
designed for single-use only and we expect their consumption to generate a
recurring revenue stream.
MassArray kit
The MassArray kit consists of a BiomassPROBE assay including the SpectroCHIP,
buffer solutions and enzymes. Each kit can be used to read and analyze 10
SpectroCHIPs for a total of 960 reactions. We have in-house expertise to
design specific assays in collaboration with our customers that deliver highly
accurate results. In addition, our assays serve a wide range of applications
and can be designed for simultaneous analyses.
POPULATION-BASED DNA BANK
We have established a population-based DNA bank as a value-added universal
reference tool for demonstrating the medical importance of genetic variances
potentially involved in the development of diseases. We intend to sell access
or license subscriptions to this resource to pharmaceutical and genomics
companies to validate the existence of potential SNPs. Our bank complements
the patient-based DNA banks collected by these potential customers, which are
typically disease specific. We believe the data sets derived will represent
essential tools for decision making in genomic drug development and the
interpretation of diagnostic and genetic profiling results.
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Our DNA bank currently consists of approximately 7,000 individual samples
collected from the North American continent. These samples were collected
using stringent criteria and are sorted by age, sex and ethnicity. We have the
capacity to increase the size of our bank to include tens of thousands of
samples.
FUTURE PRODUCT DEVELOPMENT
Our product development efforts will seek to provide value-added applications
for a broader customer base and advanced MassArray systems that offer reduced
cost and higher throughput.
384 SPECTROCHIP
We intend to introduce a SpectroCHIP with 384 sample spots on the chip
surface. The size of the silicon chip will remain the same. This chip may
significantly increase sample throughput and reduce reagent consumption per
sample.
FUTURE-GENERATION FUNCTIONALIZED SPECTROCHIP
We intend to further miniaturize by moving some of the DNA sample preparation
steps onto the chip surface. With the functionalized SpectroCHIP, the
enzymatic reactions will take place on the surface of the chip thereby
eliminating the need for the microtiter plate, providing a significant
reduction in reaction volumes.
THE MASSARRAY INTEGRATED SYSTEM AND BIOINFORMATICS
The implementation of the functionalized chip should allow us to integrate all
steps of the DNA analysis process, including sample preparation, into one
automated system. We intend for the MassArray integrated system and
bioinformatics to be compatible with all leading commercial and public domain
genetic database formats so customers will be able to integrate the MassArray
system seamlessly into whichever downstream analytical processes they prefer.
FUTURE APPLICATIONS
Our MassArray system is not restricted to DNA analysis. It can analyze a broad
range of molecules of medical and biological importance, such as proteins,
carbohydrates and metabolites. We intend to make enhancements to our MassArray
system for the analysis of additional medically relevant biomolecules.
COMMERCIAL LAUNCH PLAN
We are a development stage company. To date, we have received no revenue from
our commercial operations.
PRE-LAUNCH AND BETA TESTING PROGRAM
In July 1999 we started the implementation of our pre-launch and beta testing
program with the placement of six MassArray systems. All six of our pre-launch
sites are part of our beta testing program. Our beta test program agreements
generally include a time period of 6 to 18 months in which the users receive a
MassArray system, SpectroCHIPs and site support free of charge. In exchange
for their participation in the program, the user must provide us with
information regarding system performance and assay results. One of our beta
test site customers has agreed to purchase our MassArray system. In addition,
some of our agreements require the user to make one or more payments during
the beta test period. Amounts received under these arrangements are recorded
as customer advances and total $100,000 as of September 30, 1999. Costs
related to these arrangements totaled approximately $700,000 through December
31, 1999, and are not expected to exceed $3 million for the remaining term of
the arrangements. We believe these arrangements have the following value:
. customer feedback has enabled us to enhance our products;
. our association with these beta sites is expected to provide validation
of our system since these collaborators are highly visible; and
. we will eventually derive revenue if the customers accept our products.
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Product design, which includes feedback from our customers, has progressed to
a stage where we are able to commercially launch our product. The pre-launch
users were selected based on the following criteria:
. those entities within the genomic community with high visibility, proven
expertise and which generally adopt new technologies before others;
. coverage of diverse programs in basic genomic research, agricultural
genomics, human DNA diagnostics and genomic drug discovery and development;
. substantial genotyping demands in terms of both sample volumes and
number/complexity of assays to be designed;
. willingness and ability to provide beta testing feedback; and
. potential for conversion into a commercial customer.
We have placed MassArray systems with:
. United States Department of Agriculture Meat Animal Research Center;
. Genzyme Corporation;
. National Cancer Institute;
. National Institutes of Health--Centers for Disease Control and Prevention;
. University of Munster, Institute for Clinical Chemistry and Laboratory
Medicine; and
. GLE Medicon GmbH, Hamburg.
KEY ACCOUNT PRODUCT LAUNCH
We commercially launched the MassArray system through a key account strategy
during the fourth quarter of 1999. We have initiated this effort by selecting
highly visible academic, government and commercial centers to validate our
MassArray system in beta site testing. We intend to focus on these users in
order to establish our MassArray system as the method of choice in SNP
analysis.
SALES AND MARKETING
Our sales strategy is to initially place systems and then promote ongoing
disposables and assay sales and system upgrades. The initial placement is
executed by a business development team with expertise in the pharmaceutical
industry, drug development and contract marketing. Identification and active
development of lead customer contacts is based on a thorough knowledge of the
marketplace and supported by highly visible scientists employed by or
associated with us. The sales and marketing team, which has core competencies
in molecular biology, biochemistry, microfluidics and mass spectrometry,
focuses on ongoing disposables and new product sales. These teams collectively
consist of 12 people and are based out of our San Diego, Boston and Hamburg
offices. We expect to add additional business development and sales and
marketing team members to commercialize our MassArray system.
All our facilities have MassArray systems available for demonstration and
customer training purposes. Fully automated high throughput process lines have
been installed in San Diego and Hamburg for large-scale assay design projects
and high value marker function programs.
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OPERATIONS
We manufacture SpectroCHIPs, required reagents and Genolyzer software at our
San Diego facility. Total current capacity of this facility is estimated at
100,000 SpectroCHIPs a year with the ability to double our manufacturing
capacity at the existing facility.
The manufacturing area is designed to optimize material flow and personnel
movement with all the manufacturing and quality control operations located in
one area. Critical components are produced in an environmentally controlled
clean room and isolated from the rest of the facility in compliance with
quality system requirements, or QSRs, and ISO 9001 registration standards.
Access and safety features are designed to meet federal, state and local
health ordinances.
We have established some and intend to develop additional alternate/multiple
sources of system components other than those produced in-house. Current major
equipment suppliers are Bruker Datonik GmbH and PE Biosystems for mass
spectrometers, GeSIM GmbH for the nanoliter-dispensing unit, Beckman
Instruments, Inc. for the 96-channel dispenser, and Robocon Incorporated for
the robotic components of the automated process line.
We utilize a company-wide enterprise resource planning system to manage and
control our material and product inventories. This system encompasses product
costing, materials procurement, production planning and scheduling, inventory
tracking and control, product engineering and configuration control, with
links to document control for all manufacturing, quality control, quality
assurance and regulatory compliance procedures.
INTELLECTUAL PROPERTY
To establish and protect our proprietary technologies and products, we rely on
a combination of patent, copyright, trademark and trade secret laws, as well
as confidentiality provisions in our contracts.
We have implemented an aggressive patent strategy designed to provide us with
freedom to operate and facilitate commercialization of our current and future
products. Focusing on a global economy, our patent portfolio reflects our
transatlantic nature and includes 47 pending patent applications in the United
States and corresponding international and foreign filings in major industrial
nations. We currently own nine and license five issued patents in the United
States and have received notices of allowances for five additional patent
applications. We also own two foreign issued patents.
Our patent strategy uniquely positions us by providing patent protection for
systems and technology that allows the direct detection of biomolecules
without labels using mass spectrometry in a manner amenable to high throughput
genotyping.
The issued, allowed and pending patents distinguish us from competitors by
claiming proprietary methods for directly genotyping DNA and other
biomolecules by measuring the mass of the molecules without requiring labels
for detection. Claims to these novel methods include protection for carrying
out biopolymer purification and diagnostic methods in solution or directly by
immobilization on solid supports such as beads or chip surfaces. These methods
also allow multiplexing or analysis of more than one sample both in a single
reaction and as arrays of compounds allowing the system to be easily amenable
to high throughput genotyping. Industrial genomics is possible because mass
spectrometric analysis can be miniaturized and therefore automated. We have
extensive patent protection for novel nanoliter liquid dispensing systems and
pending claims to multifunctional solid surfaces containing nanoliter sized
elements including our SpectroCHIP. Generally, US patents have a term of 17
years from the date of issue for patents issued from applications filed with
the US Patent Office prior to June 8,
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1995, and 20 years from the application filing date or earlier claimed
priority date in the case of patents issued from applications filed on or
after June 8, 1995. Patents in most other countries have a term of 20 years
from the date of filing the patent application. Our issued United States
patents will expire between 2013 and 2017. Our success depends to a
significant degree upon our ability to develop proprietary products and
technologies. We intend to continue to file patent applications as we develop
new products and technologies.
Patents provide some degree of protection for our intellectual property.
However, the assertion of patent protection involves complex legal and factual
determinations and is therefore uncertain. In addition, the laws governing
patentability and the scope of patent coverage continue to evolve,
particularly in the areas of molecular biology of interest to us. As a result,
there can be no assurance that patents will issue from any of our patent
applications or from applications licensed to us. The scope of any of our
issued patents may not be sufficiently broad to offer meaningful protection.
In addition, our issued patents or patents licensed to us may be successfully
challenged, invalidated, circumvented or unenforceable so that our patent
rights would not create an effective competitive barrier. Moreover, the laws
of some foreign countries may not protect our proprietary rights to the same
extent as do the laws of the United States and Canada. In view of these
factors, our intellectual property positions bear some degree of uncertainty.
We also rely in part on trade secret protection of our intellectual property.
We attempt to protect our trade secrets by entering into confidentiality
agreements with third parties, employees and consultants. Our employees and
consultants also sign agreements requiring that they assign to us their
interests in patents and copyrights arising from their work for us. All
employees sign an agreement not to compete unfairly with us during their
employment and upon termination of their employment, through the misuse of
confidential information, soliciting employees, soliciting customers, and the
like. However, it is possible that these agreements may be breached or
invalidated and if so, there may not be an adequate corrective remedy
available. Despite the measures we have taken to protect our intellectual
property, we cannot assure you that third parties will not breach the
confidentiality provisions in our contracts or infringe or misappropriate our
patents, copyrights, trademarks, trade secrets and other proprietary rights.
In addition, we cannot assure you that third parties will not independently
discover or invent competing technologies or reverse engineer our trade
secrets, or other technology. Therefore, the measures we are taking to protect
our proprietary rights may not be adequate.
Although we are not a party to any material legal proceedings, in the future,
third parties may file claims asserting that our technologies or products
infringe on their intellectual property. We cannot predict whether third
parties will assert such claims against us or against the licensors of
technology licensed to us, or whether those claims will harm our business. If
we are forced to defend against such claims, whether they are with or without
any merit, whether they are resolved in favor of or against us or our
licensors, we may face costly litigation and diversion of management's
attention and resources. As a result of such disputes, we may have to develop
costly non-infringing technology, or enter into licensing agreements. These
agreements, if necessary, may be unavailable on terms acceptable to us, or at
all, which could seriously harm our business or financial condition.
COLLABORATION AND LICENSE AGREEMENTS
We have a collaboration agreement with Bruker-Franzen Analytik GmbH under
which we cooperate in the manufacture, marketing and customer service of a
product designed for the exclusive processing of our SpectroCHIPs under a
joint Bruker-Franzen-Sequenom label. Under the agreement, Bruker-Franzen
designs, manufactures and supplies the product to the market. We provide
nucleic acid analysis services to customers and to corporate partners using
our MassArray system and develop, manufacture and market SpectroCHIPs for
various applications. Either party may terminate this agreement upon 12
months' notice.
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We have entered into a patent and know-how license agreement with the Trustees
of Boston University under which Boston University granted to us a worldwide
license to some of its patents as well as technical assistance, and we agreed
to make royalty payments. Boston University may license the patents to others
under specified circumstances if we fail to put the technology to commercial
use or make it available to the public. We may terminate this agreement upon
written notice to the university. In any event, this agreement will expire
when the last licensed patent expires.
We have entered into a license agreement with The Johns Hopkins University
under which the university granted to us a worldwide license to some of its
patents related to mass spectrometer instruments. Johns Hopkins also agreed to
provide related technical assistance. We agreed to pay a processing fee,
maintenance fee and to make royalty payments. Johns Hopkins reserves specified
rights to the patents in the event that we fail to put the technology to
commercial use or make it available to the public. We may terminate this
agreement upon written notice to the university. In any event, this agreement
will expire when the last licensed patent expires.
We have an original equipment manufacturer supply and license agreement with
PerSeptive Biosystems, Inc. under which we purchase Mass Spectrometry products
at a discount from PerSeptive for incorporation into our products. Our right
to resell the products under the agreement is limited in geographical scope.
In connection with this agreement, PerSeptive also granted us a right to use
the patents and other intellectual property incorporated into the products
that we purchase from PerSeptive under the agreement. The term of the
agreement is for three years after the date it was signed. However, the
agreement may be terminated earlier for reasons of default or insolvency of a
party.
We also entered into a license agreement with Prof. Dr. Franz Hillenkamp, a
member of our scientific advisory board, under which Dr. Hillenkamp granted us
licenses to specified present and future patents in exchange for royalty
payments. We agreed to refund all of Dr. Hillenkamp's expenses that he had
incurred or will incur in connection with applying for, maintaining and
defending the licensed patents. This agreement terminates at the end of the
tenth calendar year after the first calendar year for which licenses are paid.
As of December 31, 1999, we had incurred costs of approximately $1.5 million
in connection with these collaboration and license agreements. During the life
of the these agreements, we may be obligated to pay royalties ranging from 1%-
5% of the sale of the products relating to these agreements. As of September
30, 1999, we had made no commercial sales of products under these agreements.
COMPETITION
The markets for our products are very competitive, and we expect the intensity
of competition to increase. Currently, we compete primarily with other
companies performing similar tasks using alternative technologies. Many of our
competitors have greater financial, operational, sales and marketing
resources, and more experience in research and development than we have. These
competitors and other companies may have developed or could in the future
develop new technologies that compete with our products or which could render
our products obsolete.
In the SNP genotyping marketplace, MassArray competes with alternative
technology concepts which differ in the areas of sample amplification,
analysis process, sample separation or SNP detection and are all based on
indirect detection of the molecule hybridization and/or labeling. Such
technologies include:
. Gel-based fluorescent sequencing as offered by PE Corporation, Amersham
Pharmacia Biotech, Visible Genetics, Inc. and others and primarily developed
for DNA analysis, such as DNA sequencing;
. Single base primer extensions and colormetric detection offered by the
genetic bit analysis of Orchid Biocomputer Inc.;
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. Fluorescence resonance energy transfer, or FRET, offering real-time PCR-
based fluorescent detection and incorporated in PE Corporation's TaqMan
product line;
. Invader and Invader Squared SNP detection, an alternative linear
amplification technology including structure-based hybridization and enzyme
cleavage developed by Third Wave Technologies, Inc.;
. Hybridization methods, such as those used by Affymetrix, Inc., Hyseq, Inc.,
Nanogen, Inc., Protogene Laboratories Inc. and others with miniaturized chip
formats and those offered by Genometrix in microtiter plate arrays; and
. Bead-based capture technologies involving hybridization and fluorescent
detection as developed by Illumina, Inc., which uses fiber optics, or
Luminex Corporation, which uses flow cytometry.
The number of entities applying mass spectrometry in DNA analysis is
increasing continuously. PE Corporation and GeneTrace Systems Inc. have
implemented analysis concepts that involve direct analysis of enzymatically-
generated nucleic acid fragments by MALDI-TOF. Rapigene Inc. and Genetrace
Systems Inc. use a mass spectrometry approach that incorporates mass labels
and therefore is an indirect analysis of the molecule.
GOVERNMENT REGULATION
We are not subject to direct governmental regulation other than the laws and
regulations generally applicable to businesses in the jurisdictions in which
we operate.
SCIENTIFIC ADVISORY BOARD
We have established a scientific advisory board made up of leading scholars in
the field of mass spectrometry, molecular medicine, proteonomics and molecular
microbiology. Members of our scientific advisory board consult with us on
matters relating to the development of our products described elsewhere in
this prospectus. Members of our Scientific Advisory Board are reimbursed for
the reasonable expenses of attending meetings of the scientific advisory
board. Some of the members may also receive options to purchase shares of our
common stock. The members of the scientific advisory board are as follows:
<TABLE>
<CAPTION>
ADVISOR INSTITUTION
- -----------------------------------------------------------------------------
<S> <C>
Charles R. Cantor, PhD, Chairman Sequenom, Inc.
Robert Cotter, PhD Johns Hopkins University School of Medicine
Catherine Fenselau, PhD University of Maryland
Ulf Goebel, PhD Charite University Clinic, Berlin, Germany
Franz Hillenkamp, PhD University of Munster, Germany
Ulf Landegren, PhD Uppsala University, Sweden
Peter Roepstorff, PhD University of Odense, Denmark
</TABLE>
EMPLOYEES
As of December 31, 1999, we employed 103 persons, of whom 31 hold PhD or MD
degrees and 18 hold other advanced degrees. Approximately 55 employees are
engaged in research and development, 13 in business development, sales and
marketing, 10 in manufacturing and 25 in intellectual property, finance and
other administrative functions. Our success will depend in large part upon our
ability to attract and retain employees. We face competition in this regard
from other companies, research and academic institutions, government entities
and other organizations. We believe that we maintain good relations with our
employees.
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FACILITIES
We currently lease an approximately 31,000 square foot facility in San Diego,
California for our headquarters and as the base for marketing and product
support operations, research and development and manufacturing activities.
Under this lease we will add approximately 14,000 square feet through fiscal
2001. We will need to make improvements to the additional space to make it
suitable for our needs. The lease expires in September 2004. We also lease an
approximately 3,000 square foot facility in Sudbury, Massachusetts for product
and customer support. In addition, we lease an approximately 15,000 square
foot facility in Hamburg, Germany to support sales and distribution in Europe.
Under the terms of these leases, we presently pay rent of approximately
$53,000 per month. We believe that our current facilities will be adequate to
meet our near-term space requirements. We also believe that suitable
additional space will be available to us, when needed, on commercially
reasonable terms.
ORGANIZATION
We were incorporated in the state of Delaware in 1994.
LEGAL PROCEEDINGS
We are not currently a party to any material legal proceedings.
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Management
EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
Set forth below is the name, age, position and a brief account of the business
experience of each of our executive officers, directors and key employees.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Executive Officers & Directors
Hubert Koster, PhD............... 59 President, Chief Executive Officer and Director
Charles R. Cantor, PhD........... 57 Chief Scientific Officer
Stephen L. Zaniboni.............. 42 Senior Vice President and Chief Financial Officer
Antonius Schuh, PhD.............. 36 Executive Vice President, Business Development
and Marketing
Delbert F. Foit, Jr. ............ 53 Chief Operating Officer
Andreas Braun, PhD, MD........... 43 Chief Medical Officer
Karsten Schmidt, PhD............. 38 Managing Director, Sequenom GmbH
Helmut Schuhsler, PhD(1)......... 40 Chairman of the Board of Directors
Ernst-Gunter Afting, PhD, MD(2).. 57 Director
John E. Lucas(1)(2).............. 68 Director
Peter Reinisch, PhD.............. 59 Director
Key Employees
Charles P. Rodi, PhD............. 47 Vice President, Molecular Biology
Paul J. Heaney, PhD.............. 40 Vice President, Advanced Systems
</TABLE>
- --------
(1) Member of the compensation committee.
(2) Member of the audit committee.
Hubert Koster, PhD Dr. Koster is our founder, President, Chief Executive
Officer and a member of our board of directors and our scientific advisory
board. In 1978, Dr. Koster was appointed tenured professor of organic
chemistry and biochemistry at Hamburg University. Dr. Koster founded
Biosyntech, GmbH, the first biotech company in Germany in 1981 and served on
its board of directors and scientific advisory board. In 1987, he co-founded
MilliGen/Biosearch, the biotech division of Millipore Corporation in Bedford,
MA, and served as Vice President of Science and Technology. Dr. Koster
currently holds more than 20 patents and authored more than 110 publications
prior to founding Sequenom in 1994. Dr. Koster studied chemistry at Hamburg
University, completed doctoral research at the Max Planck Institute for
Experimental Medicine in Gottingen, and completed post-doctoral research work
at the Max Planck Institute for Virus Research in Tubingen.
Charles R. Cantor, PhD Dr. Cantor joined us as our Chief Scientific Officer
and Chairman of our scientific advisory board in August 1998. From 1992 until
joining us, Dr. Cantor served as the chair of, and as a professor in the
department of biomedical engineering and biophysics, and Director of the
Center for Advanced Biotechnology at Boston University. Prior to that time,
Dr. Cantor held positions at Columbia University and the University of
California, Berkeley. He was also Director of the Human Genome Center of the
Department of Energy at Lawrence Berkeley Laboratory. Dr. Cantor published the
first textbook on genomics: The Science and Technology of the Human Genome
Project and remains active in the Human Genome Project through his membership
in a number of the project's advisory committees and review boards. He is a
scientific advisor to 16 biotech and life science companies and
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two venture capital firms. He is also a member of the National Academy of
Sciences. Dr. Cantor earned his PhD from the University of California,
Berkeley.
Stephen L. Zaniboni Mr. Zaniboni joined us as our Chief Financial Officer in
April 1997. From 1994 until joining us, Mr. Zaniboni served as Vice President,
Finance for Aspect Medical Systems, Inc. Prior to joining Aspect, Mr. Zaniboni
was Corporate Controller for Behring Diagnostics from 1988 to 1994 where he
implemented financial systems during a dramatic growth period. Before joining
Behring, he held various financial management positions at Boston Scientific
Corp. Mr. Zaniboni began his career with Arthur Andersen & Co. He earned his
MBA from Boston College and he is a Certified Public Accountant.
Antonius Schuh, PhD Dr. Schuh joined our German subsidiary as Managing
Director in December 1996 and was promoted to Executive Vice President,
Business Development and Marketing, in 1998 when he moved to our headquarters
in San Diego, California. From 1993 until joining us, Dr. Schuh was with Helm
AG, an international pharma/chemical trading and distribution corporation.
While at Helm AG, he established and headed the Pharma Business Development
Group and the associated technical and regulatory affairs department. Prior to
that, from 1992 to 1993, he was with Fisons Pharmaceuticals. Dr. Schuh is a
co-founder of BIOND, Heidelberg, a board member of Austrian Orphan
Pharmaceuticals AG, Vienna, and an advisor to Juelich Enzyme Products,
Juelich, Federal Republic Germany. Dr. Schuh earned his PhD in pharmaceutical
chemistry from the University of Bonn, in Germany.
Delbert F. Foit, Jr. Mr. Foit joined us as our Chief Operating Officer in
March 1999. From 1996 until joining us, Mr. Foit served as Vice President of
North American Operations for the Laboratory Systems Division of Boehringer
Mannheim Inc. He also served in various other positions, beginning in 1992,
where he implemented a number of successful productivity initiatives first
with Microgenics then with Boehringer Mannheim's North American Laboratory
Systems. After the acquisition of Boehringer Mannheim by Hoffmann-La Roche,
Mr. Foit assumed overall responsibility for the combined Laboratory Systems
Operations of Roche and Boehringer in North America. Prior to his tenure with
Boehringer, Mr. Foit held positions as Director of Operations and Director of
Manufacturing for Ortho Diagnostics Systems, a Johnson and Johnson Company.
Mr. Foit earned his MBA from Rider University.
Andreas Braun, PhD, MD Dr. Braun joined us in 1995 and was promoted from Vice
President, Genomics to Chief Medical Officer in September 1999. From 1992
until joining us, Dr. Braun served as Deputy Head of the Clinical Laboratory
at the Childrens Hospital, University of Munich. Dr. Braun has published more
than 45 peer-reviewed scientific publications. His research work in functional
pharmacogenomics targeting the human bradykin receptor was recognized in 1996
with the Garbor Szasz Award which was granted by the German Society of
Clinical Chemistry. Dr. Braun earned doctorate degrees in biology and medical
science from the University of Munich.
Karsten Schmidt, PhD Dr. Schmidt joined our German subsidiary as Director,
Business Development in January 1999 and was appointed as Managing Director in
May of 1999. From 1996 until joining us, Dr. Schmidt served in a senior
management position at Rhone-Poulenc Rorer, Germany, where he was responsible
for all drug regulatory affairs for asthma and allergies. From 1994 to 1996,
Mr. Schmidt served as a manager in charge of regulatory affairs, for Fisons
Araneimittel, GmbH. As a member of the International Pharmaceutical Aerosol
Consortium, Dr. Schmidt was involved in the joint activities of five prominent
pharmaceutical companies in this field to develop inhaled asthma therapies
with ozone-friendly propellants. Dr. Schmidt is a trained pharmacist and has a
broad scientific background in biochemistry and molecular biology. Dr. Schmidt
earned his PhD in pharmaceutical biology from the University in Bonn.
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Helmut Schuhsler, PhD Dr. Schuhsler joined us as the Chairman of our Board of
Directors in 1996. Since 1998, Dr. Schuhsler has served as a managing partner
at TVM Techno Venture Management, a German and US venture capital firm. He has
been with TVM since 1990 and has been responsible for over 25 healthcare
investments of the firm. He is currently a Director of several biotechnology
and instrumentation companies. Dr. Schuhsler earned a PhD in the Social and
Economic Sciences from the University of Economics in Vienna.
Ernst-Gunter Afting, PhD, MD Dr. Afting joined us as a Director in 1996. Since
1995, Dr. Afting has served as the Managing Director of Gesellschaft fur
Strahlenforschung, one of the largest German research organizations. From 1993
to 1995, he served as President and Chief Executive Officer of Roussel UCLAF,
Paris. He also headed the pharmaceutical division of Hoechst Group and was
Chairman of the Divisional Pharma Board of Hoechst. Dr. Afting earned a PhD
and an MD in Chemistry from the University of Freiburg/Breisgau.
John E. Lucas Mr. Lucas joined us as a Director in 1998. Mr. Lucas currently
serves as a management consultant to six biomedical companies. From 1994 to
1996, he was Founder, President and CEO of American Scientific Resources,
Ltd., a manufacturer of blood testing materials. From 1991 to 1994, he held
the positions of President, CEO and Chairman at Oxigene, Inc. and held similar
positions from 1974 to 1991 at Luconex, Mast ImmunoSystems, Xoma, Millipore
Ventures, Chemetrics and Oxford Laboratories. Mr. Lucas serves as a Director
of InSite Vision Incorporated. Mr. Lucas earned an MBA from Harvard
University.
Peter Reinisch, PhD Dr. Reinisch joined us as a Director in 1998. Dr. Reinisch
has served as an advisor to the general partners of Global Life Sciences LP
located in Guernsey, Channel Islands, a position he has held since 1996. Dr.
Reinisch is on the board of directors or has board visitation rights for eight
companies. From 1994 to 1998, he advised companies in the Corange Group and
played a key role in the co-establishment of Global Life Sciences LP. Prior to
that time, Dr. Reinisch held various senior management positions with
Corange/Boehringer Mannheim primarily in the area of business development of
the Diagnostics division. Dr. Reinisch earned a PhD in Business Administration
from the Technical University of Vienna.
Charles P. Rodi, PhD Dr. Rodi joined us as our Vice President, Molecular
Biology in May 1999. From 1998 until joining us, Dr. Rodi was Director of the
Genome Sequencing Center at Monsanto Company. He began at Monsanto in 1984
where he was involved in exploiting and developing molecular biological
technologies such as plasmid and library construction, expression profiling
and SNP discovery. Dr. Rodi earned his PhD in Cellular and Developmental
Biology from the University of Minnesota and pursued postdoctoral research on
molecular virology at the National Institutes of Health.
Paul J. Heaney, PhD Dr. Heaney joined us as our Vice President, Advanced
Systems in May 1999. From 1997 until joining us, Dr. Heaney served as Senior
Director of New Technologies and Applications at Orchid Biocomputer. From 1995
to 1997, he was Head of Bioelectronics at the Sarnoff Corporation in
Princeton, New Jersey, where he developed microfabricated fluidic systems for
combinatorial chemistry and DNA diagnostics--a core technology that led to the
formation of Orchid. Dr. Heaney was Vice President of R&D in the early days of
Genometrix and also worked at Amersham International and Kodak Clinical
Diagnostics in the United Kingdom. Dr. Heaney earned his PhD in Bio-Organic
Chemistry from University of Glasgow and was a Research Fellow at the Imperial
Cancer Research Fund in London.
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CLASSES OF THE BOARD
Our board currently has five members. Under our bylaws to be adopted upon the
closing of this offering, beginning at our next annual meeting of
stockholders, our board will be divided into three classes of directors
serving staggered three-year overlapping terms, with one class of directors to
be elected at each annual meeting of stockholders.
BOARD COMMITTEES
The audit committee of the board of directors was established in November 1999
and reviews, acts on and reports to the board of directors with respect to
various auditing and accounting matters, including the recommendation of our
auditors, the scope of the annual audits, the fees to be paid to the auditors,
the performance of our independent auditors and our accounting practices. The
members of the audit committee are Messrs. Afting and Lucas.
The compensation committee of the board of directors was established in
November 1999 and recommends, reviews and oversees the salaries, benefits and
stock plans for our employees, consultants, directors and other individuals
compensated by us. The compensation committee also administers our
compensation plans. The members of the compensation committee are
Messrs. Lucas and Schuhsler.
DIRECTOR COMPENSATION
Certain outside directors receive cash compensation. One outside director
receives $2,500 per quarter for his services as a director to the Company.
Another outside director currently receives $4,000 per month for advisory
services in connection with our initial public offering. All directors are
reimbursed for the reasonable expenses of attending the meetings of the board
of directors or committees. Under our 1999 Stock Incentive Plan, each
individual who first becomes a non-employee member of the board of directors
at any time after the completion of this offering will receive an option to
purchase 15,000 shares of our common stock on the date the individual joins
the board of directors, provided the individual has not previously been
employed by us or any parent or subsidiary corporation. In addition, on the
date of each annual stockholders meeting held after the effective date of this
offering beginning in 2000, each non-employee member of the board of directors
will automatically be granted an option to purchase 3,000 shares of common
stock, provided such individual has served as a non-employee member of the
board of directors for at least six months. For a further description of our
benefit plans, please see "Employee benefit plans."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our compensation committee currently consists of Messrs. Lucas and Schuhsler.
Neither member of the compensation committee has been an officer or employee
of ours at any time. None of our executive officers serves as a member of the
board of directors or compensation committee of any other company that has one
or more executive officers serving as a member of our board of directors or
compensation committee. Prior to the formation of the compensation committee
in November 1999, the board of directors as a whole made decisions relating to
compensation of our executive officers.
EMPLOYMENT AND SEVERANCE ARRANGEMENTS
All of our current employees have entered into agreements with us which
contain restrictions and covenants. These provisions include covenants
relating to the protection of our confidential information, the assignment of
inventions, and restrictions on competition and soliciting our clients,
employees, or independent contractors.
None of our employees is employed for a specified term, and each employee's
employment with us is subject to termination at any time by either party for
any reason, with or without cause.
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Dr. Koster's employment agreement provides for a salary of $240,000 per year,
subject to periodic increases by our board of directors at its discretion. In
connection with his employment with us, Dr. Koster was granted an option to
purchase 300,000 shares of our common stock under our 1994 and 1998 stock
plans. Dr. Koster has exercised these options. We recorded deferred
compensation as a result of a remeasurement of these options originally
granted in 1997. Dr. Koster was also reimbursed for expenses he incurred in
relocating from Hamburg, Germany to our corporate offices in San Diego,
California, in connection with his employment agreement. If Dr. Koster's
employment is terminated involuntarily or without cause, Dr. Koster will be
entitled to receive his annual salary in periodic payments, until he secures
other full-time employment with another company or until one year has elapsed
after termination, whichever is earlier.
Mr. Zaniboni's employment agreement provides for a salary of $195,000 per
year, subject to periodic increases by our board of directors at its
discretion. Mr. Zaniboni is also entitled to receive a bonus of $10,000 per
year. In connection with his employment with us, Mr. Zaniboni was granted
options to purchase 210,000 shares of our common stock under our 1994 and 1998
stock plans. Mr. Zaniboni has exercised these options. If Mr. Zaniboni's
employment is terminated involuntarily or without cause, Mr. Zaniboni will be
entitled to receive his annual salary in periodic payments, until he secures
other full-time employment with another company or until six months have
elapsed after termination, whichever is earlier.
Dr. Schuh's employment agreement provides for a salary of $195,000 per year,
subject to periodic increases by our board of directors at its discretion. Dr.
Schuh is also entitled to receive a bonus of $10,000 per year. In connection
with his employment with us, Dr. Schuh was granted options to purchase 280,000
shares of our common stock under our 1994 and 1998 stock plans. Dr. Schuh has
exercised these options. If Dr. Schuh's employment is terminated involuntarily
or without cause, Dr. Schuh will be entitled to receive his annual salary in
periodic payments, until he secures other full-time employment with another
company or until six months have elapsed after termination, whichever is
earlier.
Dr. Cantor's employment agreement provides for a salary of $180,000 per year,
subject to periodic increases by our board of directors at its discretion. Dr.
Cantor is also entitled to receive a bonus of $21,000 per year. In addition,
Dr. Cantor will be paid $30,000 in connection with his service as the Chairman
of our scientific advisory board. Moreover, we will pay for up to 12 visits
per year to Boston University that Dr. Cantor is required to make in
connection with his leave of absence from his positions at the university. In
connection with his employment with us, Dr. Cantor was granted options to
purchase 280,000 shares of our common stock under our 1994 and 1998 stock
plans. Dr. Cantor has exercised these options. If Dr. Cantor's employment is
terminated involuntarily or without cause, Dr. Cantor will be entitled to
receive his annual salary in periodic payments, until he secures other full-
time employment with another company or until six months have elapsed after
termination, whichever is earlier.
Mr. Foit's employment agreement provides for a salary of $180,000 per year,
subject to periodic increases by our board of directors at its discretion. Mr.
Foit is also entitled to receive a bonus of $10,000 per year. We also agreed
to pay reasonable expenses, up to a maximum of $50,000, associated with
Mr. Foit's relocation to our corporate offices in San Diego, California. Mr.
Foit was also granted an additional $1,000 monthly housing allowance during
his first twelve months of service with us. In connection with his employment
with us, Mr. Foit was granted options to purchase 100,000 shares of our common
stock under our 1998 Stock Option/Stock Issuance Plan. Mr. Foit has exercised
a portion of these options. If Mr. Foit's employment is terminated
involuntarily or without cause, Mr. Foit will be entitled to receive his
annual salary in periodic payments, until he secures other full-time
employment with another company or until six months have elapsed after
termination, whichever is earlier.
The compensation committee, as plan administrator of our 1999 Stock Incentive
Plan, will have the authority to grant options and to structure repurchase
rights under that plan so that the shares subject
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to those options or repurchase rights will immediately vest in connection with
a change in control of us, whether by merger, asset sale, successful tender
offer for more than 50% of the outstanding voting stock or by a change in the
majority of the board by reason of one or more contested elections for board
membership. Vesting of these options will occur either at the time of the
change in control or upon the subsequent involuntary termination of the
individual's service within a designated period not to exceed 18 months
following the change in control.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND OTHER COMPENSATION
The following table shows all compensation received during the year ended
December 31, 1999 and December 31, 1998 by our Chief Executive Officer and our
other five executive officers whose salary and bonus exceeded $100,000 in 1999
for services rendered in all capacities to us during 1999.
Other annual compensation for Dr. Koster includes, for 1998, $94,266 paid in
connection with his relocation to our corporate headquarters in San Diego from
Hamburg, Germany, $3,900 for use of a company automobile and $1,000 paid in
connection with various tax services and, for 1999, $6,923 paid in connection
with his relocation, and $5,702 for use of a company automobile. Other annual
compensation for Mr. Zaniboni includes, for 1998, $12,098 paid in connection
with his relocation to San Diego, California and $1,275 paid for various tax
services and, for 1999, amounts paid for various tax services. Other annual
compensation for Dr. Shuh and Andreas Braun for both years reflects the amount
paid for various tax services. Other annual compensation for Dr. Cantor during
1999 represents payment for his services as chief of our scientific advisory
board. Other annual compensation for Mr. Foit represents the amount paid in
connection with his relocation to our corporate headquarters in San Diego.
Other annual compensation for all officers listed represents income from the
exercise of non-qualified stock options.
SUMMARY COMPENSATION
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<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hubert Koster........... 1998 $252,000 $10,000 $99,166 255,000 --
President and 1999 $279,334 $10,000 $12,625 155,000 450,688
Chief Executive Officer
Stephen L. Zaniboni..... 1998 132,500 10,000 13,373 140,000 --
Senior Vice President
and 1999 185,208 10,000 1,650 50,000 17,084
Financial Officer
Antonius Schuh.......... 1998 150,426 10,000 -- 130,000 --
Executive Vice
President, 1999 187,223 10,000 750 50,000 23,126
Business Development
and
Marketing
Charles R. Cantor....... 1999 180,000 21,000 30,000 100,000 207,200
Chief Scientific
Officer
Andreas Braun........... 1998 136,000 10,000 350 50,000 --
Chief Medical Officer 1999 145,917 10,000 1,150 130,000 --
Delbert F. Foit, Jr. ... 1999 126,000 7,432 10,460 100,000 --
(from April 1, 1999)
Chief Operating Officer
</TABLE>
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OPTIONS
The following table shows information regarding options granted to the
executive officers listed in the summary compensation table above during the
fiscal years ended December 31, 1998 and 1999. We have not granted any stock
appreciation rights.
Each option represents the right to purchase one share of our common stock.
The options generally become vested over four years. To the extent not already
vested, some of these options may also accelerate and become exercisable in
the event of a merger in which we are not the surviving corporation or upon
the sale of substantially all of our assets. Please see "Management--Employee
benefit plans" for more details regarding these options. In the years ended
December 31, 1998 and 1999, we granted options to purchase an aggregate of 1.3
million and 1.1 million shares of common stock, respectively, to various
officers, employees, directors and consultants.
The potential realizable value at assumed annual rates of stock price
appreciation for the option term represents hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. The 5% and 10% assumed annual rates of compounded stock price
appreciation are required by rules of the Securities and Exchange Commission
and do not represent our estimate or projection of our future common stock
prices. These amounts represent assumed rates of appreciation in the value of
our common stock from the fair market value on the date of grant. Actual
gains, if any, on stock option exercises are dependent on the future
performance of our common stock and overall stock market conditions. The
amounts reflected in the table may not necessarily be achieved.
OPTION GRANTS IN LAST TWO FISCAL YEARS
<TABLE>
- ------------------------------------------------------------------------------------------------
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
% OF TOTAL
NUMBER OPTIONS VALUE AT ASSUMED
OF SECURITIES GRANTED TO EXERCISE ANNUAL RATES OF
UNDERLYING EMPLOYEES PRICE APPRECIATION OF STOCK
OPTIONS IN 1998 & PER EXPIRATION PRICE FOR OPTION TERM
NAME YEAR GRANTED 1999 SHARE DATE 5% 10%
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Hubert Koster........... 1998 75,000 6% $0.55 09/18/08 $ 25,942 $ 65,742
72,656 6 1.10 12/11/08 50,262 127,374
107,344 9 1.00 12/11/08 67,508 171,079
1999 8,420 * 3.30 01/29/09 17,474 44,284
36,580 3 3.00 01/29/09 69,015 174,897
60,000 6 3.00 07/09/09 113,201 286,874
50,000 5 3.00 10/21/09 94,334 239,062
Stephen L. Zaniboni..... 1998 20,000 2 0.50 04/02/08 6,289 15,937
20,000 2 0.50 06/24/08 6,289 15,937
100,000 8 1.00 12/11/08 62,889 159,374
1999 50,000 5 3.00 10/21/09 94,334 239,062
Antonius Schuh.......... 1998 30,000 2 0.50 09/18/08 9,433 23,906
100,000 8 1.00 12/11/08 62,889 159,374
1999 50,000 5 3.00 10/21/09 94,334 239,062
Charles R. Cantor....... 1998 5,000 * 0.50 04/02/08 1,572 3,984
180,000 15 0.50 06/24/08 56,601 143,433
1999 100,000 9 3.00 01/29/09 188,668 478,124
Andreas Braun........... 1998 50,000 4 1.00 12/11/08 31,444 79,687
1999 30,000 3 3.00 01/29/09 56,600 143,437
100,000 9 3.00 10/21/09 188,668 478,124
Delbert F. Foit, Jr. ... 1999 100,000 9 3.00 04/09/09 188,668 478,124
</TABLE>
- --------
* Less than 1%.
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The following table shows information at December 31, 1999 concerning the
number and value of unexercised options held by each of the executive officers
listed in the summary compensation table above. Options shown as exercisable
in the table below are immediately exercisable. However, we have rights to
repurchase shares of the common stock underlying some of these options upon
termination of the holder's employment with us. There was no public trading
market for the common stock as of December 31, 1999. Accordingly, the value of
unexercised in-the-money options listed below has been calculated on the basis
of the assumed initial public offering price of $24.00 per share, less the
applicable exercise price per share, multiplied by the number of shares
underlying such options.
AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 1999 AND YEAR-END
OPTION VALUES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS
UPON VALUE DECEMBER 31, 1999 AT DECEMBER 31, 1999
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hubert Koster........... 790,000 1,589,984 -- -- -- --
Stephen L. Zaniboni..... 260,000 492,500 -- -- -- --
Antonius Schuh.......... 330,000 687,500 -- -- -- --
Charles R. Cantor....... 351,000 657,200 -- -- -- --
Andreas Braun........... 120,000 317,500 130,000 -- 2,730,000 --
Delbert F. Foit, Jr. ... 25,000 -- 75,000 -- 1,575,000 --
</TABLE>
EMPLOYEE BENEFIT PLANS
1999 STOCK INCENTIVE PLAN
INTRODUCTION
Our 1999 Stock Incentive Plan is intended to serve as the successor program to
our 1998 Stock Option/Stock Issuance Plan. The 1999 plan was adopted by our
board of directors on November 6, 1999 and approved by the stockholders in
November 1999. The 1999 plan will become effective at the close of this
offering. At that time, all outstanding options under our existing 1998 Stock
Option/Stock Issuance Plan will be transferred to the 1999 plan, and no
further option grants will be made under the 1998 plan. Prior to the 1998 plan
being adopted, we granted options under our 1994 Stock Plan. All options
granted under our 1994 Stock Plan were transferred to our 1998 Stock
Option/Stock Issuance Plan. The transferred options will continue to be
governed by their existing terms, unless our compensation committee decides to
extend one or more features of the 1999 plan to those options. Except as
otherwise described below, the transferred options have substantially the same
terms as will be in effect for grants made under the discretionary option
grant program of our 1999 plan.
SHARE RESERVE
We have reserved 4,750,000 shares of our common stock for issuance under our
1999 Stock Incentive Plan. This share reserve consists of the number of shares
we estimate will be carried over from our 1998 plan plus an additional 850,000
shares. The share reserve under our 1999 plan will automatically increase on
the first trading day in January each calendar year, beginning with calendar
year 2001, by an amount equal to 4% of the total number of shares of our
common stock outstanding on the last trading day of December in the prior
calendar year, but in no event will this annual increase exceed 2,000,000
shares. In addition, no participant in our 1999 plan may be granted stock
options or direct stock issuances for more than 1,000,000 shares of common
stock in total in any calendar year.
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PROGRAMS
Our 1999 plan has five separate programs:
. the discretionary option grant program, under which eligible individuals may
be granted options to purchase shares of our common stock at an exercise
price not less than the fair market value of those shares on the grant date;
. the stock issuance program, under which eligible individuals may be issued
shares of common stock directly, upon the attainment of performance
milestones or the completion of a specified period of service or as a bonus
for past services;
. the salary investment option grant program, under which our executive
officers and other highly compensated employees may be given the opportunity
to apply a portion of their base salary each year to the acquisition of
special below market stock option grants;
. the automatic option grant program, under which option grants will
automatically be made at periodic intervals to eligible non-employee board
members to purchase shares of common stock at an exercise price equal to the
fair market value of those shares on the grant date; and
. the director fee option grant program, under which our non-employee board
members may be given the opportunity to apply a portion of any retainer fee
otherwise payable to them in cash each year to the acquisition of special
below market option grants.
ELIGIBILITY
The individuals eligible to participate in our 1999 plan include our officers
and other employees, our board members and any consultants we use.
ADMINISTRATION
The discretionary option grant and stock issuance programs will be
administered by our compensation committee. This committee will determine
which eligible individuals are to receive option grants or stock issuances
under those programs, the time or times when the grants or issuances are to be
made, the number of shares subject to each grant or issuance, the status of
any granted option as either an incentive stock option or a nonstatutory stock
option under the federal tax laws, the vesting schedule to be in effect for
the option grant or stock issuance and the maximum term for which any granted
option is to remain outstanding. The compensation committee will also have the
authority to select the executive officers and other highly compensated
employees who may participate in the salary investment option grant program if
the program is put into effect for one or more calendar years.
PLAN FEATURES
Our 1999 plan will include the following features:
. the exercise price for any options granted under the plan may be paid in
cash or in shares of our common stock valued at fair market value on the
exercise date. The option may also be exercised through a same-day sale
program without any cash outlay by the optionee;
. our compensation committee will have the authority to cancel outstanding
options under the discretionary option grant program, including any
transferred options from our 1998 plan, in return for the grant of new
options for the same or different number of option shares with an exercise
price per share based upon the fair market value of our common stock on the
new grant date; and
. stock appreciation rights may be issued under the discretionary option grant
program. These rights will provide the holders with the election to
surrender their outstanding options for a payment from us equal to the fair
market value of the shares subject to the surrendered options less the
exercise price payable for those shares. We may make the payment in cash or
in shares of our common stock. None of the options under our 1998 plan have
any stock appreciation rights.
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CHANGE IN CONTROL
Our 1999 plan will include the following change in control provisions which
may result in the accelerated vesting of outstanding option grants and stock
issuances if:
. we are acquired by merger or asset sale, each outstanding option under the
discretionary option grant program which is not to be assumed by the
successor corporation will immediately become exercisable for all the option
shares, and all outstanding unvested shares will immediately vest, except to
the extent our repurchase rights with respect to those shares are to be
assigned to the successor corporation;
. our compensation committee will have complete discretion to grant one or
more options which will become exercisable for all the option shares in the
event those options are assumed in the acquisition but the optionee's
service with us or the acquiring entity is subsequently terminated. The
vesting of any outstanding shares under our 1999 plan may be accelerated
upon similar terms and conditions; and
. our compensation committee may grant options and structure repurchase rights
so that the shares subject to those options or repurchase rights will
immediately vest in connection with a successful tender offer for more than
50% of our outstanding voting stock or a change in the majority of our board
through one or more contested elections. Such accelerated vesting may occur
either at the time of such transaction or upon the subsequent termination of
the individual's service.
SALARY INVESTMENT OPTION GRANT PROGRAM
If our compensation committee decides to put this program into effect for one
or more calendar years, each of our executive officers and other highly
compensated employees may elect to reduce his or her base salary for the
calendar year by an amount not less than $10,000 nor more than $50,000. Each
individual who makes such an election will automatically be granted, on the
first trading day in January of the calendar year for which his or her salary
reduction is to be in effect, an option to purchase that number of shares of
common stock determined by dividing the salary reduction amount by two-thirds
of the fair market value per share of our common stock on the grant date. The
option will have an exercise price per share equal to one-third of the fair
market value of the option shares on the grant date. As a result, the option
will be structured so that the fair market value of the option shares on the
grant date less the exercise price payable for those shares will be equal to
the amount of the salary reduction. The option will become exercisable in a
series of twelve equal monthly installments over the calendar year for which
the salary reduction is to be in effect.
AUTOMATIC OPTION GRANT PROGRAM
Each individual who first becomes a non-employee board member at any time
after the effective date of this offering will receive an option grant to
purchase 15,000 shares of our common stock on the date such individual joins
the board. In addition, on the date of each annual stockholders meeting held
after the effective date of this offering, each non-employee board member who
is to continue to serve as a non-employee board member, including each of our
current non-employee board members, will automatically be granted an option to
purchase 3,000 shares of our common stock, provided such individual has served
on the board for at least six months.
Each automatic grant will have an exercise price per share equal to the fair
market value per share of our common stock on the grant date and will have a
term of 10 years, subject to earlier termination following the optionee's
cessation of board service. The option will be immediately exercisable for all
of the option shares; however, we may repurchase, at the exercise price paid
per share, any shares purchased under the option which are not vested at the
time of the optionee's cessation of board service. The shares subject to each
initial 15,000 share automatic option grant will vest in a series of three
successive annual
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installments upon the optionee's completion of each year of board service over
the three year period measured from the grant date. The shares subject to each
3,000 share annual option grant will vest upon the optionee's completion of
one year of board service measured from the grant date. The shares subject to
each option will immediately vest in full upon various changes in control or
ownership or upon the optionee's death or disability while a board member.
DIRECTOR FEE OPTION GRANT PROGRAM
If this program is put into effect in the future, then each non-employee board
member may elect to apply all or a portion of any cash retainer fee for the
year to the acquisition of a below-market option grant. The option grant will
automatically be made on the first trading day in January in the year for
which the non-employee board member would otherwise be paid the cash retainer
fee in the absence of his or her election. The option will have an exercise
price per share equal to one-third of the fair market value of the option
shares on the grant date, and the number of shares subject to the option will
be determined by dividing the amount of the retainer fee applied to the
program by two-thirds of the fair market value per share of our common stock
on the grant date. As a result, the option will be structured so that the fair
market value of the option shares on the grant date less the exercise price
payable for those shares will be equal to the portion of the retainer fee
applied to that option. The option will become exercisable in a series of
twelve equal monthly installments over the calendar year for which the
election is in effect. However, the option will become immediately exercisable
for all the option shares upon the death or disability of the optionee while
serving as a board member. Currently our directors do not have any cash
retainer fee.
ADDITIONAL PLAN FEATURES
Our 1999 plan will also have the following features:
. Outstanding options under the salary investment and director fee option
grant programs will immediately vest if we are acquired by a merger or asset
sale or if there is a successful tender offer for more than 50% of our
outstanding voting stock or a change in the majority of our board through
one or more contested elections.
. Limited stock appreciation rights will automatically be included as part of
each grant made under the salary investment option grant program and the
automatic and director fee option grant programs, and these rights may also
be granted to one or more officers as part of their option grants under the
discretionary option grant program. Options with this feature may be
surrendered to us upon the successful completion of a hostile tender offer
for more than 50% of our outstanding voting stock. In return for the
surrendered option, the optionee will be entitled to a cash distribution
from us in an amount per surrendered option share based upon the highest
price per share of our common stock paid in that tender offer.
. Our board of directors may amend or modify our 1999 plan at any time,
subject to any required stockholder approval. Our 1999 plan will terminate
no later than November 6, 2009.
1999 EMPLOYEE STOCK PURCHASE PLAN
INTRODUCTION
Our 1999 Employee Stock Purchase Plan was adopted by our board of directors on
November 6, 1999 and approved by our stockholders in November 1999. The plan
will become effective immediately upon the signing of the underwriting
agreement for this offering. The plan is designed to allow our eligible
employees and the eligible employees of our participating subsidiaries to
purchase shares of common stock, at semi-annual intervals, with their
accumulated payroll deductions.
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58
<PAGE>
MANAGEMENT
- -------------------------------------------------------------------------------
SHARE RESERVE
We have reserved 250,000 shares of our common stock for issuance under our
1999 Employee Stock Purchase Plan. The reserve will automatically increase on
the first trading day in January each calendar year, beginning in calendar
year 2001, by an amount equal to 1% of the total number of outstanding shares
of our common stock on the last trading day in December in the prior calendar
year. In no event will any such annual increase exceed 500,000 shares.
OFFERING PERIODS
Our 1999 Employee Stock Purchase Plan will have a series of concurrent
offering periods, each with a maximum duration of 24 months. The initial
offering period will start on the date the underwriting agreement for the
offering covered is signed and will end on the last business day in January
2002. Additional offering periods of up to 24 months duration will begin on
the first day of February and August each year. However, no employee may
participate in more than one offering period at a time.
ELIGIBILITY
Individuals scheduled to work more than 20 hours per week for more than five
calendar months per year are eligible to participate in the plan and may join
the plan on the start date of any offering period.
PAYROLL DEDUCTIONS
A participant may contribute up to 15% of his or her base salary through
payroll deductions, and the accumulated deductions will be applied to the
purchase of shares on each semi-annual purchase date. The purchase price per
share in effect for each participant will be equal to 85% of the fair market
value per share on the start date of the offering period in which he or she is
participating or, if lower, 85% of the fair market value per share on the
semi-annual purchase date. Semi-annual purchase dates will occur on the last
business day of January and July each year. However, a participant may not
purchase more than 1,000 shares on any purchase date, and not more than
62,500 shares may be purchased in total by all participants on any purchase
date. Our compensation committee will have the authority to change these
limitations for any subsequent offering period.
RESET FEATURE
If the fair market value per share of our common stock on any purchase date
within a particular offering period is less than the fair market value per
share on the start date of that offering period, then that offering period
will automatically terminate, and a new offering period of up to 24 months
duration will begin on the next business day. All eligible participants in the
terminated offering will be transferred to the new offering period.
CHANGE IN CONTROL
If we are acquired by merger or a sale of substantially all of our assets or
more than 50% of our voting securities, then all outstanding purchase rights
will automatically be exercised immediately prior to the effective date of the
acquisition. The purchase price in effect for each participant will be equal
to 85% of the market value per share on the start date of the particular
offering period in which he or she is participating at the time of the
acquisition or, if lower, 85% of the fair market value per share immediately
prior to the acquisition.
PLAN FEATURES
The following features will also be in effect under the plan:
. our plan will terminate no later than the last business day of January 2010;
and
. our board may at any time amend, suspend or discontinue our plan; however,
certain amendments may require stockholder approval.
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59
<PAGE>
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Related party transactions
SALES OF SECURITIES
Since January 1996 through December 27, 1999, we have issued the following
securities in private placement transactions:
. 643,330 shares of our Series B convertible preferred stock for an aggregate
price of $964,995 in March 1996;
. warrants to purchase 70,000 shares of our Series A convertible preferred
stock in connection with the Comdisco lease arrangement;
. 4,573,331 shares of our Series C convertible preferred stock for an
aggregate price of $14,405,993 in May 1997 and January 1998;
. warrants to purchase 106,503 shares of our Series C convertible preferred
stock in connection with the sale of our Series C preferred stock;
. 5,712,763 shares of our Series D convertible preferred stock for an
aggregate price of $37,132,959 in December 1998 and March 1999;
. 2,364,200 shares of our common stock issued upon the exercise of options to
purchase such stock for an aggregate consideration of $2,511,218; and
. 6,349 shares of our common stock issued to one of our executive officers for
an aggregate consideration of $20,000.
All preferred stock was issued to various venture capital and other
institutional investors in reliance upon exemption from registration under
Section 4(2) of the Securities Act. All shares issued upon exercise of options
were issued to employees and consultants in reliance upon exemption from
registration under Rule 701 of the Securities Act. All shares of common stock
issued to one of our executive officers was issued in reliance upon exemption
from registration under Section 4(2) of the Securities Act.
The purchasers of more than $60,000 of these securities include, among others,
the following executive officers, directors and holders of more than 5% of our
outstanding stock and their affiliates:
<TABLE>
<CAPTION>
PREFERRED STOCK
EXECUTIVE OFFICERS, DIRECTORS TOTAL
AND 5% STOCKHOLDERS COMMON STOCK SERIES B SERIES C SERIES D CONSIDERATION
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Hubert Koster.................. 790,000 100,000 -- -- $ 782,542
Stephen L. Zaniboni............ 260,000 -- -- -- 287,500
Antonius Schuh................. 330,000 -- -- -- 302,500
Charles R. Cantor.............. 357,349 -- -- -- 395,800
Ernst-Gunter Afting............ -- 30,000 -- 15,018 142,617
TVM Group...................... -- 1,094,666 388,571 726,768 7,589,990
Alpinvest International B.V. .. -- 666,667 317,460 461,538 4,999,997
Lombard Odier & Cie............ -- -- 952,381 -- 3,000,000
</TABLE>
For additional information regarding the ownership of securities by executive
officers, directors and stockholders who beneficially own 5% or more of our
outstanding common stock, please see "Principal stockholders."
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60
<PAGE>
RELATED PARTY TRANSACTIONS
- -------------------------------------------------------------------------------
EMPLOYMENT AGREEMENTS
We have entered into employment agreements with each of Dr. Koster, Mr.
Zaniboni, Dr. Schuh, Dr. Cantor and Mr. Foit. For information regarding these
agreements, please see "Management-- Employment and severance arrangements."
In addition to these agreements, we have also entered into employment
agreements with each of Dr. Karsten Schmidt, the Managing Director of our
subsidiary, Dr. Paul J. Heaney, our Vice President, Advanced Systems and Dr.
Charles R. Rodi, our Vice President, Molecular Biology.
Dr. Schmidt's employment agreement provides for a salary of DEM160,000 per
year, subject to periodic increases. We also paid, during the first six months
of 1999, housing expenses for Dr. Schmidt's use of an apartment in Hamburg. We
also paid, during that time period, reasonable travel expenses relating to Mr.
Schmidt's travel to his former place of residence on a weekly basis. In
connection with his employment with us, Dr. Schmidt was granted options to
purchase 30,000 shares of our common stock under our 1998 Stock Option/Stock
Issuance Plan. Dr. Schmidt has not exercised these options.
Dr. Rodi's employment agreement provides for a salary of $140,000 per year,
subject to periodic increases by our board of directors at its discretion. Dr.
Rodi was also entitled to a bonus of $30,000 payable upon execution of his
employment agreement. In addition, Dr. Rodi is entitled to receive a bonus of
$10,000 per year. We also agreed to pay reasonable expenses, up to a maximum
of $50,000, associated with Dr. Rodi's relocation to our corporate offices in
San Diego, California. Dr. Rodi was also granted an additional $1,500 monthly
housing allowance during his first three months of service with us. In
connection with his employment with us, Dr. Rodi was granted options to
purchase 50,000 shares of our common stock under our 1998 Stock Option/Stock
Issuance Plan. Dr. Rodi has not exercised these options. If Dr. Rodi's
employment is terminated involuntarily or without cause, Dr. Rodi will be
entitled to receive his annual salary in periodic payments, until he secures
other full-time employment with another company or until six months have
elapsed after termination, whichever is earlier.
Dr. Heaney's employment agreement provides for a salary of $175,000 per year,
subject to periodic increases by our board of directors at its discretion. Dr.
Heaney was also entitled to a bonus of $15,000 payable upon execution of his
employment agreement. In addition, Dr. Heaney is also entitled to receive a
bonus of $10,000 per year. We also agreed to pay reasonable expenses, up to a
maximum of $50,000, associated with Dr. Heaney's relocation to our corporate
offices in San Diego, California. In connection with his employment with us,
Dr. Heaney was granted options to purchase 100,000 shares of our common stock
under our 1998 Stock Option/Stock Issuance Plan. Dr. Heaney has not exercised
these options. If Dr. Heaney's employment is terminated involuntarily or
without cause, Dr. Heaney will be entitled to receive his annual salary in
periodic payments, until he secures other full-time employment with another
company or until six months have elapsed after termination, whichever is
earlier.
INDEBTEDNESS OF MANAGEMENT
We have loaned money to some of our executive officers under the terms of
promissory notes and stock pledge agreements, whereby the executive officers
pledge shares of our common stock issued upon the exercise of options to
purchase such common stock. These loans were used by the executive officers
upon the exercise of these options to acquire the underlying shares of common
stock. Each loan is required to be repaid on the earlier of two years after
its execution or the completion of a secondary public offering by us, in which
the officer making the note is allowed to sell his shares of our common stock.
The amount outstanding at December 31, 1999 on each loan shown below
represents the largest aggregate
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61
<PAGE>
RELATED PARTY TRANSACTIONS
- -------------------------------------------------------------------------------
amount of indebtedness outstanding at any time during the term of each such
loan. The executive officers to whom we have made these loans and the
principal terms of the loans are shown in the following table:
<TABLE>
<CAPTION>
APPROXIMATE
AMOUNT OUTSTANDING INTEREST RATE
EXECUTIVE OFFICER POSITION AT DECEMBER 31, 1999 PER ANNUM
- ---------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Hubert Koster............. President and Chief Executive Officer $953,266 6%
Charles R. Cantor......... Chief Scientific Officer 477,391 6
Antonius Schuh............ Executive Vice President, Business Development 312,956 6
and Marketing
Stephen L. Zaniboni....... Senior Vice President, Chief Financial Officer 295,743 6
</TABLE>
INDEMNIFICATION AGREEMENTS
We have entered into indemnification agreements with each of our directors and
officers containing provisions that may require us to indemnify them against
liabilities that may arise by reason of their status or service as directors
or officers and to advance their expenses incurred as a result of any
proceeding against them. However, we will not indemnify directors or officers
with respect to liabilities arising from willful misconduct of a culpable
nature. For more information concerning these agreements, see "Description of
securities--limitation of liabilities and indemnification matters."
CONSULTING AGREEMENT
During the period beginning when we were organized in 1994 until July 1997,
Dr. Hubert Koster worked for us as a consultant. We paid Dr. Koster $5,000 per
month until September 1996 at which time we increased his consulting
compensation to $12,500 per month, in consideration for his services to us.
Dr. Koster's consulting arrangement was terminated when he was appointed as
our President and Chief Executive Officer in 1997.
INTELLECTUAL PROPERTY ASSIGNMENTS
Since our inception, Dr. Koster has assigned several personal patents and
other intellectual property rights to us that are key in the development of
our products and technology. As partial consideration for these assignments,
we reimbursed Dr. Koster for patent application costs and prior to 1996 we
issued shares of our Series A convertible preferred stock to Dr. Koster. We
have paid no additional consideration to Dr. Koster except for those amounts
paid in connection with his employment or consulting services to us since
January 1996.
Dr. Cantor is named as an inventor on a number of patents which we have
licensed from Boston University. If we are commercially successful and are
required to make royalty payments to Boston University under our license
arrangements, Dr. Cantor could receive additional compensation from Boston
University. In addition, we fund research at Boston University; however, Dr.
Cantor receives no direct compensation from Boston University as a result of
this funding.
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62
<PAGE>
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Principal stockholders
The following table shows information known to us with respect to the
beneficial ownership of our common stock as of December 27, 1999, and as
adjusted to reflect the sale of the shares of common stock offered under this
prospectus, by
. each person (or group of affiliated persons) who owns beneficially 5% or
more of our common stock;
. each of our directors;
. our executive officers listed in the "summary compensation" table above; and
. all of our directors and executive officers as a group.
Except as indicated in the footnotes to this table and subject to community
property laws where applicable, the persons named in the table have sole
voting and investment power with respect to all shares of our common stock
shown as beneficially owned by them. Beneficial ownership and percentage
ownership are determined in accordance with the rules of the SEC. The table
below includes the number of shares underlying options and warrants which are
exercisable within 60 days from the date of this offering. In addition, the
table below assumes the conversion of all shares of our preferred stock into
shares of our common stock on a one-for-one basis prior to this offering, and
is therefore based on 17,601,477 shares of our common stock outstanding prior
to this offering and 22,601,477 shares outstanding immediately after this
offering. The address for those individuals for which an address is not
otherwise indicated is: 11555 Sorrento Valley Road, San Diego, California
92121.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO THIS OFFERING OWNED AFTER THIS OFFERING
NUMBER OF
SHARES NUMBER OF
NUMBER OF UNDERLYING NUMBER OF SHARES
SHARES OPTIONS OR SHARES UNDERLYING
BENEFICIAL OWNER OUTSTANDING WARRANTS PERCENT OUTSTANDING OPTIONS PERCENT
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Five percent stockholders
Funds affiliated with TVM Techno
Venture Management(1)............ 2,536,405 38,854 14.7% 2,536,405 38,854 11.4%
Maximilianstrasse 35
Einang C
80539 Munich
Germany
Alpinvest International B.V.(2) .. 1,445,665 31,746 8.4 1,445,665 31,746 6.6
De Gooise Poort
Gooimeer 3 NL 1410 AB
Nararden
The Netherlands
Lombard Odier & Cie(3)............ 952,381 -- 5.5 952,381 -- 4.2
Todistrass 36
8027 Zurich
Switzerland
</TABLE>
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63
<PAGE>
PRINCIPAL STOCKHOLDERS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO THIS OFFERING OWNED AFTER THIS OFFERING
NUMBER OF
SHARES NUMBER OF
NUMBER OF UNDERLYING NUMBER OF SHARES
SHARES OPTIONS OR SHARES UNDERLYING
BENEFICIAL OWNER OUTSTANDING WARRANTS PERCENT OUTSTANDING OPTIONS PERCENT
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Directors and named executive officers
Hubert Koster, PhD............. 2,010,001 -- 11.4% 2,010,001 -- 8.9%
Helmut Schuhsler, PhD.......... 2,606,405 38,854 15.0 2,606,405 38,854 11.7
Ernst-Gunter Afting, PhD, MD .. 45,018 60,000 0.6 45,018 60,000 0.3
John E. Lucas.................. 40,000 -- 0.2 40,000 -- 0.2
Peter Reinisch, PhD(4)......... 832,111 10,000 4.8 832,111 10,000 3.7
Stephen L. Zaniboni............ 260,000 -- 1.5 260,000 -- 1.2
Antonius Schuh, PhD............ 330,000 -- 1.9 330,000 -- 1.5
Charles R. Cantor, PhD......... 357,349 -- 2.0 357,349 -- 1.6
Andreas Braun, PhD, MD......... 120,000 130,000 1.4 120,000 130,000 1.1
Delbert F. Foit, Jr. .......... 25,000 75,000 0.6 25,000 75,000 0.4
All directors and executive
officers as a group
(10 persons).................. 6,625,884 313,854 39.4% 6,625,884 313,854 30.6%
</TABLE>
- --------
(1) Includes 834,902 shares owned by TVM Zweite Beteiligung-US L.P; 538,461
shares owned by TVM Medical Ventures; 474,957 shares owned by TVM Eurotech
L.P.; 388,749 shares owned by TVM Techno Venture Enterprises No. II L.P.;
259,168 shares owned by TVM Intertech L.P.; and 40,168 shares owned by TVM
Techno Venture Investors No. 1 L.P. Dr. Schuhsler and Friedrich Bornikoel
are the Managing Directors of TVM Techno Venture Management GmbH and Dr.
Schuhsler is also a member of the Board of Management of TVM Medical
Ventures GmbH & Co. KG. Dr. Schuhsler disclaims beneficial ownership of
all shares issued or issuable to the foregoing entities, except to the
extent of his pecuniary interest, but exercises shared voting and
investment power with respect to some of these shares.
(2) There is no single person at Alpinvest that exercises voting control over
shares held by Alpinvest. Voting requires the signature of two of the
authorized signatories. Mr. Stan Vermeulen and Mr. Jaap Vermeulen are two
natural persons authorized to sign on behalf of Alpinvest.
(3) There is no single person at Lombard Odier that exercises voting control
over shares held by Lombard Odier. Voting requires two or more of
designated employees sign on behalf of Lombard Odier. In addition, any one
of the eight managing partners could sign on behalf of Lombard Odier alone
or in connection with the two designated employees.
(4) Represents shares owned by GLS LP Investments III Limited. Dr. Reinisch is
affiliated with GLS LP Investments III Limited. Dr. Reinisch disclaims
beneficial ownership of all shares issued or issuable to the foregoing
entities, except to the extent of his pecuniary interest, but exercises
shared voting and investment power with respect to some of these shares.
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64
<PAGE>
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Description of securities
The following information describes our common stock and preferred stock, as
well as options and warrants to purchase our common stock, and provisions of
our certificate of incorporation and our bylaws, all as will be in effect upon
the closing of this offering. This description is only a summary. You should
also refer to the certificate and bylaws which have been filed with the SEC as
exhibits to our registration statement, of which this prospectus forms a part.
The descriptions of the common stock and preferred stock, as well as options
and warrants to purchase our common stock, reflect changes to our capital
structure that will occur upon the closing of this offering in accordance with
the terms of the certificate.
Our authorized capital stock consists of 75,000,000 shares of common stock,
par value $0.001 per share, and 5,000,000 shares of preferred stock, par value
$0.001 per share.
COMMON STOCK
As of December 27, 1999, there were 2,396,800 shares of common stock
outstanding and held of record by 48 stockholders. There will be 22,601,477
shares of common stock outstanding upon the closing of this offering, which
gives effect to the issuance of 5,000,000 shares of common stock offered by us
under this prospectus, the issuance of up to 67,826 shares of common stock to
the selling stockholders immediately prior to this offering and the conversion
of preferred stock discussed below and also to the conversion of long-term
debt into 272,108 shares of common stock and the issuance of 24,792 shares of
common stock in satisfaction of accrued interest payable.
Holders of our common stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the shares of common
stock entitled to vote in any election of directors may elect all of the
directors standing for election, subject to the rights of any outstanding
preferred stock. Holders of common stock are entitled to receive dividends on
a pro rata basis, if any, as may be declared by the board of directors out of
funds legally available therefor, subject to any preferential dividend rights
of any outstanding preferred stock. Holders of common stock have no
preemptive, subscription, redemption or conversion rights. The outstanding
shares of common stock are, and the shares offered by us in this offering will
be, when issued and paid for, fully paid and nonassessable. The rights,
preferences and privileges of holders of common stock are subject to, and may
be materially adversely affected by, the rights of the holders of shares of
any series of preferred stock which we may designate and issue in the future.
Upon the closing of this offering, there will be no shares of preferred stock
outstanding.
PREFERRED STOCK
As of December 27, 1999, there were 14,842,757 shares of convertible preferred
stock outstanding. All outstanding shares of convertible preferred stock will
be converted into 14,842,757 shares of our common stock upon the closing of
this offering and these shares of convertible preferred stock will no longer
be authorized, issued or outstanding.
Upon the closing of this offering, the board of directors will be authorized,
without further stockholder approval, to issue from time to time up to an
aggregate of 5,000,000 shares of preferred stock in one or more series. Our
board of directors may also designate the powers, preferences, rights and any
qualifications, limitations or restrictions of the shares of each such series
thereof, including the dividend rights, dividend rates, conversion rights,
voting rights, terms of redemption (including sinking fund provisions),
redemption price or prices and liquidation preferences, any or all of which
may be superior
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65
<PAGE>
DESCRIPTION OF SECURITIES
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to the rights of our common stock, and the number of shares constituting any
series or designations of such series. We have no present plans to issue any
shares of preferred stock. Please see "Description of securities--Anti-
takeover effects of provisions of Delaware law and our certificate of
incorporation and bylaws."
OPTIONS
As of December 27, 1999, options to purchase a total of 1,287,049 shares of
common stock were outstanding at a weighted average exercise price of $1.66.
Options to purchase a total of 4,750,000 shares of common stock may be granted
under the 1999 Stock Incentive Plan. Please see "Management--Employee benefit
plans" and "Shares eligible for future sale."
WARRANTS
We have outstanding warrants to purchase a total of 176,503 shares of our
capital stock, at a weighted average exercise price of $2.10 per share. The
warrants contain anti-dilution provisions providing for adjustments of the
exercise price and the number of shares underlying the warrants upon the
occurrence of certain events, including any recapitalization,
reclassification, stock dividend, stock split, stock combination or similar
transaction. The warrants grant to the holders registration rights with
respect to the common stock issuable upon their exercise, which are described
below. All of these warrants will be exercisable immediately before this
offering.
REGISTRATION RIGHTS
Under the terms of an agreement with some of our stockholders, after the
closing of this offering the holders of 14,842,757 shares of common stock will
be entitled to demand the registration of their shares under the Securities
Act of 1933. The holders of 50% of such shares are entitled to demand that we
register their shares under the Securities Act of 1933 subject to limitations
described in the relevant agreement. We are not required to effect more than
two registrations for such holders pursuant to these demand registration
rights. These demand rights expire on December 21, 2001. In addition, after
the closing of this offering these holders will be entitled to piggyback
registration rights with respect to the registration of their shares of common
stock. If we propose to register any shares of common stock either for our
account or for the account of other security holders, the holders of shares
having piggyback rights are entitled to receive notice of the registration and
are entitled to include their shares in the registration, subject to some
limitations. Further, at any time after we become eligible to file a
registration statement on Form S-3, the holders of 25% of the shares held by
all holders of registration rights may require us to file registration
statements under the Securities Act of 1933 on Form S-3 with respect to their
shares of our common stock. These registration rights are subject to
conditions and limitations, among which is the right of the underwriters of an
offering to limit the number of shares of common stock held by security
holders with registration rights to be included in such registration. We are
generally required to bear all of the expenses of all these registrations,
including the reasonable fees of a single counsel acting on behalf of all
selling stockholders, except underwriting discounts and selling commissions.
Registration of any of the shares of our common stock held by security holders
with registration rights would result in such shares becoming freely tradable
without restriction under the Securities Act of 1933 immediately upon
effectiveness of such registration.
ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF DELAWARE LAW AND OUR CERTIFI-
CATE OF INCORPORATION AND BYLAWS
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. Subject to exceptions, Section 203 prohibits a publicly-held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
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66
<PAGE>
DESCRIPTION OF SECURITIES
- -------------------------------------------------------------------------------
transaction in which the person became an interested stockholder, unless the
interested stockholder attained such status with the approval of the board of
directors or unless the business combination is approved in a prescribed
manner. A "business combination" includes mergers, asset sales and other
transactions resulting in a financial benefit to the interested stockholder.
Subject to exceptions, an "interested stockholder" is a person who, together
with affiliates and associates, owns, or within three years did own, 15% or
more of the corporation's voting stock. This statute could prohibit or delay
the accomplishment of mergers or other takeover or change in control attempts
with respect to us and, accordingly, may discourage attempts to acquire us.
In addition, provisions of our certificate of incorporation and bylaws, which
will be in effect upon the closing of this offering and are summarized in the
following paragraphs, may have an anti-takeover effect and may delay, defer or
prevent a tender offer or takeover attempt that a stockholder might consider
in its best interest, including those attempts that might result in a premium
over the market price for the shares held by stockholders.
BOARD OF DIRECTORS VACANCIES
Our bylaws authorize the board of directors to fill vacant directorships or
increase the size of the board of directors. This may deter a stockholder from
removing incumbent directors and simultaneously gaining control of the board
of directors by filling the vacancies created by such removal with its own
nominees.
STAGGERED BOARD
Our bylaws provide that our board will be classified into three classes of
directors beginning at the next annual meeting of stockholders. Please see
"Management--Classes of the board" for more information regarding our
staggered board. This may inhibit a stockholder from nominating and electing
directors and gaining control of the board of directors.
STOCKHOLDER ACTION; SPECIAL MEETING OF STOCKHOLDERS
Our certificate of incorporation provides that our stockholders may not take
action by written consent, and may only act at a duly called annual or special
meetings of our stockholders. Our bylaws further provide that special meetings
of our stockholders may be called only by the President, Chief Executive
Officer or Chairman of the board of directors or a majority of the board of
directors.
ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Our bylaws provide that stockholders seeking to bring business before our
annual meeting of stockholders, or to nominate candidates for election as
directors at our annual meeting of stockholders, must provide timely notice of
their intent in writing. To be timely, a stockholder's notice must be
delivered to, or mailed and received at, our principal executive offices not
less than 120 days before the first anniversary of the date of our notice of
annual meeting provided with respect to the previous year's annual meeting of
stockholders; provided, that if no annual meeting of stockholders was held in
the previous year or the date of the annual meeting of stockholders has been
changed to be more than 30 calendar days earlier than such anniversary, notice
by the stockholder, to be timely, must be so received a reasonable time before
the solicitation is made. Our bylaws also contain specific requirements as to
the form and content of a stockholder's notice. These provisions may inhibit
our stockholders from bringing matters before our annual meeting of
stockholders or from making nominations for directors at our annual meeting of
stockholders.
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67
<PAGE>
DESCRIPTION OF SECURITIES
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AUTHORIZED BUT UNISSUED SHARES
Our authorized but unissued shares of common stock and preferred stock are
available for future issuance without stockholder approval, subject to
limitations imposed by the Nasdaq National Market. These additional shares may
be utilized for a variety of corporate purposes, including future public
offerings to raise additional capital, corporate acquisitions and employee
benefit plans. The existence of authorized but unissued and unreserved common
stock and preferred stock could render more difficult or discourage an attempt
to obtain control of us by means of a proxy contest, tender offer, merger or
otherwise.
Delaware law provides generally that the affirmative vote of a majority of the
shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or bylaws, unless a corporation's certificate of
incorporation or bylaws requires a greater percentage.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
Our certificate of incorporation provides that, except to the extent
prohibited by Delaware law, our directors shall not be personally liable to us
or our stockholders for monetary damages for any breach of fiduciary duty as
our directors. Under Delaware law, our directors have a fiduciary duty to us
which is not eliminated by this provision of the certificate and, in
appropriate circumstances, equitable remedies such as injunctive or other
forms of nonmonetary relief will remain available. In addition, each of our
directors will continue to be subject to liability under Delaware law for
breach of the director's duty of loyalty to us for acts or omissions which are
found by a court of competent jurisdiction to be not in good faith or which
involve intentional misconduct, or knowing violations of law, for actions
leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are prohibited
by Delaware law. This provision also does not affect the directors'
responsibilities under any other laws, such as the Federal securities laws or
state or Federal environmental laws.
Section 145 of the Delaware General Corporation Law empowers a corporation to
indemnify its directors and officers and to purchase insurance with respect to
liability arising out of their capacity or status as directors and officers,
provided that this provision shall not eliminate or limit the liability of a
director for the following:
. any breach of the director's duty of loyalty to us or our stockholders;
. acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law;
. unlawful payments of dividends or unlawful stock purchases or redemptions;
or
. for any transaction from which the director derived an improper personal
benefit.
Delaware law provides further that the indemnification permitted thereunder
shall not be deemed exclusive of any other rights to which the directors and
officers may be entitled under our bylaws, any agreement, a vote of
stockholders or otherwise. The certificate eliminates the personal liability
of directors to the fullest extent permitted by Delaware law. In addition, the
certificate provides that we may fully indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (whether civil, criminal, administrative
or investigative) by reason of the fact that such person is or was one of our
directors or officers or is or was serving at our request as a director or
officer of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding.
- -------------------------------------------------------------------------------
68
<PAGE>
DESCRIPTION OF SECURITIES
- -------------------------------------------------------------------------------
We have also entered into agreements to indemnify our directors and executive
officers, in addition to the indemnification provided for in our bylaws. We
believe that these provisions and agreements are necessary to attract and
retain qualified directors and executive officers. Our bylaws also permit us
to secure insurance on behalf of any officer, director, employee or other
agent for any liability arising out of his or her actions, regardless of
whether Delaware law would permit indemnification. We have applied for
liability insurance for our officers and directors.
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under our certificate of incorporation or otherwise. We
are not aware of any threatened litigation or proceeding that may result in a
claim for such indemnification.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is American Stock
Transfer and Trust Company.
- -------------------------------------------------------------------------------
69
<PAGE>
- -------------------------------------------------------------------------------
Shares eligible for future sale
Prior to this offering, there has been no public offering for our stock. The
market price of our common stock could decline as a result of sales of a large
number of shares of our common stock in the market after this offering, or the
perception that such sales could occur. Such sales also could make it more
difficult for us to sell equity securities in the future at a time and price
that we deem appropriate. After this offering, we will have outstanding
22,601,477 shares of common stock. Of these shares, the 5,000,000 shares being
offered by us and the 67,826 shares being offered by the selling stockholders
in this offering are freely tradable. This leaves 17,536,477 shares eligible
for sale in the public market as follows:
<TABLE>
<CAPTION>
NUMBER OF
SHARES DATE
- -------------------------------------------------------------------------------
<C> <S>
49,583 After the date of this prospectus
116,701 At various times after 90 days from the date of this prospectus
under Rules 701 and 144
17,370,193 At various times after 180 days from the date of this prospectus,
subject, in some cases, to volume limitations under Rule 144
</TABLE>
Our directors and officers and some of our stockholders who hold 15,110,424
shares in the aggregate, together with the holders of options to purchase
272,108 shares of common stock and the holders of warrants to purchase 106,503
shares of common stock, have entered into lock-up agreements under which they
have agreed that they will not sell, directly or indirectly, any shares of
common stock without the prior written consent of Warburg Dillon Read LLC for
a period of 180 days from the date of this prospectus.
In general, under Rule 144 of the Securities Act of 1933, as currently in
effect, a person or persons whose shares are required to be aggregated,
including an affiliate, who has beneficially owned shares for at least one
year is entitled to sell, within any three-month period after the date of this
prospectus, a number of shares that does not exceed the greater of 1% of the
then outstanding shares of common stock--approximately 225,000 shares
immediately after this offering--or the average weekly trading volume in our
common stock during the four calendar weeks preceding the date on which notice
of such sale is filed, subject to certain restrictions. In addition, a person
who is not deemed to have been an affiliate of ours at any time during the 90
days preceding a sale and who has beneficially owned the shares proposed to be
sold for at least two years would be entitled to sell such shares under
Rule 144(k) without regard to the requirements described above. To the extent
that shares were acquired from one of our affiliates, such person's holding
period for the purpose of effecting a sale under Rule 144 commences on the
date of transfer from the affiliate.
Following 90 days after the date of this prospectus, shares issued upon
exercise of options that we granted prior to the date of this offering will
also be available for sale in the public market pursuant to Rule 701 under the
Securities Act of 1933. Rule 701 permits resales of such shares in reliance
upon Rule 144 under the Securities Act of 1933 but without compliance with the
restrictions, including the holding-period requirement, imposed under Rule
144. As of December 27, 1999, options to purchase a total of 1,287,049 shares
of common stock were outstanding, all of which were currently exercisable, but
some of which are subject to repurchase by us. Of these 1,287,049 shares,
484,457 shares may be eligible for sale in the public market at various times
after 90 days from the date of this prospectus.
Upon the closing of this offering, we intend to file a registration statement
to register for resale the 2,385,819 shares of common stock reserved for
issuance under our stock option plans. We expect the
- -------------------------------------------------------------------------------
70
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
- -------------------------------------------------------------------------------
registration statement to become effective immediately upon filing. Shares
issued upon the exercise of stock options granted under our stock option plans
will be eligible for resale in the public market from time to time subject to
vesting and, in the case of certain options, the expiration of the lock-up
agreements referred to above.
Stockholders holding approximately 14,842,757 shares of common stock have the
right, subject to various conditions and limitations, to include their shares
in registration statements relating to our securities. By exercising their
registration rights and causing a large number of shares to be registered and
sold in the public market, these holders may cause the price of the common
stock to fall. In addition, any demand to include such shares in our
registration statements could have a material adverse effect on our ability to
raise needed capital. Please see "Management--Benefit plans," "Principal
stockholders," "Description of securities--Registration rights," "Shares
eligible for future sale" and "Underwriting."
- -------------------------------------------------------------------------------
71
<PAGE>
- -------------------------------------------------------------------------------
Underwriting
Sequenom and the underwriters for the offering named below have entered into
an underwriting agreement concerning the shares being offered. Subject to
conditions, each underwriter has severally agreed to purchase the number of
shares indicated in the following table. Warburg Dillon Read LLC, FleetBoston
Robertson Stephens Inc. and SG Cowen Securities Corporation are the
representatives of the underwriters.
<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
- -------------------------------------------------------------------------------
<S> <C>
Warburg Dillon Read LLC........................................
FleetBoston Robertson Stephens Inc.............................
SG Cowen Securities Corporation................................
----
Total........................................................
====
</TABLE>
If the underwriters sell more shares than the total number set forth in the
table above, the underwriters have a 30-day option to buy from us up to an
additional 750,000 shares at the initial public offering price less the
underwriting discounts and commissions to cover these sales. If any shares are
purchased under this option, the underwriters will severally purchase shares
in approximately the same proportion as set forth in the table above.
The following table shows the per share and total underwriting discounts and
commissions we will pay to the underwriters. These amounts are shown assuming
both no exercise and full exercise of the underwriters' option to purchase up
to an additional 750,000 shares.
<TABLE>
<CAPTION>
NO EXERCISE FULL EXERCISE
- --------------------------------------------------------------------------------
<S> <C> <C>
Per share............................................. $ $
Total............................................... $ $
</TABLE>
We estimate that the total expenses of the offering payable by us, excluding
underwriting discounts and commissions, will be approximately $ .
Shares sold by the underwriters to the public will initially be offered at the
initial public offering price set forth on the cover of this prospectus. Any
shares sold by the underwriters to securities dealers may be sold at a
discount of up to $ per share from the initial public offering price.
Any of these securities dealers may resell any shares purchased from the
underwriters to other brokers or dealers at a discount of up to $ per
share from the initial public offering price. If all the shares are not sold
at the initial public offering price, the representatives may change the
offering price and the other selling terms.
The underwriters have informed us that they do not expect discretionary sales
to exceed 5% of the shares of common stock to be offered.
Sequenom, its directors, officers and certain of its stockholders have agreed
with the underwriters not to offer, sell, contract to sell, hedge or otherwise
dispose of, directly or indirectly, or file with the SEC a registration
statement under the Securities Act relating to, any of its common stock or
securities convertible into or exchangeable for shares of common stock during
the period from the date of this prospectus continuing through the date 180
days after the date of this prospectus, without the prior written consent of
Warburg Dillon Read LLC. This agreement does not apply to any securities
issued under existing employee benefit plans.
- -------------------------------------------------------------------------------
72
<PAGE>
UNDERWRITING
- -------------------------------------------------------------------------------
The underwriters have reserved for sale, at the initial public offering price,
up to shares of our common stock being offered for sale to our
customers and business partners. At the discretion of our management, other
parties, including our employees, may participate in the reserved shares
program. The number of shares available for sale to the general public in the
offering will be reduced to the extent these persons purchase reserved shares.
Any reserved shares not so purchased will be offered by the underwriters to
the general public on the same terms as the other shares.
Pursuant to a settlement and release relating to a consulting agreement for
advisory services rendered in connection with this offering between ACXIT
Capital Management GmbH and Value Management & Research AG and Sequenom,
Sequenom will pay those entities an aggregate amount of approximately DEM
789,000 or approximately $410,000. The National Association of Securities
Dealers, Inc. has determined this amount to be underwriting compensation.
These consultants are deemed to be underwriters for purposes of this offering.
Prior to this offering, there has been no public market for our common stock.
The initial public offering price will be negotiated by us and the
representatives. The principal factors to be considered in determining the
initial public offering price include:
. the information set forth in this prospectus and otherwise available to the
representatives;
. the history and the prospects for the industry in which we compete;
. the ability of our management;
. our prospects for future earnings, the present state of our development, and
our current financial position;
. the general condition of the securities markets at the time of this
offering; and
. the recent market prices of, and the demand for, publicly traded common
stock of generally comparable companies.
In connection with the offering, the underwriters may purchase and sell shares
of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the offering.
Stabilizing transactions consist of bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the common stock
while the offering is in progress.
The underwriters also may impose a penalty bid. This occurs when a particular
underwriter repays to the underwriters a portion of the underwriting discount
received by it because the representatives have repurchased shares sold by or
for the account of that underwriter in stabilizing or short covering
transactions.
These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the common stock. As a result, the price of the
common stock may be higher than the price that otherwise might exist in the
open market. If these activities are commenced, they may be discontinued by
the underwriters at any time. These transactions may be effected on the Nasdaq
National Market, in the over-the-counter market or otherwise.
We have agreed to indemnify the several underwriters against some liabilities,
including liabilities under the Securities Act of 1933 and to contribute to
payments that the underwriters may be required to make in respect thereof.
- -------------------------------------------------------------------------------
73
<PAGE>
- -------------------------------------------------------------------------------
Legal matters
The validity of the shares of common stock offered hereby will be passed upon
for us by Brobeck, Phleger & Harrison LLP, San Diego, California and for the
underwriters by Shearman & Sterling, Menlo Park, California.
Experts
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements at December 31, 1997 and 1998 and September 30, 1999 and
for each of the three years in the period ended December 31, 1998 and the nine
months ended September 30, 1999, and the period from February 14, 1994
(inception) to September 30, 1999, as set forth in their report. We have
included our financial statements in this prospectus and elsewhere in the
registration statement in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
Where you can find more information
We have filed with the SEC a registration statement on Form S-1, including the
exhibits, schedules and amendments to the registration statement, under the
Securities Act of 1933 with respect to the shares of common stock to be sold
in this offering. This prospectus does not contain all the information set
forth in the registration statement. For further information with respect to
Sequenom and the shares of common stock to be sold in this offering, please
refer to the registration statement. Statements contained in this prospectus
as to the contents of any contract, agreement or other document referred to
are not necessarily complete, and in each instance reference is made to the
copy of such contract, agreement or other document filed as an exhibit to the
registration statement, each such statement being qualified in all respects by
such reference.
You may read and copy all or any portion of the registration statement or any
other information we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You can request copies of these
documents, upon payment of a duplicating fee, by writing to the SEC. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference room. Our SEC filings, including the registration statement,
are also available to you on the SEC's Web site (http://www.sec.gov).
As a result of this offering, we will become subject to the information and
reporting requirements of the Securities Exchange Act of 1934, and, in
accordance therewith, will file periodic reports, proxy statements and other
information with the SEC. Upon approval of the common stock for quotation on
the Nasdaq National Market, such reports, proxy and information statements and
other information may also be inspected at the offices of Nasdaq Operations,
1735 K Street, N.W., Washington, D.C. 20006.
We intend to furnish our stockholders with annual reports containing audited
financial statements.
- -------------------------------------------------------------------------------
74
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- --------------------------------------------------------------------------------
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
- ------------------------------------------------------------------------------
<S> <C>
Report of Ernst & Young LLP, independent auditors........................ F-2
Consolidated balance sheets as of December 31, 1997 and 1998 and Septem-
ber 30, 1999............................................................ F-3
Consolidated statements of operations for the years ended December 31,
1996, 1997 and 1998, the nine months ended September 30, 1999, the nine
months ended September 30, 1998 (unaudited) and the period February 14,
1994 (inception) to September 30, 1999.................................. F-4
Consolidated statements of stockholders' equity (deficit) for the period
February 14, 1994 (inception) to September 30, 1999..................... F-5
Consolidated statements of cash flows for the years ended December 31,
1996, 1997 and 1998, the nine months ended September 30, 1999, the nine
months ended September 30, 1998 (unaudited) and the period February 14,
1994 (inception) to September 30, 1999.................................. F-7
Notes to consolidated financial statements............................... F-8
</TABLE>
- --------------------------------------------------------------------------------
F-1
<PAGE>
- -------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors
Sequenom, Inc.
We have audited the accompanying consolidated balance sheets of Sequenom, Inc.
(a development stage company) as of December 31, 1997 and 1998 and September
30, 1999 and the related consolidated statements of operations, stockholders'
equity (deficit), and cash flows for each of the three years in the period
ended December 31, 1998, the nine month period ended September 30, 1999 and
the period from February 14, 1994 (inception) to September 30, 1999. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Sequenom,
Inc. (a development stage company) at December 31, 1997 and 1998 and September
30, 1999, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1998, the nine month period ended
September 30, 1999 and the period from February 14, 1994 (inception) to
September 30, 1999, in conformity with generally accepted accounting
principles.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
San Diego, California
January 23, 2000
- -------------------------------------------------------------------------------
F-2
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
PRO FORMA
BALANCE SHEET
INFORMATION AT
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1997 1998 1999 1999
- ------------------------------------------------------------------------------------------------------------
ASSETS (Unaudited)
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents......................... $832,782 $8,559,612 $3,046,600
Short-term investments, available-for-sale........ -- 19,937,876 25,022,660
Grant receivable.................................. 181,350 -- --
Inventories....................................... -- -- 242,829
Other current assets and prepaid expenses......... 108,442 251,596 434,057
----------- ------------ ------------
Total current assets............................... 1,122,574 28,749,084 28,746,146
Equipment and leasehold improvements, net......... 1,002,197 3,941,888 5,810,844
Other assets...................................... 147,802 86,312 74,636
----------- ------------ ------------
Total assets....................................... $2,272,573 $32,777,284 $34,631,626
=========== ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses............. $1,121,971 $2,385,254 $3,534,003
Unearned revenue.................................. 126,000 -- --
Current portion of capital lease obligations...... -- 349,489 441,446
----------- ------------ ------------
Total current liabilities.......................... 1,247,971 2,734,743 3,975,449
Capital lease obligations, less current portion.... -- 730,064 1,312,713
Long-term debt..................................... 3,348,000 5,964,000 5,446,000 $3,267,600
Accrued long-term interest payable on long-term
debt.............................................. 424,000 713,500 930,625
Commitments
Stockholders' equity:
Convertible preferred stock, par value $0.001;
Authorized shares--14,842,757 at September 30,
1999; 5,000,000 pro forma
Issued and outstanding shares--5,621,742 and
12,973,694 at December 31, 1997 and 1998 and
14,842,757 at September 30, 1999; no shares
pro forma
Aggregate liquidation preference--$8,609,994 and
$44,645,038 at December 31, 1997 and
1998 and $56,793,947 at September 30, 1999...... 5,622 12,974 14,843 $--
Common stock, par value $0.001;
Authorized shares--19,500,000 at September 30,
1999; 75,000,000 pro forma
Issued and outstanding shares--292,260 and
331,010 at December 31, 1997 and 1998 and
873,369 at September 30, 1999; 16,053,234 shares
pro forma....................................... 292 331 873 16,053
Additional paid-in capital........................ 8,569,705 46,798,743 62,533,274 66,375,651
Notes receivable for stock........................ -- -- (511,281) (511,281)
Deferred compensation related to stock options.... -- (2,420,150) (2,167,162) (2,167,162)
Accumulated other comprehensive income (loss)..... 140,683 (22,649) 216,602 256,888
Deficit accumulated during the development stage.. (11,463,700) (21,734,272) (37,120,310) (41,029,567)
----------- ------------ ------------ -----------
Total stockholders' equity......................... (2,747,398) 22,634,977 22,966,839 $38,977,763
----------- ------------ ------------ -----------
Total liabilities and stockholders' equity......... $2,272,573 $32,777,284 $34,631,626
=========== ============ ============
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
F-3
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM FEBRUARY
14, 1994
NINE MONTHS ENDED (INCEPTION) TO
YEARS ENDED DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1998 1998 1999 1999
- -------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Research and development
grants................. $892,903 $526,573 $351,067 $126,000 $80,653 $1,851,196
Costs and expenses:
Research and
development............ 3,136,205 3,531,558 6,187,572 3,550,263 7,137,677 22,189,265
General and
administrative......... 1,032,005 1,860,629 4,218,453 2,639,877 5,363,295 13,124,367
Amortization of deferred
compensation
($3,047,127 and
$568,023 related to
general and
administrative and
research and
development,
respectively).......... -- -- -- -- 3,615,150 3,615,150
----------- ----------- ------------ ----------- ------------ ------------
4,168,210 5,392,187 10,406,025 6,190,140 16,116,122 38,928,782
----------- ----------- ------------ ----------- ------------ ------------
Loss from operations.... (3,275,307) (4,865,614) (10,054,958) (6,064,140) (16,035,469) (37,077,586)
Interest income......... 72,918 56,986 397,361 290,929 1,225,696 1,758,021
Interest expense........ (274,793) (308,191) (612,975) (229,947) (576,265) (1,800,745)
----------- ----------- ------------ ----------- ------------ ------------
Net loss................ $(3,477,182) $(5,116,819) $(10,270,572) $(6,003,158) $(15,386,038) $(37,120,310)
=========== =========== ============ =========== ============ ============
Historical net loss per
share, basic and
diluted................ $(23.45) $(22.62) $(33.33) $(20.12) $(39.41)
=========== =========== ============ =========== ============
Weighted average shares
outstanding, basic and
diluted................ 148,251 226,251 308,121 298,375 390,486
Pro forma net loss per
share, basic and
diluted................ $(1.02) $(1.03)
============ ============
Pro forma weighted
average shares
outstanding, basic and
diluted................ 9,748,992 14,714,027
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
F-4
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
DEFERRED DEFICIT
NOTES COMPENSATION ACCUMULATED ACCUMULATED
CONVERTIBLE ADDITIONAL RECEIVABLE RELATED TO OTHER DURING THE
PREFERRED STOCK COMMON STOCK PAID-IN FROM STOCK COMPREHENSIVE DEVELOPMENT
SHARES AMOUNT SHARES AMOUNT CAPITAL OFFICERS OPTIONS INCOME (LOSS) STAGE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net loss........ -- $-- -- $-- $-- $-- $-- $-- $(1,149,498)
Translation
adjustment..... -- -- -- -- -- -- -- (1,703) --
Comprehensive
loss........... -- -- -- -- -- -- -- -- --
Issuance of
common stock... -- -- 1 -- 1 -- -- -- --
Issuance of
Series A
Convertible Preferred
Stock, net of
issuance costs
of $35,484..... 442,000 442 -- -- 185,074 -- -- -- --
Issuance of
Series A
Convertible Preferred
Stock for
services....... 38,000 38 -- -- 18,962 -- -- -- --
Issuance of
Series A
Convertible Preferred
Stock for
assets......... 1,100,000 1,100 -- -- 548,900 -- -- -- --
--------- ------ ------- ------ ---------- --- ------- -------- -----------
Balance at
December 31,
1994............ 1,580,000 1,580 1 -- 752,937 -- -- (1,703) (1,149,498)
Net loss........ -- -- -- -- -- -- -- -- (1,720,201)
Translation
adjustment..... -- -- -- -- -- -- -- (3,222) --
Comprehensive
loss........... -- -- -- -- -- -- -- -- --
Issuance of
Series B
Convertible Preferred
Stock, net of
issuance costs
of $32,940..... 2,333,333 2,333 -- -- 3,464,727 -- -- -- --
Issuance of
common stock... -- -- 26,250 26 1,287 -- -- -- --
Exercise of
stock options.. -- -- 122,000 122 5,978 -- -- -- --
--------- ------ ------- ------ ---------- --- ------- -------- -----------
Balance at
December 31,
1995............ 3,913,333 3,913 148,251 148 4,224,929 -- -- (4,925) (2,869,699)
Net loss........ -- -- -- -- -- -- -- -- (3,477,182)
Translation
adjustment..... -- -- -- -- -- -- -- (63,554) --
Comprehensive
loss........... -- -- -- -- -- -- -- -- --
Issuance of
Series B
Convertible Preferred
Stock, net of
issuance costs
of $10,592..... 643,330 644 -- -- 953,647 -- -- -- --
Issuance of
warrants....... -- -- -- -- 18,000 -- -- -- --
Deferred
compensation... -- -- -- -- 33,000 -- (25,000) -- --
--------- ------ ------- ------ ---------- --- ------- -------- -----------
Balance at
December 31,
1996............ 4,556,663 4,557 148,251 148 5,229,576 -- (25,000) (68,479) (6,346,881)
Net loss........ -- $-- -- $-- $-- $-- $-- $-- $(5,116,819)
Translation ad-
justment....... -- -- -- -- -- -- -- 209,162 --
Comprehensive
loss........... -- -- -- -- -- -- -- -- --
Exercise of
stock options.. -- -- 144,009 144 35,856 -- -- -- --
<CAPTION>
TOTAL
STOCKHOLDERS'
EQUITY
(DEFICIT)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
Net loss........ $(1,149,498)
Translation
adjustment..... (1,703)
-------------
Comprehensive
loss........... (1,151,201)
Issuance of
common stock... 1
Issuance of
Series A
Convertible Preferred
Stock, net of
issuance costs
of $35,484..... 185,516
Issuance of
Series A
Convertible Preferred
Stock for
services....... 19,000
Issuance of
Series A
Convertible Preferred
Stock for
assets......... 550,000
-------------
Balance at
December 31,
1994............ (396,684)
Net loss........ (1,720,201)
Translation
adjustment..... (3,222)
-------------
Comprehensive
loss........... (1,723,423)
Issuance of
Series B
Convertible Preferred
Stock, net of
issuance costs
of $32,940..... 3,467,060
Issuance of
common stock... 1,313
Exercise of
stock options.. 6,100
-------------
Balance at
December 31,
1995............ 1,354,366
Net loss........ (3,477,182)
Translation
adjustment..... (63,554)
-------------
Comprehensive
loss........... (3,540,736)
Issuance of
Series B
Convertible Preferred
Stock, net of
issuance costs
of $10,592..... 954,291
Issuance of
warrants....... 18,000
Deferred
compensation... 8,000
-------------
Balance at
December 31,
1996............ (1,206,079)
Net loss........ $(5,116,819)
Translation ad-
justment....... 209,162
-------------
Comprehensive
loss........... (4,907,657)
Exercise of
stock options.. 36,000
</TABLE>
- --------------------------------------------------------------------------------
F-5
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
<TABLE>
<CAPTION>
DEFERRED DEFICIT
NOTES COMPENSATION ACCUMULATED ACCUMULATED
CONVERTIBLE ADDITIONAL RECEIVABLE RELATED TO OTHER DURING THE
PREFERRED STOCK COMMON STOCK PAID-IN FROM STOCK COMPREHENSIVE DEVELOPMENT
SHARES AMOUNT SHARES AMOUNT CAPITAL OFFICERS OPTIONS INCOME (LOSS) STAGE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of
Series C
Convertible
Preferred
Stock, net of
issuance costs
of $49,661..... 1,065,079 1,065 -- -- 3,304,273 -- -- -- --
Amortization of
deferred
compensation... -- -- -- -- -- -- 25,000 -- --
---------- ------- ------- ---- ----------- --------- ----------- -------- ------------
Balance at
December 31,
1997............ 5,621,742 5,622 292,260 292 8,569,705 -- -- 140,683 (11,463,700)
Net loss........ -- -- -- -- -- -- -- -- (10,270,572)
Unrealized gain
on available-
for-sale
securities..... -- -- -- -- -- -- -- 23,326 --
Translation
adjustment..... -- -- -- -- -- -- -- (186,658) --
Comprehensive
loss........... -- -- -- -- -- -- -- -- --
Exercise of
stock options.. -- -- 38,750 39 7,086 -- -- -- --
Issuance of
Series C
Convertible
Preferred
Stock, net of
issuance costs
of $47,370..... 3,508,252 3,508 -- -- 11,000,115 -- -- -- --
Issuance of
Series D
Convertible
Preferred
Stock, net of
Issuance costs
of $188,519.... 3,843,700 3,844 -- -- 24,791,687 -- -- -- --
Deferred
compensation... -- -- -- -- 2,420,150 -- (2,420,150) -- --
---------- ------- ------- ---- ----------- --------- ----------- -------- ------------
Balance at
December 31,
1998............ 12,973,694 12,974 331,010 331 46,798,743 (2,420,150) (22,649) (21,734,272)
Net loss........ -- -- -- -- -- -- -- -- (15,386,038)
Unrealized loss
available-for-
sale
securities..... -- -- -- -- -- -- -- (48,083) --
Translation
adjustment..... -- -- -- -- -- -- -- 287,334 --
Comprehensive
loss........... -- -- -- -- -- -- -- -- --
Exercise of
stock options.. -- -- 542,359 542 495,008 (511,281) -- -- --
Issuance of
stock options
to
consultants.... -- -- -- -- 102,527 -- -- -- --
Issuance of
Series D
Convertible
Preferred
stock, net of
issuance costs
of $372,206.... 1,869,063 1,869 -- -- 11,774,834 -- -- -- --
Deferred
compensation... -- -- -- -- 3,362,162 -- (3,362,162) -- --
Amortization of
deferred
compensation... -- -- -- -- -- -- 3,615,150 -- --
---------- ------- ------- ---- ----------- --------- ----------- -------- ------------
Balance at
September 30,
1999............ 14,842,757 $14,843 873,369 $873 $62,533,274 $(511,281) $(2,167,162) $216,602 $(37,120,310)
========== ======= ======= ==== =========== ========= =========== ======== ============
<CAPTION>
TOTAL
STOCKHOLDERS'
EQUITY
(DEFICIT)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
Issuance of
Series C
Convertible
Preferred
Stock, net of
issuance costs
of $49,661..... 3,305,338
Amortization of
deferred
compensation... 25,000
-------------
Balance at
December 31,
1997............ (2,747,398)
Net loss........ (10,270,572)
Unrealized gain
on available-
for-sale
securities..... 23,326
Translation
adjustment..... (186,658)
-------------
Comprehensive
loss........... (10,433,904)
Exercise of
stock options.. 7,125
Issuance of
Series C
Convertible
Preferred
Stock, net of
issuance costs
of $47,370..... 11,003,623
Issuance of
Series D
Convertible
Preferred
Stock, net of
Issuance costs
of $188,519.... 24,795,531
Deferred
compensation... --
-------------
Balance at
December 31,
1998............ 22,634,977
Net loss........ (15,386,038)
Unrealized loss
available-for-
sale
securities..... (48,083)
Translation
adjustment..... 287,334
-------------
Comprehensive
loss........... (15,146,787)
Exercise of
stock options.. (15,731)
Issuance of
stock options
to
consultants.... 102,527
Issuance of
Series D
Convertible
Preferred
stock, net of
issuance costs
of $372,206.... 11,776,703
Deferred
compensation... --
Amortization of
deferred
compensation... 3,615,150
-------------
Balance at
September 30,
1999............ $22,966,839
=============
</TABLE>
- --------------------------------------------------------------------------------
F-6
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
FEBRUARY 14,
1994
YEARS ENDED NINE MONTHS ENDED (INCEPTION) TO
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1998 1998 1999 1999
- -------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss................ $(3,477,182) $(5,116,819) $(10,270,572) $(6,003,158) $(15,386,038) $(37,120,310)
Adjustments to reconcile
net loss to net cash
used in operating
activities:
Amortization of deferred
compensation........... -- -- -- -- 3,615,149 3,615,149
Warrants issued in
conjunction with lease
financing.............. 18,000 -- -- -- -- 18,000
Options issued to
consultants............ 8,000 25,000 10,000 -- 102,527 145,527
Stock issued for
technology and
services............... -- -- -- -- -- 569,000
Depreciation and
amortization........... 314,195 351,173 961,051 797,599 1,285,789 3,060,173
Changes in operating
assets and liabilities:
Inventories............. -- -- -- -- (243,036) (243,036)
Other current assets.... (247,711) 75,364 47,305 (238,993) (263,499) (556,508)
Other assets............ 10,213 (107,427) 56,085 59,405 4,829 (16,160)
Accounts payable and
accrued expenses....... 256,235 356,155 1,237,892 (29,252) 1,217,450 3,733,659
Unearned revenue........ 251,000 (125,000) (126,000) (126,000) -- --
Other liabilities....... 149,000 149,500 289,500 74,750 217,125 805,125
----------- ----------- ------------ ----------- ------------ ------------
Net cash used in
operating activities... (2,718,250) (4,392,054) (7,794,739) (5,465,649) (9,449,704) (25,989,381)
INVESTING ACTIVITIES
Purchase of equipment
and leasehold
improvements........... (429,896) (490,891) (3,830,666) (2,613,514) (3,275,247) (8,997,999)
Purchases of marketable
securities............. -- -- (19,914,550) -- (22,655,545) (42,570,095)
Maturities of marketable
securities............. -- -- -- -- 17,476,703 17,476,703
----------- ----------- ------------ ----------- ------------ ------------
Net cash used in
investing activities... (429,896) (490,891) (23,745,216) (2,613,514) (8,454,089) (34,091,391)
FINANCING ACTIVITIES
Proceeds from issuance
of Convertible
Preferred Stock........ 954,291 3,305,338 35,799,154 11,009,967 11,776,703 53,908,061
Proceeds from long-term
debt................... 1,706,592 1,165,000 2,276,560 2,233,200 -- 6,039,160
Borrowings under capital
lease obligations...... -- -- 1,306,312 1,074,549 912,149 2,218,461
Payments on capital
lease obligations...... -- -- (226,758) (132,286) (237,542) (464,300)
Proceeds from issuance
of convertible term
notes to stockholders.. -- -- -- -- -- 1,580,000
Proceeds from issuance
of Common Stock........ -- 36,000 7,125 36 37,721 88,260
----------- ----------- ------------ ----------- ------------ ------------
Net cash provided by
financing activities... 2,660,883 4,506,338 39,162,393 14,185,466 12,489,031 63,369,642
----------- ----------- ------------ ----------- ------------ ------------
Net increase (decrease)
in cash and cash
equivalents............ (424,078) (376,607) 7,622,438 6,106,303 (5,414,762) 3,288,870
Effect of exchange rate
change on cash and cash
equivalents............ (126,739) (116,748) 104,392 120,775 (98,250) (242,270)
Cash and cash
equivalents at
beginning of period.... 1,876,954 1,326,137 832,782 832,782 8,559,612 --
----------- ----------- ------------ ----------- ------------ ------------
Cash and cash
equivalents at end of
period................. $1,326,137 $832,782 $8,559,612 $7,059,860 $3,046,600 $3,046,600
=========== =========== ============ =========== ============ ============
SUPPLEMENTAL SCHEDULE OF
NONCASH INVESTING AND
FINANCING ACTIVITIES:
Conversion of
convertible term notes
to Series B Convertible
Preferred Stock........ $-- $-- $-- $-- $-- $1,580,000
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW
INFORMATION:
Interest paid........... $-- $158,691 $323,475 $155,197 $359,140 $841,306
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
F-7
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF THE BUSINESS
Sequenom, Inc. (the "Company") was incorporated on February 14, 1994 in the
State of Delaware. Since inception, the Company has been primarily involved in
the research and development of high definition DNA analysis tools for
industrial biomedical and life science applications, and has not yet generated
revenues from its planned commercial operations. Accordingly, through the date
of these financial statements, the Company is considered to be a development
stage company.
Since inception, the Company has incurred significant losses and, as of
September 30, 1999, has an accumulated deficit of $37.1 million. Revenues to
date have been solely from research grants. The Company began placing
MassArray systems at beta sites and pre-launch partners in July 1999.
Information received from these sites is being used to optimize product
offerings. The Company expects to generate revenue from the commercial launch
of its MassArray system in the first quarter of 2000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, Sequenom GmbH. All significant
intercompany transactions have been eliminated in consolidation.
CASH AND CASH EQUIVALENTS
Cash equivalents consist of highly liquid investments with original maturities
when purchased of less than three months.
SHORT-TERM INVESTMENTS AND CONCENTRATION OF CREDIT RISK
In accordance with Statement of Financial Accounting Standards ("SFAS") No.
115, Accounting for Certain Investments in Debt and Equity Securities, the
Company's investment securities are classified as available-for-sale and
unrealized holding gains or losses are included in comprehensive income
(loss.) Realized gains or losses, calculated based on the specific
identification method, were not material for the years ended December 31,
1996, 1997 and 1998, or the nine-month period ended September 30, 1999.
At December 31, 1998, short-term investments consisted of the following:
<TABLE>
<CAPTION>
AMORTIZED MARKET UNREALIZED
COST VALUE GAIN
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Obligations of U.S. government agencies..... $ 6,829,729 $ 6,830,085 $ 356
Corporate debt securities................... 13,084,821 13,107,791 22,970
----------- ----------- -------
Total short-term investments................ $19,914,550 $19,937,876 $23,326
=========== =========== =======
</TABLE>
Approximately 75% and 25% of these securities mature within one and two years
of December 31, 1998, respectively.
- -------------------------------------------------------------------------------
F-8
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
At September 30, 1999, short-term investments consisted of the following:
<TABLE>
<CAPTION>
AMORTIZED MARKET UNREALIZED
COST VALUE GAIN
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Obligations of U.S. government agencies..... $ 8,484,336 $ 8,459,315 $25,021
Corporate debt securities................... 16,609,057 16,563,345 45,712
----------- ----------- -------
Total short-term investments................ $25,093,393 $25,022,660 $70,733
=========== =========== =======
</TABLE>
Approximately 76% and 24% of these securities mature within one and two years
of September 30, 1999, respectively.
INVENTORIES
Inventories consist principally of raw materials and are stated at the lower
of cost or market. Cost is determined by the first-in, first-out (FIFO)
method.
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment is stated at cost and depreciated using the straight-line method
over the estimated useful lives of the assets, generally 3 to 5 years, or the
lease term, whichever is shorter. Leasehold improvements are amortized using
the straight-line method over the estimated useful life of the improvement or
the remaining term of the lease, whichever is shorter.
SOFTWARE COSTS
Purchased software is capitalized at cost and amortized over the estimated
useful life, generally three years. Software developed for use in the
Company's products is expensed as incurred until both (i) technological
feasibility for the software has been established, and (ii) all research and
development activities for the other components of the system have been
completed. The Company believes this will occur after the Company has received
evaluations from the beta sites and has concluded any resulting modifications
to the products. Expenditures to date have been classified as research and
development expense.
IMPAIRMENT OF LONG-LIVED ASSETS
In accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of, if indicators of
impairment exist, the Company assesses the recoverability of the affected
long-lived assets by determining whether the carrying value of such assets can
be recovered through undiscounted future operating cash flows. If impairment
is indicated, the Company measures the amount of such impairment by comparing
the carrying value of the asset to the present value of the expected future
cash flows associated with the use of the asset. While the Company's current
and historical operating and cash flow losses are indicators of impairment,
the Company believes the future cash flows to be received from the long-lived
assets will exceed the assets' carrying value, and accordingly the Company has
not recognized any impairment losses through September 30, 1999.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial instruments, including cash and cash equivalents, accounts
receivable, accounts payable, and accrued liabilities are carried at cost,
which management believes approximates fair value because of the short-term
maturity of these instruments.
The long-term debt and related accrued interest is not scheduled to be repaid
until 2005 and 2007. However, in connection with this offering, the Company
intends to extinguish the aggregate of $5,446,000 in long-term debt and
$930,625 in accrued interest through the issuance of 296,900 shares of common
stock (with a fair value of $7,125,600 at an assumed initial public offering
price of $24.00 per share) and cash of approximately $3,267,000.
- -------------------------------------------------------------------------------
F-9
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
REVENUE RECOGNITION
Grant revenue is recorded as the research expenses relating to the grants are
incurred, provided that the amounts received are not refundable if the
research is not successful. Amounts received that are refundable if the
research is not successful would be recorded as deferred revenue and
recognized as revenue upon the grantor's acceptance of the success of the
research results.
The Company's product shipments through September 30, 1999 have been under
arrangements whereby the customer is performing beta testing on the MassArray
product and may elect to purchase the product following the completion of an
evaluation period. Revenue under these arrangements will be recognized upon
the completion of the evaluation period and upon the customer's definitive
acceptance of the product. Certain of these arrangements require the customer
to make one or more payments during the testing and evaluation period. Amounts
received under these arrangements ($100,000 at September 30, 1999) are
recorded as customer advances, which are included in accounts payable and
accrued expenses in the accompanying balance sheet.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs are expensed in the period incurred.
INCOME TAXES
In accordance with SFAS No. 109, Accounting for Income Taxes, a deferred tax
asset or liability is determined based on the difference between the financial
statement and tax basis of assets and liabilities as measured by the enacted
tax rates which will be in effect when these differences reverse. The Company
provides a valuation allowance against net deferred tax assets unless, based
upon the available evidence, it is more likely than not that the deferred tax
assets will be realized.
PATENT COSTS
Costs related to filing and pursuing patent applications are expensed as
incurred as recoverability of such expenditures is uncertain.
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS
The financial statements of the Company's German subsidiary are measured using
the German Deutsche Mark (DEM) as the functional currency. Assets and
liabilities of this subsidiary are translated at the rates of exchange at the
balance sheet date. Income and expense items are translated at the average
daily rate of exchange during the reporting period. The resulting translation
adjustments are included as a separate component of other comprehensive income
(loss). Transactions denominated in currencies other than the local currency
are recorded based on exchange rates at the time such transactions arise.
Subsequent changes in exchange rates result in transaction gains and losses
which are reflected in income as unrealized (based on period-end translations)
or realized upon settlement of the transactions.
STOCK-BASED COMPENSATION
As permitted by SFAS No. 123, Accounting for Stock-Based Compensation, the
Company has elected to follow Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, ("APB 25") and related
Interpretations in accounting for stock-based employee compensation. Under APB
25, if the exercise price of the Company's employee and director stock options
equals or exceeds the estimated fair value of the underlying stock on the date
of grant, no compensation expense is recognized.
- -------------------------------------------------------------------------------
F-10
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
When the exercise price of the employee or director stock options is less than
the fair value of the underlying stock on the grant date, the Company records
deferred compensation for the difference and amortizes this amount to expense
in accordance with FASB Interpretation No. 28, or FIN 28, over the vesting
period of the options. Options or stock awards issued to non-employees are
recorded at their fair value as determined in accordance with SFAS No. 123 and
recognized over the related service period.
COMPREHENSIVE INCOME (LOSS)
As of January 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. SFAS No. 130 requires unrealized gains or losses on the
Company's available-for-sale securities and foreign currency translation
adjustments, which prior to adoption were reported separately in stockholders'
equity, to be included in other comprehensive income (loss).
SEGMENT REPORTING
The Company adopted SFAS No. 131, Disclosures About Segments of an Enterprise
and Related Information, during 1998. SFAS No. 131 requires the use of a
management approach in identifying segments of an enterprise. Management has
determined that the Company operates in one business segment.
INTERIM FINANCIAL DATA
The consolidated statements of operations and cash flows for the nine months
ended September 30, 1998 are unaudited. The unaudited consolidated financial
statements have been prepared on the same basis as the audited consolidated
financial statements and, in the opinion of management, include all
adjustments, consisting of only normal recurring adjustments, necessary to
state fairly therein, in accordance with generally accepted accounting
principles.
NET LOSS PER SHARE
In accordance with SFAS No. 128, Earnings Per Share, and SEC Staff Accounting
Bulletin (or SAB) No. 98, basic net income (loss) per share is computed by
dividing the net income (loss) for the period by the weighted average number
of common shares outstanding during the period. Diluted net income (loss) per
share is computed by dividing the net income (loss) for the period by the
weighted average number of common and common equivalent shares outstanding
during the period. Potentially dilutive securities composed of incremental
common shares issuable upon the exercise of stock options and warrants, and
common shares issuable on conversion of preferred stock, were excluded from
historical diluted loss per share because of their anti-dilutive effect.
Under the provisions of SAB No. 98, common shares issued for nominal
consideration, if any, would be included in the per share calculations as if
they were outstanding for all periods presented. No common shares have been
issued for nominal consideration.
Pro forma net loss per share has been computed as described above and also
gives effect to common equivalent shares arising from preferred stock and
long-term debt that will automatically convert upon the closing of the initial
public offering contemplated by this prospectus (using the as-if converted
method from the original date of issuance) and reflects the elimination of
interest expense on the debt to be converted.
UNAUDITED PRO FORMA BALANCE SHEET INFORMATION
The unaudited pro forma balance sheet information at September 30, 1999
reflects the conversion of the convertible preferred stock and convertible
long-term debt into 14,842,757 and 272,108 shares of
- -------------------------------------------------------------------------------
F-11
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
common stock, respectively, including the related recognition of
(i) $4,244,884 of interest expense for the beneficial conversion of the debt,
and (ii) the recognition of $147,600 of related foreign translation gains on
such debt from October 1, 1999 through December 27, 1999. The pro forma
balance sheet information does not reflect (i) the issuance of 1,523,451
shares of common stock from October 1, 1999 through December 27, 1999 pursuant
to the exercise of stock options, and the related issuance of loans to certain
executives of $1,545,185, resulting in a net decrease in cash of $66,993, or
(ii) $2,212,650 of additional deferred compensation recorded from October 1,
1999 through December 27, 1999.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain amounts in the prior year financial statements have been reclassified
to conform to current year presentation.
NEW ACCOUNTING PRONOUNCEMENTS
The Company expects to adopt SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, effective January 1, 2001. SFAS No. 133
will require the Company to recognize all derivatives on the balance sheet at
fair value. The Company does not anticipate that the adoption of the SFAS
No. 133 will have a significant effect on its results of operations or
financial position.
3. EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements and related accumulated depreciation and
amortization are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1997 1998 1999
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Laboratory equipment.................. $1,248,735 $3,982,149 $4,906,210
Leasehold improvements................ 119,061 1,044,891 1,392,927
Office furniture and equipment........ 238,418 417,990 1,875,083
---------- ---------- ----------
1,606,214 5,445,030 8,174,220
Less accumulated depreciation and
amortization......................... 604,017 1,503,142 2,363,376
---------- ---------- ----------
$1,002,197 $3,941,888 $5,810,844
========== ========== ==========
</TABLE>
Total depreciation and amortization expense amounted to $314,195, $351,173 and
$961,051 for the years ended December 31, 1996, 1997 and 1998, respectively,
and $1,285,789 for the nine month period ended September 30, 1999.
Depreciation expense for the period from inception (February 14, 1994) through
September 30, 1999 was $3,060,173.
4. LONG-TERM DEBT
In 1995, the Company entered into agreements with Technologie Beteiligungs
Gesellschaft ("TBG") for two unsecured loans, one for DEM1 million
(approximately $700,000) and the other for DEM3 million
- -------------------------------------------------------------------------------
F-12
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(approximately $2.0 million). In 1997, the Company's subsidiary entered into
another agreement with the same German bank for an additional unsecured loan
of DEM2 million (approximately $1.2 million).
Interest is payable semi-annually on the loans. The 1995 loans began accruing
interest at 6% per annum commencing March 31, 1997 and payments commenced in
June 1997. The effective nominal interest rate over the life of the 1995 loans
is 4.8%. The 1997 loan bears interest at 7% and payments commenced in 1998.
The subsidiary is also required to pay additional interest equal to 9% of the
subsidiary's annual profits, to the extent that such profits exceed DEM100,000
per year (the subsidiary has not earned any such profits through September 30,
1999). The combined annual interest rate (nominal interest and additional
interest) may not exceed 7% per year through December 31, 2000. Commencing
January 1, 2001 and January 1, 2003, any amounts still outstanding will accrue
additional interest at 6% and 7% per annum for the 1995 loans and 1997 loan,
respectively.
In addition, at the end of the loan term (earlier of repayment or December 31,
2005 and December 31, 2007 for the 1995 loans and 1997 loan, respectively),
the subsidiary is obligated to pay terminal interest equal to 25%, 30% and 35%
of the amounts loaned under the DEM1 million, DEM3 million and DEM2 million
agreements, respectively, estimated to be approximately $1.2 million at the
end of the loan term. The Company has accrued interest in the amount of
$930,625 relating to the terminal interest representing approximately 75% of
the terminal interest to be paid at the end of the loan term. The Company's
accrual has been recorded on a straight-line basis, based upon the assumption
that the entire success fee would be paid in 2000, when the Company has been
expecting it would be able to repay the debt. The bank may elect to forego
collection of such amounts in certain situations. In December 1999, TBG agreed
to accept shares of the Company's common stock with an aggregate value of
$595,000, contingent upon completion of this offering, in full satisfaction of
the Company's obligation for interest payable to TBG. Assuming completion of
the initial public offering, the Company's ultimate interest cost will be
$595,000. The difference between the ultimate interest cost and accrued
interest liability will be recorded as a reduction of, interest expense upon
completion of the offering.
Under certain conditions, the Company may exercise a put option to sell its
shares of capital stock in the subsidiary to TBG for an amount equal to 50% of
the Company's equity contribution to the subsidiary pursuant to the DEM3
million loan. Through December 31, 1998, the Company had made capital
contributions to the subsidiary under the DEM3 million loan agreement of DEM3
million; therefore, the potential amount recoverable under this put option was
approximately DEM1.5 million at December 31, 1998. If the Company exercises
such put option, then the Series B Preferred Stockholders have a right to
demand redemption of their Series B Preferred Stock in the amount of $1.50 per
share. At the present time, the Company has no intention of exercising the put
option.
In January 1998, the Company entered into an agreement with TBG for debt of
DEM4 million (approximately $2.3 million) which is convertible into Common
Stock. Interest is payable at 6% of the subsidiary's annual profits. However,
the combined annual interest rate on all loans granted by TBG may not exceed
9% of the subsidiary's annual profits or 7% of the principal outstanding. The
Company may call for conversion in the event of a triggering event, as defined
in the agreement (generally a change in control or an initial public
offering). TBG may call for conversion at any time. The conversion ratio is
calculated as the arithmetic mean between $3.15 per share and a current
valuation of the Common Stock at the time of conversion, not to exceed $8.40
per share. The loan must be repaid by December 31, 2007, if not previously
converted. The Company intends to call for conversion of the loan upon
completion of this offering, and the conversion ratio is likely to be $8.40
per share, resulting in the issuance of approximately 272,108 shares of Common
Stock. Upon conversion, the Company will record additional
- -------------------------------------------------------------------------------
F-13
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
interest expense equal to the difference between the offering price and $8.40
per share. Assuming an initial public offering price of $24.00 per share, the
amount of such charge would be approximately $4,244,884.
In 1999, the Company established a $5 million revolving line of credit with a
bank. The Company may borrow under this agreement through June 2000. Payments
of principal and interest would be made over a 48 month period, commencing
October 31, 2001. Payments prior to that date would consist of interest only.
Borrowings bear interest at LIBOR plus 1.75%. Any amounts borrowed will be
secured by short-term investments maintained at the bank. No borrowings had
been made under this agreement as of September 30, 1999.
5. STOCKHOLDERS' EQUITY
CONVERTIBLE PREFERRED STOCK
At September 30, 1999, convertible Preferred Stock outstanding is as follows:
<TABLE>
<CAPTION>
PRICE PER NUMBER OF LIQUIDATION
DATE ISSUED SERIES SHARE SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
March-August 1995....................... A $0.50 1,580,000 $790,000
December 1995........................... B $1.50 2,333,333 3,500,000
February-March 1996..................... B $1.50 643,330 964,995
May 1997................................ C $3.15 1,065,079 3,354,999
January 1998............................ C $3.15 3,508,252 11,050,994
December 1998........................... D $6.50 3,843,700 24,984,050
February-March 1999..................... D $6.50 1,869,063 12,148,909
---------- -----------
14,842,757 $56,793,947
========== ===========
</TABLE>
Each share of Preferred Stock is convertible into one share of Common Stock at
the option of the holder. In addition, each share of Preferred Stock will
automatically convert to Common Stock upon the closing of the initial public
offering contemplated by this prospectus. A particular series of Preferred
Stock may be converted upon at least a two-thirds vote of the related holders
of such series of Preferred Stock.
No dividends shall be declared or paid to the holders of Series A Preferred
Stock or Common Stock unless the holders of Series B, Series C and Series D
Preferred Stock have been paid in full for all of the dividends to which they
are entitled. No dividends can be declared or paid to the holders of Series A
Preferred Stock or Common Stock at a rate greater than the rate paid to the
holders of Series B and Series C Preferred Stock.
The Series D Preferred Stock has preference as to the assets of the Company
upon liquidation over all other classes of capital stock. In liquidation, the
holders of Series A, Series B, Series C, and Series D Preferred Stock are
entitled to the greater of (i) $0.50, $1.50, $3.15 or $6.50 per share of
Series A, Series B, Series C, or Series D Preferred Stock, respectively
(subject to certain adjustments), plus declared but unpaid dividends, or (ii)
the amount per share of the Series D Preferred Stock as would have been
payable had all shares been converted to Common Stock immediately prior to a
liquidation event, plus declared but unpaid dividends. If the assets of the
Company are insufficient to permit payment in full, the entire assets of the
Company available for distribution will be distributed ratably first among the
holders of the Series D Preferred Stock and then the Series C, Series B,
Series A and Common Stock, respectively.
- -------------------------------------------------------------------------------
F-14
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The holders of Series B Preferred Stock have redemption rights under certain
limited conditions as discussed in Note 4.
In February 1998, a German bank purchased 2,700 shares or approximately 5% of
Sequenom GmbH common stock for DM3 million (approximately $1.7 million). The
German bank's ownership interest in the subsidiary was convertible, at the
option of the Company, into Series C Preferred Stock. Later in 1998, the
Company effected the conversion of the minority interest into 540,000 shares
of Series C Preferred Stock at $3.15 per share. Due to the Company's ability
and intention to convert the minority interest, which existed from the date of
the original transaction, the Company accounted for the transaction as a sale
of Series C Preferred Stock and has not reflected any minority interest in its
losses during the time the German bank held the 5% minority interest.
WARRANTS
In 1994, the Company entered into a $1 million equipment lease. Under the
terms of this agreement, the Company issued warrants to purchase 70,000 shares
of Series A Preferred Stock at an exercise price of $0.50 per share. In
connection with those warrants, the Company recorded $18,000 of additional
interest expense.
In connection with the Series C Preferred Stock issued in May 1997, the
Company issued warrants to purchase 106,503 shares of Series C Preferred Stock
at an exercise price of $3.15 per share.
NOTES RECEIVABLE
In 1999, the Board of Directors authorized the issuance of approximately $3.0
million in loans to executive officers, related to the exercise of their stock
options. The notes are full recourse and are also secured by the underlying
stock. The notes bear interest at the applicable federal rate in existence
when the notes were made (approximately 6%). The principal amount of the notes
and the related interest are required to be repaid on the earlier of two years
from the origination date of the loans or in the event of a secondary public
offering, if the executive officers making the note are allowed to sell their
stock. An aggregate of $511,281 of such loans were issued as of September 30,
1999. An additional $1,545,185 of such loans were issued from October 1, 1999
through December 27, 1999 in connection with the exercise of options to
purchase 1,523,451 shares of common stock, which options had been outstanding
as of September 30, 1999. The remainder of the loans are expected to be issued
through early 2000.
STOCK COMPENSATION PLANS
In December 1998, the Company adopted the 1998 Stock Option/Stock Issuance
Plan ("1998 Plan"). The Plan provides for the grant to directors, employees
and consultants of options to purchase Common Stock. The Plan also provides
for the issuance of shares of Common Stock, subject to the Company's right to
repurchase the shares at the original purchase price in the event the employee
terminates prior to vesting. Prior to the 1998 Plan, the Company granted
options under the 1994 Stock Plan ("1994 Plan"). All options previously
granted under the 1994 Plan were transferred to the 1998 Plan in 1999. The
number of shares of Common Stock issuable under the plans was 1,700,000 and
2,700,000 in 1997 and 1998, respectively. At September 30, 1999 the number of
shares issuable under the 1998 Plan was 3,400,000. In October 1999 the number
of shares issuable under the 1998 plan was increased to 3,900,000. Options
granted under the 1998 Plan generally vest over a four-year period.
In November 1999, the Company adopted the Stock Incentive Plan ("the 1999
Plan"). The 1999 Plan provides for the grant of 4,750,000 shares of common
stock, which consists of the number of shares
- -------------------------------------------------------------------------------
F-15
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
estimated to carryover from the 1998 Plan, plus an increase of approximately
850,000 shares. Beginning in 2001, the amount of authorized shares available
under the 1999 Plan will automatically increase each January 1st by an amount
equal to 4% of the outstanding common stock on the prior December 31st,
subject to an annual increase limitation of 2,000,000 shares. Officers,
employees, board members and consultants are eligible to participate in the
1999 Plan. To date, no options have been granted under the 1999 Plan.
In November 1999, the Company adopted the 1999 Employee Stock Purchase Plan
("1999 ESPP"). The Company has reserved 250,000 shares of common stock for
issuance under the 1999 ESPP. Beginning in 2001, the amount of authorized
shares available under the 1999 ESPP will automatically increase each January
1st by an amount equal to 1% of the outstanding common stock on the prior
December 31st, subject to an annual increase limitation of 500,000. The 1999
ESPP will have a series of concurrent offering periods, each with a maximum
duration of 24 months, however, no employee may participate in more than one
offering period at a time.
The stock option activity is summarized as follows:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
NUMBER OF EXERCISE
SHARES PRICE
- --------------------------------------------------------------------------------
<S> <C> <C>
Balance at December 31, 1996................................ 683,000 $0.18
Granted.................................................... 731,000 $0.25
Cancelled.................................................. (50,000) $0.25
Exercised.................................................. (144,000) $0.25
---------
Balance at December 31, 1997................................ 1,220,000 $0.21
Granted.................................................... 1,268,500 $0.71
Cancelled.................................................. (71,250) $0.28
Exercised.................................................. (38,750) $0.18
--------- -----
Balance at December 31, 1998................................ 2,378,500 $0.47
Granted.................................................... 685,250 $3.00
Cancelled.................................................. (52,500) $0.60
Exercised.................................................. (536,000) $0.89
---------
Balance at September 30, 1999............................... 2,475,250 $1.09
=========
</TABLE>
At September 30, 1999, 84,000 shares were available for future option grants
and 2,559,250 shares of Common Stock were reserved for issuance of all
options. The weighted average grant-date fair value of options granted in
1996, 1997 and 1998 and for the nine month period ended September 30, 1999 was
$0.06, $0.07, $0.17 and $2.86, respectively.
The following table summarizes information about options outstanding at
September 30, 1999:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
WEIGHTED
RANGE OF AVERAGE WEIGHTED NUMBER WEIGHTED
EXERCISE NUMBER REMAINING AVERAGE EXERCISABLE AVERAGE
PRICE OUTSTANDING CONTRACTUAL LIFE EXERCISE PRICE AND VESTED EXERCISE PRICE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$0.05-$0.25 977,000 7.4 $0.22 951,451 $0.18
$0.50-$1.10 913,000 9.0 $0.79 371,884 $0.67
$3.00-$3.30 585,250 8.9 $3.00 49,625 $3.00
--------- ---------
$0.05-$3.30 2,475,250 8.3 $1.09 1,372,960 $0.42
========= =========
</TABLE>
- -------------------------------------------------------------------------------
F-16
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Had compensation cost for these option grants been determined consistent with
the fair value method prescribed in SFAS No. 123, the Company's net loss would
have been changed to the following pro forma amounts:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER
1996 1997 1998 30, 1999
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pro forma net loss...... $(3,479,642) $(5,122,653) $(10,325,893) $(15,812,155)
Net loss as reported.... $(3,477,182) $(5,116,819) $(10,270,572) $(15,386,038)
Pro forma net loss per
share, basic and
diluted................ $ (23.51) $ (22.64) $ (33.51) $ (40.50)
Net loss per share,
basic and diluted, as
reported............... $ (23.45) $ (22.62) $ (33.33) $ (39.41)
</TABLE>
The fair value of these options was estimated at the date of grant using the
minimum value pricing model with the following weighted average assumptions
for 1996, 1997 and 1998 and for the nine months ended September 30, 1999:
risk-free interest rate of 5%, 6%, 6%, 6%; dividend yield of 0%; and a
weighted-average life of the options of four years.
The minimum value pricing model is similar to the Black-Scholes option
valuation model which was developed for use in estimating the fair value of
traded options which have no vesting restrictions and are fully transferable,
except that it excludes the factor for volatility. In addition, option
valuation models require the input of highly subjective assumptions. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of its employee stock options.
DEFERRED COMPENSATION
The Company has recorded deferred compensation totalling $2,420,150 in
December 1998 and $1,689,662 in the nine months ended September 30, 1999 in
connection with the grants of stock options to employees. In addition, the
Company recorded deferred compensation of $1,672,500 in July 1999 related to a
remeasurement of certain options originally granted to an officer in 1997.
Amortization of deferred compensation totalled $3,615,150 during the nine
months ended September 30, 1999.
In October 1999, the Company granted options to purchase 335,250 shares of
stock at $3.00 per share and recorded additional deferred compensation of
$2,212,650. In January 2000, the Company granted options to purchase 76,000
shares of stock at $3.00 per share and expects to record additional deferred
compensation of approximately $1.6 million.
CONSULTING ARRANGEMENT RELATED TO INITIAL PUBLIC OFFERING
In March 1999, the Company engaged two German consulting firms to assist the
Company in completing an initial public offering (IPO) of its common stock.
The Company agreed to pay the consulting firms an aggregate amount of
DEM150,000, or approximately $78,000, plus a percentage of the amount of
capital raised attributable to their efforts. The Company also offered and
committed to sell the firms an aggregate of DEM3 million, or approximately
$1,560,000, of freely tradeable common shares, for cash, at the IPO price in
conjunction with the completion of an IPO.
In January 2000, the Company was advised that its March 1999 offer and
commitment to sell the shares may have been in violation of Section 5 of the
Securities Act of 1933. Such a violation would provide the consulting firms
with a "put right" through January 2001 pursuant to which they could demand
that
- -------------------------------------------------------------------------------
F-17
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
the Company repurchase their shares at the original purchase price (i.e. the
initial public offering price). In January 2000, the consulting firms signed
an agreement waiving any "put right" to which they otherwise would have been
entitled and assigning their stock purchase rights to third parties. The
Company agreed to register such shares with the Registration Statement of
which this Prospectus forms a part. The consulting firms also agreed that the
total advisory fee due to them under the original agreement would be
DEM789,000, or approximately $410,000.
The Company intends to net the $410,000 advisory fee against the proceeds of
the offering, as the Company considers the fee to be a specific incremental
cost directly attributable to the offering. The Company expects the third
party assignees designated by the consulting firms will purchase an aggregate
of approximately 65,000 shares, assuming an initial public offering price of
$24.00 per share, immediately prior to the completion of this offering.
Despite the signing of the waiver, the consulting firms may still attempt to
exercise the "put right." In this event, if the Company is compelled to
repurchase their shares, the Company will record the excess of the repurchase
price over the then-current fair market value of the stock as a general and
administrative expense.
6. INCOME TAXES
Deferred income taxes reflect the net effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax assets are shown below. A valuation allowance of
$15,091,000 has been recorded as realization of such assets is uncertain.
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1997 1998 1999
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforwards...... $3,383,000 $7,495,000 $13,178,000
Research and development credits...... 193,000 521,000 541,000
Capitalized research expenses......... 981,000 1,028,000 1,222,000
Other, net............................ 64,000 150,000 150,000
---------- ----------- ------------
Total deferred tax assets.............. 4,621,000 9,194,000 15,091,000
Valuation allowance.................... (4,621,000) (9,194,000) (15,091,000)
---------- ----------- ------------
Net deferred tax assets................ $-- $-- $--
========== =========== ============
</TABLE>
At September 30, 1999, the Company has federal and state tax net operating
loss carryforwards of approximately $24,800,000 and $13,100,000, respectively.
The difference between the federal and state tax loss carryforwards is
attributable to the capitalization of research and development expenses for
state tax purposes. The federal tax loss carryforwards will begin to expire in
2008, unless previously utilized.
Approximately $278,000 of the state tax loss carryforwards expired in 1998,
and the state tax loss carryforwards will continue to expire in 1999 unless
previously utilized. The Company also has German net operating loss
carryforwards of approximately $7,200,000, which may be carried forward
indefinitely. The Company also has federal and state research and development
tax credit carryforwards of approximately $410,000 and $200,000, respectively,
which will begin to expire in 2011 unless previously utilized.
Pursuant to Internal Revenue Code Sections 382 and 383, use of the Company's
net operating loss and credit carryforwards may be limited due to a cumulative
change in ownership of more than 50% which occurred in January 1998, as a
result of the issuance of Series C Preferred Stock, and which is anticipated
to occur with the offering. However, the Company does not believe these
limitations will materially impact the use of the net operating loss and
credit carryforwards.
- -------------------------------------------------------------------------------
F-18
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. COMMITMENTS
LEASES
The Company leases facilities in both the United States and Germany. In
September 1999, the Company amended its lease of office and research
development space to extend through September 2004. Prior to that date, the
Company had been subject to a short-term lease agreement that commenced in
October 1996. The Company's subsidiary entered into a lease of office and
research and development space in 1995 that extends through June 2001. Total
rent expense under these leases was approximately $102,000 in 1996, $250,000
in 1997, $446,000 in 1998, and $411,000 for the nine month period ended
September 30, 1999. Total rent expense under these leases was approximately
$1,154,000 for the period from February 14, 1994 (inception) to September 30,
1999.
During 1998, the Company entered into a master equipment lease agreement
providing for borrowings up to $2,100,000. Under the agreement, the lessor
will purchase equipment that the Company will lease for a 42-month period. At
September 30, 1999, the Company had borrowed the full amount available under
the agreement.
Property under capital leases is included in equipment and leasehold
improvements, as follows:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1997 1998 1999
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Laboratory equipment.................. $-- $957,323 $1,571,537
Leasehold improvements................ -- 33,211 34,357
Office furniture and equipment........ -- 115,701 354,223
---------- ---------- ----------
-- 1,106,235 1,960,117
Less accumulated amortization......... -- 174,270 658,174
---------- ---------- ----------
$-- $931,965 $1,301,943
========== ========== ==========
The following is a schedule by year of future minimum lease payments at
September 30, 1999:
<CAPTION>
CAPITAL OPERATING
YEAR LEASES LEASES
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
1999 (three months)................... $181,026 $176,392
2000.................................. 724,102 858,570
2001.................................. 870,743 917,422
2002.................................. 508,276 712,974
2003.................................. 18,055 684,420
2004.................................. -- 533,109
---------- ----------
2,302,202 $3,882,887
==========
Less amount representing interest..... 548,043
----------
Present value of minimum lease
payments............................. 1,754,159
Less current portion.................. 441,446
----------
Long-term capital lease obligations... $1,312,713
==========
</TABLE>
CONSULTING AGREEMENTS
The Company has entered into consulting agreements with a number of
individuals for scientific advisory services. Each individual receives a
certain number of nonqualified stock options. In certain cases, the options
vest upon the later of the achievement of milestones or ten years. In other
cases, the options vest
- -------------------------------------------------------------------------------
F-19
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ratably over a specified period, generally two years. Compensation expense is
measured either upon the achievement of the milestones or ratably over the
service period, in accordance with EITF 96-18, and aggregated $24,000, $10,000
and $102,527 in the years ended December 31, 1997, 1998 and the nine months
ended September 30, 1999, respectively.
DEVELOPMENT AGREEMENTS
In August 1994, the Company entered into a development agreement with a
university for the design and construction of a prototype DNA sequencing mass
spectrometer. In September 1997, the Company extended the agreement through
September 30, 1999. Through September 30, 1999, the Company has paid
approximately $592,000 under this agreement and is committed to pay
approximately $21,000 in the remainder of 1999.
In September 1994, the Company entered into a development agreement with
another university for the design of a system for preparation of DNA samples.
In September 1998, the agreement was extended to September 30, 1999. Through
September 30, 1999, the Company has paid approximately $677,000 under this
agreement and is committed to pay approximately $55,000 in the remainder of
1999.
LICENSE AGREEMENTS
The Company has entered into license agreements allowing the Company to
utilize certain patents. If these patents are used in connection with a
commercial product sale, the Company will pay royalties ranging from 1%-5% on
the related product revenues. As of September 30, 1999, the Company has not
made any commercial sales related to these agreements.
8. SAVINGS PLAN
In 1998, the Company initiated a 401(k) savings plan covering most United
States employees. Individual employees may make contributions to the plan,
which can be matched by the Company in an amount determined by the Board of
Directors. The Company may also make profit sharing contributions as
determined by the Board of Directors. As of September 30, 1999, the Company
has not made any contributions to the plan.
9. GERMAN GOVERNMENT GRANTS
The Company's wholly owned subsidiary, Sequenom GmbH, has been the recipient
of three grants from German government authorities. The first grant, received
in 1996 from the City/State of Hamburg, is for DEM 800,000 (approximately
$475,000). This grant reimburses the subsidiary for the cost of certain
equipment to be used in a three-year research project. If the equipment is not
used for the grant's express purpose the equipment must be relinquished to the
City/State of Hamburg. Through December 31, 1998, approximately DEM 704,000
(approximately $420,000) of such equipment had been purchased under the grant
program and was being used for the grant's express purpose. The Company has
collected such amount from the grantor agency and no additional amounts are
expected to be expended or received related to this grant.
The second grant, also received in 1996, is from the German Federal Ministry
of Research and Development and amounts to DEM 2.2 million (approximately $1.3
million). This grant reimburses the Company for certain materials, personnel,
travel and development costs. Through December 31, 1998, approximately DEM 2.1
million (approximately $1.2 million) had been expended and recovered under
this grant program. The Company has collected such amount from the grantor
agency and no additional amounts are expected to be expended or received
related to this grant.
- -------------------------------------------------------------------------------
F-20
<PAGE>
SEQUENOM, INC. (A DEVELOPMENT STAGE COMPANY)
- -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
A third grant, received in 1998, is also from the German Federal Ministry of
Research and Development and amounts to DEM 1.4 million (approximately
$860,000). This grant reimburses the Company for certain materials, personnel,
travel and development costs. Through September 30, 1999, approximately DEM
296,000 (approximately $160,000) had been expended and recognized under this
grant program.
10. GEOGRAPHIC INFORMATION
The Company has a wholly-owned subsidiary located in Germany. The following
table presents information about the Company by geographic area. There were no
material amounts of transfers between geographic areas. Included in the
consolidated balance sheets are the following domestic and foreign components
at December 31, 1997, 1998 and for the years then ended and at September 30,
1999 and for the nine months then ended:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1997 1998 1999
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Current assets:
Domestic........................... $319,295 $26,828,538 $28,478,929
Foreign............................ 803,279 1,920,546 267,217
----------- ------------ ------------
$1,122,574 $28,749,084 $28,746,146
=========== ============ ============
Equipment and leasehold
improvements, net:
Domestic........................... $594,979 $2,805,418 $4,221,833
Foreign............................ 407,218 1,136,470 1,589,011
----------- ------------ ------------
$1,002,197 $3,941,888 $5,810,844
=========== ============ ============
Other assets:
Domestic........................... $91,881 $12,550 $28,331
Foreign............................ 55,921 73,762 46,305
----------- ------------ ------------
$147,802 $86,312 $74,636
=========== ============ ============
Total assets:
Domestic........................... $1,006,155 $29,646,506 $32,729,093
Foreign............................ 1,266,418 3,130,778 1,902,533
----------- ------------ ------------
$2,272,573 $32,777,284 $34,631,626
=========== ============ ============
Net loss:
Domestic........................... $(2,870,823) $(7,929,395) $(13,274,509)
Foreign............................ (2,245,996) (2,341,177) (2,111,529)
----------- ------------ ------------
$(5,116,819) $(10,270,572) $(15,386,038)
=========== ============ ============
</TABLE>
- -------------------------------------------------------------------------------
F-21
<PAGE>
INSIDE BACK PANEL:
[PICTURES OF COMPONENTS OF MASSARRAY SYSTEM]
DNA SAMPLE PREPARATION
SPECTROCHIP(TM)
SPECTROJET(TM)
GENOLYZER(TM) SOFTWARE
SPECTROSCAN(TM)
MASSARRAY(TM) PRINCIPLE
SEQUENOM has developed powerful investigative tools that industrialize the
process of analyzing genetic diversity, thus ushering in a new level of
genetic analysis--INDUSTRIAL GENOMICS.
SEQUENOM's MassArray system represents a novel approach to genetic analysis by
combining its proprietary enzymatic chemistry, software and miniaturized
silicon chip with the proven technology of mass spectrometry, which measures
molecular weight using a laser.
IBC
<PAGE>
[LOGO OF SEQUENOM INDUSTRIAL GENOMICS]
<PAGE>
ALTERNATE COVER PAGE FOR SHELF PROSPECTUS
- -------------------------------------------------------------------------------
Selling stockholders
The following table shows the number of shares owned by each of the selling
stockholders. This registration statement also shall cover any additional
shares of common stock which become issuable to the selling stockholders in
connection with the 67,826 shares registered for sale under this prospectus by
reason of any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which results in an
increase in the number of our outstanding shares of common stock.
Although neither of the selling stockholders has had a material relationship
with us within the past three years, ALPHA Beteiligungsverwaltungs GbR is
associated with AXCIT Capital Mgmt. GmbH and Halford Enterprises Limited is
associated with Value Management & Research AG. Beginning in March 1999, we
had a consulting agreement with ACXIT Capital Mgmt. GmbH and Value Management
& Research AG. This agreement provided that these two companies would provide
advice and services to us in connection with this offering. We are selling to
ALPHA Beteiligungsverwaltungs GbR and Halford Enterprises Limited up to 67,826
shares as part of a settlement and full payment of the fees payable under the
agreement with AXCIT Capital Mgmt. GmbH and Value Management & Research AG for
these services.
Any estimate that we give regarding the number of shares that will be held by
the selling stockholders after completion of this offering may prove to be
inaccurate because the selling stockholders may offer all or some of the
shares they hold and because there currently are no agreements, arrangements
or understandings with respect to the sale of any of the shares. The shares
offered by this prospectus may be offered from time to time by the selling
stockholders named below. Unless otherwise indicated, each person has sole
power to invest and vote the shares listed in the table, subject to community
property laws, where applicable. For purposes of this table, a person or group
of persons is deemed to have "beneficial ownership" of any shares which that
person has the right to acquire within 60 days. Percentage ownership is based
on 17,601,477 shares of our common stock outstanding on December 27, 1999. For
purposes of computing the percentage of outstanding shares held by each person
or group of persons named below, any security which such person or group of
persons has the right to acquire within 60 days is deemed to be outstanding
for the purpose of computing the percentage ownership for such person or
persons, but is not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER THE
THE OFFERING OFFERING
----------------- SHARES TO -----------------
NUMBER PERCENTAGE BE SOLD NUMBER PERCENTAGE
------ ---------- --------- ------ ----------
<S> <C> <C> <C> <C> <C>
ALPHA Beteiligungsverwaltungs
GbR............................ 33,913 * 33,913 0 0%
Halford Enterprises Limited..... 33,913 * 33,913 0 0%
TOTAL......................... 67,826 * 67,826
</TABLE>
- --------
* Represents beneficial ownership of less than 1%
- -------------------------------------------------------------------------------
1
<PAGE>
ALTERNATE COVER PAGE FOR SHELF PROSPECTUS
- -------------------------------------------------------------------------------
Plan of distribution
The selling stockholders may sell the shares from time to time. The selling
stockholders will act independently of us in making decisions regarding the
timing, manner and size of each sale. The sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and at
terms then prevailing or at prices related to the then current market price,
or in negotiated transactions. The selling stockholders may effect such
transactions by selling the shares to or through broker-dealers. The shares
may be sold by one or more of, or a combination of, the following:
. a block trade in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction,
. purchases by a broker-dealer as principal and resale by such broker-
dealer for its account under this prospectus,
. an exchange distribution in accordance with the rules of such exchange,
. ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
. in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In effecting sales,
broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in the resales.
The selling stockholders may enter into hedging transactions with broker-
dealers in connection with distributions of the shares or otherwise. In these
transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders also may sell shares short and redeliver the shares to
close out such short positions. The selling stockholders may enter into option
or other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer such shares under this prospectus. The selling stockholders also may
loan or pledge the shares to a broker-dealer. The broker-dealer may sell the
shares so loaned, or upon a default the broker-dealer may sell the pledged
shares under this prospectus.
Broker-dealers or agents may receive compensation in the form of commissions,
discounts or concessions from selling stockholders. Broker-dealers or agents
may also receive compensation from the purchasers of the shares for whom they
act as agents or to whom they sell as principals, or both. Compensation as to
a particular broker-dealer might be in excess of customary commissions and
will be in amounts to be negotiated in connection with the sale. Broker-
dealers or agents and any other participating broker-dealers or the selling
stockholders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, the Securities Act, in connection
with sales of the shares. Accordingly, any such commission, discount or
concession received by them and any profit on the resale of the shares
purchased by them may be deemed to be underwriting discounts or commissions
under the Securities Act. Because selling stockholders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, the
selling stockholders will be subject to the prospectus delivery requirements
of the Securities Act. In addition, any securities covered by this prospectus
which qualify for sale to comply with Rule 144 promulgated under the
Securities Act may be sold under Rule 144 rather than under this prospectus.
The selling stockholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or broker-
dealers regarding the sale of their securities. There is no underwriter or
coordinating broker acting in connection with the proposed sale of shares by
the selling stockholders.
- -------------------------------------------------------------------------------
2
<PAGE>
PLAN OF DISTRIBUTION ALTERNATE COVER PAGE FOR SHELF PROSPECTUS
- -------------------------------------------------------------------------------
The shares will be sold only through registered or licensed brokers or dealers
if required under applicable state securities laws. In addition, in certain
states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution. In addition,
each selling stockholder will be subject to applicable provisions of the
Exchange Act and the associated rules and regulations under the Exchange Act,
including Regulation M, which provisions may limit the timing of purchases and
sales of shares of our common stock by the selling stockholders. We will make
copies of this prospectus available to the selling stockholders and have
informed them of the need to deliver copies of this prospectus to purchasers
at or prior to the time of any sale of the shares.
We will file a supplement to this prospectus, if required, to comply with Rule
424(b) under the Securities Act upon being notified by a selling stockholder
that any material arrangements have been entered into with a broker-dealer for
the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer,
such supplement will disclose:
. the name of each such selling stockholder and of the participating broker-
dealer(s),
. the number of shares involved,
. the price at which such shares were sold,
. the commissions paid or discounts or concessions allowed to such broker-
dealer(s), where applicable,
. that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus, and
. other facts material to the transaction.
In addition, upon being notified by a selling stockholder that a donee or
pledgee intends to sell more than 500 shares, we will file a supplement to
this prospectus.
We will bear all costs, expenses and fees in connection with the registration
of the shares. The selling stockholders will bear all commissions and
discounts, if any, attributable to the sales of the shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.
- -------------------------------------------------------------------------------
3
<PAGE>
Alternate Cover Page For Shelf Prospectus
Shares to be sold by Selling Stockholders
The following information assumes that the underwriters do not exercise the
over-allotment option we granted to them to purchase additional shares in the
offering.
<TABLE>
<S> <C>
Common stock our selling stockholders are
offering.................................. 67,826 shares
Common stock to be outstanding after the
offering.................................. 22,601,477 shares
</TABLE>
Except as otherwise indicated, you should assume the following when analyzing
information in this prospectus:
. the conversion of 14,842,757 outstanding shares of our preferred stock into
14,842,757 shares of our common stock on a one-for-one basis upon the closing
of this offering;
. the sale of approximately $1,560,000 in shares of common stock to two German
consulting firms in a private sale to be completed immediately prior to this
offering, or 65,000 shares assuming an initial public offering price of
$24.00 per share;
. the conversion of debt owed to Technologie Beteiligungs Gesellschaft, or TBG,
in the amount of DEM4 million, approximately $2.1 million, into 272,108
shares of our common stock upon the closing of this offering at an assumed
price of $24.00 per share;
. the issuance of 24,792 shares of our common stock upon the closing of this
offering in satisfaction of accrued interest of approximately DEM1.7 million
or $930,625 payable to TBG; and
. no exercise of the underwriters' over-allotment option.
We have an obligation to issue shares of common stock upon exercise of options
and warrants outstanding at December 27, 1999, in addition to the shares of
common stock to be outstanding after this offering. These shares, when issued,
will include:
. 750,000 shares issuable upon exercise of the underwriters' over-allotment
option;
. 1,287,049 shares issuable upon the exercise of options outstanding as of
December 27, 1999, at a weighted average exercise price of $1.66 per share.
This share amount consists of 2,475,250 shares issuable upon the exercise of
options outstanding at September 30, 1999 and 335,250 shares issuable upon
the exercise of options granted during October 1999, less 1,523,451 shares
issued upon exercise of options during the period October 1, 1999 through
December 27, 1999;
. 176,503 shares issuable upon the exercise of warrants outstanding as of
December 27, 1999 at a weighted average exercise price of $2.10 per share;
and
. 248,750 additional shares available for future grant as of December 27, 1999
under our 1998 stock plan, and an additional 850,000 shares made available
for future grant under our stock plans to be adopted at the close of this
offering. For a description of our stock option and stock purchase plans,
please see "Management--Employee benefit plans."
We base our calculation of the number of shares of common stock outstanding
after the offering on shares outstanding as of December 27, 1999. Please see
"Capitalization."
4
<PAGE>
- -------------------------------------------------------------------------------
PART II
Information not required in prospectus
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by the Registrant are as follows. All amounts other
than the SEC registration fee, the NASD filing fees and the Nasdaq National
Market listing fee are estimates.
<TABLE>
<CAPTION>
AMOUNT TO
BE PAID
- -------------------------------------------------------------------------------
<S> <C>
SEC registration fee................................................ $ 39,378
NASD filing fee..................................................... 7,500
Nasdaq National Market listing fee.................................. 94,000
Legal fees and expenses............................................. 280,000
Accounting fees and expenses........................................ 200,000
Printing and engraving.............................................. 220,000
Blue Sky fees and expenses (including legal fees)................... 10,000
Transfer agent fees................................................. 10,000
Miscellaneous....................................................... 439,122
----------
Total............................................................. $1,300,000
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933.
As permitted by the Delaware General Corporation Law, the registrant's Second
Amended and Restated Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors for monetary damages for
breach of fiduciary duty as a director, except for liability (1) for any
breach of the director's duty of loyalty to the registrant or its
stockholders, (2) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (3) under section 174 of
the Delaware General Corporation Law (regarding unlawful dividends and stock
purchases) or (4) for any transaction from which the director derived an
improper personal benefit.
As permitted by the Delaware General Corporation Law, the bylaws of the
registrant provide that (1) the registrant is required to indemnify its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law, subject to certain very limited exceptions, (2) the
registrant may indemnify its other employees and agents as set forth in the
Delaware General Corporation Law, (3) the registrant is required to advance
expenses, as incurred, to its directors and executive officers in connection
with a legal proceeding to the fullest extent permitted by the Delaware
General Corporation Law, subject to certain very limited exceptions and (4)
the rights conferred in the bylaws are not exclusive.
The registrant has entered into indemnification agreements with each of its
directors and executive officers to give such directors and officers
additional contractual assurances regarding the scope of the
- -------------------------------------------------------------------------------
II-1
<PAGE>
PART II
- -------------------------------------------------------------------------------
indemnification set forth in the registrant's Second Amended and Restated
Certificate of Incorporation and to provide additional procedural protections.
At present, there is no pending litigation or proceeding involving a director,
officer or employee of the registrant regarding which indemnification is
sought, nor is the registrant aware of any threatened litigation that may
result in claims for indemnification.
Reference is also made to Section 9 of the Underwriting Agreement, which
provides for the indemnification of officers, directors and controlling
persons of the registrant against certain liabilities. The indemnification
provision in the registrant's Second Amended and Restated Certificate of
Incorporation, bylaws and the indemnification agreements entered into between
the registrant and each of its directors and executive officers may be
sufficiently broad to permit indemnification of the registrant's directors and
executive officers for liabilities arising under the Securities Act of 1933.
The registrant has applied for liability insurance for its officers and
directors.
Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere in this prospectus:
<TABLE>
<CAPTION>
EXHIBIT
DOCUMENT NUMBER
- ------------------------------------------------------------------------------
<S> <C>
Underwriting Agreement (draft dated January 20, 2000)................. 1.1
Form of Second Amended and Restated Certificate of Incorporation of
Registrant........................................................... 3.2
Form of Restated Bylaws of Registrant................................. 3.4
Form of Indemnification Agreement..................................... 10.48
Form of Indemnification Agreement..................................... 10.49
</TABLE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The Registrant has sold and issued the following securities since January
1996:
A. The Registrant from time to time has granted stock options to employees and
consultants in reliance upon exemption from registration pursuant to either
(1) Section 4(2) of the Securities Act of 1933 or (2) Rule 701 promulgated
under the Securities Act of 1933. The following table sets forth certain
information regarding such grants:
<TABLE>
<CAPTION>
NUMBER OF EXERCISE
SHARES PRICES
- --------------------------------------------------------------------------------
<S> <C> <C>
January 1, 1996 to December 31, 1996...................... 435,000 $0.25
January 1, 1997 to December 31, 1997...................... 731,000 $0.25
January 1, 1998 to December 31, 1998...................... 1,268,500 $0.50-$1.10
January 1, 1999 to December 27, 1999...................... 1,020,500 $3.00-$3.30
</TABLE>
For additional information concerning these transactions, please see
"Management--Employee benefit plans" in the prospectus included in this
registration statement.
B. On December 23, 1996, we issued a warrant to purchase 70,000 shares of
Series A preferred stock to Comdisco, Inc. in consideration of entering into a
certain rental agreement. This security was offered and sold by the Registrant
in reliance upon an exemption from registration pursuant to Section 4(2) of
the Securities Act of 1933 as a transaction not involving any public offering.
This offer and sale was made to a limited number of investors. No underwriters
were involved in connection with the sales of this security.
- -------------------------------------------------------------------------------
II-2
<PAGE>
PART II
- -------------------------------------------------------------------------------
C. On May 8, 1997, we issued 1,065,079 shares of Series C preferred stock and
warrants to purchase 106,503 shares of Series C preferred stock to various
venture capitalists and individuals for an aggregate consideration of
$3,354,999. These securities were offered and sold by the Registrant in
reliance upon an exemption from registration pursuant to Section 4(2) of the
Securities Act of 1933 as a transaction not involving any public offering.
This offer and sale was made to a limited number of investors. No underwriters
were involved in connection with the sales of these securities.
D. On January 12, 1998, we issued 3,508,252 shares of Series C preferred stock
to various venture capitalists for an aggregate consideration of $11,050,994.
These securities were offered and sold by the Registrant in reliance upon an
exemption from registration pursuant to Section 4(2) of the Securities Act of
1933 as a transaction not involving any public offering. This offer and sale
was made to a limited number of investors. No underwriters were involved in
connection with the sales of these securities.
E. On December 21, 1998, we issued 3,843,700 shares of Series D preferred
stock to various venture capitalists and individuals for an aggregate
consideration of $24,984,050. These securities were offered and sold by the
Registrant in reliance upon an exemption from registration pursuant to Section
4(2) of the Securities Act of 1933 as a transaction not involving any public
offering. This offer and sale was made to a limited number of investors. No
underwriters were involved in connection with the sales of these securities.
F. On February 28, 1999, we issued 900,303 shares of Series D preferred stock
to various venture capitalists and individuals for an aggregate consideration
of $5,851,970. These securities were offered and sold by the Registrant in
reliance upon an exemption from registration pursuant to Section 4(2) of the
Securities Act of 1933 as a transaction not involving any public offering.
This offer and sale was made to a limited number of investors. No underwriters
were involved in connection with the sales of these securities.
G. On March 30, 1999, we issued 968,760 shares of Series D preferred stock to
various venture capitalists, insiders, and individuals for an aggregate
consideration of $6,296,939. These securities were offered and sold by the
Registrant in reliance upon an exemption from registration pursuant to
Section 4(2) of the Securities Act of 1933 as a transaction not involving any
public offering. This offer and sale was made to a limited number of
investors. No underwriters were involved in connection with the sales of these
securities.
H. From January 1, 1996 through December 27, 1999, we issued 2,386,538 shares
of common stock upon exercise of options for an aggregate consideration of
$2,488,973. These securities were offered and sold by the Registrant in
reliance upon an exemption from registration pursuant to either (1) Section
4(2) of the Securities Act of 1933 or (2) Rule 701 promulgated under the
Securities Act of 1933. The exercise of these options were by a limited number
of the Registrant's employees or consultants. No underwriters were involved.
I. On March 23, 1999, we issued 6,349 shares of common stock to a consultant
for consideration of $20,000. These securities were offered and sold by the
Registrant in reliance upon an exemption from registration pursuant to either
(1) Section 4(2) of the Securities Act of 1933 or (2) Rule 701 promulgated
under the Securities Act of 1933. These securities were issued to a single
consultant of the Registrant. No underwriters were involved.
J. On March 31, 1999, we offered and committed ourselves to sell approximately
65,000 shares of common stock to two German consulting firms for an aggregate
consideration of approximately $1,600,000. These securities were offered and
sold by the Registrant in reliance upon an exemption from
- -------------------------------------------------------------------------------
II-3
<PAGE>
PART II
- --------------------------------------------------------------------------------
registration pursuant to Section 4(2) of the Securities Act of 1933 as a
transaction not involving any public offering. This offer and sale was made to
only these two investors. No underwriters were involved in connection with the
offer and committment to sell these securities.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<C> <S>
1.1++ Form of Underwriting Agreement.
3.1++ Restated Certificate of Incorporation of the Registrant, as amended.
3.2++ Form of Second Amended and Restated Certificate of Incorporation of
the Registrant to become effective immediately prior to the Offering.
3.3++ Bylaws of Registrant, as amended.
3.4++ Form of Restated Bylaws to be in effect upon the completion of the
Offering.
4.1++ Specimen common stock certificate.
5.1++ Opinion of Brobeck, Phleger & Harrison LLP.
10.1+ Series B Convertible Preferred Stock Purchase Agreement, dated
December 22, 1995.
10.2+ Series C Convertible Preferred Stock Purchase Agreement, dated May 8,
1997.
10.3++ Form of Warrant Agreement between the Registrant and holders of the
Series C Preferred Stock warrants.
10.4+++ Series D Convertible Preferred Stock Purchase Agreement, dated
December 21, 1998.
10.5++ Amended and Restated Registration Rights Agreement, dated December 21,
1998.
10.6++ Amended and Restated Voting Agreement, dated December 21, 1998.
10.7++ Amended and Restated Stock Restriction Agreement, dated December 21,
1998.
10.8++ Amended and Restated Amendment Agreement to the Series D Convertible
Preferred Stock Purchase Agreement, dated March 1, 1999.
10.9++ Warrant Agreement, dated December 23, 1996, between the Registrant and
Comdisco, Inc.
10.10++ Form of Note Secured by Stock Pledge Agreement between the Registrant
and the individuals listed on Schedule A thereto.
10.11++ Form of Stock Pledge Agreement between the Registrant and the
individuals listed on Schedule A thereto.
10.12++ Investment Contract, dated May 18, 1995, between the Registrant's
subsidiary and TBG.
10.13++ Cooperation Agreement, dated May 1995, between the Registrant and TBG.
10.14++ Investment Contract, dated December 14, 1995, between the Registrant's
subsidiary and TBG.
</TABLE>
<TABLE>
<C> <S>
10.15++ Cooperation Agreement, dated December 14, 1995, between the Registrant
and TBG.
10.16++ Investment Contract, dated September 22, 1997, between the
Registrant's subsidiary and TBG.
10.17++ Cooperation Agreement, dated October 7, 1997, between the Registrant
and TBG.
10.18++ Security Agreement, dated April 29, 1999, between the Registrant and
Union Bank of California.
10.19++ Promissory Note, dated April 29, 1999, between the Registrant and
Union Bank of California.
</TABLE>
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II-4
<PAGE>
PART II
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
10.20++ Business Loan Agreement, dated May 25, 1999, between the Registrant
and Union Bank of California.
10.21+ Beta Test Agreement, dated March 1, 1999, between the Registrant
and GLE Medicon, GmbH.
10.22+ Beta Test Agreement, dated April 21, 1999, between the Registrant
and Universitat Munster.
10.23+ Beta Test Agreement, dated July 15, 1999, between the Registrant
and Genzyme Corporation.
10.24+ Sponsored Research Agreement, dated October 1, 1999 between the
Registrant and the Trustees of Boston University
10.25+ Patent and Know-How License Agreement, dated June 1, 1996, between
the Registrant and the Trustees of Boston University.
10.26+ License Agreement, dated July 3, 1997 between the Registrant and
Johns Hopkins University.
10.27+ [Omitted]
10.28+ Letter Agreement, dated October 8, 1997, between the Registrant and
Community Technology Fund, Office of Technology Transfer of
Community Technology Fund and Center for Advanced Biotechnology
(BU).
10.29+ Collaboration Agreement, dated November 24, 1997, between the
Registrant and Bruker-Franzen Analytik, GmbH.
10.30+ Contractual Agreement, dated October 1, 1998, between the
Registrant and GeSIM.
10.31+ License Agreement, dated January 14, 1999, and Addendum to License
Agreement and Patent Assignment, dated September 29, 1999, between
the Registrant and Franz Hillenkamp.
10.32+ Supply Agreement, dated April 1, 1999, between the Registrant and
Tactical Fabs, Inc.
10.33+ OEM Supply and License Agreement, dated June 15, 1999, between the
Registrant and PerSeptive Biosystems, Inc.
10.34+ Specific Cooperative Research Agreement No. 58-5438-9-120, dated
June 15, 1999, between the Registrant and US Department of
Agriculture (US Meat Animal Research Center).
10.35+ OEM Supply Agreement, dated June 24, 1999, between the Registrant
and Beckman Coulter.
10.36+ Cooperative Research and Development Agreement, dated September 17,
1999, between the Registrant and Public Health Service.
10.37++*** Employment Agreement, dated July 1, 1997, between the Registrant
and Hubert Koster.
10.38++*** Form of Employment Agreement between the Registrant and the
employees listed on Schedule A thereto.
10.39+ Consulting Services Agreement, dated October 4, 1996, between the
Registrant and Franz Hillenkamp.
10.40+ Consulting Services Agreement, dated January 30, 1997, between the
Registrant and Peter Roepstorff.
</TABLE>
- --------------------------------------------------------------------------------
II-5
<PAGE>
PART II
- -------------------------------------------------------------------------------
<TABLE>
<C> <S>
10.41+ Consulting Services Agreement, dated February 17, 1997, between the
Registrant and Ulf B. Gobel.
10.42+ Consulting Services Agreement, dated March 1, 1999, between the
Registrant and John Cashman.
10.43+ Consulting Services Agreement, dated March 1, 1999, between the
Registrant and Lindsay Farrer.
10.44++ Standard Industrial Gross Lease, dated December 12, 1996, between
Registrant and Sorrento Business Complex, L.P., as amended.
10.45++ Master Equipment Lease Agreement No. 0135 and Letter extending the
equipment lease, dated October 22, 1998, between Registrant and
Phoenix Leasing Incorporated, as amended.
10.46++ Standard Form Commercial Lease, dated June 24, 1999, between
Registrant and Cummings Properties, LLC, as amended.
10.47++ Agreement for office space in Hamburg, dated May 1996, between the
Registrant and Fiszman-Steinriede, GbR, as amended.
10.48++ Form of Indemnification Agreement between the Registrant and each of
its directors.
10.49++ Form of Indemnification Agreement between the Registrant and each of
its officers.
10.50++ 1994 Stock Plan.
10.51++ 1994 Stock Plan Form of Non-Qualified Stock Option Grant.
10.52++ 1994 Stock Plan Form of Incentive Stock Option Grant.
10.53++ 1994 Stock Plan Form of Stock Restriction Agreement.
10.54++ 1998 Stock Option/Stock Issuance Plan.
10.55++ 1998 Stock Option/Stock Issuance Plan Form of Notice of Grant of Stock
Option.
10.56++ 1998 Stock Option/Stock Issuance Plan Form of Stock Option Agreement.
10.57++ 1998 Stock Option/Stock Issuance Plan Form of Stock Purchase
Agreement.
10.58++ 1998 Stock Option/Stock Issuance Plan Form of Stock Issuance
Agreement.
10.59++ 1999 Stock Incentive Plan.
10.60++ 1999 Employee Stock Purchase Plan.
10.61++ 1999 Stock Incentive Plan Form of Notice of Grant of Stock Option
10.62++ 1999 Stock Incentive Plan Form of Stock Option Agreement
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2++ Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
24.1++ Powers of Attorney (See Signature Page on Page II-6).
27.1++ Financial Data Schedule.
</TABLE>
- --------
***Management contract or compensatory plan.
+ Certain confidential portions of this Exhibit were omitted by means of
redacting a portion of the text (the "Mark"). This Exhibit has been filed
separately with the Secretary of the Commission without the Mark pursuant
to the Company's Application Requesting Confidential Treatment under Rule
406 under the Securities Act.
++ Previously filed.
- -------------------------------------------------------------------------------
II-6
<PAGE>
- -------------------------------------------------------------------------------
(b) Financial Statement Schedules.
All financial statement schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange Commission
have been omitted because they are not required under the related instructions
or are inapplicable as the information has been provided in the consolidated
financial statements or related notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the underwriter at
the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is
against public policy as expressed in the Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933 each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
- -------------------------------------------------------------------------------
II-7
<PAGE>
PART II
- -------------------------------------------------------------------------------
Signatures
Pursuant to the requirements of the Securities Act of 1933 the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in San Diego, California, on this 28th
day of January, 2000.
SEQUENOM, INC.
/s/ Stephen Zaniboni
By: _________________________________
Name: Stephen Zaniboni
Title: Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933 this Registration
Statement has been signed by the following persons in the capacities indicated
on January 28, 2000:
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
- -----------------------------------------------------------------------------------
<S> <C> <C>
*/s/ Hubert Koster President and Chief January 28, 2000
____________________________________ Executive Officer
HUBERT KOSTER (principal executive
officer) and Director
/s/ Stephen Zaniboni Senior Vice President and January 28, 2000
____________________________________ Chief Financial Officer
STEPHEN ZANIBONI (principal financial and
accounting officer)
*/s/ Helmut Schuhsler Director January 28, 2000
____________________________________
HELMUT SCHUHSLER
*/s/ Ernst-Gunter Afting Director January 28, 2000
____________________________________
ERNST-GUNTER AFTING
*/s/ John Lucas Director January 28, 2000
____________________________________
JOHN LUCAS
*/s/ Peter Reinisch Director January 28, 2000
____________________________________
PETER REINISCH
*By: /s/ Stephen Zaniboni
____________________________________
STEPHEN ZANIBONI
ATTORNEY-IN-FACT
</TABLE>
- -------------------------------------------------------------------------------
II-8
<PAGE>
- --------------------------------------------------------------------------------
Index to exhibits
<TABLE>
<C> <S>
1.1++ Form of Underwriting Agreement.
3.1++ Restated Certificate of Incorporation of the Registrant, as amended.
3.2++ Form of Second Amended and Restated Certificate of Incorporation of
the Registrant to become effective immediately prior to the Offering.
3.3++ Bylaws of Registrant, as amended.
3.4++ Form of Restated Bylaws to be in effect upon the completion of the
Offering.
4.1++ Specimen common stock certificate.
5.1++ Opinion of Brobeck, Phleger & Harrison LLP.
10.1+ Series B Convertible Preferred Stock Purchase Agreement, dated
December 22, 1995.
10.2+ Series C Convertible Preferred Stock Purchase Agreement, dated May 8,
1997.
10.3++ Form of Warrant Agreement between the Registrant and holders of the
Series C Preferred Stock warrants.
10.4+ Series D Convertible Preferred Stock Purchase Agreement, dated
December 21, 1998.
10.5++ Amended and Restated Registration Rights Agreement, dated December 21,
1998.
10.6++ Amended and Restated Voting Agreement, dated December 21, 1998.
10.7++ Amended and Restated Stock Restriction Agreement, dated December 21,
1998.
10.8++ Amended and Restated Amendment Agreement to the Series D Convertible
Preferred Stock Purchase Agreement, dated March 1, 1999.
10.9++ Warrant Agreement, dated December 23, 1996, between the Registrant and
Comdisco, Inc.
10.10++ Form of Note Secured by Stock Pledge Agreement between the Registrant
and the individuals listed on Schedule A thereto.
10.11++ Form of Stock Pledge Agreement between the Registrant and the
individuals listed on Schedule A thereto.
10.12++ Investment Contract, dated May 18, 1995, between the Registrant's
subsidiary and TBG.
10.13++ Cooperation Agreement, dated May 1995, between the Registrant and TBG.
10.14++ Investment Contract, dated December 14, 1995, between the Registrant's
subsidiary and TBG.
10.15++ Cooperation Agreement, dated December 14, 1995, between the Registrant
and TBG.
10.16++ Investment Contract, dated September 22, 1997, between the
Registrant's subsidiary and TBG.
10.17++ Cooperation Agreement, dated October 7, 1997, between the Registrant
and TBG.
10.18++ Security Agreement, dated April 29, 1999, between the Registrant and
Union Bank of California.
10.19++ Promissory Note, dated April 29, 1999, between the Registrant and
Union Bank of California.
10.20++ Business Loan Agreement, dated May 25, 1999, between the Registrant
and Union Bank of California.
10.21+ Beta Test Agreement, dated March 1, 1999, between the Registrant and
GLE Medicon, GmbH.
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
INDEX TO EXHIBITS
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
10.22+ Beta Test Agreement, dated April 21, 1999, between the Registrant
and Universitat Munster.
10.23+ Beta Test Agreement, dated July 15, 1999, between the Registrant
and Genzyme Corporation.
10.24+ Sponsored Research Agreement, dated October 1, 1999 between the
Registrant and the Trustees of Boston University.
10.25+ Patent and Know-How License Agreement, dated June 1, 1996, between
the Registrant and the Trustees of Boston University.
10.26+ License Agreement, dated July 3, 1997 between the Registrant and
Johns Hopkins University.
10.27 [Omitted]
10.28+ Letter Agreement, dated October 8, 1997, between the Registrant and
Community Technology Fund, Office of Technology Transfer of
Community Technology Fund and Center for Advanced Biotechnology
(BU).
10.29+ Collaboration Agreement, dated November 24, 1997, between the
Registrant and Bruker-Franzen Analytik, GmbH.
10.30+ Contractual Agreement, dated October 1, 1998, between the
Registrant and GeSIM.
10.31+ License Agreement, dated January 14, 1999, and Addendum to License
Agreement and Patent Assignment, dated September 29, 1999, between
the Registrant and Franz Hillenkamp.
10.32+ Supply Agreement, dated April 1, 1999, between the Registrant and
Tactical Fabs, Inc.
10.33+ OEM Supply and License Agreement, dated June 15, 1999, between the
Registrant and PerSeptive Biosystems, Inc.
10.34+ Specific Cooperative Research Agreement No. 58-5438-9-120, dated
June 15, 1999, between the Registrant and US Department of
Agriculture (US Meat Animal Research Center).
10.35+ OEM Supply Agreement, dated June 24, 1999, between the Registrant
and Beckman Coulter.
10.36+ Cooperative Research and Development Agreement, dated September 17,
1999, between the Registrant and Public Health Service.
10.37++*** Employment Agreement, dated July 1, 1997, between the Registrant
and Hubert Koster.
10.38++*** Form of Employment Agreement between the Registrant and the
employees listed on Schedule A thereto.
10.39+ Consulting Services Agreement, dated October 4, 1996, between the
Registrant and Franz Hillenkamp.
10.40+ Consulting Services Agreement, dated January 30, 1997, between the
Registrant and Peter Roepstorff.
10.41+ Consulting Services Agreement, dated February 17, 1997, between the
Registrant and Ulf B. Gobel.
10.42+ Consulting Services Agreement, dated March 1, 1999, between the
Registrant and John Cashman.
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
INDEX TO EXHIBITS
- -------------------------------------------------------------------------------
<TABLE>
<C> <S>
10.43+ Consulting Services Agreement, dated March 1, 1999, between the
Registrant and Lindsay Farrer.
10.44++ Standard Industrial Gross Lease, dated December 12, 1996, between
Registrant and Sorrento Business Complex, L.P., as amended.
10.45++ Master Equipment Lease Agreement No. 0135 and Letter extending the
equipment lease, dated October 22, 1998, between Registrant and
Phoenix Leasing Incorporated, as amended.
10.46++ Standard Form Commercial Lease, dated June 24, 1999, between
Registrant and Cummings Properties, LLC, as amended.
10.47++ Agreement for office space in Hamburg, dated May 1996, between the
Registrant and Fiszman-Steinriede, GbR, as amended.
10.48++ Form of Indemnification Agreement between the Registrant and each of
its directors.
10.49++ Form of Indemnification Agreement between the Registrant and each of
its officers.
10.50++ 1994 Stock Plan.
10.51++ 1994 Stock Plan Form of Non-Qualified Stock Option Grant.
10.52++ 1994 Stock Plan Form of Incentive Stock Option Grant.
10.53++ 1994 Stock Plan Form of Stock Restriction Agreement.
10.54++ 1998 Stock Option/Stock Issuance Plan.
10.55++ 1998 Stock Option/Stock Issuance Plan Form of Notice of Grant of Stock
Option.
10.56++ 1998 Stock Option/Stock Issuance Plan Form of Stock Option Agreement.
10.57++ 1998 Stock Option/Stock Issuance Plan Form of Stock Purchase
Agreement.
10.58++ 1998 Stock Option/Stock Issuance Plan Form of Stock Issuance
Agreement.
10.59++ 1999 Stock Incentive Plan.
10.60++ 1999 Employee Stock Purchase Plan.
10.61++ 1999 Stock Incentive Plan Form of Notice of Grant of Stock Option
10.62++ 1999 Stock Incentive Plan Form of Stock Option Agreement
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2++ Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
24.1++ Powers of Attorney (See Signature Page on Page II-6).
27.1++ Financial Data Schedule.
</TABLE>
- --------
**German language version filed herewith. English language translation
previously filed.
***Management contract or compensatory plan.
+ Certain confidential portions of this Exhibit were omitted by means of
redacting a portion of the text (the "Mark"). This Exhibit has been filed
separately with the Secretary of the Commission without the Mark pursuant
to the Company's Application Requesting Confidential Treatment under Rule
406 under the Securities Act.
++ Previously filed.
- -------------------------------------------------------------------------------
<PAGE>
EXHIBIT 10.1
SERIES B CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
THIS AGREEMENT made as of the 22nd day of December, 1995, by and among
Sequenom, Inc., a Delaware corporation (the "Corporation"); the several
investors named on the Schedule of Investors attached hereto (individually, an
"Initial Investor", and collectively, the "Initial Investors"); such additional
investors as may be identified on such addenda to the Schedule of Investors as
may be agreed upon by the Corporation and such additional investors in
accordance with the terms of this Agreement (individually, an "Additional
Investor", and collectively, the "Additional Investors") (the Initial Investors
and the Additional Investors being hereinafter sometimes referred to
individually as an "Investor" and collectively as the "Investors"); and, solely
for purposes of Section 8.1 hereof, Hubert Koster, Nola E. Masterson, and Robert
E. Patterson (individually a "Founder" and collectively the "Founders).
WHEREAS, the Investors wish to purchase from the Corporation, and the
Corporation wishes to sell to the Investors, up to an aggregate of 3,333,333
shares of the Corporation's Series B Convertible Preferred Stock, par value
$.001 per share (the "Series B Preferred");
WHEREAS, pursuant to that certain Stock Purchase Agreement dated May 26,
1994 (the "Original Purchase Agreement") the Corporation granted certain rights
of first refusal to certain of the Initial Investors and the Founders, and the
Corporation, such Initial Investors and the Founders now desire to replace such
rights of first refusal in the Original Purchase Agreement with the rights of
first refusal set forth in Section 8.1 hereof;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereby agree as follows:
SECTION 1. Amendment of Certificate of Incorporation. Immediately prior
--------- -----------------------------------------
to the execution and delivery of this Agreement, the Corporation filed with the
Secretary of State of Delaware a Certificate of Amendment (the "Certificate of
Amendment"), a copy of which is attached hereto as Exhibit 1, to its Certificate
of Incorporation (the Certificate of Incorporation of the Corporation, as
amended by the Certificate of Amendment and in effect on the date hereof being
hereinafter referred to as the "Certificate of Incorporation"), for the purpose
of increasing and amending the authorized capital stock of the Corporation and
setting forth the designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions thereof, granted to or imposed upon
the capital stock of the Corporation or the holders thereof.
SECTION 2. Purchase and Sale of the Series B Preferred.
--------- -------------------------------------------
2.1 Initial Shares. Subject to the terms and conditions of this
--------------
Agreement, at the Initial Closing (as defined in Section 3.1), the Corporation
agrees to issue and sell an aggregate of 2,333,333 shares of Series B Preferred
(the "Initial Shares") to the Initial Investors, and each Initial Investor,
acting severally and not jointly, hereby agrees to purchase from the Corporation
the number of Initial Shares set forth opposite the name of such Initial
Investor on
<PAGE>
the Schedule of Investors, at the purchase price of $1.50 per share and at the
aggregate purchase price set forth opposite the name of such Initial Investor on
the Schedule of Investors.
2.2 Additional Shares. Subject to the terms and conditions of this
-----------------
Agreement, from time to time after the Initial Closing, but on or before January
31, 1996, the Corporation hereby agrees to issue and sell up to an aggregate of
1,000,000 shares of Series B Preferred (the "Additional Shares") to one or more
Additional Investors who enter into this Agreement by executing one or more
counterparts hereof. By executing such a counterpart, each such Additional
Investor shall agree to purchase that number of Additional Shares as may be set
forth opposite its name on such addenda to the Schedule of Investors which may
be agreed upon between the Corporation and each such Additional Investor, at the
purchase price of $1.50 per share and at the aggregate purchase price set forth
opposite such Additional Investor's name on such addenda. Each such addendum
shall be executed by the Corporation and each such Additional Investor, a copy
of each such addendum shall be delivered to each Investor, and each such
addendum shall be deemed a part of this Agreement ab initio. Initial Investors
-- ------
may become Additional Investors.
The Initial Shares and the Additional Shares are referred to collectively
hereinafter as the "Shares".
SECTION 3. Closings.
--------- --------
3.1 Initial Closing. The closing of the sale and purchase of the
---------------
Initial Shares (the "Initial Closing") shall take place simultaneously with the
execution of this Agreement at the offices of Foley, Hoag & Eliot, One Post
Office Square, Boston, Massachusetts 02109, on December 22, 1995 (the "Initial
Closing Date"), or at such other location, date and time as may be agreed upon
between the Initial Investors and the Corporation. At the Initial Closing, the
Corporation shall issue and deliver to each Initial Investor a certificate or
certificates registered in the name of such Initial Investor, representing the
Initial Shares being purchased by it at the Initial Closing, against payment by
such Initial Investor to the Corporation of the purchase price therefor in the
form of (a) a check payable to the order of the Corporation, (b) a wire transfer
to the account of the Corporation, (c) cancellation of indebtedness of the
Corporation to such Investor or an affiliate of such Investor, (d) conversion of
convertible promissory notes issued by the Corporation to such Investor or an
affiliate of such Investor, or (e) any Combination of (a), (b), (c) and (d)
above.
3.2 Additional Closings. The closings of the sale and purchase of
-------------------
the Additional Shares under this Agreement (the "Additional Closings") shall
take place at such time, date and place as are mutually agreeable to the
Corporation and any Additional Investor, but such Additional Closings, if any,
shall take place on or before January 31, 1996. At the Additional Closings, the
Corporation shall issue and deliver to each Additional Investor a certificate or
certificates registered in the name of such Additional Investor, representing
the Additional Shares being purchased by it at the Additional Closing, against
payment by such Additional Investor to the Corporation of the purchase price
therefor in the form of (a) a check payable to the order of the Corporation, (b)
a wire transfer to the account of the Corporation, (c) cancellation of
indebtedness of the Corporation to such Additional Investor, (d) conversion of
-2-
<PAGE>
convertible promissory notes issued by the Corporation to such Additional
Investor, or (e) any combination of (a), (b), (c) and (d) above.
SECTION 4. Representations and Warranties of the Corporation. The
--------- -------------------------------------------------
Corporation hereby represents and warrants to the Investors as follows:
4.1 Organization. The Corporation is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own and lease its
properties, to carry on its business as presently conducted and as proposed to
be conducted and to carry out the transactions contemplated hereby. Except as
set forth in Exhibit 4.1, the Corporation is duly qualified as a foreign
-----------
corporation and is in good standing in all such other jurisdictions (which
jurisdictions are listed in Exhibit 4.1) in which the conduct of its business or
-----------
its ownership or leasing of property requires such qualification and in which
the failure so to qualify or so to be in good standing would have a materially
adverse effect on the Corporation's operations or financial condition. Exhibit
-------
4.1 contains true, complete and accurate copies of the Certificate of
- ---
Incorporation and the By-Laws, as amended to date, of the Corporation (the
"ByLaws").
4.2 Capitalization. The entire authorized capital stock of the
--------------
Corporation consists of:
(a) 5,726,700 shares of Common Stock, par value $.001 per share (the
"Common Stock");
(b) 1,650,000 shares of Series A Convertible Preferred Stock, par
value $.001 per share (the "Series A Preferred"); and
(C) 3,376,666 shares of Series B Preferred.
The number of shares of Common Stock and Series A Preferred that are issued
and outstanding or held as treasury shares as of the date hereof is as set forth
in Exhibit 4.2. All issued and outstanding shares of Common Stock and Series A
-----------
Preferred are validly issued, fully paid and nonassessable. The number of
shares of Common Stock reserved for issuance upon the exercise of options
granted and to be granted, and upon conversion of the Series A Preferred and the
Series B Preferred, is as set forth in Exhibit 4.2. Prior to the Initial
-----------
Closing, no shares of Series B Preferred were issued or outstanding.
Immediately following the Initial Closing, 2,333,333 shares of Series B
Preferred (the "Initial Shares") will be issued and outstanding and held by the
Initial Investors, and 1,000,000 shares of Series B Preferred (the "Additional
Shares") will be reserved for issuance at the Additional Closings.
Exhibit 4.2 contains a list of all holders of capital stock of the
-----------
Corporation and options, warrants or rights to purchase such capital stock, in
each case including the number of shares of capital stock held by, or subject to
purchase pursuant to the exercise of any option, warrant or right held by, each
such holder. Except as set forth in Exhibit 4.2, there are no outstanding
-----------
shares of capital stock of the Corporation or warrants, options, agreements,
convertible securities or other commitments pursuant to which the Corporation is
or may become obligated to issue
-3-
<PAGE>
any shares of its capital stock or other securities of the Corporation. Except
as set forth in Exhibit 4.2, the number of shares of capital stock, if any,
-----------
reserved for issuance in connection with the securities described in the
immediately preceding sentence is not subject to adjustment by reason of the
issuance of the Shares or the Reserved Shares (as defined in Section 4.16).
Except as set forth in Exhibit 4.2, there are no preemptive or similar rights to
-----------
purchase or otherwise acquire shares of capital stock of the Corporation
pursuant to any provision of law, the Certificate of Incorporation or the By-
Laws or any agreement to which the Corporation is a party, or otherwise, and
except as set forth in the Voting Agreement described in Section 6.6 of this
Agreement, there is no agreement, restriction or encumbrance with respect to the
sale or voting of any shares of the Corporation's capital stock (whether
outstanding or issuable upon conversion or exercise of outstanding securities).
4.3 Equity Investments. Except as set forth on Exhibit 4.3, the
------------------ -----------
Corporation does not currently have any subsidiaries nor currently own any
capital stock or other proprietary interest, directly or indirectly, in any
corporation, association, trust, partnership, joint venture or other entity.
4.4 Financial Statements. Attached as Exhibit 4.4A are the unaudited
-------------------- ------------
balance sheet for the Corporation as of December 31, 1994, and the related
unaudited statement of income for the year ending December 31, 1994. Attached
as Exhibit 4.4B are the unaudited balance sheet of the Corporation as of October
------------
31, 1995 (the "Balance Sheet"), and the related unaudited statement of income
for the ten-month period ended October 31, 1995. (October 31, 1995 is
hereinafter sometimes referred to as the "Balance Sheet Date.") The December 31,
1994 and October 31, 1995 financial statements are in accordance with the books
and records of the Corporation and present fairly the financial position and
results of operations of the Corporation as of the dates and for the periods
indicated.
4.5 Absence of Undisclosed Liabilities. Except as set forth in
----------------------------------
Exhibit 4.5 or as reflected in the Balance Sheet, at the Balance Sheet Date (a)
- -----------
the Corporation had no material liabilities of any nature (matured or unmatured,
fixed or contingent) of a type required by generally accepted accounting
principles to be disclosed on a balance sheet of the Corporation which were not
so disclosed; (b) all reserves established by the Corporation and set forth in
the Balance Sheet were adequate; and (c) there were no loss contingencies (as
such term is used in Statement of Financial Accounting Standards No. 5 issued by
the Financial Accounting Standards Board in March 1975) which were not
adequately disclosed in the Balance Sheet as required by such Statement No. 5.
4.6 Absence of Changes. Except as set forth in Exhibit 4.6, since
------------------ -----------
the Balance Sheet Date there has not been (a) any material adverse change in the
financial condition, results of operations, assets, liabilities, business or
prospects of the Corporation, (b) any material asset or property of the
Corporation made subject to a lien of any kind, (c) any waiver of any valuable
right of the Corporation, or the cancellation of any debt or claim held by the
Corporation, (d) any payment of dividends on, or other distribution with respect
to, or any direct or indirect redemption or acquisition of, any shares of the
capital stock of the Corporation, or any agreement or commitment therefor, (e)
any mortgage, pledge, sale, assignment or transfer of any tangible or intangible
assets of the Corporation, except in the ordinary course of business, (f) any
loan by the
-4-
<PAGE>
Corporation to, or any loan to the Corporation from, any officer, director,
employee or stockholder of the Corporation, or any agreement or commitment
therefor, (g) any damage, destruction or loss (whether or not covered by
insurance) materially and adversely affecting the assets, property or business
of the Corporation, or (h) any change in the accounting methods or practices
followed by the Corporation.
4.7 Encumbrances. Except as set forth in Exhibit 4.7, the
------------ -----------
Corporation has good title to all of its property and assets, real, personal or
mixed, tangible or intangible, free and clear of all liens, security interests,
charges and other encumbrances of any kind.
4.8 Intellectual Property Rights. Except in each case as set forth
----------------------------
in Exhibit 4.8:
-----------
(a) the Corporation owns or has the right to use all Intellectual
Property Rights (as hereinafter defined) necessary or required for the conduct
of its business as presently conducted or as proposed to be conducted, which
Intellectual Property Rights are identified in said Exhibit 4.8;
-----------
(b) to the Corporation's knowledge, no royalties or other amounts are
payable by the Corporation to other persons by reason of the ownership or use of
said Intellectual Property Rights; and
(c) to the Corporation's knowledge, no product marketed or sold or
proposed to be marketed or sold by the Corporation violates or will violate any
license or infringes any Intellectual Property Rights of another, nor has the
Corporation received any notice that any of such Intellectual Property Rights or
the operation or proposed operation of the Corporation's business conflicts or
will conflict with the rights of others.
As used herein, the term "Intellectual Property Rights" means all patents,
trademarks, service marks, trade names, copyrights, inventions, trade secrets,
proprietary processes and formulae, applications for patents, trademarks,
service marks and copyrights, and other industrial and intellectual property
rights.
Dr. Hubert Koster has entered into an agreement with the Company
relating to protection of proprietary information and invention assignment in
the form included in Exhibit 4.8.
-----------
4.9 Litigation. There is no action, suit, claim, proceeding or
----------
investigation, at law, in equity or otherwise, or by or before any governmental
instrumentality or other agency, now pending, or, to the Corporation's
knowledge, threatened against the Corporation.
4.10 No Defaults. The Corporation is not in violation or breach of,
-----------
or in default under, any provision of (a) the Certificate of Incorporation or
the By-Laws or (b) except where any such violation, breach or default would not
have a material adverse effect on the Corporation, any note, indenture,
mortgage, lease, contract, purchase order or other instrument, document or
agreement to which the Corporation is a party or by which it or any of its
property
-5-
<PAGE>
is bound or affected or any ruling, writ, injunction, order, judgment or decree
of any court, administrative agency or other governmental body. To the
Corporation's knowledge, there exists no condition, event or act which after
notice, lapse of time, or both, would constitute a violation or breach of, or a
default under, any of the foregoing.
4.11 Employment of Officers, Employees and Consultants. No third
-------------------------------------------------
party may assert any valid claim against the Corporation, any Investor, or any
Designated Person (as hereinafter defined) with respect to (a) the continued
employment by or association with the Corporation of any of the present officers
or employees of, or consultants to, the Corporation (collectively, the
"Designated Persons"), or (b) the use or disclosure by the Corporation or any
Designated Person of any information which the Corporation or any Designated
Person would be prohibited from using or disclosing under any prior agreements
or arrangements or under any laws, including, without limitation, laws
applicable to unfair competition, trade secrets or proprietary information.
4.12 Taxes. The Corporation has filed all Federal, state, local and
-----
foreign tax returns which are required to be filed by it and all such returns
are true and correct. The Corporation has paid all taxes pursuant to such
returns or pursuant to any assessments received by it or which it is obligated
to withhold from amounts owing to any employee, creditor or third party, except,
in each case, for those which are not yet due and payable pursuant to such
returns.
4.13 Agreements. Except as set forth in Exhibit 4.13, the
---------- ------------
Corporation is not a party to any written or oral (a) contract with any labor
union; (b) contract for the future purchase of fixed assets or for the future
purchase of materials, supplies or equipment in excess of normal operating
requirements; (c) contract for the employment of any officer, individual
employee or other person or any contract with any person on a consulting basis;
(d) bonus, pension, profit-sharing, retirement, stock purchase, stock option,
hospitalization, medical insurance or similar plan, contract or understanding in
effect with respect to employees or any of them or the employees of others; (e)
agreement or indenture relating to the borrowing of money or to the mortgaging,
pledging or otherwise placing a lien on any assets of the Corporation; (f)
guaranty of any obligation for borrowed money or otherwise; (g) lease or
agreement under which the Corporation is lessee of or holds or operates any
property, real or personal, owned by any other party; (h) lease or agreement
under which the Corporation is lessor of or permits any third party to hold or
operate any property, real or personal, owned or controlled by the Corporation;
(i) license or lease agreement with respect to any Intellectual Property Rights;
(j) agreement or other commitment for capital expenditures in excess of $25,000;
or (k) contract, agreement or commitment under which the Corporation is
obligated to pay any broker's fees, finder's fees or any such similar fees, to
any third party. Except as set forth in Exhibit 4.13, the Corporation is not
------------
engaged in any negotiations which could lead to any such contract, agreement,
arrangement, understanding or commitment. The Corporation has furnished to the
Investors true and correct copies of all such agreements, and other documents
requested by the Investors or its authorized representatives.
4.14 Compliance. The Corporation has complied in all material
----------
respects with all Federal, state, local or foreign laws applicable to its
business. The Corporation has all Federal, state, local and foreign
governmental licenses, registrations and permits material to or
-6-
<PAGE>
necessary for the conduct of its business, and such licenses, registrations and
permits are in full force and effect and there have been no violations in any
material respect of any such licenses, registrations or permits. No proceeding
is pending or, to the Corporation's knowledge, threatened, to revoke or limit
any thereof.
4.15 Insurance. Exhibit 4.15 sets forth each insurance policy
--------- ------------
(specifying the insurer, the amount of coverage, the type of insurance, the
policy number, the expiration date, the annual premium and any pending claims
thereunder) maintained by the Corporation on its properties, assets, business or
personnel. The insurance maintained by the Corporation on its properties,
assets, business and personnel is in amounts deemed adequate by the Corporation,
is in accordance with the standards of the industry in which the Corporation
operates, and is under policies currently in effect and issued by insurers of
recognized responsibility.
4.16 Authorization of this Agreement. The execution, delivery and
-------------------------------
performance by the Corporation of this Agreement, the Registration Rights
Agreement of even date herewith by and among the Corporation and the Investors
in the form of Exhibit 4.16A (the "Registration Rights Agreement") and the
-------------
Voting Agreement of even date herewith by and among the parties hereto in the
form of Exhibit 4.16B (the "Voting Agreement"; this Agreement, the Registration
-------------
Rights Agreement and Voting Agreement are herewith referred to collectively as
the "Transaction Documents") have been duly authorized by all requisite
corporate action. The Transaction Documents have been duly executed and
delivered on behalf of the Corporation and constitute the valid and binding
obligations of the Corporation, enforceable in accordance with their respective
terms. The execution, delivery and performance of the Transaction Documents,
the issuance, sale and delivery of the Shares and the shares of Common Stock
issuable upon conversion of the Shares (the "Reserved Shares"), and compliance
with the provisions hereof and thereof by the Corporation, do not and will not,
with or without the passage of time or the giving of notice or both, (a) violate
any provision of law, statute, rule or regulation or any ruling, writ,
injunction, order, judgment or decree of any court, administrative agency or
other governmental body or (b) conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute a default (or give rise to
any right of termination, cancellation or acceleration) under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Corporation under, the Certificate of Incorporation
or By-Laws or any note, indenture, mortgage, lease, contract, purchase order or
other instrument, document or agreement to which the Corporation is a party or
by which it or any of its property is bound or affected.
4.17 Authorization of Shares. The issuance, sale and delivery
-----------------------
hereunder by the Corporation of the Shares have been duly authorized by all
requisite corporate action, and when so issued, sold and delivered, the Shares
will be validly issued and outstanding, fully paid and nonassessable, and not
subject to preemptive or any other similar rights of the stockholders of the
Corporation or others.
4.18 Authorization of Reserved Shares. The issuance, sale and
--------------------------------
delivery by the Corporation of the Reserved Shares have been duly authorized by
all requisite corporate action of the Corporation, and the Reserved Shares have
been duly reserved for issuance upon conversion of all or any of the Shares, and
when so issued and delivered upon conversion of any
-7-
<PAGE>
of the Shares, the Reserved Shares will be validly issued and outstanding, fully
paid and nonassessable, and not subject to preemptive or any other similar
rights of the stockholders of the Corporation or others.
4.19 Related Transactions. Except as set forth in Exhibit 4.19, no
-------------------- ------------
director, officer or employee of the Corporation nor any "associate" (as defined
in the rules and regulations promulgated under the Securities Exchange Act of
1934 (the "Exchange Act")) of any such person is indebted to the Corporation,
nor is the Corporation indebted (or committed to make loans or extend or
guarantee credit) to any such person, nor is any such person a party to any
transaction (other than as an employee or consultant) with the Corporation
providing for the furnishing of services by, or rental of real or personal
property from, or otherwise requiring cash payments to, any such person.
4.20 No Governmental Consent or Approval Required. Except as set
--------------------------------------------
forth in Exhibit 4.20, no authorization, consent, approval or other order of,
------------
declaration to, or filing with, any governmental agency or body is required to
be made or obtained by the Corporation for or in connection with the valid and
lawful authorization, execution and delivery by the Corporation of the
Transaction Documents, for or in connection with the valid and lawful
authorization, issuance, sale and delivery of the Shares or for or in connection
with the valid and lawful authorization, reservation, issuance, sale and
delivery of the Reserved Shares, except such exemptive filings as are required
to be made under applicable securities laws and have been and shall be made on a
timely basis.
4.21 Registration Rights. Except as contemplated by the Registration
-------------------
Rights Agreement, no person has any right to cause the Corporation to effect the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of any shares of Common Stock, Series A Preferred or any other securities
of the Corporation.
4.22 Exemptions from Securities Laws. Subject to the accuracy of the
-------------------------------
representations and warranties of the Investors set forth in Section 5 hereof,
the provisions of Section 5 of the Securities Act are inapplicable to the
offering, issuance, sale and delivery of the Shares and the Reserved Shares, and
no consent, approval, qualification or registration or filing under any state
securities laws is required in connection therewith, except such exemptive
filings as are required to be made under applicable securities laws and have
been and shall be made on a timely basis.
4.23 Commitments from German Government. Exhibit 4.23 accurately
---------------------------------- ------------
describes certain commitments from certain German governmental authorities made
with respect to the Corporation and its subsidiary Sequenom Instruments GmbH.
SECTION 5. Representations and Warranties of the Investors. Each
--------- -----------------------------------------------
Investor, severally and not jointly, represents and warrants to the Corporation
as follows:
5.1 Organization. Such Investor is an entity duly organized, validly
------------
existing and in good standing under the laws of the jurisdiction of its
organization, with all requisite
-8-
<PAGE>
power and authority to own and lease its properties, to carry on its business,
and to carry out the transactions contemplated hereby.
5.2 Purchase for Investment. Such Investor is acquiring the Shares,
-----------------------
and, in the event such Investor should acquire Reserved Shares upon conversion
of the Shares, such Investor will be acquiring the Reserved Shares, for its own
account, for investment and not for, with a view to, or in connection with, any
distribution or public offering thereof within the meaning of the Securities
Act.
5.3 Unregistered Securities; Legend. Such Investor understands that
-------------------------------
the Shares have not been, and the Reserved Shares will not be, registered under
the Securities Act or any state securities law, by reason of their issuance in a
transaction exempt from the registration requirements of the Securities Act and
such laws, and that they must be held indefinitely unless they are subsequently
registered under the Securities Act and such laws or a subsequent disposition
thereof is exempt from registration. Such Investor further understands that
such exemption depends upon, among other things, the bona fide nature of such
---- ----
Investor's investment intent expressed herein. Such Investor acknowledges that
the certificates for the Shares and the Reserved Shares shall bear a legend to
such effect, and appropriate stock transfer instructions may be issued.
5.4 Status of the Investors. Such Investor has not been formed for
-----------------------
the specific purpose of acquiring Shares or Reserved Shares pursuant to this
Agreement. Such Investor understands the term "accredited investor," as used in
Regulation D promulgated under the Securities Act and represents and warrants to
the Corporation that such Investor is an "accredited investor" for purposes of
acquiring Shares and Reserved Shares.
5.5 Knowledge and Experience; Economic Risk. Such Investor has
---------------------------------------
sufficient knowledge and experience it business and financial matters and with
respect to investment in securities of privately held companies so as to enable
it to analyze and evaluate the merits and risks of the investment contemplated
hereby and is capable of protecting its interest in connection with this
transaction. Such Investor is able to bear the economic risk of such
investment, including a complete loss of the investment.
5.6 Access to Information. Such Investor acknowledges that such
---------------------
Investor and its representatives have had the opportunity to ask questions and
receive answers from officers and representatives of the Corporation concerning
the transactions contemplated by this Agreement, and to obtain any additional
information which the Corporation possesses or can acquire that is necessary to
verify the accuracy of the information regarding the Corporation herein set
forth or otherwise desired in connection with its purchase of the Shares and the
Reserved Shares.
5.7 Authorization. The execution, delivery and performance by such
-------------
Investor of this Agreement have been duly authorized by all requisite action of
such Investor and its partners or equity holders. This Agreement has been duly
executed and delivered on behalf of such Investor and constitutes the valid and
binding obligation of such Investor, enforceable in accordance with its terms.
The execution, delivery and performance of the Transaction
-9-
<PAGE>
Documents, the purchase of the Shares and the Reserved Shares, and compliance
with the provisions hereof and thereof by such Investor, do not and will not,
with or without the passage of time or the giving of notice or both, (a) violate
any provision of law, statute, rule or regulation or any ruling, writ,
injunction, order, judgment or decree of any court, administrative agency or
other governmental body or (b) conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute a default (or give rise to
any right of termination, cancellation or acceleration) under, such Investor's
charter, by-laws, partnership agreement or other organizational document, or any
material note, indenture, mortgage, lease, agreement, contract, purchase order
or other instrument, document or agreement to which such Investor is a party or
by which it or any of its property is bound or affected.
5.8 No Governmental Consent or Approval Required. No authorization,
--------------------------------------------
consent, approval or other order of, or declaration to, or filing with, any
governmental agency or body is required to be made or obtained by such Investor
for or in connection with the valid authorization, execution and delivery by
such Investor of the Transaction Documents or for the valid purchase by such
Investor of the Shares to be sold to it hereunder or for or in connection with
the valid issuance to such Investor of any Reserved Shares.
5.9 Rule 144. Such Investor understands that the exemption from
--------
registration afforded by Rule 144 (the provisions of which are known to such
Investor) promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act depends upon the satisfaction of various
conditions, that such exemption is not currently available and that, if
applicable, Rule 144 affords the basis for sales only in limited amounts.
SECTION 6. Conditions Precedent to Closing by the Investor. The
--------- -----------------------------------------------
obligation of each Investor to purchase and pay for the Shares being purchased
by such Investor at the initial Closing or any Additional Closing (each a
"Closing") is subject to satisfaction (or waiver by the Investor) of the
following conditions precedent at or before such Closing:
6.1 Corporate Proceedings. All corporate and other proceedings to be
---------------------
taken and all waivers and consents to be obtained in connection with the
transactions contemplated by this Agreement shall have been taken or obtained
and all documents incident to such transactions shall be satisfactory in form
and substance to the Investors and their counsel, who shall have received all
such originals or certified or other copies of such documents as they may
reasonably request.
6.2 Representations and Warranties Correct. The representations and
--------------------------------------
warranties made by the Corporation in Section 4 hereof shall be true and correct
when made, and shall be true and correct in all material respects at the time of
such Closing with the same force and effect as if they had been made at and as
of the time of such Closing.
6.3 Compliance with Covenants. The corporation shall have duly
-------------------------
complied with and performed all covenants and agreements of the Corporation
herein which are required to be complied with and performed at or before such
Closing.
-10-
<PAGE>
6.4 Certificate of Compliance. The Corporation shall have provided
-------------------------
to each of the Investors purchasing Shares at such Closing a certificate, dated
the date of such Closing, in form and substance reasonably satisfactory to such
Investor, confirming compliance with the conditions set forth it Sections 6.2
and 6.3.
6.5 Opinion of Counsel. At such Closing, each of the Investors
------------------
purchasing Shares at such Closing shall have received from Foley, Hoag & Eliot,
counsel for the Corporation, an opinion addressed to such Investors, dated the
date of the Closing, to the effect set forth in Exhibit 6.5.
-----------
6.6 Related Agreements and Documents. At or before such Closing, the
--------------------------------
parties thereto shall have executed and delivered the Registration Rights
Agreement and the Voting Agreement, the Corporation and each of the Founders
shall have executed and delivered a Stock Restriction Agreement in the form of
Exhibit 6.6 hereto (each a "Stock Restriction Agreement"), and the Corporation
- -----------
shall have delivered to the Investors such other documents as they shall
reasonably request.
6.7 Blue Sky Matters. All consents, approvals, qualifications,
----------------
registrations and filings required to be obtained or effected under any
applicable state securities or "blue sky" laws in connection with the issuance,
sale and delivery of the Shares prior to the sale of the Shares shall have been
obtained or effected and copies of the same delivered to each of the Investors.
6.8 Purchase by Other Investors. All of the Initial Shares shall
---------------------------
have been purchased and paid for at the Initial Closing.
SECTION 7. Financial Reports. Subject to the limitations set forth in
--------- -----------------
Section 7.6, the Corporation agrees to furnish each of the Investors and any
transferee to which any Investor transfers at least 100,000 Shares (a "Series B
Transferee") with the following:
7.1 Quarterly and Monthly Reports. Within 45 days after the end of
-----------------------------
each month and each fiscal quarter, an unaudited financial report of the
Corporation, which report shall be prepared in accordance with generally
accepted accounting principles consistently applied (except that the financial
report may (i) be subject to normal year-end audit adjustments neither
individually nor in the aggregate material and (ii) not contain all notes
thereto which may be required in accordance with generally accepted accounting
principles) and shall be certified by either the Chief Executive Officer or the
Chief Financial officer of the Corporation to have been so prepared, and which
shall include the following:
(a) an income statement for such month or quarter, together with a
cumulative income statement from the first day of the then-current fiscal year
to the last day of such month or quarter;
(b) a balance sheet as of the last day of such month or quarter;
(c) a statement of cash flows for such month or quarter;
-11-
<PAGE>
(d) a comparison between the actual figures for such month or
quarter, the comparable figures (with respect to the foregoing clauses (a) and
(b) only) for the prior year (if any) and the comparable figures included in the
Budget (as hereinafter defined) for such month or quarter, with an explanation
of any material differences between them.
The financial report for each fiscal quarter shall be accompanied by a
report by the Chief Executive Officer of the Corporation explaining business
developments and problems occurring during the quarter.
7.2 Annual Reports. Within 120 days after the end of each fiscal
--------------
year of the Corporation, audited financial statements of the Corporation, which
shall include an income statement for such fiscal year and a balance sheet as of
the last day thereof, and statements of stockholders' equity and cash flows for
such fiscal year, each prepared in accordance with generally accepted accounting
principles consistently applied, certified by independent certified public
accountants of recognized national standing satisfactory to the Investors,
together with such accountants' annual management letter.
7.3 Consolidated Financial Statements. If for any period the
---------------------------------
Corporation shall have any subsidiary whose accounts are consolidated with those
of the Corporation, then in respect of such period the financial statements
delivered pursuant to the foregoing Sections 7.1 and 7.2 shall be the
consolidated and consolidating financial statements of the Corporation and all
such consolidated subsidiaries.
7.4 Other Reports and Information. Promptly upon becoming available:
-----------------------------
(a) copies of all financial statements, reports, notices, press
releases, proxy statements and other documents sent by the Corporation to
its stockholders or released to the public and copies of all regular and
periodic reports, if any, filed by the Corporation with the Commission or
any securities exchange; and
(b) any other financial or other information available to
management of the Corporation as any of the Investors shall have reasonably
requested on a timely basis.
7.5 Budgets and Operating Plans. At least 30 days prior to the
---------------------------
beginning of each fiscal year of the Corporation, a monthly operating plan of
the Corporation, with monthly breakdowns, for such fiscal year (the "Budget").
The Budget shall be accepted as the Budget for such fiscal year when it has been
approved by the Board of Directors of the Corporation. The Budget shall be
reviewed by the Corporation periodically and all changes therein and all
material deviations therefrom which are proposed to be made by the Corporation
shall be resubmitted to its Board of Directors and to each of the Investors in
advance and shall be accepted when approved by, and the Corporation shall not
make any such changes or material deviations to or from the Budget without such
prior approval of, its Board of Directors. The Budget shall include an income
statement, balance sheet and cash flow information.
-12-
<PAGE>
7.6 Limitations on Rights of Investors under Section 7. The
--------------------------------------------------
Corporation shall provide the information required by Sections 7.1 through 7.5
to each Investor and any Series B Transferee so long as such Investor or Series
B Transferee shall own at least 200,000 shares of the Common Stock (including in
such number shares of Common Stock issuable upon Conversion of Series B
Preferred) appropriately adjusted to take account of any stock split, stock
dividend, combination of shares or the like. The foregoing provisions of this
Section 7 to the contrary notwithstanding, the Investors shall not have any
rights and the Corporation shall not have any obligations under the foregoing
provisions of this Section 7 at such time that the Common Stock is registered
under Section 12 of the Exchange Act.
SECTION 8. Additional Agreements of the Corporation.
--------- ----------------------------------------
8.1 Right of First Refusal.
----------------------
(a) Subject to the limitations set forth in paragraph (i) of this
Section 8.1 and in Section 8.9, the Corporation hereby grants to each Investor,
each Founder, and any of their respective permitted assignees described in
paragraph (j) of this Section 8.1 (each a "Right Holder") the right of first
refusal to purchase, pro rata, all (or any part) of any New Securities (as
defined in this Section 8.1(b)) that the Corporation may, from time to time,
propose to sell or issue. Each such Right Holder's pro rata share, for purposes
of this right of first refusal, is the ratio of (i) the number of shares of
Common Stock then held of record by, or issuable on conversion of Series B
Preferred or Series A Preferred (together, "Preferred Stock") then held of
record by, such Right Holder to (ii) the sum of the total number of shares of
the Common Stock issued and outstanding plus the total number of shares of
Common Stock issuable upon conversion of the Preferred Stock, in each case at
such time (the "Basic Amount").
(b) "New Securities" shall mean any equity securities of the
Corporation, whether now authorized or not, and rights, options, or warrants to
purchase said equity securities, and securities of any type whatsoever that are,
or may become, convertible into said equity securities; provided, however, that
-------- -------
"New Securities" does not include (i) securities offered to the public pursuant
to a registration statement filed under the Securities Act, the gross proceeds
to the Corporation from the sale of which would equal or exceed $10,000,000;
(ii) securities issued pursuant to the acquisition of another corporation by the
Corporation by merger, purchase of substantially all of the assets, or other
reorganization whereby the Corporation acquires not less than 51% of the voting
power of such corporation; (iii) up to 700,000 shares (appropriately adjusted to
take account of any stock split, stock dividend, combination of shares or the
like) of Common Stock (or related options) issued to employees, officers or
other persons performing services for the Corporation pursuant to any stock
offering, plan or arrangement approved by the Board of Directors of the
Corporation, which number may be adjusted upward by the affirmative vote of two-
thirds of the whole Board of Directors; (iv) securities issued in connection
with any stock split, stock dividend or recapitalization by the Corporation; (v)
shares of Common Stock issued upon conversion of the Shares; (vi) securities
issuable upon exercise or conversion of any rights, options, warrants or
convertible securities outstanding on the date of this Agreement; (vii)
securities issued to any financial institution in connection with a loan
transaction approved by the Board of Directors of the Corporation; (viii)
securities issued to vendors or customers or to other persons in similar
commercial situations with the Corporation, provided such issuance is
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<PAGE>
approved by the Board of Directors of the Corporation; (ix) securities issued in
connection with obtaining lease financing, whether issued to a lessor, guarantor
or other person involved in the financing, provided such issuance is approved by
the Board of Directors of the Corporation; or (x) any right, option or warrant
to acquire any security convertible into securities excluded from the definition
of New Securities pursuant to clauses (i) through (ix) above.
(c) The Corporation shall not issue, sell or exchange, agree to
issue, sell or exchange, or reserve or set aside for issuance, sale or exchange
any New Securities unless the Corporation shall deliver to each Right Holder a
written notice of any proposed or intended issuance, sale or exchange of New
Securities (the "Offer"), which Offer shall (i) identify and describe the New
Securities, (ii) describe the price and other terms upon which they are to be
issued, sold or exchanged, and the number or amount of the New Securities to be
issued, sold or exchanged, (iii) identify the persons or entities to which or
with which the New Securities are to be offered, issued, sold or exchanged and
(iv) offer to issue and sell to or exchange with such Right Holder (a) such
Right Holder's Basic Amount, and (b) any additional portion of the New
Securities as such Right Holder shall indicate it will purchase or acquire
should the other Right Holders subscribe for less than their Basic Amounts (the
"Undersubscription Amount"). Each Right Holder shall have the right, for a
period of 30 days following delivery of the Offer, to purchase or acquire, at a
price and upon the other terms specified in the Offer, the number or amount of
New Securities described above. The Offer by its terms shall remain open and
irrevocable for such 30-day period.
(d) To accept an Offer, in whole or in part, a Right Holder must
deliver a written notice to the Corporation prior to the end of the 30-day
period of the Offer, setting forth the portion of the Right Holder's Basic
Amount that such Right Holder elects to purchase and, if such Right Holder shall
elect to purchase all of its Basic Amount, the Undersubscription Amount (if any)
that such Right Holder elects to purchase (the "Notice of Acceptance"). If the
Basic Amounts subscribed for by all Right Holders are less than the total New
Securities, then each Right Holder who has set forth an Undersubscription Amount
in its Notice of Acceptance shall be entitled to purchase, in addition to the
Basic Amount subscribed for, the Undersubscription Amount it has subscribed for;
provided, however, that should the Undersubscription Amounts subscribed for
- -------- -------
exceed the difference between the New Securities and the Basic Amounts
subscribed for (the "Available Undersubscription Amount"), each Right Holder who
has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the
Undersubscription Amount subscribed for by such Right Holder bears to the total
Undersubscription Amounts subscribed for by all Right Holders, subject to
rounding by the Board of Directors to the extent it reasonably deems necessary.
(e) In the event that Notices of Acceptance are not given by the
Right Holders in respect of all the New Securities, the Corporation shall have
90 days from the expiration of the period set forth in paragraph (c) above to
issue, sell or exchange all or any part of such New Securities as to which a
Notice of Acceptance has not been given by the Right Holders (the "Refused
Securities"), but only to the offerees or purchasers and only upon terms and
conditions (including, without limitation, unit prices and interest rates) which
are described in the Offer.
-14-
<PAGE>
(f) In the event the Corporation shall propose to sell less than all
the Refused Securities (any such sale to be in the manner and on the terms
specified in paragraph (e) above), then each Right Holder may, at its sole
option and in its sole discretion, reduce the number or amount of the New
Securities specified in its Notice of Acceptance to an amount that shall be not
less than the number or amount of the New Securities that the Right Holder
elected to purchase pursuant to paragraph (d) above multiplied by a fraction,
(i) the numerator of which shall be the number or amount of New Securities the
Corporation actually proposes to issue, sell or exchange (including New
Securities to be issued or sold to Right Holders pursuant to paragraph (d) above
prior to such reduction) and (ii) the denominator of which shall be the amount
of all New Securities. In the event that any Right Holder so elects to reduce
the number or amount of New Securities specified in its Notice of Acceptance,
the Corporation may not issue, sell or exchange more than the reduced number or
amount of the New Securities unless and until such securities have again been
offered to the Right Holders in accordance with paragraph (c) above.
(g) Upon the closing of the issuance, sale or exchange of all or less
than all the Refused Securities, the Right Holders shall acquire from the
Corporation, and the Corporation shall issue to the Right Holders, the number or
amount of New Securities specified in the Notices of Acceptance, as reduced
pursuant to paragraph (f) above if the Right Holders have so elected, upon the
terms and conditions specified in the Offer. The purchase by the Right Holders
of any New Securities is subject in all cases to the preparation, execution and
delivery by the Corporation and the Right Holders of a purchase agreement
relating to such New Securities reasonably satisfactory in form and substance to
the Right Holders and their respective counsel.
(h) Any New Securities not acquired by the Right Holders or other
persons in accordance with paragraph (e) above may not be issued, sold or
exchanged until they are again offered to the Right Holders under the procedures
specified in this Agreement.
(i) This right of first refusal shall run to each Investor, each
Founder and any of their respective permitted assignees under paragraph (j) of
this Section 8.1 only for so long as they hold the following number of shares of
Common Stock (including in such number shares of Common Stock issuable upon
conversion of Preferred Stock):
(i) in the case of the Founders, the Investors who were parties
to the Original Purchase Agreement and their permitted assignees, 50,000 shares;
and
(ii) in the case of all other Investors and their permitted
assignees, 200,000 shares.
(j) This right of first refusal may be assigned, in whole or in part,
(i) to any Affiliate (as hereinafter defined) of any Right Holder or (ii) to any
assignee who acquires not less than 50,000 shares of Common Stock in the case of
an assignment from assignor described in clause (i) of paragraph (i) of this
Section 8.1, or 200,000 shares of Common Stock in the case of an assignment from
an assignor described in clause (ii) of paragraph (i) of this Section 8.1 (in
each case, including in such number shares of Common Stock issuable upon
conversion of Preferred Stock and appropriately adjusted to take account of any
stock split, stock dividend,
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<PAGE>
combination of shares, or the like). As used in this Section, an Affiliate of a
Right Holder shall mean any partner of the Right Holder that is a partnership or
any person or entity that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Right Holder.
(k) This Section 8.1 shall supersede and replace Section 8 of the
Original Purchase Agreement, which Section 8 shall no longer have any force or
effect.
8.2 Keeping of Records and Books of Account. The Corporation shall keep,
---------------------------------------
and cause each subsidiary to keep, adequate records and books of account, in
which complete entries will be made in accordance with generally accepted
accounting principles consistently applied, reflecting all financial
transactions of the Corporation and such subsidiary, and in which, for each
fiscal year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection with its
business shall be made.
8.3 Insurance. The Corporation will do or cause to be done all things
---------
necessary to preserve and maintain in full force and effect fire and casualty
insurance policies, with extended coverage, on its properties, assets, business
and personnel, in amounts deemed adequate by the Corporation, and in accordance
with the standards of the industry in which the Corporation operates, sufficient
in amount to allow it to replace any of its properties which might be damaged or
destroyed.
8.4 Key Man Life Insurance. The Corporation shall use its best efforts to
----------------------
obtain and thereafter maintain in force a policy of life insurance, naming the
Corporation as beneficiary, on the life of Dr. Hubert Koster, in the amount of
US$1,000,000, once Dr. Koster becomes an employee of the Corporation.
8.5 Maintenance of Corporate Existence, etc. The Corporation will do or
---------------------------------------
cause to be done all reasonable things necessary to preserve and keep in full
force and effect its existence and all of its rights (charter and statutory),
subject in all cases to the exercise by the Board of Directors of the
Corporation of their fiduciary obligations. The Corporation shall comply in all
respects with the provisions of its Certificate of Incorporation and By-laws.
8.6 Maintenance of Facilities. The Corporation will cause all facilities
-------------------------
owned or leased in the conduct of its business to be maintained and kept in good
condition and repair and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Corporation may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Corporation
- -------- -------
from discontinuing the lease or maintenance of any such facilities if such
discontinuance is, in the good faith judgment of the Board of Directors of the
Corporation, desirable in the conduct of its business and would not have a
material adverse effect on the Corporation.
8.7 Payment of Taxes. The Corporation will pay or discharge or cause to
----------------
be paid or discharged, before the same shall become delinquent, (1) all material
taxes, assessments and governmental charges levied or imposed upon the
Corporation or upon the income, profits or
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<PAGE>
property of the Corporation; and (2) all material liabilities of the
Corporation; provided, however, that the Corporation shall not be required to
-------- -------
pay or discharge or cause to be paid or discharged any such tax assessment,
liability, or charge, whose amount, applicability or validity is being contested
in good faith by appropriate proceedings if adequate reserves therefor have been
established in accordance with generally accepted accounting principles.
8.8 Compliance with Applicable Laws. The Corporation shall conduct its
-------------------------------
business in compliance in all material respects with all laws and valid
requirements of governmental authorities relating to the conduct of its business
or to its properties or assets.
8.9 Limitation On Rights of Investors. The rights of Right Holders under
---------------------------------
Section 8.1 and the Investors under Section 8.2 through 8.8, inclusive, and the
obligations of the Corporation under Sections 8.1 through 8.8, inclusive, shall
terminate and be of no effect upon and following the closing of a firm
commitment underwritten public offering of the Corporation's Common Stock
pursuant to an effective registration statement under the Securities Act in
which (i) the offering price per share is not less than $4.50 (prior to
underwriter's discounts and commissions), appropriately adjusted to take account
of any stock split, stock dividend, combination of shares, or the like, and (ii)
the aggregate net proceeds to the Corporation from such offering are not less
than $10 million.
8.10 Proprietary Information and Invention Assignment Agreements. As soon
-----------------------------------------------------------
as practicable after the Initial Closing, the Corporation will use reasonable
efforts to cause each senior technical employee who has not already signed an
agreement with the Corporation relating to the protection of proprietary
information and the assignment of inventions to sign such an agreement in a form
acceptable to the Board of Directors of the Corporation.
SECTION 9. Expenses.
--------- --------
9.1 Expenses. The Corporation shall pay the reasonable fees and
--------
disbursements of Bingham, Dana & Gould, special counsel to Boston University
Nominee Partnership, in connection with the transactions contemplated by this
Agreement, up to a maximum amount of $10,000. Otherwise, the Corporation and
the Investors shall each bear their own expenses, including the fees and
disbursements of their respective counsel, incurred in connection with the
purchase and sale of the Shares.
9.2 Brokers. No party to this Agreement has employed any broker or finder
-------
in connection with the transactions contemplated hereby. No person or entity
will have, as a result of the transactions contemplated by this Agreement, any
right, interest or valid claim against or upon any such party of any commission,
fee or other compensation as a finder or broker because of any act or omission
by such party or any agent of such party. Each party to this Agreement agrees
to indemnify and hold the others harmless from payment of any brokerage fee,
finders fee, or commission claimed by any third party who claims to have been
involved because of association with such party.
SECTION 10. Exchanges; Lost, Stolen or Mutilated Certificates. Upon
---------- -------------------------------------------------
surrender by any Investor to the Corporation of a certificate or certificates
representing shares of Series B
-17-
<PAGE>
Preferred purchased or acquired by such Investor hereunder or Reserved Shares
received upon conversion of any such shares of Series B Preferred, the
Corporation at its expense shall issue in exchange therefor, and deliver to such
Investor, a new certificate or certificates representing such shares, in such
denomination or denominations as may be requested by such Investor. Upon receipt
of evidence satisfactory to the Corporation of the loss, theft, destruction or
mutilation of any certificate representing any shares of Series B Preferred
purchased or acquired by the Investor hereunder or Reserved Shares received upon
conversion of any such shares of Series B Preferred and in case of any such
loss, theft or destruction, upon delivery of any indemnity agreement
satisfactory to the Corporation, or in case of any such mutilation, upon
surrender and cancellation of such certificate, the Corporation at its expense
shall issue and deliver to such Investor a new certificate for such shares of
Series B Preferred or Reserved Shares, of like tenor, in lieu of such lost,
stolen or mutilated certificate.
SECTION 11. Survival of Representations, Warranties and Agreements. The
---------- ------------------------------------------------------
covenants, representations and warranties of the parties contained herein shall
survive any Closing hereunder. Each of the parties may rely on such covenants,
representations and warranties irrespective of any investigation made, or notice
or knowledge held by, it or any other person. All statements contained in any
certificate or other instrument delivered by any party pursuant to this
Agreement or in connection with the transactions contemplated by this Agreement
shall constitute representations and warranties by such party under this
Agreement.
SECTION 12. Remedies. In case any one or more of the covenants or
---------- --------
agreements set forth in this Agreement shall have been breached by the
Corporation, the Investors may proceed to protect and enforce their rights
either by suit in equity or by action at law, including, but not limited to, an
action for damages as a result of any such breach or an action for specific
performance of any such covenant or agreement contained in this Agreement.
SECTION 13. Successors and Assigns. This Agreement shall be binding upon,
---------- ----------------------
and inure to the benefit of, each of the parties hereto and, except as otherwise
expressly provided herein, each other person who shall become a registered
holder named in any certificate evidencing shares of Common Stock or Series B
Preferred transferred to such holder by any of the Investors or their permitted
transferees, and (except as aforesaid) their respective legal representatives,
successors and assigns.
SECTION 14. Entire Agreement; Effect on Prior Documents. This Agreement
---------- -------------------------------------------
and the other documents referred to herein or delivered pursuant hereto contain
the entire agreement among the parties with respect to the financing
transactions contemplated hereby and supersede all prior negotiations,
commitments, agreements-and understandings among them with respect thereto.
SECTION 15. Notices. All notices, requests, consents and other
---------- -------
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or duly sent by first-
class mail, postage prepaid, or by any internationally recognized express
courier service, addressed to such party at the address set forth below or such
other address as may hereafter be designated in writing by the addressee to the
addressor listing all parties:
-18-
<PAGE>
(i) if to the Corporation, to:
Sequenom, Inc.
c/o TVM Techno Venture Management
101 Arch Street
Suite 1950
Boston, MA 02110
Attention: President
with a copy to:
David R. Pierson, Esq.
Foley, Hoag & Eliot
One Post Office Square
Boston, Massachusetts 02109
(ii) if to the Investors, to their respective addresses set forth on
the Schedule of Investors.
SECTION 16. Amendments; waivers. This Agreement may be amended, and
---------- -------------------
compliance with the provisions of this Agreement may be omitted or waived, by
the written agreement of the Corporation and Investors or assignees of their
rights hereunder holding 85% in voting power of the Series B Preferred (and
Common Stock issued upon conversion thereof) held by the Investors and such
assignees.
SECTION 17. Counterparts. This Agreement may be executed in any number of
---------- ------------
counterparts, each such counterpart shall be deemed to be an original
instrument, and all such counterparts together shall constitute but one
agreement. Any such counterpart may contain one or more signature pages.
SECTION 18. Headings. The headings of the various sections of this
---------- --------
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.
SECTION 19. Nouns and Pronouns. Whenever the context may require, any
---------- ------------------
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice-versa.
SECTION 20. Governing Law. This Agreement shall be governed by, and
---------- -------------
construed and enforced in accordance with, the substantive laws of The
Commonwealth of Massachusetts, without regard to its principles of conflicts of
laws.
SECTION 21. Severability. Any provision of this Agreement that is
---------- ------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any
-19-
<PAGE>
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 22. Information Confidential. Each Investor acknowledges that the
---------- ------------------------
information received by it pursuant hereto (including without limitation under
Section 7 hereof) is confidential and for its use only and such Investor will
not reproduce, disclose or disseminate such information to any other person
(other than its employees or agents having a need to know the contents of such
information), except in connection with the exercise of rights under this
Agreement, unless the Corporation has made such information available to the
public generally or such Investor is required to disclose such information by
law or by any court or other governmental body. The obligation of
confidentiality set forth in this Section shall not apply to information (i)
generally known on a non-confidential basis (without fault of an Investor) to
companies in the Corporation's line of business; (ii) lawfully obtained by an
Investor without restriction on disclosure; (iii) known to an Investor prior to
receipt from the Corporation without restriction on disclosure; or (iv)
independently developed by an Investor without use of information provided by
the Corporation.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
SEQUENOM, INC.
By: /s/ illegible
----------------------------------------
Its Treasurer
-20-
<PAGE>
For purposes of Section 8.1 only:
FOUNDERS:
/s/ Hubert Koster
-------------------------
Hubert Koster
/s/ Nola E. Masterson
-------------------------
Nola E. Masterson
/s/ Robert E. Patterson
-------------------------
Robert E. Patterson
-21-
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 22nd day of December, 1995.
TVM Techno Venture Enterprises No. II
Limited Partnership
-------------------------------------------
(Print name)
212,267 By: /s/ illegible
- --------------------- ----------------------------------------
Shares Purchased
Title: Treasurer
-------------------------------------
$318,400.50
- ---------------------
Total Purchase Price Address: 101 Arch St.
-------------------------------------
Suite 1950
-------------------------------------
Boston, Massachusetts 02110
-------------------------------------
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 22nd day of December, 1995.
TVM Intertech Limited Partnership
------------------------------------------
(Print name)
141,513 By: /s/ illegible
- ----------------------- ---------------------------------------
Shares Purchased
Title: Treasurer
------------------------------------
$212,269.50
- -----------------------
Total Purchase Price Address: 101 Arch St.
----------------------------------
Suite 1950
------------------------------------------
Boston, Massachusetts 02110
------------------------------------------
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 22nd day of December, 1995.
TVM Zweite Beteiligung - U.S.
Limited Partnership
----------------------------------------
(Print name)
432,953 By: /s/ illegible
- ----------------------- -------------------------------------
Shares Purchased
Title: Treasurer
----------------------------------
$649,429.50
- -----------------------
Total Purchase Price Address: 101 Arch St.
--------------------------------
Suite 1950
----------------------------------------
Boston, Massachusetts 02110
----------------------------------------
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 22nd day of December, 1995.
TVM Eurotech Limited Partnership
--------------------------------
(Print name)
288,633 By: /s/ illegible
- --------------------- ------------------------------------
Shares Purchased
Title: Treasurer
---------------------------------
$432,949.50
- ---------------------
Total Purchase Price Address: 101 Arch St.
-------------------------------
Suite 1950
---------------------------------------
Boston, Massachusetts 02110
---------------------------------------
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 22nd day of December, 1995.
TVM Techno Venture Investors No. 1
Limited Partnership
-------------------
(Print name)
12,634 By: /s/ illegible
- --------------------- --------------------------------------
Shares Purchased
Title: General Partner
-----------------------------------
$18,951.00
- ---------------------
Total Purchase Price Address: 101 Arch St.
---------------------------------
Suite 1950
-----------------------------------------
Boston, Massachusetts 02110
-----------------------------------------
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 22nd day of December, 1995.
KBL Founder Ventures SCA
------------------------------------------
(Print name)
245,333 By: /s/ illegible
- ------------------------ ------------------------------------------
Shares Purchased illegible illegible
Title: Director Director
------------------------------------
Managing Director
------------------------------------
$367,999.50
- ------------------------
Total Purchase Price Address: 43 Boulevard Royal
---------------------------------
L-2955 Luxembourg
-----------------------------------------
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 22nd day of December, 1995.
Alpinvest International B.V.
-----------------------------------
(Print name)
666,667 By: /s/ illegible
- ---------------------- --------------------------------
Shares Purchased
Title:_____________________________
$1,000,000.50
- ----------------------
Total Purchase Price Address: Gooimeer 3
---------------------------
NL - 1410 AB Naarden
-----------------------------------
The Netherlands
-----------------------------------
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 22nd day of December, 1995.
Boston University Nominee Partnership
--------------------------------------
(Print name)
333,333 By: /s/ John E. Bagalay
- --------------------- -----------------------------------
Shares Purchased John E. Bagalay
Title: Partner
--------------------------------
$499,999.50
- ---------------------
Total Purchase Price Address: 881 Commonwealth Avenue
------------------------------
Boston, MA 02215
--------------------------------------
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 21 day of February, 1996.
/s/ Gerald E. Coughlan
--------------------------------------
Gerald E. Coughlan
Address: Lehman Brothers
------------------------------
One Broadgate
London EC2M 7HA
England
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 23 day of February, 1996.
/s/ Charles P. Floe
------------------------------------
Charles P. Floe
Address: Lehman Brothers
-----------------------------
One Broadgate
London EC2M 7HA
England
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 6 day of February, 1996.
/s/ Dr. Hellmut Kirchner
------------------------------
Dr. Hellmut Kirchner
Address: Martelsgraben 2
------------------------
82327 Tutzing
Germany
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 5 day of February, 1996.
/s/ Dr. Herwig Brunner
-------------------------------
Dr. Herwig Brunner
Address: An der Betteleiche 6
-----------------------
70569 Stuttgart
Germany
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 29th day of February, 1996.
TVM TECHNO VENTURE INVESTORS
NO. 1 LIMITED PARTNERSHIP
By: /s/ Illegible
--------------------
Title: General Partner
-----------------
Address: c/o TVM Venture
Management
101 Arch Street
Suite 1950
Boston, MA 02210
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 29 day of February, 1996.
/s/ Dr. Franz A. Wirtz
-------------------------------
Dr. Franz A. Wirtz
Address: Geschaftsfurhender
------------------------
Gesellschafter Grunenthal
GmbH 52220 Stolberg
Germany
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 14 day of February, 1996.
/s/ Frau Hannemarie Wirtz
-----------------------------
Frau Hannemarie Wirtz
Address: Atzenach 37
---------------------
D-52223 Stolberg
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 29th day of February, 1996.
/s/ Hubert Koster
------------------
Hubert Koster
Address: Stapolstrasse 56
D 22529
Hamburg, Germany
Prof. Dr. Hubert Koster
Hallerstradle 74
20146 Hamburg
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 29 day of March, 1996.
illegible
--------------------------
SVE Star Ventures Enterprises No. III L.P.
By: SVM Star Ventures Managementgesellschaft MbH NR.3
-------------------------------------------------
Managing Partner
Title: ----------------------------------------------
By: Dr. Meir Barel, Managing Partner
---------------------------------------------
Address: Star Ventures Management
Possartstrasse 9
D-81679 Munich Germany
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 29 day of March, 1996.
illegible
-----------------------------------------------------
SVE Star Ventures Enterprises No. IIIa L.P.
By: SVM Star Ventures Managementgesellschaft mbH NR.3
-------------------------------------------------
Managing Partner
Title: ----------------------------------------------
By: Dr. Meir Barel, Managing Partner
---------------------------------------------
Address: Star Ventures Management
Possartstrasse 9
D-81679 Munich Germany
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 29 day of March, 1996.
illegible
------------------------------
SVM Star Ventures Managementgesellschaft
NR. 3 & Co. Beteiligungs KG mbH
By: SVM Star Ventures Managementgesellschaft mbH NR.3
-------------------------------------------------
Title: Managing Partner
----------------------------------------------
By: Dr. Meir Barel - Managing Partner
Address: Star Ventures Management
-------------------------------------------
Possartstrasse 9 D-81679 Munich Germany
-------------------------------------------
<PAGE>
SEQUENOM, INC.
Series B Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of December 22, 1995,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series B Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 28 day of March, 1996.
/s/ Dr. Ernst-Gunter Afting
-------------------------------------
Professor Dr. Ernst-Gunter Afting
Address: Maisenweg 21
82152 Krailing
Germany
<PAGE>
SCHEDULE OF INVESTORS
<TABLE>
<CAPTION>
Number of Shares of Aggregate
Investor Series B Preferred Stock Purchase Price
- -------- ------------------------ --------------
<S> <C> <C>
TVM Techno Venture 212,267 $ 318,400.50
Enterprises No. II Limited Partnership
c/o TVM Techno Venture
Management ("TVM"),
101 Arch Street, Suite 1950
Boston, MA 02210
TVM Intertech Limited Partnership 141,513 $ 212,269.50
c/o TVM
TVM Zweite Beteiligung-U.S. 432,953 $ 649,429.50
Limited Partnership
c/o TVM
TVM Eurotech Limited Partnership 288,633 $ 432,949.50
c/o TVM
TVM Techno Venture 12,634 $ 18,951.00
Investors No. 1 Limited Partnership
c/o TVM
KBL Founder Ventures SCA 245,333 $ 367,999.50
43, Boulevard Royal
L-2955 Luxembourg
Alpinvest International B.V. 666,667 $1,000,000.50
Gooimeer 3
NL-1410 AB Naarden
The Netherlands
Attn: John van Grootel
Boston University Nominee 333,333 $ 499,999.50
Partnership
881 Comonwealth Avenue
Boston, MA 02215
AttN: William Golden
</TABLE>
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES B CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 22, 1995
<TABLE>
<CAPTION>
Number of Shares of Aggregate
Investor Series B Preferred Stock Purchase Price
- -------- ------------------------ --------------
<S> <C> <C>
Gerald E. Coughlan 13,333 $20,000
</TABLE>
/s/ Gerald E. Coughlan
- -----------------------------------------
Gerald E. Coughlan
Date: 2/21/96
------------------------------------
Accepted and agreed to this
29th day of February, 1996
SEQUENOM, INC.
By: /s/ illegible
----------------------------------------
Its: Treasurer
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES B CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 22, 1995
<TABLE>
<CAPTION>
Number of Shares of Aggregate
Investor Series B Preferred Stock Purchase Price
- -------- ------------------------ --------------
<S> <C> <C>
Charles P. Floe 6,666 $10,000
</TABLE>
/s/ Charles P. Floe
- -------------------------------------
Charles P. Floe
Date: 23 February 1996
--------------------------------
Accepted and agreed to this
29th day of February, 1996
SEQUENOM, INC.
By: /s/ illegible
-----------------------------------
Its: Treasurer
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES B CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 22, 1995
<TABLE>
<CAPTION>
Number of Shares of Aggregate
Investor Series B Preferred Stock Purchase Price
- -------- ------------------------ --------------
<S> <C> <C>
Dr. Hellmut Kirchner 66,666 $100,000
</TABLE>
/s/ Dr. Hellmut Kirchner
- ---------------------------------
Dr. Hellmut Kirchner
Date: February 6, 1996
----------------------------
Accepted and agreed to this
29th day of February, 1996
SEQUENOM, INC.
By: /s/ illegible
------------------------------
Its: Treasurer
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES B CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 22, 1995
<TABLE>
<CAPTION>
Number of Shares of Aggregate
Investor Series B Preferred Stock Purchase Price
- -------- ------------------------ --------------
<S> <C> <C>
Dr. Herwig Brunner 20,000 $30,000
</TABLE>
/s/ Dr. Herwig Brunner
- --------------------------------
Dr. Herwig Brunner
Date: 05/Feb/1996
---------------------------
Accepted and agreed to this
29th day of February, 1996
SEQUENOM, INC.
By: /s/ illegible
-------------------------------
Its: Treasurer
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES B CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 22, 1995
<TABLE>
<CAPTION>
Number of Shares of Aggregate
Investor Series B Preferred Stock Purchase Price
- -------- ------------------------ --------------
<S> <C> <C>
TVM Techno Venture 6,666 $10,000
Investors No. 1
Limited Partnership
</TABLE>
TVM TECHNO VENTURE INVESTORS
NO. 1 LIMITED PARTNERSHIP
By: /s/ illegible
----------------------------------
Title: General Partner
-------------------------------
Accepted and agreed to this
29th day of February, 1996
SEQUENOM, INC.
By: /s/ illegible
----------------------------------
Its: Treasurer
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES B CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 22, 1995
<TABLE>
<CAPTION>
Number of Shares of Aggregate
Investor Series B Preferred Stock Purchase Price
- -------- ------------------------ --------------
<S> <C> <C>
Dr. Franz A. Wirtz 33,333 $50,000
</TABLE>
/s/ Dr. Franz A. Wirtz
- -----------------------------------
Dr. Franz A. Wirtz
Date: 2/29/96
------------------------------
Accepted and agreed to this
29th day of February, 1996
SEQUENOM, INC.
By: /s/ illegible
--------------------------------
Its: Treasurer
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES B CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 22, 1995
<TABLE>
<CAPTION>
Number of Shares of Aggregate
Investor Series B Preferred Stock Purchase Price
- -------- ------------------------ --------------
<S> <C> <C>
Frau Hannemarie Wirtz 33,333 $50,000
</TABLE>
/s/ Frau Hannemarie Wirtz
- ----------------------------------
Frau Hannemarie Wirtz
Date: Feb 14 1996
-----------------------------
Accepted and agreed to this
29th day of February, 1996
SEQUENOM, INC.
By: /s/ illegible
-------------------------------
Its: Treasurer
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES B CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 22, 1995
<TABLE>
<CAPTION>
Number of Shares of Aggregate
Investor Series B Preferred Stock Purchase Price
- -------- ------------------------ --------------
<S> <C> <C>
Hubert Koster 100,000 $150,000
</TABLE>
/s/ Hubert Koster
- ------------------------------------
Hubert Koster
Date: 2/29/96
-------------------------------
Accepted and agreed to this
29th day of February, 1996
SEQUENOM, INC.
By: /s/ illegible
----------------------------------
Its: Treasurer
<PAGE>
EXHIBIT 1
---------
Certificate of Amendment
------------------------
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF SEQUENOM, INC.
Sequenom, Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of said corporation
resolutions were duly adopted proposing and declaring advisable
that the Certificate of Incorporation of said corporation be
amended and that such amendment be submitted to the stockholders of
the Corporation for their consideration, as follows:
RESOLVED: That the Board of Directors of this Corporation
recommends and deems it advisable that the
Certificate of Incorporation of this Corporation,
as heretofore amended, be further amended by
deleting Article FOURTH thereof and substituting
for said Article FOURTH the new Article FOURTH
set forth on Exhibit A attached hereto; and
---------
RESOLVED: That the aforesaid proposed amendment be
submitted to the stockholders of the Corporation
for their consideration; and
RESOLVED: That following the approval by the stockholders
of the aforesaid amendment as required by law,
the officers of this Corporation be, and they
hereby are, and each of them hereby is,
authorized and directed (i) to prepare, execute
and file with the Secretary of State of the State
of Delaware a Certificate of Amendment setting
forth the aforesaid amendment in the form
approved by the stockholders and (ii) to take any
and all other actions necessary, desirable or
convenient to give effect to the aforesaid
amendment or otherwise to carry out the purposes
of the foregoing Resolutions.
SECOND: That in lieu of a meeting and vote of
stockholders, the stockholders have given written
consent to said amendments in accordance with the
provisions of section 228 of the General
Corporation Law of the State of Delaware, and
written notice of the adoption of the amendments
has been given as
<PAGE>
provided in section 228 of the General
Corporation Law of the State of Delaware to every
stockholder entitled to such notice.
THIRD: That the aforesaid amendments were duly adopted
in accordance with the applicable provisions of
sections 228 and 242 of the General Corporation
Law of the State of Delaware.
IN WITNESS WHEREOF, said Sequenom, Inc. has caused this certificate to be
signed by Randall R. Lunn, its President, and attested by David R. Pierson, its
Secretary, this 22nd day of December, 1995.
ATTEST: SEQUENOM, INC.
By: /s/ David R. Pierson By: /s/ Randall R. Lunn
------------------------------ -------------------------------
Secretary President
-2-
<PAGE>
EXHIBIT A
---------
FOURTH: The total number of shares of all classes of stock which the
- ------
Corporation has authority to issue is 10,753,366 shares, consisting of 5,726,700
shares of Common Stock, par value $.001 per share (the "Common Stock"),
1,650,000 shares of Series A Convertible Preferred Stock, par value $0.001 per
share (the "Series A Preferred Stock"), and 3,376,666 shares of Series B
Convertible Preferred Stock, par value $.001 per share (the "Series B Preferred
Stock", and, together with the Series A Preferred Stock, the "Preferred Stock"),
amounting to an aggregate par value of $10,753.37.
The powers, preferences and rights, and the qualifications, limitations or
restrictions thereof, in respect of each class or series of stock of the
corporation shall be as follows:
Section 1. Liquidation Rights.
--------- ------------------
(a) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders of
each share of the Series B Preferred Stock shall be entitled to be paid first
out of the assets of the Corporation available for distribution to holders of
the Corporation's capital stock of all classes an amount equal to the greater
of:
(i) $1.50 per share of Series B Preferred Stock (which amount
shall be subject to equitable adjustment whenever there shall occur a stock
dividend, stock split, combination of shares, reclassification or other
similar event with respect to the Series B Preferred Stock) plus all
dividends declared but unpaid thereon, to and including the date full
payment shall be tendered to the holders of the Series B Preferred Stock
with respect to such liquidation, dissolution or winding up, or
(ii) such amount per share of Series B Preferred Stock as would
have been payable had all shares of Series B Preferred Stock been converted
to Common Stock immediately prior to such event of liquidation, dissolution
or winding up pursuant to the provisions of Section 2 hereof, plus all
dividends declared but unpaid on each share of Series B Preferred Stock to
and including the date full payment shall be tendered to the holders of the
Series B Preferred Stock with respect to such liquidation, dissolution or
winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to the holders of the Series B Preferred Stock of all amounts so
distributable to them, then the entire assets of the Corporation available for
such distribution shall be distributed ratably among the holders of the Series B
Preferred Stock in proportion to the full preferential amount each such holder
is otherwise entitled to receive.
After such payments shall have been made in full to the holders of the
Series B Preferred Stock or funds necessary for such payments shall have been
not aside by the Corporation in trust
<PAGE>
for the account of holders of Series B Preferred Stock so as to be available for
such payments, the holders of each share of the Series A Preferred Stock shall
be entitled to be paid out of the assets of the Corporation available for
distribution to holders of the Corporation's capital stock of all classes an
amount equal to the greater of:
(i) $0.50 per share of Series A Preferred Stock (which amount
shall be subject to equitable adjustment whenever there shall occur a stock
dividend, stock split, combination of shares, reclassification or other
similar event with respect to the Series A Preferred Stock) plus all
dividends declared but unpaid thereon, to and including the date full
payment shall be tendered to the holders of the Series A Preferred Stock
with respect to such liquidation, dissolution or winding up, or
(ii) such amount per share of Series A Preferred Stock as would
have been payable had all shares of Series A Preferred Stock been converted
to Common Stock immediately prior to such event of liquidation, dissolution
or winding up pursuant to the provisions of Section 2 hereof, plus all
dividends declared but unpaid on each share of Series A Preferred Stock to
and including the date full payment shall be tendered to the holders of the
Series A Preferred Stock with respect to such liquidation, dissolution or
winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to the holders of the Series A Preferred Stock of all amounts so
distributable to them, then the entire remaining assets of the Corporation
available for such distribution shall be distributed ratably among the holders
of the Series A Preferred Stock in proportion to the full preferential amount
each such holder is otherwise entitled to receive.
After such payments shall have been made in full to the holders of the
Series B Preferred Stock and to the holders of the Series A Preferred Stock, or
funds necessary for such payments shall have been set aside by the Corporation
in trust for the account of holders of Preferred Stock so as to be available for
such payments, the remaining assets available for distribution shall be
distributed among the holders of the Common Stock ratably in proportion to the
number of shares of Common Stock held by them.
Upon conversion of shares of Series B Preferred Stock or Series A Preferred
Stock into shares of Common Stock Pursuant to Section 2 below, the holder of
such Common Stock shall not be entitled to any preferential payment or
distribution in case of any liquidation dissolution or winding up, but shall
share ratably in any distribution of the assets of the Corporation to all the
holders of Common Stock.
The amounts payable with respect to shares of Series B Preferred Stock and
Series A Preferred Stock under this Section 1(a) are sometimes hereinafter
referred to as "Series B Liquidation Payments" and "Series A Liquidation
Payments," respectively, and together are sometimes hereinafter referred to as
the "Liquidation Payments."
(b) Distributions Other than Cash. Whenever the distributions
-----------------------------
provided for in this Section 1 shall be payable in property other than cash, the
value of such distributions shall be
-2-
<PAGE>
the fair market value of such property as determined in good faith by the Board
of Directors of the Corporation.
(c) Merger as Liquidation, etc. The merger or consolidation of the
--------------------------
Corporation into or with another corporation (except one in which the holders of
capital stock of the Corporation immediately prior to such merger or
consolidation continue to hold at least eighty percent (80%) in voting power of
the capital stock of the surviving corporation, in which case the provisions of
Subsection 2(h) shall apply), or the sale of all or substantially all of the
assets of the Corporation, shall be deemed to be a liquidation, dissolution or
winding up of the affairs of the Corporation for purposes of this Section 1 with
respect to the Series B Preferred Stock unless the holders of at least eighty-
five percent (85%) of the then outstanding shares of the Series B Preferred
Stock elect to the contrary, and with respect to the Series A Preferred Stock
unless the holders of at least eighty percent (80%) of the then outstanding
shares of the Series A Preferred Stock elect to the contrary, such election in
either case to be made by giving written notice thereof to the Corporation at
least three days before the effective date of such event. If such notice is
given with respect to the Series B Preferred Stock or the Series A Preferred
Stock, the provisions of Subsection 2(h) shall apply to such Series B Preferred
Stock or Series A Preferred Stock, as the case may be. Unless such election is
made, any amounts received by the holders of the Series B Preferred Stock and
the Series A Preferred Stock as a result of such merger or consolidation shall
be deemed to be applied toward, and all consideration received by the
Corporation in such asset sale together with all other available assets of the
Corporation shall be distributed toward, the Liquidation Payments attributable
to such shares of Series B Preferred Stock and Series A Preferred Stock,
respectively, in the order of preference set forth in Section 1.
(d) Notice. Written notice of any proposed liquidation, dissolution
------
or winding up of the affairs of the corporation (including any merger,
consolidation or sale of assets which may be deemed to be a liquidation,
dissolution or winding up of the affairs of the corporation under Subsection
1(c)), stating a payment date, the amount of the Liquidation Payments and the
place where said Liquidation Payments shall be payable, shall be given by first
class mail, postage prepaid, or by telex to non-U.S. residents, not less than
twenty (20) days prior to the payment date stated therein, to the holders of
record of the Series B Preferred Stock and the Series A Preferred Stock, such
notice to be addressed to each such holder at its address as shown by the
records of the Corporation.
Section 2. Conversion. The holders of Preferred stock shall have
--------- ----------
conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert; Conversion Price. Each share of Preferred
----------------------------------
Stock shall be convertible, without the payment of any additional consideration
by the holder thereof and at the option of the holder thereof, at any time after
the date of issuance of such share, at the office of the Corporation or any
transfer agent for the Preferred Stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined in accordance with the
following:
(i) in the case of the Series B Preferred Stock, by dividing
$1.50 by the Series B Conversion Price, determined as hereinafter provided,
in effect at the time of
-3-
<PAGE>
conversion. The Conversion Price at which shares of Common Stock shall be
deliverable upon conversion of Series B Preferred Stock without the payment
of any additional consideration by the holder thereof (the "Series B
Conversion Price") shall initially be $1.50 per share of Common Stock. Such
initial Series B Conversion Price shall be subject to adjustment, in order
to adjust the number of shares of Common Stock into which the Series B
Preferred Stock is convertible, as hereinafter provided.
(ii) in the case of the Series A Preferred Stock, by dividing
$0.50 by the Series A Conversion Price, determined as hereinafter provided,
in effect at the time of conversion. The Conversion Price at which shares
of Common Stock shall be deliverable upon conversion of Series A Preferred
Stock without the payment of any additional consideration by the holder
thereof (the "Series A Conversion Price") shall initially be $0.50 per
share of Common Stock. Such initial Series A Conversion Price shall be
subject to adjustment, in order to adjust the number of shares of Common
Stock into which the Series A Preferred Stock in convertible, an
hereinafter provided.
(b) Automatic Conversion. Each share of Series B Preferred Stock
--------------------
shall automatically be converted into shares of Common Stock at the applicable
Series B conversion Price than in effect upon:
(i) the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, covering the offer and sale of Common
Stock for the account of the Corporation to the public at an offering price
per share (prior to underwriter commissions and discounts) of not less than
$4.50 (as adjusted pursuant to Subsection 2(e)(vi) hereof to reflect any
stock dividends, distributions, combinations, reclassifications or other
like transactions affected by the Corporation in respect of its Common
Stock) and with gross proceeds to the Corporation of not less than
$10,000,000 (in the event of which offering, the person(s) entitled to
receive the Common Stock issuable upon such conversion of the Series B
Preferred Stock shall not be deemed to have converted that Series B
Preferred Stock until the closing of such offering); or
(ii) the written election of the holders of not less than eighty-
five percent (85%) of the then outstanding shares of the Series B Preferred
Stock to require such mandatory conversion.
Each share of Series A Preferred Stock shall automatically be converted
into shares of Common Stock at the applicable Series A Conversion Price then in
effect upon:
(i) the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, covering the offer and sale of Common
Stock for the account of the Corporation to the public at an offering price
per share (prior to underwriter commissions and discounts) of not less than
$2.50 (as adjusted pursuant to Subsection 2(e)(vi) hereof to reflect any
stock dividends, distributions, combinations, reclassifications or other
like transactions affected by the Corporation in respect of its Common
Stock) and with gross
-4-
<PAGE>
proceeds to the Corporation of not less than $10,000,000 (in the event of
which offering, the person(s) entitled to receive the Common Stock issuable
upon such conversion of the Series A Preferred Stock shall not be deemed to
have converted that Series A Preferred Stock until the closing of such
offering); or
(ii) the written election of the holders of not less than eighty
percent (80%) of the then outstanding shares of the Series A Preferred
Stock to require such mandatory conversion.
(c) Mechanics of Automatic Conversions. Upon the occurrence of an
----------------------------------
event specified in Subsection 2(b), the Series B Preferred Stock or the Series A
Preferred Stock, as applicable, or both, shall be converted automatically
without any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent; provided, however, that all holders of shares of Preferred Stock
being converted shall be given written notice of the occurrence of an event
specified in Subsection 2(b) including the date such event occurred (the
"Mandatory Conversion Date"), and the Corporation shall not be obligated to
issue certificates evidencing the shares of Common Stock issuable upon such
conversion unless certificates evidencing such shares of the Preferred Stock
being converted are either delivered to the Corporation or its transfer agent,
or the holder notifies the Corporation or any transfer agent that such
certificates have been lost, stolen, or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection therewith and, if the Corporation so elects,
provides an appropriate indemnity bond. On the Mandatory Conversion Date, all
rights with respect to the Preferred Stock so converted shall terminate, except
any of the rights of the holder thereof, upon surrender of the holder's
certificate or certificates therefor, to receive certificates for the number of
shares of Common Stock into which such Preferred Stock has been converted,
together with cash in an amount equal to all dividends declared but unpaid on,
and any and all other amounts owing with respect to, the shares of Preferred
Stock converted to and including the time of conversion. Upon the automatic
conversion of the Preferred Stock, the holders of such Preferred Stock shall
surrender the certificates representing such shares at the office of the
Corporation or of its transfer agent. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or by the holder's attorney
duly authorized in writing. Upon surrender of such certificates there shall be
issued and delivered to such holder, promptly at such office and in the holder's
name as shown on such surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which the shares of
the Preferred Stock surrendered were convertible on the date on which such
automatic conversion occurred, together with cash in an amount equal to all
dividends declared but unpaid on, and any and all other amounts owing with
respect to, the shares of Preferred Stock converted to and including the time of
conversion. No fractional share of Common Stock shall be issued upon the
mandatory conversion of the Preferred Stock. In lieu of any fractional share to
which the holder would otherwise be entitled, the Corporation shall pay cash
equal to such fraction multiplied by the applicable Conversion Price then in
effect.
-5-
<PAGE>
(d) Mechanics of Optional Conversions. Before any holder of
---------------------------------
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, the holder shall surrender the certificate or certificates therefor at
the office of the Corporation or of any transfer agent for the Preferred Stock,
and shall give written notice to the corporation at such office that the holder
elects to convert the same and shall state therein the holder's name or the name
or names of the holder's nominees in which the holder wishes the certificate or
certificates for shares of Common Stock to be issued. On the date of conversion,
all rights with respect to the Preferred Stock so converted shall terminate,
except any of the rights of the holder thereof, upon surrender of the holder's
certificate or certificates therefor, to receive certificates for the number of
shares of Common Stock into which such Preferred Stock has been converted and
cash in an amount equal to all dividends declared but unpaid thereon and any and
all other amounts owing with respect thereto at such time. If so required by the
Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or by
the holder's attorney duly authorized in writing. No fractional share of Common
Stock shall be issued upon the optional conversion of Preferred Stock. In lieu
of any fractional share to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the applicable
Conversion Price then in effect. The Corporation shall, as soon as practicable
after surrender of the certificate or certificates for conversion, issue and
deliver at such office to such holder of Preferred Stock, or to the holder's
nominee or nominees, a certificate or certificates for the number of shares of
Common Stock to which the holder shall be entitled as aforesaid, together with
cash in lieu of any fraction of a share and cash in an amount equal to all
dividends declared but unpaid thereon and any and all other amounts owing with
respect thereto at such time. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Preferred Stock to be converted, and the person or persons entitled to
receive the shares of Common Stock issuable upon conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock on
such date.
(e) Adjustments to Conversion Price for Diluting Issues.
---------------------------------------------------
(i) Special Definitions. For purposes of this Subsection 2(e),
-------------------
the following definitions shall apply:
(1) "Option" shall mean rights, options or warrants to
------
subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.
(2) "Original Issue Date" shall mean, with respect to the
-------------------
Series A Preferred Stock, the first date on which a share of Series A
Preferred Stock was issued, and shall mean, with respect to the Series
B Preferred Stock, the first date on which a share of Series B
Preferred Stock was issued.
(3) "Convertible Securities" shall mean any evidences of
----------------------
indebtedness; shares of capital stock (other than Common Stock) or
other
-6-
<PAGE>
securities directly or indirectly convertible into or exchangeable for
Common Stock.
(4) "Additional Shares of Common Stock" shall mean all
---------------------------------
shares of Common Stock issued (or, pursuant to Subsection 2(e)(iii),
deemed to be issued) by the Corporation after the Original Issue Date,
other than:
(A) shares of Common Stock issued or issuable upon
exercise of Options outstanding on the Original Issue Date;
(B) up to 113,333 shares of Common Stock issuable upon
conversion of shares of Series A Preferred Stock and Series B
Preferred Stock issuable upon exercise of Options which may be
issued in connection with equipment lease financing provided to
the Corporation by Comdisco, Inc. or its affiliates;
(C) up to 700,000 shares of Common Stock issued or
issuable to officers or employees or directors of, or consultants
to, the Corporation pursuant to a stock purchase or option plan
or other employee stock bonus arrangement (collectively, the
"Plans") approved by the Board of Directors;
(D) shares of Common Stock issued or issuable upon
conversion of shares of Series B Preferred Stock; and
(E) shares of Common Stock issued or issuable upon
conversion of shares of Series A Preferred Stock.
(ii) No Adjustment of Conversion Price. Except as set forth in
---------------------------------
Subsection 2(e)(vi), no adjustment in the number of shares of Common Stock
into which the Series B Preferred Stock or the Series A Preferred Stock is
convertible shall be made, by adjustment in the applicable conversion Price
in respect of the issuance of Additional Shares of Common Stock, unless the
consideration per share for an Additional Share of Common Stock (determined
pursuant to Subsection 2(a)(v)) issued or deemed to be issued by the
Corporation is less than the applicable Conversion Price in effect on the
date of, and immediately prior to, the issue of such Additional Share.
(iii) Issue of Securities Deemed Issue of Additional Shares of
--------------------------------------------------------
Common Stock.
------------
(1) Options and Convertible Securities. In the event the
----------------------------------
Corporation at any time or from time to time after the Original Issue
Date shall issue any Options or Convertible Securities or shall fix a
record date for the determination of holders of any class of
securities entitled to receive any such Options or Convertible
Securities, then the maximum number of shares (as set forth in the
instrument relating thereto without regard to any provisions contained
-7-
<PAGE>
therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or
exchange of such Convertible Securities, shall be deemed to be
Additional Shares of Common Stock issued as of the time of such issue
or, in case such a record date shall have been fixed, as of the close
of business on such record date, provided that in any such case in
which Additional Shares of Common Stock are deemed to be issued;
(A) no further adjustment in the Series B Conversion
Price or the Series A Conversion Price shall be made upon the
subsequent issue of Convertible Securities or shares of Common
Stock upon the exercise of such Options or conversion or exchange
of such Convertible Securities;
(B) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for
any increase in the consideration payable to the Corporation, or
decrease in the number of shares of Common Stock issuable, upon
the exercise, conversion or exchange thereof, the Series B
Conversion Price and the Series A Conversion Price computed upon
the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based
thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease
insofar as it affects such Options or the rights of conversion or
exchange under such Convertible Securities;
(C) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible
Securities which shall not have been exercised, the Series B
Conversion Price and the Series A Conversion Price computed upon
the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based
thereon, shall, upon such expiration, be recomputed as if:
(I) In the case of Convertible Securities or
Options for Common Stock the only Additional Shares of
Common Stock issued were the shares of Common Stock, if any,
actually issued upon the exercise of such Options or the
conversion or exchange of such Convertible Securities and
the consideration received therefor was the consideration
actually received by the Corporation for the issue of all
such Options, whether or not exercised, plus the
consideration actually received by the Corporation upon such
exercise, or for the issue of all such Convertible
Securities which were actually converted or exchanged, plus
the additional consideration, if any, actually
-8-
<PAGE>
received by the Corporation upon such conversion or
exchange; and
(II) in the case of Options for Convertible
Securities only the Convertible Securities, if any, actually
issued upon the exercise thereof were issued at the time of
issue of such Options, and the consideration received by the
Corporation for the Additional Shares of Common Stock deemed
to have been then issued was the consideration actually
received by the Corporation for the issue of all such
Options, whether or not exercised, plus the consideration
deemed to have been received by the Corporation (determined
pursuant to Subsection 2(a)(v)) upon the issue of the
Convertible Securities with respect to which such Options
were actually exercised;
(D) no readjustment pursuant to clause (B) or (C)
above shall have the effect of increasing the Series B Conversion
Price or the Series A Conversion Price to an amount which exceeds
the lower of (i) the respective Conversion Price on the original
adjustment date, or (ii) the respective Conversion Price that
would have resulted from any issuance of Additional Shares of
Common Stock between the original adjustment date and such
readjustment date;
(E) in the case of any Options which expire by their
terms not more than 30 days after the date of issue thereof, no
adjustment of the Series B Conversion Price or the Series A
Conversion Price shall be made until the expiration or exercise
of all such Options, whereupon such adjustment shall be made in
the same manner provided in clause (C) above; and
(F) if such record date shall have been fixed and such
Options or Convertible Securities are not issued on the date
fixed therefor, the adjustment previously made in the Series B
Conversion Price and the Series A Conversion Price which became
effective on such record date shall be cancelled as of the close
of business on such record date, and thereafter the respective
Conversion Prices shall be adjusted pursuant to this Subsection
2(e)(iii) as of the actual date of their issuance.
(2) Stock Dividends, Stock Distributions and Subdivisions.
-----------------------------------------------------
In the event the Corporation at any time or from time to time after
the Original Issue Date shall declare or pay any dividend or make any
other distribution on the Common Stock payable in Common Stock or
effect a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in Common
Stock), then and in any such events Additional Shares of Common Stock
shall be deemed to have been issued:
-9-
<PAGE>
(A) in the case of any such dividend or distribution,
immediately after the close of business on the record date for
the determination of holders of any class of securities entitled
to receive such dividend or distribution, or
(B) in the case of any such subdivision, at the close
of business on the date immediately prior to the date upon which
such corporate action becomes effective.
If such record date shall have been fixed and no part
of such dividend shall have been paid on the date fixed therefor,
the adjustment previously made in the Series B Conversion Price
and the Series A Conversion Price which became effective on such
record date shall be cancelled as of the close of business on
such record date, and thereafter the respective Conversion Prices
shall be adjusted pursuant to this Section 2(e)(iii) as of the
time of actual payment of such dividend.
(iv) Adjustment of Conversion Price Upon Issuance of Additional
----------------------------------------------------------
Shares of Common Stock. In the event that at any time or from time to time
----------------------
after the Original Issue Date, the Corporation shall issue Additional
Shares of Common Stock (including, without limitation, Additional Shares of
Common Stock deemed to be issued pursuant to Subsection 2(e)(iii)(1) but
excluding Additional Shares of Common Stock deemed to be issued pursuant to
Subsection 2(e)(iii)(2), which event is dealt with in Subsection
2(e)(vi)(1)), without consideration or for a consideration per share less
than the applicable Series B Conversion Price or Series A Conversion Price
in effect on the date of and immediately prior to such issue, then and in
such event, such Series B Conversion Price or Series A Conversion Price, as
the case may be, shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined in accordance with the
following formula:
(P//1//) (Q//1//) + (P//2//) (Q//2//)
NCP = -------------------------------------
Q//1// + Q//2//
where:
NCP = New Series B Conversion Price or Series A
Conversion Price, as applicable.
P//1// = Series B Conversion Price or Series A Conversion
Price, an applicable, in effect immediately prior
to new issue.
Q//1// = Number of shares of Common Stock outstanding, or
deemed to be outstanding as set forth below,
immediately prior to such issue.
-10-
<PAGE>
P//2// = Weighted average price per share received by the
Corporation upon such issue.
Q//2// = Number of shares of Common Stock issued, or
deemed to have been issued, in the subject
transaction.
provided that for the purpose of this Subsection 2(e)(iv), all shares of
--------
Common Stock issuable upon exercise or conversion of any Options or
Convertible Securities outstanding immediately prior to such issue shall be
deemed to be outstanding, and immediately after any Additional Shares of
Common Stock are deemed issued pursuant to Subsection 2(e)(iii), such
Additional Shares of Common Stock shall be deemed to be outstanding; and
provided further, that the applicable Conversion Price shall not be so
----------------
reduced at any time if the amount of such reduction would be an amount less
than $.01, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent
reduction which, together with such amount and any other amount or amounts
so carried forward, shall aggregate $.01 or more.
(v) Determination of Consideration. For purposes of this
------------------------------
Subsection 2(e), the consideration received by the Corporation for the
issue of any Additional Shares of Common Stock shall be computed as
follows:
(1) Cash and Property: Such consideration shall:
-----------------
(A) insofar as it consists of cash, be computed at the
aggregate amounts of cash received by the Corporation excluding
amounts paid or payable for accrued interest or accrued
dividends;
(B) insofar as it consists of property other than cash,
be computed at the fair value thereof at the time of such issue,
an determined in good faith by the Board of Directors; and
(C) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets
of the Corporation for consideration which covers both, be the
proportion of such consideration so received, computed as
provided in clauses (A) and (B) above, as determined in good
faith by the Board of Directors.
(2) Options and Convertible Securities. The consideration
----------------------------------
per share received by the Corporation for Additional Shares of Common
Stock deemed to have been issued pursuant to Subsection 2(e)(iii)(1),
relating to Options and Convertible Securities, shall be determined by
dividing (x) the total amount, if any, received or receivable by the
Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a
subsequent adjustment of
-11-
<PAGE>
such consideration) payable to the Corporation upon the exercise of
such Options or the conversion or exchange of such Convertible
Securities, or in the case of Options for Convertible Securities, the
exercise of such Options for Convertible Securities and the conversion
or exchange of such Convertible Securities, by (y) the maximum number
of shares of Common Stock (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of
such Options or the conversion or exchange of such Convertible
Securities.
(vi) Adjustment for Dividends, Distributions, Subdivisions,
------------------------------------------------------
Combinations or Consolidations of Common Stock.
----------------------------------------------
(1) Stock Dividends, Distributions or Subdivisions. In the
----------------------------------------------
event the Corporation shall be deemed to issue Additional Shares of
Common Stock pursuant to Subsection 2(e)(iii)(2) in a stock dividend,
stock distribution or subdivision, the Series B Conversion Price and
the Series A Conversion Price in effect immediately before such deemed
issuance shall, concurrently with the effectiveness of such deemed
issuance, be proportionately decreased.
(2) Combinations or Consolidations. In the event the
------------------------------
outstanding shares of Common Stock shall be combined or consolidated,
by reclassification or otherwise, into a lesser number of shares of
Common Stock, the Series B Conversion Price and the Series A
Conversion Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such
combination or consolidation, be proportionately increased.
(f) Adjustments for Certain Dividends and Distributions. In the event
---------------------------------------------------
that at any time or from time to time after the Original Issue Date the
Corporation shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation other than shares of Common Stock, then
and in each such event provision shall be made so that the holders of Preferred
Stock shall receive upon conversion thereof in addition to the number of shares
of Common Stock receivable thereupon, the amount of securities of the
Corporation that they would have received had their Preferred Stock been
converted into Common Stock on the date of such event and had they thereafter,
during the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during such
period, giving application during such period to all adjustments called for
herein.
(g) Adjustment for Reclassification, Exchange, or Substitution. In
----------------------------------------------------------
the event that at any time or from time to time after the Original Issue Date,
the Common Stock issuable upon the conversion of Preferred Stock shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification, or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
above, or a merger, consolidation, or sale of assets provided for below), then
and in each such event the holder of any share or shares of Preferred Stock
shall have the right thereafter to
-12-
<PAGE>
convert such shares into the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification,
or other change, by the holder of a number of shares of Common Stock equal to
the number of shares of Common Stock into which such shares of Preferred Stock
might have been converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as provided
herein.
(h) Adjustment for Merger, Consolidation or Sale of Assets. In the
------------------------------------------------------
event that at any time or from time to time after the Original Issue Date, the
Corporation shall merge or consolidate with or into another entity or sell all
or substantially all of its assets, each share of Preferred Stock as to which
such consolidation, merger or sale is not treated as a liquidation under
Subsection 1(c) shall thereafter be convertible into the kind and amount of
shares of stock or other securities or property to which a holder of the number
of shares of Common Stock of the Corporation deliverable upon conversion of such
Preferred Stock would have been entitled to receive upon such consolidation,
merger or sale; and, in such case, appropriate adjustment (as determined in good
faith by the Board of Directors) shall be made in the application of the
provisions set forth in this Section 2 with respect to the rights and interest
thereafter of the holders of Preferred Stock, to the end that the provisions set
forth in this Section 2 (including provisions with respect to changes in and
other adjustments of the Conversion Price) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the conversion of Preferred Stock.
(i) No Impairment. The Corporation shall not, by amendment of its
-------------
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation but shall at
all times in good faith assist in the carrying out of all the provisions of this
Section 2 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of
Preferred Stock against impairment.
(j) Certificate as to Adjustments. Upon the occurrence of each
-----------------------------
adjustment or readjustment of the Series B Conversion Price or the Series A
Conversion Price pursuant to this Section 2, the Corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each affected holder of Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Corporation
shall, upon the written request at any time of any affected holder of Preferred
Stock, furnish or cause to be furnished to such holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) the Conversion Price
at the time in effect, and (iii) the number of shares of Common Stock and the
amount, if any, of other property which at the time would be received upon the
conversion of each share of Preferred Stock.
(k) Notices of Record Date. In the event of any taking by the
----------------------
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the Corporation shall mail to each
-13-
<PAGE>
holder of Preferred Stock at least ten (10) days prior to such record date a
notice specifying the date on which any such record is to be taken for the
purpose of such dividend or distribution.
(1) Common Stock Reserved. The Corporation shall reserve and keep
---------------------
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect conversion of
the Preferred Stock.
(m) Certain Taxes. The Corporation shall pay any issue or transfer
-------------
taxes payable in connection with the conversion of Preferred Stock, provided,
however, that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer to a name other than that of the holder of
the Preferred Stock.
(n) Closing of Books. The Corporation shall at no time close its
----------------
transfer books against the transfer of any Preferred Stock or of any shares of
Common Stock issued or issuable upon the conversion of any shares of Preferred
Stock in any matter which interferes with the timely conversion or transfer of
such Preferred Stock or Common Stock.
Section 3. Restrictions.
- --------- ------------
(a) At any time when shares of Preferred Stock are outstanding,
except where the vote of the holders of a greater number of shares of the
corporation is required by law or by this Certificate of Incorporation, and in
addition to any other vote required by law or this Certificate of Incorporation,
without the affirmative vote of the holders of at least sixty percent (60%) of
the then outstanding shares of Preferred Stock (with calculations based upon the
number of shares of Common Stock into which such shares of Preferred Stock are
then convertible), voting collectively as a single class, the Corporation will
not:
(i) consent to any liquidation, dissolution or winding
up of the Corporation or merge or consolidate with or into any other entity
or entities;
(ii) sell, abandon, transfer, lease or otherwise
dispose of all or any substantially portion of its properties and other
assets; or
(iii) amend this Certificate of Incorporation or the
Corporation's By-Laws.
(b) At any time when shares of Series B Preferred Stock are
outstanding, except where the vote of the holders of a greater number of shares
of the Corporation is required by law or by this Certificate of Incorporation,
and in addition to any other vote required by law or this Certificate of
Incorporation, without the affirmative vote of the holders of at least eighty-
five percent (85%) of the then outstanding shares of Series B Convertible
Preferred Stock, the Corporation will not:
(i) amend, alter or change the designation or any
preferences, voting powers, qualifications, or special or relative rights
or privileges of the Series B
-14-
<PAGE>
Convertible Preferred Stock in a manner adverse to the interests of the
holders of the Series B Convertible Preferred Stock in any material
respect;
(ii) increase the authorized number of shares of Series
B Preferred Stock;
(iii) create or authorize the creation of any additional
series of shares of stock unless such series ranks junior to the Series B
Convertible Preferred Stock as to both dividends and the distribution of
assets on the liquidation, dissolution, winding up or insolvency of the
Corporation, or increase the authorized amount of any other class or series
of shares of stock unless the same ranks junior to the Series B Convertible
Preferred Stock as to dividends and the distribution of assets on the
liquidation, dissolution, winding up or insolvency of the Corporation, or
create or authorize any obligation or security convertible into shares of
Series B Convertible Preferred Stock or into shares of any other class or
series of shares of stock unless the same ranks junior to the Series B
Convertible Preferred Stock as to dividends and the distribution of assets
an the liquidation dissolution, winding up or insolvency of the
Corporation, whether any such creation authorization or increase shall be
by means of amendment to this Certificate of Incorporation or by merger,
consolidation or otherwise.
(c) At any time when shares of Series A Preferred Stock are
outstanding, except where the vote of the holders of a greater number of shares
of the Corporation is required by law or by this Certificate of Incorporation,
and in addition to any other vote required by law or this Certificate of
Incorporation, without the affirmative vote of the holders of at least sixty
percent (60%) of the then outstanding shares of Series A Convertible Preferred
Stock, the Corporation will not:
(i) amend, alter or change the designation or any
preferences, voting powers, qualifications, or special or relative rights
or privileges of the Series A Convertible Preferred Stock in a manner
adverse to the interests of the holders of the Series A Convertible
Preferred Stock in any material respect;
(ii) increase the authorized number of shares of Series A
Preferred Stock;
(iii) create or authorize the creation of any additional
series of shares of stock unless such series ranks junior to the Series A
Convertible Preferred Stock as to both dividends and the distribution of
assets on the liquidation, dissolution, winding up or insolvency of the
Corporation, or increase the authorized amount of any other class or series
of shares of stock unless the same ranks junior to the Series A Convertible
Preferred Stock as to dividends and the distribution of assets on the
liquidation, dissolution, winding up or insolvency of the Corporation, or
create or authorize any obligation or security convertible into shares of
Series A Convertible Preferred Stock or into shares of any other class or
series of shares of stock unless the same ranks junior to the Series A
Convertible Preferred Stock as to dividends and the distribution of assets
on the liquidation, dissolution, winding up or insolvency of the
Corporation, whether any
-15-
<PAGE>
such creation, authorization or increase shall be by means of amendment to
this Certificate of Incorporation or by merger, consolidation or otherwise.
Section 4. Voting Rights. Except as otherwise required by law or
---------- -------------
hereinafter set forth, the holders of Preferred Stock shall be entitled to
notice of any meeting of stockholders and shall vote together with the holders
of Common Stock an a single class upon any matter submitted to the stockholders
for a vote, on the following basis:
(a) Holders of Common Stock shall have one vote per share; and
(b) Holders of Preferred Stock shall have that number of votes
per share as is equal to the number of shares of Common Stock (including
fractions of a share) into which each such share of Preferred Stock held by
such holder could be converted on the date for determination of
stockholders entitled to vote at the meeting or on the date of any written
consent.
With respect to all questions as to which, under law, stockholders are
required to vote by classes, each of the Series A Preferred Stock and Series B
Preferred Stock shall vote separately as a single class apart from each other
and from the Common Stock.
Section 5. Dividends.
--------- ---------
(a) The holders of Series B Preferred Stock shall be entitled to
receive, from funds legally available therefor, a noncumulative dividend at the
rate of $.05 per share per annum, payable when and as declared by the Board of
Directors. No dividends shall be declared or paid to the holders of Series A
Preferred Stock or Common Stock unless the holders of Series B Preferred Stock
have been paid in full all of the dividends to which they are entitled, nor
shall any dividends be declared or paid to the holders of Series A Preferred
Stock or Common Stock at a rate greater than the rate paid to the holders of
Series B Preferred Stock.
(b) Subject to Subsection 5(a), dividends may be declared and paid
on Series A Preferred Stock from funds lawfully available therefor as and when
determined by the Board of Directors of the Corporation. If, when and as
dividends are declared and paid on shares of Series A Preferred Stock, the
Corporation shall, after making payment in full to the holders of Series B
Preferred Stock the amounts to which they are entitled pursuant to Subsection
5(a), declare and pay at the same time to each holder of Series B Preferred
Stock, a dividend at the same rate, based on the number of shares of Common
Stock into which the Series B Preferred Stock and the Series A Preferred Stock
are convertible on the record date for the determination of holders of Series A
Preferred Stock entitled to receive such dividend.
(c) Subject to Subsection 5(a), dividends may be declared and paid
on Common Stock from funds lawfully available therefor as and when determined by
the Board of Directors of the Corporation. If, when and as dividends are
declared and paid on shares of Common Stock, the Corporation shall, after making
payment in full to the holders of Series B Preferred Stock the amounts to which
they are entitled pursuant to Subsection 5(a), declare and pay at the same time
to each holder of Preferred stock, a dividend equal to the dividend which
-16-
<PAGE>
would have been payable to such holder if the shares of Preferred Stock hold by
such holder had been converted into Common Stock on the record date for the
determination of holders of Common Stock entitled to receive such dividend.
Section 6. Redemption.
--------- ----------
(a) In the event that the Corporation shall exercise its put option
to sell shares of capital stock of Sequenom Instruments GmbH to Technologie-
Beteiligungs-Gesellschaft mbH der Deutschen Ausgleichsbank ("TBG") pursuant to
that certain Kooperationsvertrag between the Corporation and TBG relating to the
investment by the Corporation of DM 3 million in Sequenom Instruments GmbH, the
Corporation shall, within 30 days after receipt of the proceeds of the sale of
such shares to the TBG, send notice of such exercise (the "Put Exercise Notice")
by first class mail, postage prepaid, to each holder of record of the Series B
Preferred Stock at its address as it appears on the books of the Corporation,
specifying (i) the amount of proceeds so received from the TBG net of any
expenses incurred in connection therewith (the "Put Net Proceeds"), (ii) the
date (the "Redemption Date") on which the Corporation will redeem shares of
Series B Preferred Stock from electing holders of the Series B Preferred Stock
in accordance with this Section 6, which Redemption Date shall be not less than
45 days nor more than 90 days after the date of such notice (the "Notice Date")
and (iii) each such holder's Pro Rata Redemption Amount (as hereinafter
defined).
(b) Each holder of Series B Preferred Stock may elect to have the
Corporation redeem from it on the Redemption Date, to the extent the Corporation
has funds legally available for such purpose, up to a number of shares of Series
B Preferred Stock equal to such holder's Pro Rata Redemption Amount (as
hereinafter defined) at a redemption price of $1.50 per share. Such election
may be made only by delivering to the Corporation within thirty (30) days after
the Notice Date (i) a written election signed by such holder specifying the
number of shares of Series B Preferred Stock so to be redeemed (which number
shall be not more than such holder's Pro Rata Redemption Amount), and (ii)
certificates for the shares of Series B Preferred Stock so to be redeemed,
together with stock powers therefor duly executed by such holder in blank.
(c) For purposes of this Section 6, each holder of Series B
Preferred Stock's "Pro Rata Redemption Amount" shall be the greatest whole
number represented by a fraction, the numerator or which is the product of the
number of shares of Series B Preferred Stock held by such holder times the Put
Net Proceeds, and the denominator or which is the product of the total number of
shares of Series B Preferred Stock issued and outstanding times $1.50.
(d) On the Redemption Date the Corporation shall redeem from the
electing holders of Series B Preferred Stock the shares of Series B Preferred
Stock as to which election notices have been properly given, to the extent the
Corporation has funds legally available for such purpose.
(e) If the funds of the Corporation legally available for
redemption of shares of Series B Preferred Stock on the Redemption Date are
insufficient to redeem the total number of shares of Series B Preferred Stock
submitted for redemption, those funds which are legally available will be used
to redeem the maximum possible number of whole shares ratably among
-17-
<PAGE>
the holders of such shares in accordance with the manner of determining the "Pro
Rata Redemption Amount" set forth above. The shares of Series B Preferred Stock
not redeemed shall remain outstanding and entitled to all rights and preferences
provided herein.
Section 7. Residual Rights. All rights accruing to the outstanding shares
--------- ---------------
of the Corporation not expressly provided for to the contrary herein shall be
vested in the Common Stock.
-18-
<PAGE>
EXHIBIT 4.1
-----------
Foreign Qualification; Certificate of Incorporation; By-Laws
------------------------------------------------------------
The Corporation is qualified to do business in Massachusetts.
A certified copy of the Certificate of Incorporation (not including the
Certificate of Amendment contained in Exhibit 1) is included at Tab 9.
A copy of the By-Laws is included as Exhibit A in Tab 7.
<PAGE>
EXHIBIT 4.2
-----------
Capitalization
--------------
Attached-hereto is a stockholder list dated December 1, 1995.
Also attached hereto is a common-equivalent capitalization table dated
December 14, 1995.
<PAGE>
SEQUENOM, INC.
Stockholder List
December 1, 1995
<TABLE>
<CAPTION>
AUTHORIZED:
Par Value Authorized Issued
------------- ----------------- ----------------
<S> <C> <C> <C>
Common: $.001 2,301,000 148,251
Series A Convertible $.00l 2,098,000 1,580,000
Preferred:
</TABLE>
COMMON STOCK
------------
<TABLE>
<CAPTION>
Shareholder Shares Cert. No. Issue Date
- --------------------- -------------- --------------- -----------------
<S> <C> <C> <C>
Hubert Koster 1 C-10 03-08-95
Stapelstrasse 56
D-22529
Hamburg, Germany
Nola E. Masterson 90,000 C-11 10-16-95
Science Futures Inter-
national
768 West California Way
Woodside, CA 94062
Russell D. Hayes 26,250 C-12 10-31-95
136 Lark Court
Alamo, CA 94507
Randall R. Lunn 10,000 C-13 12-01-95
Helmut Schuhsler 10,000 C-14 12-01-95
Patricia Dane 2,000 C-15 12-01-95
Amy B. Crawford 2,000 C-16 12-01-95
Monica Schlawinsky 2,000 C-17 12-01-95
John J. DiBello 6,000 C-18 12-01-95
</TABLE>
<PAGE>
SERIES A CONVERTIBLE PREFERRED STOCK
------------------------------------
<TABLE>
<CAPTION>
Shareholder Shares Cert. No. Issue Date
- ------------------------ -------------- ----------------- ------------------
<S> <C> <C> <C>
Hubert Koster 1,120,000 1 03-08-95
Stapelstrasse 56
D-22529
Hamburg, Germany
Nola Masterson 40,000 2 03-08-95
Science Futures Inter-
national
768 West California Way
Woodside, CA 94062
Robert E. Patterson 20,000 3 03-08-95
176 Tuscaloos Avenue
Atherton, CA 94025
TVM Techno Venture 8,000 10 08-18-95
Investors No. 1 Limited
Partnership
101 Arch Street
Suits 1950
Boston, MA 02110
TVM Techno Venture 63,680 12 08-18-95
Enterprises No. II Limited
Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Intertech Limited 42,454 13 08-18-95
Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Zweite Beteiligung- 98,000 6 03-08-95
U.S. Limited Partnership 29,360 11 08-18-95
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Eurotech Limited 65,200 7 03-08-95
Partnership 19,706 9 08-18-95
101 Arch Street
Suite 1950
Boston, MA 02110
KBL Founder Ventures SCA 73,600 8 03-08-95
</TABLE>
<PAGE>
Sequenom, Inc.
Analysis of shares and options issued
December 14, 1996-before financing
<TABLE>
<CAPTION>
Shares to be
Shares issued for Shares issued through Total shares issued under
Shares service of exercise of issued and options or
purchased technology stock options outstanding warrants
--------- ----------------- --------------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Founders:
- ---------
Koster 20,001 1,100,000 1,120,001 80,000
Masterson 2,000 38,000 90,000 130,000
Peterson 20,000 20,000 30,000
--------------------------------------------------------------------------------
Founder Subtotal 42,001 1,138,000 90,000 1,270,001 110,000
--------------------------------------------------------------------------------
TVM entities:
TVM Techno Venture Enterprises
No. II L.P. _______ _________
TVM Intertech L.P. 42,454 42,454
TVM Eurotech L.P. 84,906 84,906
TVM Zweite Beteiligung US L.P. 127,380 127,380
TVM Techno Venture Investors 8,000 8,000
No. I L.P.
KBL Founder Ventures SCA 73,000 73,000
--------------------------------------------------------------------------------
TVM Subtotal 400,000 0 0 400,000 0
--------------------------------------------------------------------------------
Other shares Issued:
- --------------------
Russell Hays 28250 28250
Helmut Schuhsler 10,000 10,000
Randall Lunn 10,000 10,000
John J. DiBello 6,000 6,000
Monica Schlawinsky 2,000 2,000
Amy B. Crawford 2,000 2,000
Patricia Dane 2,000 2,000
--------------------------------------------------------------------------------
Other subtotal 28250 32,000 0 58,250 0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total shares issued as of December 14, 1995 488,251 1,170,000 $90,000 1,278,251 110,000
--------------------------------------------------------------------------------
Options and warrants outstanding:
- ---------------------------------
Bob Cotter (technical advisory board) 42000
Charles Cantor (technical advisory board) _______
Dong-Jing Fu (employee) 10000
Maryanne Maloney (employee) 10000
Kai Tang (employee) 10000
Comdisco warrants:*
First $35,000 at $0.50/share 70000
Second $85,000 at $1.96/share 43333
--------------------------------------------------------------------------------
Total options and warrants outstanding 251,333
--------------------------------------------------------------------------------
Fully diluted total as of December 14, 1995 488,251 1,170,000 90,000 1,728,251 361,333
--------------------------------------------------------------------------------
<CAPTION>
Total shares Fully Diluted
Issued and under Percentage
Options/warrants Ownership
---------------- -------------
Founders:
- ---------
<S> <C> <C>
Koster 1,200,001 57.43%
Masterson 130,000 6.22%
Peterson 50,000 2.30%
----------------------------------
Founder Subtotal 1,380,000 86.04%
----------------------------------
TVM entities:
TVM Techno Venture Enterprises _________ 3.05%
No. II L.P.
TVM Intertech L.P. 42,454 2.03%
TVM Eurotech L.P. _________ 4.08%
TVM Zweite Beteiligung US L.P. 127,380 _____%
TVM Techno Venture Investors 8,000 0.38%
No. I L.P.
KBL Founder Ventures SCA 73,000 3.62%
----------------------------------
TVM Subtotal 400,000 19.14%
----------------------------------
Other shares Issued:
- --------------------
Russell Hays 28250 1.2__%
Helmut Schuhsler 10,000 _____%
Randall Lunn 10,000 _____%
John J. DiBello 6,000 0.2___%
Monica Schlawinsky 2,000 0.10%
Amy B. Crawford 2,000 0.10%
Patricia Dane 2,000 0.10%
----------------------------------
Other subtotal 58,250 2.79%
----------------------------------
-----------------------
Total shares issued as of December 14, 1995 1,636,251
-----------------------
Options and warrants outstanding:
- ---------------------------------
Bob Cotter (technical advisory board) 42,000 2.01%
Charles Cantor (technical advisory board) _________ 3.16%
Dong-Jing Fu (employee) 10,000 0.48%
Maryanne Maloney (employee) 10,000 0.48%
Kai Tang (employee) 10,000 0.48%
Comdisco warrants:*
First $35,000 at $0.50/share 70,000 3.35%
Second $85,000 at $1.96/share 43,333 2.07%
----------------------------------
Total options and warrants outstanding 251,333 12.03%
----------------------------------
Fully diluted total as of December 14, 1995 2,089,564 100.00%
----------------------------------
</TABLE>
* Warrants not yet issued
<PAGE>
EXHIBIT 4.3
-----------
Equity Investments
------------------
The Corporation has one subsidiary, Sequenom Instruments GmbH, all of the
outstanding equity interest in which is owned by the corporation.
<PAGE>
EXHIBIT 4.4A
------------
Unaudited Financial Statements
as of December 31, 1994 and
for the year ended
------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SEQUENOM, INC
(A Development Stage Enterprise)
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
December 31, 1994
ASSETS
<TABLE>
<S> <C>
Cash $ 168,570
Other current assets 2,500
-------------
Total current assets 171,070
-------------
Office equipment 2,264
Less accumulated depreciation (38)
-------------
2,226
-------------
Organizational costs (net accumulated 34,000
amortization of $6,000)
Other assets 22,334
-------------
Total assets $ 229,631
-------------
LIABILITIES
Convertible term notes $ 500,000
Accrued expenses 76,993
-------------
Total Liabilities $ 576,993
-------------
STOCKHOLDERS' DEFICIT
Series A Convertible Preferred Stock $ 754,516
Common Stock 1
Cumulative translation adjustment (1,703)
Deficit accumulated in the development stage (1,100,176
-------------
Total stockholder's deficit 347,362
-------------
Total liabilities and stockholders' deficit $ 229,631
=============
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SEQUENOM, INC
(A Development Stage Enterprise)
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF OPERATIONS
From the period of inception (February 14, 1994) through December 31, 1994
<TABLE>
<S> <C>
Operating Expenses:
Research and development 872,230
General and administrative 230,588
--------------
1,102,817
--------------
Net Operating loss from Operations (1,102,817)
Interest Income 2,641
Net loss (1,100,176)
==============
</TABLE>
<PAGE>
EXHIBIT 4.4B
------------
Unaudited Financial Statements
as of October 31, 1995 and
for the ten-months then ended
--------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SEQUENOM, INC
(A Development Stage Enterprise)
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
October 31, 1995
ASSETS
10/31/95
----------
cash $ 110,748
Prepaid expenses 34,304
Other current assets 2,500
Accounts receivable 9,130
Other assets 181,830
Fixed assets (net accumulated depreciation of $629) 660,003
Organizational costs (net accumulated
amortization of $12,667) 28,380
----------
Total assets $1,026,896
==========
LIABILITIES
Accounts Payable and Accrued Expenses $ 501,393
Convertible term notes 1,361,600
Silent Partnership loan 710,700
----------
Total Liabilities $2,573,693
----------
STOCKHOLDERS' DEFICIT
Series A Convertible Preferred Stock 754,516
Common Stock 1,314
Cumulative translation adjustment (13,784)
Deficit accumulated in the development stage (2,288,842)
----------
Total stockholder's deficit (1,546,797)
----------
Total liabilities and stockholders' deficit $1,026,896
==========
<PAGE>
- --------------------------------------------------------------------------------
SEQUENOM, INC
(A Development Stage Enterprise)
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF OPERATIONS
For the period ended October 31, 1995
10/31/95
Operating Expenses: ----------
Consulting fees 328,350
Travel expenses 84,342
Amortization expense 6,667
Depreciation expense 51,639
Audit fees 4,000
Legal & Tax 205,670
Recruitment expense 1,937
Advisory fees 0
unrealized f(x) loss 1,703
General and administrative expenses 499,548
----------
1,183,856
----------
Net Operating loss from Operations (1,183,856)
Interest Income (4,804)
Net loss (1,188,659)
==========
<PAGE>
EXHIBIT 4.5
Undisclosed Liabilities
-----------------------
None.
<PAGE>
EXHIBIT 4.6
-----------
Changes Since October 31, 1995
------------------------------
The Corporation has received bridge loans from certain of the Investors
since October 31, 1995 as follows:
Date Amount
--------- ---------
November 1, 1995 $ 18,400
November 10-21, 1995 100,000
November 30, 1995 100,000
--------------
Total $218,400
<PAGE>
EXHIBIT 4.7
-----------
Encumbrances
------------
None, other than non-consensual liens arising in the ordinary course of
business by operation of law. The Corporation is not aware of the existence of
any such liens.
<PAGE>
EXHIBIT 4 - 8
-------------
Intellectual Property Rights;
Agreements with Dr. Koster
--------------------------
Attached hereto is a patent status sheet dated December 8, 1995.
Also attached hereto are copies of the Assignment of Inventions dated May
26, 1994, Executive Employment Agreement dated as of April 1, 1994 and
Consulting Services Agreement dated April 1, 1994 between the Corporation and
Dr. Hubert Koster.
<PAGE>
Page 1 (as of 12/08/95)
SEQUENOM PATENT STATUS SHEET AND PROJECTED 1996 PATENT COSTS (U.S.)
-------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
L&C Serial No./ Projected
Docket No. Patent No. Title and Inventor(s) Filing Date Status 1996 Costs
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SQI-003 08/001,323 DNA Sequencing by Mass Spectrometry 01/07/93 Abandoned in Favor -------
by Hubert Koster of SQI-003CP
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-003CP 08/178,216 DNA Sequencing by Mass Spectrometry 01/06/94 Response to Final
by Hubert Koster Rejection Submitted
(Sequencing Method) 12/01/95
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-003CPD1 08/470,123 DNA Sequencing by Mass Spectrometry 06/06/95 Awaiting First Office $2,000-$5,000
by Hubert Koster Action Prosecution
(Sequencing Kit) Costs
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-003CPD2 08/467,208 DNA Sequencing by Mass Spectrometry 06/06/95 Awaiting First Office $2,000-$5,000
by Hubert Koster Action Prosecution
(Solid Supports) Costs
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-003CPD3 08/481,033 DNA Sequencing by Mass Spectrometry 06/07/95 Awaiting First Office $2,000-$5,000
by Hubert Koster Action Prosecution
(Primers) Costs
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-005 08/034,738 DNA Sequencing by Mass Spectrometry via 03/19/93 Abandoned ------
Exonuclease Degradation
by Hubert Koster
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-005CN 08/388,171 DNA Sequencing by Mass Spectrometry via 02/10/95 -Preliminary $2,000-$5,000
Exonuclease Degradation Amendment Filed Prosecution
by Hubert Koster 07/10/95; Costs
(Sequencing Method) -Awaiting First Office
Action
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-005CNDI 08/454,527 DNA Sequencing by Mass Spectrometry via 05/30/95 Awaiting First Office $2,000-$5,000
Exonuclease Degradation Action Prosecution
by Hubert Koster Costs
(Multiplex Method; Kit)
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-005CND2 08/453,499 DNA Sequencing by Mass Spectrometry via 05/30/95 Awaiting First Office $2,000-$5,000
Exonuclease Degradation Action Prosecution
by Hubert Koster Costs
(System for Exonuclease Mediated Mass
Specific Sequencing)
- -----------------------------------------------------------------------------------------------------------------------------------
SQI-013 08/406,199 DNA Diagnostics Based on Mass 03/17/95 Response is due $2,000-$5,000
Spectrometry 12/14/95 Prosecution
by Hubert Koster Costs
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-017 08/521,638 Filtration Processes, Kits and Devices 08/31/95 IDS is due 11/30/95 $2,000-$5,000
for Isolating Plasmids Prosecution
by Hubert Koster Costs
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEQUENOM PATENT STATUS SHEET AND PROJECTED 1996 PATENT COSTS (Foreign)
----------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
L&C Region/ Serial No./ Projected
Docket No. Country Patent No. Title and Inventor(s) Filing Date Status 1996 Costs
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SQI-003CPPC PCT PCT/US94/00193 DNA Sequencing by Mass Spectrometry 01/06/94 Entered into ------
by Hubert Koster National Phase
07/07/95
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-003CPAU Australia 59929/94 DNA Sequencing by Mass Spectrometry 01/06/94 Request for Payment of
by Hubert Koster Examination Renewal and
due 12/06/98 Request for
Examination
Fees $800.00
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-003CPCA Canada New Application DNA Sequencing by Mass Spectrometry 01/06/94 Awaiting First Payment of
by Hubert Koster Office Action Renewal Fee
$1,300.00
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-003CPJP Japan 516209/94 DNA Sequencing by Mass Spectrometry 01/06/94 Early
by Hubert Koster Instructions:
Examination
due 12/06/2000
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-003CPEP EPO 94 90 6047.9 DNA Sequencing by Mass Spectrometry 01/06/94 Awaiting First Payment of
by Hubert Koster Office Action Renewal Fee
$750.00
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-005PC PCT PCT/US91/02938 DNA Sequencing by Mass Spectrometry 03/18/94 Entered into ------------
via Exonuclease Degradation National Phase
by Hubert Koster 09/19/95
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-005AU Australia New Application DNA Sequencing by Mass Spectrometry 03/18/94 Petition for Request for
via Exonuclease Degradation Examination Examination
by Hubert Koster due 03/18/99 and Payment
of Renewal
Fees $800.00
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-005CA Canada New Application DNA Sequencing by Mass Spectrometry 03/18/94 Request for Payment of
via Exonuclease Degradation Examination Renewal Fee
by Hubert Koster due 3/18/2001 $300.00
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-005EP EPO New Application DNA Sequencing by Mass Spectrometry 03/18/94 Awaiting First Payment of
via Exonuclease Degradation Office Action Renewal Fee
by Hubert Koster $800.00
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-005JP Japan 9509061 DNA Sequencing by Mass Spectrometry 03/18/94 Early
via Exonuclease Degradation Instructions:
by Hubert Koster Examination
due 02/18/2001
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-013PC PCT DNA Diagnostics Based on Mass File $3-$4,000.00
Spectrometry International
by Hubert Koster Patent
Application on
or before
03/17/96
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-017PC PCT Filtration Processes, Kits and File $3-$4,000.00
Devices for Isolating Plasmids International
by Hubert Koster Patent
Application on
or before
08/31/96
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEQUENOM SUBJECT MATTER
-----------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
L & C Docket No. Sequenom Docket No. Title
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SQI-002 Cantor Patent Application
- ------------------------------------------------------------------------------------------------------------------------------------
SQI-003 Drukier Patent Application
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ASSIGNMENT OF INVENTIONS
------------------------
This Assignment of Inventions (the "Assignment") is made as of May 26,
1994, by and between SEQUENOM, INC., a Delaware corporation (the "Company"), and
Dr. Hubert Koster (the "Assignor") having a place of business at 1640 Monument
Street, Concord, MA 01742.
R E C I T A L S:
---------------
A. Prior to the date hereof, Assignor has been developing certain
technology and products to determine DNA sequencing by mass spectrometry (the
"Products");
B. Assignor desires to transfer to the Company all intellectual
property related to the Products, and to cancel certain expenses incurred in
connection with the development thereof, in exchange for the issuance of Common
Stock of the Company; and
C. Assignor and the Company intend the foregoing transaction to
qualify as a non-taxable transfer within the meaning of Section 351 of the
Internal Revenue Code of 1986, as amended, in that such transfer will be made
solely in exchange for Common Stock of the Company and immediately thereafter
Assignor will be in control of the Company.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, the parties agree as follows:
1. The recitals set forth above shall be deemed to be a part of this
Agreement as though such provisions had been forth in full in this Agreement.
2. In consideration of the issuance of 1,100,000 shares of the
Common Stock of the Company, Assignor hereby assigns to the Company all of his
right, title and interest in and to (i) all inventions and improvements,
designs, know-how, and ideas (including all patents, trademarks, trade names,
copyrights, inventions, trade secrets, proprietary processes and
<PAGE>
formulae, applications for patents, trademarks and copyrights, and other
industrial and intellectual property rights) relating to the Products, including
but not limited to the United States Patent and Trademark Applications and
inventions described on Exhibit A hereto, and (ii) all machines, instruments,
devices, equipment or models incident or related thereto, made, conceived, or
created by Assignor prior to the date of this Assignment, all of which are
hereafter referred to as the "Inventions." This Assignment is intended to
include any additional rights in or to the Inventions received by Assignor after
the effective date of this Assignment, without further consideration to
Assignor, including rights to any credits and royalties arising out of the
Inventions. Assignor further waives and relinquishes his tight to request any
reimbursement by the Company of expenses incurred by or on behalf of Assignor
prior to the date hereof in connection with the development of the Products or
the Inventions.
3. Assignor represents and warrants that he has made no prior
license, transfer, assignment or hypothecation of any interest in the Inventions
and that no other person or firm has any interest in the Patent and Patent
Applications and the trademark Application listed in Exhibit A hereto and to the
best of Assignor's knowledge in any other Inventions. Assignor owns, possesses,
and has the right to use, to bring actions for the infringement of and to
transfer and assign to the Company the Patent and Patent Applications and the
Trademark Application listed in Exhibit A hereto and to the best of Assignor's
knowledge all other Inventions. No royalties or other amounts will be payable
by the Company to Assignor by reason of its ownership, use or licensing of the
Inventions. To the best of Assignor's knowledge, no Invention violates any
license or infringes any patent, copyright, trademark, trade secret or other
intellectual property right of any person or entity, nor will royalties or other
amounts be payable by the Company to any person or entity by reason of the
Company's ownership, use or licensing
2.
<PAGE>
of the Inventions, nor is there any reasonable basis to believe that any such
violation, infringement or conflict may exist, except that Assignor is aware of,
and hereby gives the Company notice of, U.S. Patent No. 5,288,644 issued on
February 22, 1994 to Rockefeller University (Inventors R.C. Beavis and B.T.
Chait) and now in the possession of Perceptive Biosystems, Cambridge,
Massachusetts. Assignor has not received any notice that any of such Inventions
or the-ownership, use or licensing thereof in the operation or proposed
operation of the Company's business conflicts with the rights of others.
Assignor owns all right, title and interest in and to the Patent and Trademark
Applications described on Exhibit A hereto.
4. In support of said Assignment, Assignor further agrees as
follows:
(a) To deliver to the company copies of all writings and other
tangible evidence or representations of the Inventions, and any improvements
covered by this Assignment;
(b) To execute such additional documents as may reasonably be
required to transfer to the Company Assignor's entire right, title and interest
in or to the Inventions, improvements thereof covered by this Assignment and to
all rights of priority thereto pursuant to the International Convention for
Protection of Industrial Property; and in and to any and all Letters Patent on
said Inventions and/or said improvements that may be granted in the United
States or any foreign country, including each and every Letter Patent granted on
any application which is a division, substitution, or continuation of said
application specifically identified herein, and in and to each and every reissue
or extension of said Letters Patent;
(c) Not to make any use of the Inventions or improvements
covered by this Assignment for his benefit or interest and to hold them in
confidence and not to disclose
3.
<PAGE>
them to anyone other than personnel of the Company, without the prior written
consent of an officer of the Company;
(d) To cooperate with the company whereby said company may enjoy
to the fullest extent the right, title and interest herein conveyed. Such
cooperation shall include: (i) prompt execution of all papers (prepared at the
expense of the Company) which are deemed necessary or desirable by the Company
to perfect in it the right, title and interest herein conveyed; (ii) prompt
execution of all petitions, oaths, specifications, declarations or other papers
(prepared at the expense of the Company) which are deemed necessary or desirable
by the Company for prosecuting said applications specifically identified herein,
for filing and prosecuting substitutions, divisions, continuing or additional
applications in the United States and/or foreign countries covering said
Inventions and/or said improvements, for filing and prosecuting applications for
reissuance of Letters Patent included herein, or for interference (i.e.,
priority) proceedings involving said Inventions and/or said improvements; and
(iii) prompt assistance and cooperation in the prosecution of legal proceedings
involving said Inventions and/or said improvements, said applications and
patents granted thereon, including oppositions, cancellation proceedings,
priority contests, public use proceedings and court actions; provided, however,
that any expense which may be incurred by Assignor in lending such assistance
and cooperation shall be paid by the Company.
5. This Assignment shall constitute the Company as the owner of the
Inventions as of May 26, 1994 and all tangible representations thereof, without
the requirement of further delivery; provided, however, that if by September 1,
1994 the Company has not received aggregate gross proceeds of at least Five
Million Dollars ($5,000,000.00) from financings on terms no less favorable to
the Company than those set forth in a Memorandum of
4.
<PAGE>
Terms for a Private Placement of Preferred Stock dated March 28, 1994, despite
Assignor's best efforts to assist the Company in obtaining such financing
Assignor shall have the option (the "Option"), exercisable by delivery of a
written election to the Company on or before October 1, 1994, to declare the
assignment and transfer of the Inventions pursuant to this Assignment of
Inventions null and void. On receipt of Assignor's election to exercise the
Option to declare the assignment and transfer of the Inventions null and void,
the Company shall: (a) deliver to Assignor copies of all materials provided to
the company by Assignor pursuant to Paragraph 4 above; (b) execute and deliver
to Assignor such additional documents as may reasonably be required to transfer
to Assignor the Company's entire right, title, and interest in or to the
Inventions; and (c) cease making any use of the Inventions or improvements
covered by this Assignment of Inventions.
6. This Assignment of Inventions shall be binding on all of the
heirs and assigns of Assignor, and shall inure to the benefit of the Company,
its assigns and successors.
7. This Assignment of Inventions shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts, U.S.A.,
without application of principles of conflicts of laws.
EXECUTED this 26th day of May, 1994.
/s/ Hubert Koster
--------------------------------
Hubert Koster
SEQUENOM, INC.
By: /s/ Nola E. Masterson
-----------------------------
Title: CEO
--------------------------
5.
<PAGE>
EXHIBIT A
---------
INVENTIONS
U.S. Patent or
Patent Application
Description Number of Status
- ----------- ----------------
1. "DNA Sequencing by Serial No. 08/001,323 (filed
Mass Spectroscopy" January 7, 1993)
Continuation-in-Part, Serial
No. 08/178,216 (filed
January 6, 1994)
PCT-Application, Serial No.
PCT/US94/00192 (filed
January 6, 1994)
2. "DNA Sequencing by Serial No. 08/034,738 (filed
Mass Spectroscopy March 19, 1993)
via Exonuclease
Degradation"
PCT-Application, Serial No.
PCT/US94/02938 (filed
March 18, 1994)
Filings for both of the patent applications have been made in the following
countries: Austria, Belgium, Switzerland/Liechtenstein, Germany, Denmark, Spain,
France, United Kingdom, Greece, Ireland, Italy, Luxembourg, Monaco, Netherlands,
Portugal, Sweden, Australia, Canada, China, Japan and the Russian Federation.
TRADEMARK
U.S. Trademark
Application Number
or Status
-----------------------------
1. SEQUENOM Serial No. 74/347,804
(Notice of Allowance issued
12/7/93)
<PAGE>
CONSENT OF SPOUSE
I, Jutta Koster, spouse of Hubert Koster, agree that my interest
in the Inventions subject to the foregoing Assignment of Inventions shall
be irrevocably bound by the terms thereof. I further understand and agree
that my community property interest, if any, shall be similarly bound by
said Assignment, that such consent is binding upon my heirs, personal
representatives and assigns, and I agree to execute and deliver such
documents as may be necessary to carry out the intent of this Agreement.
Date: May 26, 1994
/s/ Jutta Koster
--------------------------------
Jutta Koster
<PAGE>
EXECUTIVE EMPLOYMENT AGREEMENT
------------------------------
This Executive Employment Agreement (the "Agreement") is dated as of April
1, 1994 between Sequenom, Inc. (the "Company"), a Delaware corporation, and Dr.
Hubert Koster (the "Executive") currently residing at Stapelstr. 5b, 22529
Hamburg, Germany.
ARTICLE 1. RECITALS
1.1. Development of Technologies. Executive has developed certain
---------------------------
technologies related to DNA sequencing by mass spectrometry (the "Technologies")
and, in connection with the founding of the Company, has assigned to the Company
all patent applications, technological developments and trademarks owned or
controlled by him which are related to the Technologies.
1.2. Employment of Executive. Executive is currently a Professor at the
-----------------------
University of Hamburg (the 'University") in Germany. The Company wishes to
secure the services of Executive as a key employee of the Company to facilitate
the transfer of the Technologies to the Company, to develop products based on
the Technologies and to obtain the benefit of Executive's vision for the long
range development of the Technologies and the business of the Company.
Executive is willing to become an employee of the Company commencing on the date
(the "Effective Date") he is permitted to do so under the terms of his
arrangement with the University.
ARTICLE 2. EMPLOYMENT OF EXECUTIVE
2.1. Employment. Subject to the terms and conditions of this Agreement,
----------
the Company agrees to employ Executive in a full time capacity to serve as
Executive Vice President, Science & Operations and Chief Technical Officer. The
duties of Executive shall include directing the research, development and
engineering activities of the Company, being responsible for long range
technological planning, assisting other officers of the Company in establishing
marketing objectives and strategic plans for overall business development, and
performing such other specific duties as may reasonably be assigned to the
Executive from time to time by the Board of Directors of the Company. Executive
hereby accepts such employment for the term hereof.
2.2. Term. Executive's employment under this Agreement shall be for an
----
initial term commencing on the Effective Date and terminating three (3) years
from such date, unless earlier terminated as herein provided. The term of this
Agreement may be extended beyond the initial term by mutual written consent.
2 3. No Conflicting Commitments. During the period of the Executive's
--------------------------
full time employment with the Company, Executive will not undertake any
Commitments which might impair Executive's performance of his duties as a full
time employee of the Company. Notwithstanding the foregoing, (i) Executive
shall be permitted to continue his consulting
<PAGE>
relationship with Hybridon, Inc., including an extensions thereof. and to retain
all payments received thereunder and (ii) Executive shall be entitled to
maintain in affiliations with one or more universities in Hamburg and Boston on
the understanding that such relationships will advance the interests of the
Company by permitting Executive to utilize facilities, equipment and research
personnel in areas of research which are of interest to the Company. Without
limiting the generality of the foregoing, the Company acknowledges and
understands that (i) during a transition period, Executive will direct the
efforts of some scientists. diploma and Ph.D. students working at the University
as they finish their research topics; (ii) Executive may continue to act as a
principal investigator, in collaboration with colleagues at other German
universities and with certain German scientific instrument manufacturers, under
a grant from the German Ministry of Research and Technology extending through
June 30, 1996, and (iii) Executive may act as a principal investigator under a
potential grant from the Deutsche Forschungsgemeinschaft entitled "Use of MALDI-
TOF and Electrospray Mass Spectrometry in the Analysis of Nucleic Acids.'
Executive's consulting relationship and university affiliations are expected to
consume less than ten percent (10%) of Executive's productive time.
ARTICLE 3. COMPENSATION
For all services to be rendered by Executive to the Company pursuant to
this Agreement, the Company shall pay to the Executive the compensation and
provide for Executive the benefits set forth below:
3.1. Base Salary. The Company shall pay to Executive a base salary at the
-----------
rate of $170,000 per annum during the initial twelve (12) months of this
Agreement. prorated and payable in substantially equal monthly installments.
Executive's salary will be reviewed annually and may be increased (but not
reduced) by the Board of Directors of the Company or a duly appointed committee
thereof.
3.2. Relocation Expenses. The Company shall reimburse Executive all
-------------------
moving expenses incurred in moving his family and household goods to the Boston,
Massachusetts area, up to a maximum of $40,000.
3.3. Bonuses. Executive shall be entitled to receive a cash bonus of
-------
$10,000 payable when the Company hires its first full-time Chief Executive
Officer.
3.4. Fringe Benefits. In addition to Executive's base salary, relocation
---------------
expenses and bonuses, the Company shall provide Executive and Executive's
dependents medical insurance and such other benefits as are generally made
available by the Company to its other full time executive employees.
ARTICLE 4. EARLY TERMINATION
4.1. Early Termination. Executive's employment hereunder shall terminate
-----------------
prior to the expiration of the terms of this Agreement upon the occurrence of
any of the following events:
-2-
<PAGE>
4.1.1. Executive's death or legal incapacity; or
4.1.2. The termination of Executive's employment hereunder by the
Board of Directors of the Company, at its option, to be exercised by
written notice to Executive. upon Executive's other incapacity or inability
to further perform services as contemplated herein for a period aggregating
90 days or more within any six-month period because Executive's physical or
mental health shall have become impaired so as w make it impossible or
impractical to perform the duties and responsibilities contemplated
hereunder; or
4.1.3. The termination of Executive's employment hereunder by the
Board of Directors of the Company, at its option, to be exercised by
written notice to Executive, in the event of Executive's gross neglect of
his duties hereunder, the commission by Executive of an act of deliberate
dishonesty or moral turpitude in connection with his employment or the
material breach by Executive of any obligation under this Agreement or any
other agreement between Executive and the Company; or
4.1.4. The termination of Executive's employment hereunder by the
Board of Directors of the Company, at its option which may be exercised
with or without cause, to be exercised by delivery of written notice from
the Company to the Executive; or
4.1.5. The termination of Executive's employment hereunder by
Executive to be exercised by delivery of written notice from Executive to
the Company.
4.2. Adjustments Upon Early Termination. Notwithstanding any other
----------------------------------
provisions in this Agreement to the contrary:
4.2.1. If Executive's employment with the Company terminates
pursuant to Section 4.1.1. or 4.1.2., all payments and benefits provided to
Executive under this Agreement shall cease as of the date of termination of
employment.
4.2.2. If Executive's employment with the Company terminates
pursuant to Section 4.1.3. or 4.1.5., all payments and benefits provided to
Executive under this Agreement shall cease as of the date of termination of
employment.
4.2.3. If Executive's employment with the Company terminates
pursuant to Section 4.1.4., (a) the Company shall pay to Executive as
severance pay an amount equal to twelve times his then current base salary.
payable in substantially equal monthly installments ("Severance Payments"),
and distribute to him any sums accrued as of the termination date under the
Company's retirement plan and other benefit plans (including accrued
vacation pay, if any) and all other payments and benefits provided to
Executive under this Agreement shall cease, (b) for a twelve month period
after termination or such longer period as may be required by law.
Executive shall be entitled to continue to receive medical benefits under
the provisions of applicable laws (including COBRA) upon payment of the
applicable premiums to the Company and (c) during the period in which the
Executive is receiving Severance Payments, the Executive shall provide
-3-
<PAGE>
consulting services w the Company, as may be reasonably requested by the
Company, subject to the Executive's reasonable availability.
ARTICLE 5. COVENANTS AGAINST COMPETITION
5.1. Non-solicitation of Employees. Executive agrees that during the term
-----------------------------
of Executive's employment with the Company and during the applicable Non-
competition Period (as defined below) after the termination of Executive's
employment with the Company, Executive shall not directly or indirectly recruit,
solicit or otherwise induce or attempt to induce any employees of the Company to
leave the employment of the Company.
5.2. Non-competition. Executive agrees that during the term of
---------------
Executive's employment with the Company and during the applicable Non-
competition Period (as defined below) after the termination of Executive's
employment with the Company, Executive shall not directly or indirectly, except
as a passive investor in publicly held companies and except for investments held
at the date hereof, engage in competition with the Company or any of its
subsidiaries, or own or control any interest in or act as director, officer or
employee of, or consultant to, any firm, corporation or institution directly or
indirectly engaged in competition with the Company or any of its subsidiaries.
5.3. Non-competition Period. In the event that Executive's employment is
----------------------
terminated pursuant to Section 4. 1. (other than pursuant to Section 4.1.1), the
Non-competition Period shall be twelve (12) months following the effective date
of Executive's termination without the payment of any compensation by the
Company to Executive beyond the Severance Payments provided in Section 4.2.3 in
the case of a termination pursuant to Section 4.1.4.
5.4. Academic Employment Permitted. Notwithstanding the foregoing,
-----------------------------
employment of Executive as a professor by a university of similar academic
institution shall not be deemed to be in competition with the business of the
Company.
ARTICLE 6. CONFIDENTIAL INFORMATION
6.1. Maintenance of Confidentiality. Executive agrees that Executive will
------------------------------
not (except as required in the course of employment with the Company), both
during the term of Executive's employment with the Company and thereafter,
communicate or divulge to, or use for Executive's own benefit or the. benefit of
any other person, firm or organization, any confidential and proprietary
information of the Company and its subsidiaries.
6.2. Ownership of Confidential Information. Records, riles, memoranda,
-------------------------------------
reports, price lists, customer lists, drawings, plans, sketches and documents
and the like, relating to the business of the Company, which Executive shall use
or prepare or come into contact within the course of, in connection with, or as
a result of employment with the Company, shall remain the Company's Sole and
exclusive property.
-4-
<PAGE>
ARTICLE 7.
OWNERSHIP OF INVENTIONS
7.1. "Invention" Defined. As used in this Agreement, "Invention" means
-------------------
any invention, discovery or innovation with regard to physics, chemistry,
enzymology, biology, biotechnology, genetic engineering or recombinant DNA
technology, whether or not patentable, made, conceived, or first actually
reduced to practice by Executive, alone or jointly with others, in the course
of, in connection with, or as a result of service as an executive of the
Company, including any art, method, process, machine, manufacture, design of
composition of matter, or any improvement thereof, or any variety of plant or
microorganism.
7.2. Disclosure of Inventions. Each Invention made, conceived or first
------------------------
actually reduced to practice by Executive, whether alone or jointly with others,
during the term Of Executive's employment with the Company and each Invention
made, conceived or first actually reduced to practice by Executive, whether
alone or jointly with others, within one year after the termination of
Executive's employment with the Company which relates in any way to work
performed for the Company during the term of Executive's employment, shall be
promptly disclosed in writing to the President of the Company (or such officer
of the Company as the President or Board of Directors may designate). Such
report shall be sufficiently complete in technical detail and appropriately
illustrated by sketch or diagram to convey to one skilled in the art of which
the Invention pertains, a clear understanding of the nature, purpose,
operations, and, to the extent known, the physical, chemical, biological or
electrical characteristics of the Invention.
7.3. Ownership of Inventions. Each Invention, as herein defined, shall be
-----------------------
the sole and exclusive property of the Company.
7.4. Assignment of Title. Executive agrees to execute an assignment to
-------------------
the Company or its nominee of Executive's entire right, title and interest in
and to any Invention, without compensation beyond that provided in this
Agreement. Executive further agrees, upon the request of the Company and at its
expense, that Executive will execute any other instrument and document necessary
or desirable in applying for and obtaining patents in the United States and in
any foreign country with respect to any Invention. Executive further agrees,
whether or not Executive is than an employee of the Company, to cooperate to the
extent and in the manner reasonably requested by the Company in the prosecution
or defense of any claim involving a patent covering any Invention or any
litigation or other claim or proceeding involving any invention covered by this
Agreement, but all expenses thereof shall be paid by the Company.
ARTICLE 8. MISCELLANEOUS
8.1. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
-5-
<PAGE>
8.2. Binding Effect. This Agreement shall inure to the benefit of and be
--------------
binding upon the parties hereto and their respective lawful successors and
assigns and upon Executive's heirs and personal representatives.
8.3. Assignment. Neither this Agreement nor any rights or obligations
----------
hereunder shall be assignable by either party hereto without the prior written
consent of the other party.
8.4. Notices. All notices, requests, demands and other communications to
-------
be given pursuant to this Agreement shall be in writing and shall be deemed to
have been duly given if delivered by hand or mailed by registered or certified
mail, return receipt requested, postage prepaid or by facsimile transmission if
a true and correct copy is sent the same day by first class mail, postage
prepaid, or by dispatch by an internationally recognized express courier
service, and in each case addressed as follows:
If to the Executive: Dr. Hubert Koster
-------------------
Stapelstr. 5b, 22529
Hamburg, Germany
If to the Company: Sequenom, Inc.
-----------------
c/o Techno Venture Management
101 Arch Street
Suite 1950
Boston, Massachusetts 02110
Attn: President
with a copy to: Palmer & Dodge
One Beacon Street
Boston, Massachusetts 02108
Arm: Peter Wirth, Esq.
or such other address as either party hereto shall have designated by notice in
writing to the other party.
8.5. Amendments. This Agreement may be amended, supplemented or otherwise
----------
modified at any time, but only by an instrument in writing signed by the parties
hereto.
8.6. Governing Law. This Agreement and the legal relations among the
-------------
parties hereto shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts.
8.7. Specific Performance. The Executive acknowledges that money damages
--------------------
alone will not adequately compensate the Company for breach of any of the
Executive's covenants and agreements herein and therefore, the Executive agrees
that in the event of the breach or threatened breach of any such covenant or
agreement, in addition to all other remedies available to the Company at law, in
equity or otherwise, the Company shall be entitled to injunctive relief
compelling specific performance of, or other compliance with, the terms hereof.
-6-
<PAGE>
8.8. Severability. In case any provision hereof shall, for any reason, be
------------
held to be invalid or unenforceable in any respect, such invalidity or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid or unenforceable provision had wt been
included herein. If any provision hereof shall for any reason, be held by a
court to be excessively broad as to duration, geographical scope, activity or
subject matter, it shall be construed by limiting and reducing it to make it
enforceable to the extent compatible with applicable law as then in effect.
8.9. Survival. Articles 5, 6, 7 and 8 shall survive the termination of
--------
this Agreement for the periods of time indicated therein or indefinitely if no
period of time is indicated.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as of the date first above written.
SEQUENOM, INC.
Date: 5-25-94 By: /s/ Nola E. Masterson
---------------------------- ----------------------------------
Nola E. Masterson, President
EXECUTIVE
Date: May 26, 1994 /s/ Hubert Koster
---------------------------- ---------------------------------------
Hubert Koster
-7-
<PAGE>
CONSULTING SERVICES AGREEMENT
THIS AGREEMENT is entered into this 1st day of April, 1994, by and between
Sequenom, Inc. (the "Company") and Dr. Hubert Koster ("Consultant").
NOW, THEREFORE, it is agreed as follows:
1. Definitions. As used herein:
-----------
(a) The term "Products" shall mean the devices, if any, proposed to
be developed by, or with the assistance of, Consultant hereunder as defined, and
with the specifications set forth in Exhibit A hereto.
(b) The term "Technology" shall mean the results and product (interim
and/or final) of the consulting services performed by Consultant hereunder,
whether tangible or intangibles including, without limitation, each and every
invention, formula, trade secret, software program (including without
limitation, object code, source code, flow charts, algorithms and related
documentation), listing, routine, manual, specification, technique, product,
concept, know-how, or similar property, whether or not patentable or
copyrightable and whether or not embodied in any Products, that are made,
developed, perfected, designed, conceived or first reduced to practice by
Consultant, either solely or jointly with others, in the course and scope of the
consulting services performed hereunder.
2. Engagement and Performance of Services.
--------------------------------------
(a) Engagement. The Company hereby engages Consultant to perform
----------
consulting services in accordance with the terms and conditions of this
Agreement. The specific tasks and services to be performed by Consultant are set
forth on Exhibit A attached hereto. If such services include the development of
specific Products, the specifications of such Products are as set forth on
Exhibit A attached hereto.
(b) Facilities, Equipment and Supplies. The Company will provide to
----------------------------------
Consultant the facilities, equipment and supplies specified on Exhibit A
attached hereto. Consultant shall, at his own cost and expense, provide all
other facilities, equipment and supplies necessary to perform the consulting
services hereunder.
(c) Other Services. The Company acknowledges and agrees that, subject
--------------
to its obligations hereunder, Consultant shall have the right to engage in
research and development and consulting activities for himself and others during
the term of this Agreement; provided, however, that Consultant shall not perform
any consulting services for an actual or potential competitor of the Company
during the term of this Agreement and for a period of one (1) year after
termination of this Agreement.
<PAGE>
(d) Primary Duty. The Company and Consultant recognize that
------------
Consultant's Primary duty as a member of the faculty of the University of
Hamburg (the "University") is to the University. The Company and consultant
agree that the University's policies and Consultant's obligations to the
University shall be observed in the event a conflict arises with this Agreement.
(e) Compensation. As compensation for the consulting services
------------
provided by Consultant hereunder, the Company shall pay to Consultant the
amounts specified, at the time(s) specified, on Exhibit B attached hereto.
(f) Expenses. In addition to the compensation specified in subsection
--------
2(d), the Company will pay reasonable out-of-pocket expenses incurred by
Consultant and approved in advance by the Company in the furtherance of or in
connection with the performance of consulting services hereunder.
(g) No Violation of Others' Rights. Consultant represents and
------------------------------
warrants that in the course of performing services hereunder Consultant will not
infringe or wrongfully appropriate any patents, copyrights, trade secret rights,
or other intellectual property rights of any person or entity anywhere in the
world.
3. Employment Agreement. On or before the date hereof, the Company and
--------------------
the Consultant shall have entered into an Executive Employment Agreement (the
"Employment Agreement"). The provisions of this Agreement shall not supersede
the provisions of the Employment Agreement, and the Consultant specifically
acknowledges that the provisions of Articles 5, 6 and 7 of the Employment
Agreement shall apply during the period of his consultancy hereunder.
4. Property Rights. All right, title and interest in and to the Products
---------------
(if any) and the Technology shall at all times be and remain the sole and
exclusive property of the Company, and the Products and the Technology shall be
deemed to be works made for hire. The parties agree that any patents, trademarks
or copyrights that may issue relating to any of the Products or the Technology
shall be in the name of and assigned to the Company.
5. Term and Termination. The term of this Agreement shall be as set forth
--------------------
in Exhibit A attached hereto; provided, however, that this Agreement shall
automatically terminate upon the commencement of Consultant's services under the
Employment Agreement. Unless otherwise specified in Exhibit A, either party may
terminate this Agreement at any time upon thirty (30) days written notice
delivered to the other. The provisions of Sections 3 and 4 hereof shall survive
the termination of this Agreement.
6. Miscellaneous.
-------------
(a) Use of University's Name. With the limited exception of citing
------------------------
Consultant's faculty title, the Company and its affiliates will not use the
names, likeness, or logos of the University or any of its schools or divisions
in any of their fund raising or in investment documents, general publications,
advertisements, or marketing and promotional materials without the prior written
permission of the University. A request for such permission must be submitted
by Consultant to the University's Office of Public Affairs.
-2-
<PAGE>
(b) Relationship of Parties. Consultant shall at all times during the
-----------------------
performance of his services hereunder be an independent contractor, maintaining
sole and exclusive control over its business and operations. At no time will
either party hold itself out to be the agent, employee, lessee, sublessee,
partner or joint venturer of the other party. Neither party hereto shall have
the express or implied right or authority to assume or create any obligation on
behalf of or in the name of the other party, or to bind the other party in
regard to any contract, agreement or undertaking with any third party.
(c) Entire Agreement. Except as set forth in Section 3, this
----------------
Agreement, together with the exhibits attached hereto, constitutes the entire
agreement between the parties relating to the subject matter hereof and
supersedes all prior written or oral negotiations, representations or
agreements. No modification of this Agreement shall be binding on either parry
unless it is in writing and signed by both parties.
(d) Severability. The provisions of this Agreement are severable, and
------------
if one or more provisions are judicially determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions or portions of this
Agreement shall nevertheless be binding on and enforceable by and between the
parties hereto.
(e) Assignment. This Agreement shall inure to the benefit of and be
----------
binding upon the successors and assigns of the parties hereto; provided,
however, that Consultant shall not transfer or assign this Agreement without the
prior written consent of the Company.
(f) Governing Law. The rights and obligations of the parties to this
-------------
Agreement shall be governed by and construed in accordance with the laws of
Massachusetts.
(g) Headings. Section headings are for convenience of reference only
--------
and shall not be considered in the interpretation of this Agreement.
(h) Unavoidable Delays. Either party shall be excused for any delays
------------------
or defaults in the performance of this Agreement (except the payment of amounts
due and payable hereunder) unavoidably caused by the act of the other, the act
of any agent of the other, the act of any governmental authority, acts of God,
the elements, war, litigation, strikes, walkouts, or any other cause beyond its
reasonable control. Each party shall use all reasonable diligence to avoid any
such delay or default and to resume performance under this Agreement as soon as
practicable after such delay or default.
(i) Notices. All notices, requests, demands and other communications
-------
to be given pursuant to this Agreement shall be in writing and shall be deemed
to have been duly given if delivered by hand or mailed by registered or
certified mail, return receipt requested, postage prepaid or by facsimile
transmission if a true and correct copy is sent the same day by first class
mail, postage prepaid, or by dispatch by an internationally recognized express
courier service, and in each cm addressed as follows:
-3-
<PAGE>
If to the Consultant: Dr. Hubert Koster
--------------------
Stapelstr. 5b, 22529
Hamburg, Germany
If to the Company: Sequenom, Inc.
-----------------
c/o Techno Venture Management
101 Arch Street
Suite 1950
Boston, Massachusetts 02110
Attn: President
with a copy to: Palmer & Dodge
One Beacon Street
Boston, Massachusetts 02108
Attn: Peter Wirth, Esq.
or such other address as either party hereto shall have designated by notice in
writing to the other party.
(j) Attorneys' Fees and Costs. Should litigation arise concerning the
-------------------------
enforcement or interpretation of this Agreement, the prevailing party shall be
entitled to recover its reasonable attorneys' fees and costs as determined by
the court.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
SEQUENOM, INC. CONSULTANT:
By: /s/ Nola E. Masterson /s/ Hubert Koster
--------------------------------- ----------------------------------
Dr. Hubert Koster
Title: CEO
------------------------------
-4-
<PAGE>
EXHIBIT A
---------
DESCRIPTION OF SERVICES AND TASKS
[see attached]
-5-
<PAGE>
EXHIBIT A
1. SEQUENOM H. KOSTER MARCH 31, 1994 CONFIDENTIAL
R & D PROJECTS
TO BE PERFORMED BY CONSULTANT
There are six Mini-Teams (T1 - T5) with selected experience; several projects
therefor can be initiated and pursued in parallel.
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
2. SEQUENOM H. KOSTER MARCH 31, 1994 CONFIDENTIAL
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
3. SEQUENOM H. KOSTER MARCH 31, 1994 CONFIDENTIAL
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
4. SEQUENOM H. KOSTER MARCH 31, 1994 CONFIDENTIAL
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT B
---------
COMPENSATION AND PAYMENT SCHEDULE
In return, Sequenom will provide to the consultant:
(1) full compensation for round-trip airfare, hotel accommodations, meals and
other expenses related to consultant's regular visits to Sequenom or
attendance at Scientific Advisory Board meetings;
(2) full compensation for round-trip airfare, hotel accommodations, meals and
other expenses related to consultant's travel to scientific meetings for
which his attendance is deemed critical to the development of mass
spectrometric DNA-sequencing technologies, or for visits to companies,
patent offices or for any other travel carried out in connection with his
work with Sequenom; and
(3) full compensation for other expenses (fax, mail, etc.) encountered directly
in connection with his work for Sequenom.
(4) commencing as of April 1, 1994, a monthly consultancy fee of $5,000, to be
paid monthly in arrears with the first payment of $5,000 due on May 1, 1994
and covering the period from April 1, 1994 to April 30, 1994.
-6-
<PAGE>
EXHIBIT 4.13
------------
Material Agreements
-------------------
(a) None.
(b) None.
(c) (1) See Exhibit 4.8 with respect to agreements with Dr. Koster.
-----------
(2) Consulting services Agreement between the Corporation and Charles
Cantor dated April 1, 1994.
(3) consulting Services Agreement between the Corporation and Robert
Cotter dated April 1, 1994, as amended.
(4) Oral consulting agreement with Nola Masterson, pursuant to which Ms.
Masterson is paid $5,000 per month to assist the corporation in
developing business strategies and monitoring U.S. operations.
(d) (1) Sequenom, Inc. 1994 Stock Plan.
(2) The Corporation also provides medical and dental benefits to its
employees.
(e) The Corporation has borrowed an aggregate of $1,580,000 in outstanding
principal amount from certain of the Investors and has issued to such
Investors convertible term notes to evidence a portion of such loans. None
of such loans will remain outstanding after the Initial Closing. The
corporation has also borrowed DM 550,000 in outstanding aggregate principal
amount from its wholly owned subsidiary Sequenom Instruments GmbH.
(f) None.
(g) Equipment lease arrangements with COMDISCO.
(h) None.
(i) (1) Research Agreement between the Corporation and The Johns Hopkins
University, dated October l, 1994, an amended.
(2) Confidentiality/Materials Transfer Agreement between the Corporation
and Becton Dickinson and Company dated December 1, 1995.
(3) Sponsored Research Agreement between the Corporation and the Trustees
of Boston University dated September 15, 1994.
(4) Proposed Letter Agreement with Synteni.
(j) None.
(k) None.
<PAGE>
EXHIBIT 4.15
------------
Insurance
---------
See attached materials from Waverley Insurance Agency, Inc. with respect to
insurance maintained by the Corporation.
<PAGE>
Professional
Office
Package
WAVERLEY INSURANCE AGENCY, INC.
493 Trapolo Road
Belmont, MA 02173
<PAGE>
CONTENTS
- --------
We've designed your Professional Office Package so it can be tailored to fit
your individual insurance needs. Because each policy may be different, the
pages aren't numbered consecutively. Here's a list of commonly referred to
items in the same order as they appear in your policy.
Introduction Page
Name and mailing address of insured
Name and location of insurance company
Policy dates
Former policy number
Your premium
Name and address of our authorized representative
Policy Forms List
General Rules
Special rights and duties of the first named insured
Your policy period
Premiums
Our right to inspect and audit
Policy changes
Assignment and transfer
Cancellation
Recovering damages from a third party
Fraud and misrepresentation
Appraisal of property disputes
How state law affects this policy
Lawsuits against us
Provisions required by law
What To Do If You Have A Loss
Coverage Summary
The Coverage Summary shows the variable information that affects your coverage.
Coverages
Each type of coverage included in your policy is provided by a separate form
called an insuring agreement.
<PAGE>
POLICY INFORMATION
THIS IS NOT A BILL
YOUR POLICY IS DIRECTLY BILLED. IF THIS IS A POLICY CHANGE, THE
ADDITIONAL OR RETURN PREMIUM WILL BE SHOWN ON FUTURE INSTALLMENT
BILLINGS. IF ALL INSTALLMENTS HAVE BEEN BILLED, THE PREMIUM
CHANGE WILL BE BILLED OR CREDITED PROMPTLY.
A BILL WILL BE SENT TO:
THE INSURED
- --------------------------------------------------------------------------------
Company: ST. PAUL FIRE & MARINE INSURANCE COMPANY
- --------------------------------------------------------------------------------
I Policy Inception/Effective Date: 10/26/94
N Policy Number: FK06003565
S Agency Number: 2003083
U SEQUENOM INCORPORATED
R _________________ Transaction Type:
E 101 ARCH STREET POLICY IS NEW
D BOSTON, MA 02110 Transaction number: 001
Processing Date: 11/10/94 08:57
__________________________________
A WAVERLY INS AG INC
G 493 TRAPELO RD
E BELMONT MA 02178
N
T
- ------------------------------------------------------------------------------
Policy Description Amount Surtax/
Number Surcharge
- ------------------------------------------------------------------------------
FK 06003565 PROFESSIONAL OFFICE PACKAGE POLICY $350.00
THE PREMIUM SHOWN DOES NOT INCLUDE A PREMIUM PAYMENT PLAN SERVICE CHARGE. IF
YOU SELECTED A PREMIUM PAYMENT PLAN YOUR PAYMENT SCHEDULE/BILL WILL SHOW THIS
CHARGE.
THIS POLICY IS A NINE PAY PAYMENT PLAN.
A PAYMENT SCHEDULE/BILL WILL FOLLOW SHORTLY.
- --------------------------------------------------------------------------------
Ed. 12 - 90 Printed in U.S.A. Page 1
INSURED COPY
<PAGE>
THE ST. PAUL
POLICY FORM LIST
Here's a lit of all forms included in your
policy [ILLEGIBLE] the date shown below. These forms
are [ILLEGIBLE] in the dame order as they appear in
your policy.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Title Form Number Edition Date
<S> <C> <C>
Introduction - St. Paul Fire and Marine Insurance Company 40800 05-87
Policy Form List 40705 05-84
General Rules - Massachusetts 40731 05-92
What to do if you have a loss 40814 11-91
Professional Office Package Coverage Summary 46157 05-91
Professional Office Package Location Coverage Summary 46159 05-91
Professional Office Package Property Protection 46156 09-91
POP - Commercial General Liability Protection 46155 05-91
Medical Expenses Endorsement 46190 09-93
Auto Contract Liability Endorsement-Massachusetts 44412 01-89
Contract Liability Defense Expenses Endorsement 47320 03-92
Liability Protection For Autos You Don't Own 44471 04-91
- -----------------------------------------------------------------------------------------------------------
Name of Insured Policy Number FK06003565 Effective Date 10/26/94
SEQUENUM INCORPORATED Processing Date 11/10/94 08:57 001
- -----------------------------------------------------------------------------------------------------------
</TABLE>
4070 5-84 Printed in U.S.A. Form List Page 1
(C)St. Paul Fire and Marine Insurance Co. 1992
<PAGE>
THE ST. PAUL
<TABLE>
<S> <C>
discovery of fraud or material misrepresentation by the company a signed, sworn statement in proof of loss which
insured in obtaining the policy; (4) discovery of willful sets forth to the best knowledge and belief of the insured
or reckless acts or omissions by the insured increasing the following: the time and cause of the loss, the interest
the hazard insured against; (5) physical changes in the of the insured and of all others in the property, the actual
property insured which result in the property becoming cash value of each item thereof and the amount of loss
uninsurable; or (6) a determination by the commissioner thereto, all encumbrances thereon, all other contracts of
that continuation of the policy would violate or place insurance, whether valid or not, covering of said property,
the insurer in violation of the law. Where the stated any changes in the title, use, occupancy, location,
reason is [ILLEGIBLE] of premium, the insured may possession or exposures of said property, since the issuing
[ILLEGIBLE] coverage and avoid the effect of the of this policy, by whom and for what purpose any building
cancellation by payment at any time prior to the herein described and the several parts thereof were occupied
effective date of cancellation. at the time of loss and whether or not it then stood on
leased ground, and shall furnish a copy of all the
Mortgage interests and obligations. Notwithstanding any descriptions and schedules in all policies and detailed
other provisions of this policy, if the policy shall be estimates for repair of the damage. The insured, as often
made payable to a mortgage of the covered real estate, no as may be reasonably required, shall exhibit to any person
act or default of any person other than such mortgagee or designated by this company all that remains of any property
his agent or those claiming under him, whether the same herein described, and submit to examinations under oath by
occurs before or during the term of this policy, shall any person named in this company, and subscribe the same;
render this policy void as to such mortgagee nor affect and, as often as may be reasonably required, shall produce
such mortgagee's right to recover in case of loss of such for examination all books of account, bills, invoices and
real estate: provided, that the mortgagee shall on demand other vouchers, or certified copies thereof if originals be
[ILLEGIBLE] according to the established scale of rate lost, at such reasonable time and place as may be designated
for any increase of risk not paid for by the insured; and by this company or its representative, and shall permit
whenever this company shall be liable to a mortgagee for extracts and copies thereof to be made.
any sum for loss under this policy for which no liability
exists as to the mortgage, or owner, and this company When loss payable. In case of any loss or damage, the
shall elect by itself, or with others, to pay the company, within thirty days after the insured shall have
mortgagee the full amount secured by such mortgagee, then submitted a statement, as provided in the preceding clause,
the mortgagee shall assign and transfer the company shall either pay the amount for which it shall be liable,
interested, upon such payment, the said mortgage together which amount if not agreed upon, shall be ascertained by
with the [ILLEGIBLE] debt thereby secured. award of referees as hereinafter provided or replace the
property with other of the same kind and goodness; or it
Pro rata liability. This company shall not be liable for may, within fifteen days after such statement is submitted,
a greater proportion of any loss than the amount hereby notifying insured of its intention to rebuild or repair the
insured shall bear to the whole insurance covering the premises, or any portion thereof separately covered by this
property against the [ILLEGIBLE] involved. policy, and shall thereupon enter upon said premises and
proceed to rebuild or repair the same with reasonable
[ILLEGIBLE] in case loss occurs. The insured shall give expedition. It is moreover understood that there can be no
immediate written notice to this company of any loss, abandonment of the property described to the company and
protect the property from further damage, forthwith that the company shall not in any case be liable for more
separate the damaged and undamaged personal property, put than the sum insured, with interest thereon from the time
in the best possible order, furnish a complete inventory when the loss shall become payable, as above provided. The
of the destroyed and damaged property, showing in detail company shall be liable for the payment of the interest to
the quantity, description, actual cash value and amount the
of loss claimed; and the insured shall forthwith render
to this
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</TABLE>
[ILLEGIBLE] Rev. 5-92 Printed in U.S.A. General Rules
(C)St. Paul Fire and Marine Insurance Co. 1992 All Rights Reserved Page 3 of 7
<PAGE>
THE ST. PAUL
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Calculation of premium. We'll figure your premium of these examinations. We'll reduce the amount we pay
due on each anniversary in accordance with our rule, on the medical expense claim by whatever we pay for
rates and rating plans in effect on the anniversary these services. The fact that we make payments to any
date. injured person for these services doesn't mean you've
admitted responsibility for his or her injury.
The following paragraph replaces any Protective
Safeguards section in your policy. Property Protection - Buildings That Are Vacant
Protective safeguards. You must also maintain any If your policy includes Property Protection, the
protective safeguards that are described in the following is added to the "Buildings that are vacant"
Protective Safeguards Endorsement. We [ILLEGIBLE] section of your agreement. But only for loss caused by
credit for these protective safeguards in setting fire or lightning.
our rates. If you fail to maintain these
safeguards, we won't be liable for losses to the If your building where a loss occurred was vacant or
specifically affected areas. However, your unoccupied for a period of:
[ILLEGIBLE] will continue for other areas.
. 50 consecutive days for the residential properties
The following paragraph replaces any "Medical Reports of 3 units or less; or
and Examinations" section in your policy.
Medical reports and examinations. The insured person . 30 consecutive days for all other premises;
must give us written proof of his [ILLEGIBLE] claim
for medical expenses as soon as possible, and must before the loss occurred, we won't pay for the loss.
agree to make the claim under oath if we think it is This applies regardless of whether or not the building
necessary. We must also receive an authorization had been intended for occupancy by either the owner or
allowing us to obtain pertinent medical reports and tenant.
copies of records. The injured person must agree to
be examined by doctors of our choosing as often as The following is added to the If Your Building is
we decide, within reason. We'll pay the cost Mortgaged section. We'll make payments for losses to
mortgage holders in order, according to the financial
interest each has in the covered property.
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[ILLEGIBLE] Rev. 5-92 Printed in U.S.A. General Rules
(C)St. Paul Fire and Marine Insurance Co. 1992 All Rights Reserved Page 7 of 7
<PAGE>
THE ST. PAUL
PROFESSIONAL OFFICE PACKAGE COVERAGE SUMMARY
This summary shows the Limits of Coverage
and the Optional Coverages you have for state
or [ILLEGIBLE] coverages. These coverages
and [ILLEGIBLE] apply to all locations on your policy.
[ILLEGIBLE] your Professional Office Package
[ILLEGIBLE] Coverage Summary for coverages that
[ILLEGIBLE] a specific location.
<TABLE>
<CAPTION>
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Commercial General Liability Protection Limits of Coverage
<S> <C> <C>
Each event limit $1,000,000
Premises damage limit. $1,000,000
Medical expenses limit. $ 5,000
Personal injury and $1,000,000
advertising injury limit
General total limit. $2,000,000
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Loss of Earnings And Extra
Expense Coverage Limit of coverage $ 500,000
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Optional Coverages Premium
Liability Protection For Autos You Don't Own
Limit: $1,000,000
Non-owned Auto Number of Employees: 2 $ 18.00
Hired Auto If Any $ 29.00
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Year Premium for the above
coverages $ 47.00
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Name of Insured Policy Number FK06003565 Effective Date 10/26/94
SEQUENOM INCORPORATED Processing Date 11/10/94 08:57 001
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[ILLEGIBLE] Ed. 5-91 Printed in U.S.A. Coverage Summary Page 1
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<PAGE>
THE ST. PAUL
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<S> <C>
Power supply services means: we'll only pay for such increase during the period of
. [ILLEGIBLE] generating plants; restoration.
. switching stations;
. substations; Strike. We won't cover any increase in loss due to
. transformers; and delay caused by strikers or anyone else at a location
. transmission lines; of rebuilding, repairing or replacing damaged property
supplying electricity, steam, or gas to the described when it interferes with efforts to resume business.
premises.
However, you can recover for an increase in a covered
But coverage isn't included for overhead transmission loss when a strike on another person's premises
lines unless indicated in the Coverage Summary. prevents you from resuming business. For example:
Off premises utility failure limit of coverage. The You've ordered materials to repair your building and
most we'll pay for your earnings and extra expense you can't obtain them because there's a strike at the
loss in any one event is $25,000 unless the manufacturer's plant. This prevents you from resuming
additional optional coverage for off-premises utility business and increases your loss of earnings and extra
failure is indicated in the Coverage Summary. If the expense. We'll cover this increase in your loss.
option is shown, your loss of earnings and extra
expense limit shown on the Coverage Summary includes Expenses for putting out a fire. We won't cover
the $25,000 automatic coverage. This is the most expenses you have in putting out a fire.
we'll pay for all covered loss caused by any one
event. Direct Loss. We won't cover any direct damage to
property.
Loss of earnings and extra expense exclusions. All of
the exclusions under the Exclusions - Losses We Won't Rules for loss of earnings and extra expense loss
Cover section apply to this coverage. The following adjustment. When covered earnings or extra expense
exclusions also apply to Loss Of Earnings And Extra loss occurs, we'll consider the following in
Expense Coverage. determining what we'll pay under this coverage:
Repair. We won't cover the cost of repairing or 1. loss determination
replacing damaged property, including the cost of 2. your responsibility for resuming operations; and
research necessary to replace or restore [ILLEGIBLE] limit of coverage.
account books, card index systems, data processing,
recording or storage media and other records. But we 1. Loss determination.
will pay any expense you incur over the normal cost 1. Earnings. Your amount of earnings loss will be
of such repair or replacement if it's necessary to determined based on:
reduce your total extra expenses due to a covered . net income of your business before the direct
loss. physical loss or damage occurred;
. the probable net income if no loss or damage had
This extra expense for repair or replacement may not occurred;
be more than the amount by which it reduces your . the operating expenses, including payroll, expenses,
total extra expense loss. necessary to resume operations with the same quality of
Cancellation of Contracts. We won't cover any service that existed just before the direct physical
[ILLEGIBLE] in loss that's caused by the suspension, loss or damage; and
lapse or cancellation of any lease, license, contract . other sources of information on your business such
or order. as: your financial records and accounting procedures,
bills, invoices and other vouchers and deeds, liens or
However, if the suspension, lapse or cancellation contracts.
results directly from the interruption of your
business, we'll cover any increase in a [ILLEGIBLE] 2. Extra expense.
that affects your earnings. But
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46156 Rev.9-91 Printed in U.S.A. Insuring Agreement 5 Page 5 of 22
(C)St. Paul Fire and Marine Property Coverage
Insurance Co. 1991
<PAGE>
THE ST. PAUL
PROFESSIONAL OFFICE PACKAGE
PROPERTY PROTECTION
We have designed this agreement to protect you
and your business against a variety of direct
and indirect losses. Of course, there are [ILLEGIBLE]
which are explained later in this agreement.
<TABLE>
<CAPTION>
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Table of Contents Page What This Agreement Covers
--------------------------
<S> <C> <C>
What This Agreement Covers 1 The description of covered property and limit of coverage
[ILLEGIBLE] Coverage 1 are shown in the Coverage Summary. In this section, we
Business Contents Coverage 2 explain what is included under the building and business
Preservation Of Property 2 contents coverage.
Debris Removal Coverage 2 Building Coverage
Loss Of Earnings And Extra Expense
[ILLEGIBLE] 3 We'll cover your financial interest in the insured building
Property That Has Limited Coverage 6 or structure. While at the same location we'll also cover:
Property Covered Only As Defined 6 . garages, storage buildings and other structures that
Property Not Covered At All 7 pertain to your office.
. fixtures, machinery and equipment that are a permanent
Additional Benefits 7 part of the building and are used to provide building
[ILLEGIBLE] Clean Up And Removal 7 services such as elevators and hearing equipment.
Temporary Location Or Property In Transit 7 . yard fixtures such as lamp posts and flag poles.
Fire Department Service Charge 8 . construction materials, supplies and equipment that you
Newly Acquired Property 8 intend to use to alter, repair or expand the covered
Loss Assessments 8 building. During construction we'll cover these materials
[ILLEGIBLE] Property 8 at the insured location or in the open within 1,000 feet of
Personal Belongings 8 it. We'll also cover any temporary structures at the
Accounts Receivable Coverage 9 insured location.
Valuable Records Research Coverage 9 . property which you own and use to service or maintain the
[ILLEGIBLE] And Securities Coverage 10 covered building or structure or its premises such as
Covered Causes Of Loss 11 outdoor furniture, fire extinguishing equipment, floor
11 coverings and appliances for refrigerating, ventilating,
Exclusions - Losses We Won't Cover cooking, dishwashing and laundering.
15 . personal property you own in rooms or apartments you
Optional Coverages 15 furnish as landlord.
Optional Glass Coverage 16
Optional Sign Coverage 16 Building inflation protection. At the end of each 3 months
Optional Scheduled Valuables Coverage 17 this agreement is in effect, we'll increase your insurance
Optional Computer Coverage 18 by the percentage shown in the Coverage Summary. This
Rules For Loss Adjustment 18 percentage applies only to the building limit shown
1. How Your Property Is Valued 20 [ILLEGIBLE] the Coverage Summary and not to the increases
2. Deductible 20 you're given under this building inflation protection. For
3. [ILLEGIBLE] Insurance 20 example:
[ILLEGIBLE] Losses 21
Who will [ILLEGIBLE] For Loss 21
If [ILLEGIBLE] Is Mortgaged
21
Other Rules For This Agreement
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46156 Rev.9-91 Printed in U.S.A. Insuring Agreement 5 Page 1 of 22
(C) St. Paul Fire and Marine Property Coverage
Insurance Co. 1991
<PAGE>
THE ST. PAUL
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<S> <C>
Accounts Receivable Coverage Accounts Receivable Coverage exclusions.
Bookkeeping errors. We won't cover any loss that's
If you have Business Contents Coverage, we'll protect caused by mistakes or omissions in bookkeeping,
your accounts receivable records against risks of accounting or billings.
direct loss or damage.
We automatically cover your accounts receivable up to In addition, the following exclusions under the
$5,000 unless an accounts receivable limit of Exclusions - Losses We Won't Cover section also apply
coverage is shown in the Coverage Summary. If an to this coverage:
accounts receivable [ILLEGIBLE], the $5,000 automatic . Government action;
coverage will be included and is not in addition to . Illegal transportation or trade;
such limit. . Nuclear transportation or trade;
. Nuclear activity;
The [ILLEGIBLE] we'll pay for all covered accounts . War;
[ILLEGIBLE] loss in any one event is $5,000 or the . Electronic recordings;
accounts receivable limit shown in the coverage . Dishonesty;
summary, whichever is [ILLEGIBLE]. . Voluntary surrender;
. Acts or decisions of people;
We cover the following costs that you incur when your . Planning, design, materials, maintenance; and
records of accounts receivable are damaged or loss . Disappearance-inventory loss.
because of a covered cause of loss.
. [ILLEGIBLE] your customers owe you but you can't No other exclusions under the Exclusions - Losses We
collect because of loss or damage to your [ILLEGIBLE]; Won't Cover section apply to this coverage.
. [ILLEGIBLE] only on any loan you have to take out
because you can't collect your receivables, and need Valuable Records Research Coverage
money while waiting for your claim to be paid;
. [ILLEGIBLE] collection costs, over and above your If you have Business Contents Coverage, we'll protect
[ILLEGIBLE] collection costs, that are made necessary your valuable records against risks of direct physical
because of their loss or damage to your [ILLEGIBLE] loss or damage. We'll also protect anyone else's
and valuable records that are in your care. If research is
. [ILLEGIBLE] you reasonably incur in re-establishing necessary to replace the item, we'll pay for the
your records. expense involved. For example, if maps are lost or
damaged we'll pay for the surveying and photographing
We also cover your accounts receivable [ILLEGIBLE] necessary to replace them.
while they're away from an insured [ILLEGIBLE] at a
safe place because of imminent [ILLEGIBLE] of loss. We'll automatically cover your valuable records loss up
And we'll cover those records [ILLEGIBLE] they're to $10,000 unless a valuable records limit of coverage
being moved to and from that safe [ILLEGIBLE]. But is shown in the Coverage Summary. If a valuable
you must tell us within 10 days after you receive the records limit is shown, the $10,000 automatic coverage
records for this coverage to [ILLEGIBLE]. will be included [ILLEGIBLE] not in addition to such
limit.
[ILLEGIBLE] covered. You're covered for losses
[ILLEGIBLE] at the location shown in the Coverage The most we'll pay for all covered valuable records
Summary, at a storage location or while temporarily loss in any one event is $10,000 or the valuable
within the premises of others. Your accounts records limit shown in the Coverage Summary, whichever
receivable records are also covered [ILLEGIBLE] is more.
transit within the United States of America, Puerto
Rico or Canada. Valuable records includes account books, manuscripts,
abstracts, drawings, card index systems and other
printed or written documents. Valuable records also
include maps, films, tapes and other such material.
But it doesn't include electronic data processing
media, data or programs.
</TABLE>
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46156 Rev.9-91 Printed in U.S.A. Insuring Agreement 5 Page 9 of 22
(C)St. Paul Fire and Marine Insurance Co. 1991 Property Coverage
<PAGE>
THE ST. PAUL
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<S> <C>
[ILLEGIBLE] we'll pay for the damage caused by the fire. Planning, design, materials, maintenance. We won't cover
loss caused by faulty, inadequate or defective:
Electronic recordings.
. planning, zoning, development, surveying, siting;
We won't cover loss to electronic recordings caused by . design, specifications, workmanship, repair,
electrical or [ILLEGIBLE] injury, disturbance or erasing. construction, renovation, remodeling, grading, compaction;
This [ILLEGIBLE] doesn't apply to loss caused by lightning. . materials used in repair, construction, renovation or
[ILLEGIBLE] action. We won't cover loss caused [ILLEGIBLE] remodeling; or
indirectly by any of the following. [ILLEGIBLE] is . maintenance.
excluded regardless of any other [ILLEGIBLE] event that
contributes concurrently or [ILLEGIBLE] sequence to the All of the above apply to part or all of any property on or
loss: off the location described in the Coverage Summary.
Mechanical Breakdown. But if a loss not otherwise excluded results, we'll pay for
that resulting loss.
We won't cover loss to [ILLEGIBLE] property caused or made
worse by Pollution. We won't pay for loss that results from
pollution unless the pollution is caused by any of the
. [ILLEGIBLE] caused by centrifugal force; or following causes of loss:
. [ILLEGIBLE] due to faulty work, design, materials or
[ILLEGIBLE]. . fire;
. lightning;
But [ILLEGIBLE] not otherwise excluded results [ILLEGIBLE] . explosion;
of these causes, we'll pay for the loss that results . wind or hail;
directly from the covered cause. . smoke;
. vehicles and aircraft;
Nuclear activity. We won't cover loss caused directly or . civil disturbance and riot;
indirectly by nuclear reaction, nuclear radiation, or . vandalism;
radioactive contamination. Such loss is excluded . sprinkler leakage;
regardless of any other cause or event that contributes . sinkhole collapse;
concurrently or in [ILLEGIBLE] to the loss. But if loss . volcanic action;
or damage by fire results, we'll pay for that resulting . falling objects;
loss or damage, if it would otherwise be covered under . weight of snow, ice or sleet; or
this agreement. . water damage.
Ordinances, regulations or laws. We won't cover loss Pollution means the actual, alleged or threatened discharge,
caused directly or indirectly by the [ILLEGIBLE] of any dispersal, release leakage, seepage, migration or escape of
ordinance, regulation [ILLEGIBLE] the use, construction, pollutants.
repair [ILLEGIBLE] of any property.
This includes removal of debris. Such loss is [ILLEGIBLE] However, we won't pay for the costs associated with the
regardless of any other cause or event that contributes enforcement of any ordinance, regulation or law which
concurrently or in any sequence to the [ILLEGIBLE]. But requires you or anyone else to:
this exclusion won't apply to property destroyed by a
civil authority in order to [ILLEGIBLE] the actual spread . test for, monitor, clean up, remove;
of fire. For example, to establish a fire break. . contain, treat, detoxify or neutralize; or
. in any way respond to, or [ILLEGIBLE] the effects of
pollutants.
Pollutants means any solid, liquid, gaseous or thermal
irritant or contaminant including:
. smoke, vapors, soot, fumes;
. acids, alkalis, chemicals;
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46156 Rev.9-91 Printed in U.S.A. Insuring Agreement 5 Page 13 of 22
(C)St. Paul Fire and Marine Property Coverage
Insurance Co. 1991
<PAGE>
THE ST. PAUL
<TABLE>
<S> <C>
[ILLEGIBLE] from motor vehicles. We won't cover loss computer equipment coverage. This benefits in addition to
through theft or attempted theft from any [ILLEGIBLE] the limit of coverage for computer equipment shown in the
motor vehicle or trailer. Such loss [ILLEGIBLE], however, Coverage Summary.
if theft results from [ILLEGIBLE] into a fully enclosed Data, media and computer programs. We'll cover direct
and locked [ILLEGIBLE] containing the property. The physical loss or damage to data and media you own or are
[ILLEGIBLE] trailer must show visible signs of forced legally responsible for. We'll pay the actual cost of
entry. This limitation does not apply to [ILLEGIBLE] in reproducing lost or damage data, provided you actually
the custody of a hired transportation [ILLEGIBLE]. replace or reproduce it, and repairing or replacing the
damage media with material of the same kind or quality.
Unauthorized instructions. We won't cover loss resulting
from unauthorized instructions from anyone to transfer Data means facts, concepts or instructions converted to a
property to any person or place. form useable in your data processing operations. This
includes computer programs, documentation and source
In addition, the following exclusions under the [ILLEGIBLE] materials.
Losses We Won't Cover section [ILLEGIBLE] apply to this
coverage: Media means materials on which data is recorded, such as
. [ILLEGIBLE] action; magnetic tapes, disk packs, paper tapes and punch cards.
. [ILLEGIBLE] transportation or trade; Computer breakdown coverage. We'll cover the following
. [ILLEGIBLE] activity; kinds of direct physical loss to covered computer equipment,
. [ILLEGIBLE] deterioration-animals; data, media and programs inside your building and to covered
. [ILLEGIBLE] air conditioning equipment inside your building and within
. [ILLEGIBLE] surrender; 1,000 feet of it for:
. [ILLEGIBLE] decisions of people; . mechanical breakdown or machinery breakdown; or
. [ILLEGIBLE] design, materials, maintenance; . short circuit, blow-out, or other electrical damage to
. [ILLEGIBLE] inventory loss; and electrical equipment, apparatus, or devices, including
wiring.
[ILLEGIBLE] exclusions under the Exclusions - [ILLEGIBLE]
We Won't Cover section apply to this [ILLEGIBLE]. But we won't cover loss caused by any change in your
electric power supply, such as interruption, power surge, or
[ILLEGIBLE] Computer Coverage brown out, if the change originates more than 1,000 feet
from the building containing your computer equipment.
[ILLEGIBLE] coverage is indicated in the Coverage Summary,
we'll cover direct physical loss or [ILLEGIBLE] to Air conditioning. We'll cover any direct physical loss to
computer equipment which you own, [ILLEGIBLE] from others your computer equipment caused by corrosion, rust, or
or for which you are [ILLEGIBLE] responsible. changes in humidity or temperature if your air conditioning
Computer Equipment means a network of [ILLEGIBLE] system that exclusively services your computer equipment is
components capable of accepting [ILLEGIBLE] from magnetic damaged by a covered cause of loss.
tapes, disk packs, [ILLEGIBLE] and punch cards, processing
it [ILLEGIBLE] to a plan and producing the desired Processing. We'll cover direct physical loss to your
[ILLEGIBLE]Computer equipment includes disks [ILLEGIBLE] computer equipment, data, media or programs that results
printers, display screens and [ILLEGIBLE] terminals. during processing operations or while the equipment is being
worked on or serviced. The loss or damage must result from
[ILLEGIBLE] media additional benefits. We'll provide this processing, [ILLEGIBLE] service. It
[ILLEGIBLE] benefit in addition to your
</TABLE>
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46156 Rev.9-91 Printed in U.S.A. Insuring Agreement 5 Page 17 of 22
(C)St. Paul Fire and Marine Property Coverage
Insurance Co. 1991
<PAGE>
The St. Paul
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<S> <C>
Adjustment Losses Transfer of mortgage holder's right to us. If we pay
your mortgage holder for loss or damage that we claim
[ILLEGIBLE] there's a covered loss to your property, isn't covered by this agreement the mortgage holder's
we will of course, adjust the loss with you. If rights to recover that amount from you will then belong
[ILLEGIBLE] a covered loss to someone else's to us. But that won't affect your mortgage holder's
property, we'll adjust the loss with you for the rights to recover the remaining amount of the mortgage
owners account. Or, we can choose to settle debt from you.
[ILLEGIBLE] with the owner. If we settle with the
owner, the owner's release will satisfy any claim We also have the right to pay off the mortgage debt.
[ILLEGIBLE] make for the same loss. If we do, we'll take over the mortgage holder's right
to be repaid by you.
[ILLEGIBLE] Pay For Loss
Cancellation notice to mortgage holder. If we cancel
[ILLEGIBLE]Adjust any loss with you. However, if the this agreement, we'll mail or deliver a cancellation
Coverage Summary identifies a person or [ILLEGIBLE] notice to your mortgage holder at least 30 days before
to receive payments for covered [ILLEGIBLE], our coverage ends - 10 days if we cancel for non-payment of
payments will be made to you and [ILLEGIBLE] or premium.
organization named, based on the financial interest
each has in the covered property described in the Nonrenewal notice to mortgage holder.. If we elect
Coverage Summary. [ILLEGIBLE] renew this policy, we'll mail or deliver a
renewal notice to your mortgage holder at least 10 days
If Your Building Is Mortgaged before the expiration date of the policy.
If the Coverage Summary identifies a mortgage holder, Other Rules For This Agreement
this section applies. We'll consider [ILLEGIBLE] to -----------------------------
have the same rights and duties as mortgage holders.
Maintaining your coverage. You should keep your
[ILLEGIBLE] and duties of mortgage holders. We'll building and property in as safe a condition as
make payments for losses to you and any mortgage possible. If you are aware of a condition under your
holder based on the interest each has in the covered control that increases the risk of loss, you should do
property. all you can do to reduce the hazard and notify us of
this condition.
Any mortgage holder's right to receive payment won't
be affected by foreclosure or other similar Insurance for your benefit. This insurance is for your
proceedings. benefit. No third party having temporary possession of
your property, such as transportation company, can
[ILLEGIBLE] your claim because of your acts or benefit directly or indirectly from it.
[ILLEGIBLE] haven't complied with the terms of this
Agreement, the mortgage holder will still have the Protective safeguards. You must maintain any
right to receive loss payments if the mortgage holder: protective safeguards under your control that are
indicated in your application. We gave you credit for
. [ILLEGIBLE] any premium when due at our request these safeguards in setting our rates. If you fail to
[ILLEGIBLE]fail to do so. maintain these safeguards, we won't be liable for
. [ILLEGIBLE] a signed, sworn statement of loss losses to the specifically affected areas. However,
[ILLEGIBLE] fail to do so; and your coverage will continue for other areas.
. [ILLEGIBLE] when aware of any change in
[ILLEGIBLE] occupancy or risk. Buildings that are vacant. A building is vacant when
[ILLEGIBLE] rules and conditions that apply to you it does not contain enough business or personal
[ILLEGIBLE] to the mortgage holder. property to conduct customary [ILLEGIBLE].
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</TABLE>
46156 Rev. 9-91 Printed in U.S.A. Insuring Agreement 5 Page 21 of 22
(C)St. Paul Fire and Marine Property Coverage
Insurance Co. 1991
<PAGE>
The St. Paul
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<S> <C>
Tel [ILLEGIBLE] means transmitting or televising any Additional payments. We'll have the duty to make only
audio or visual material by television for any the payments shown below in connection with any claim
purpose. or suit we defend. These payments are in addition to
the limits of coverage. But our duty to make such
Medical expenses mean the reasonable expenses incurred payments ends when we have used up the limits of
by any person or organization for necessary medical coverage that apply with the payment of judgments,
services received by a person any time during the one settlements or medical expenses.
year following [ILLEGIBLE] of an event which causes
that person [ILLEGIBLE] bodily injury. Our expenses. We'll pay all expenses we incur.
[ILLEGIBLE] services include: Bail bonds. We'll pay up to $250 for the cost of bail
. [ILLEGIBLE] first aid received at the time of an bonds that are required because of accidents or
event; violations of traffic laws. But only if the accidents
. ambulance and emergency care services; or violations result from the use of a vehicle to which
. dental, medical, nursing, surgical, x-ray and other the bodily injury liability coverage under this
health care professional services; agreement applies. We don't have to furnish such bonds.
. [ILLEGIBLE] services;
. artificial limbs and organs; and Bonds to release property. We'll pay the cost of bonds
. funeral services. to release property that's being used to secure a legal
obligation. But only for bond amounts within the limit
[ILLEGIBLE] explain what we mean by your products, of coverage that applies. We don't have to furnish
[ILLEGIBLE] work and your completed work in the such bonds.
product recall exclusion.
Expenses incurred by protected persons. We'll pay all
[ILLEGIBLE] and duty to defend. We'll have the right reasonable expenses that any protected person incurs at
and [ILLEGIBLE] defend any claim or suit for covered our request while helping us investigate or defend a
[ILLEGIBLE] damage made or brought against any claim or suit. But we won't pay more than $250 per day
[ILLEGIBLE] person. We'll do so even if any of for earnings actually lost by the protected person
[ILLEGIBLE] of any such claim or suit are [ILLEGIBLE] because of time taken off from work.
false or fraudulent. But we have no way to perform
other acts or services. And [ILLEGIBLE] duty to Taxed cost. We'll pay all costs taxed against any
defend claims or suits ends when [ILLEGIBLE] used up protected person in the suit.
the limits of coverage that [ILLEGIBLE] with the
payment of judgments, settlements or medical expenses. Pre-judgment interest. We'll pay the pre-judgment
interest that's awarded against the protected person on
[ILLEGIBLE] have the right to investigate any claim or that part of a judgment paid by us. But if we make a
[ILLEGIBLE] to the extent that we believe is proper. settlement offer to pay the available limit of
[ILLEGIBLE] also have the right to settle any claim coverage, we won't pay the pre-judgment interest that
or [ILLEGIBLE] within the available limits of accumulates after the date of our offer.
coverage.
Post-judgment interest. We'll pay all interest that
[ILLEGIBLE] means a demand which seeks damages. accumulates on the full amount of that part of a
judgment for which we make a payment. But only from
[ILLEGIBLE] means a civil proceeding which seeks the date of the judgment to the date we:
[ILLEGIBLE] includes:
[ILLEGIBLE] proceeding for such damages to [ILLEGIBLE] . pay;
protected person must submit or [ILLEGIBLE] with our . offer to pay; or
consent; and [ILLEGIBLE] other alternative dispute . deposit in court;
resolution [ILLEGIBLE] for such damages to which the
[ILLEGIBLE] person submits with our consent.
</TABLE>
<PAGE>
Injury or damage means bodily injury, [ILLEGIBLE]
injury or property [ILLEGIBLE].
- ------------------------------------------------------------------------------
155 ___ 5-91 Printe_________ Insuring Agreement 51 Page 3 of 16
(C)St. Paul Fire and Marine Liability Coverage
Insurance Co. 1991
<PAGE>
The ST. PAUL
<TABLE>
<S> <C>
How the limits of coverage apply if the General total . parking of an auto on any premises you own, rent,
limit is left blank. If the amount of the General lease or borrow, or on ways next to such premises, if
total limit is left blank in the Coverage Summary, the auto isn't owned, rented, leased or borrowed by any
that total limit will be considered to be the same as protected person; or
the Each event limit or $100,000, whichever is more. . operation of specialized equipment.
- What This Agreement Won't Cover Auto means a land motor vehicle, trailer or semitrailer
- ------------------------------------- designed for travel on public streets or roads. It
Advertising, broadcasting, publishing or telecasting includes any permanently attached machinery or
business. We won't cover advertising injury equipment. But we won't consider mobile equipment to
[ILLEGIBLE] results form an offense committed by any be an auto.
[ILLEGIBLE] person in the business of advertising,
broadcasting, publishing or telecasting. Loading or unloading means the handling of property:
. while it's being moved from the place where it's
[ILLEGIBLE]. We won't cover bodily injury, property accepted for transportation;
[ILLEGIBLE] medical expenses that result from the: . while it's being loaded, transported and unloaded;
and
. ownership, maintenance, use or operation; . until it's moved to the place where it's finally
. [ILLEGIBLE] to others; delivered.
. [ILLEGIBLE] aircraft owned, operated, rented or
borrowed by any protected person. However, we won't consider moving property by an
unattached mechanical device to be loading or unloading.
[ILLEGIBLE] We won't apply this exclusion to:
. [ILLEGIBLE] for bodily injury or property damage Unattached mechanical device includes any forklift,
assumed under any covered contract for the ownership, conveyor or other unattached mechanical device, other
maintenance, or use of aircraft; or than a hand truck.
. [ILLEGIBLE] injury, property damage or medical
expenses that result from the operation of Entrustment to others means:
[ILLEGIBLE] equipment. . the permitting of others to use or do something; or
. the giving of something to others for safekeeping.
We explain what we mean by entrustment to others and
loading or unloading in the Auto exclusion. We explain what we mean by mobile equipment and
specialized equipment in the Mobile equipment exclusion.
[ILLEGIBLE] what we mean by specialized equipment or
the Mobile equipment exclusion. Breach of contract. We won't cover advertising injury
that results from the failure of any protected person
[ILLEGIBLE] won't cover bodily injury, property damage to do what is required by a contract or agreement.
or medical expenses that result from [ILLEGIBLE];
But we won't apply this exclusion to the unauthorized
. [ILLEGIBLE] maintenance, use or operation; taking or use of advertising ideas if the contract or
[ILLEGIBLE] loading; or agreement doesn't specifically prohibit such taking or
use.
. [ILLEGIBLE] to others;
If any auto owned, operated, rented, leased or Contract liability. We won't cover the protected
borrowed by any protected person. person's liability for injury or damage assumed under
any contract or agreement.
But we won't apply this exclusion to bodily injury,
property damage or medical expenses that result from However, we won't apply this exclusion to liability for
the: injury or damage the protected
- ------------------------------------------------------------------------------------------------------
</TABLE>
[ILLEGIBLE] 155 Ed. 5-91 Printed in U.S.A. Insuring Agreement 51 Page 7 of 16
St. Paul Fire and Marine Insurance Co. 1991 Liability Coverage
<PAGE>
The ST. PAUL
<TABLE>
<S> <C>
[ILLEGIBLE] refuses to be examined as often as we require, Construction equipment includes any grader, scraper, roller
within reason, by doctors we choose. or power crane, shovel, loader, digger or drill.
[ILLEGIBLE] includes: Specialized equipment means any:
. declared or undeclared war, or invasion; . cherry picker or similar device used to lift workers;
. warlike action by a military force or other agents of . pump, generator or air compressor; or
any government, sovereign or other authority; . other equipment, such as building cleaning, geophysical
. [ILLEGIBLE] insurrection, rebellion, revolution or exploration, lighting, spraying, welding or well-servicing
[ILLEGIBLE] power; or equipment, that has a built-in pump, generator or air
. [ILLEGIBLE] to hinder or defend against such compressor.
[ILLEGIBLE].
Racing mobile equipment means any mobile equipment while
[ILLEGIBLE] explain what we mean by your products and your being prepared for or used in any:
completed work in the Products and completed work . prearranged racing, speed, demolition or stunting contest
exclusion. or activity; or
. practice for such contest or activity.
Mobile equipment. We won't cover bodily injury, property
damage or medical expenses that result from the We explain what we mean by auto, loading or unloading, and
transportation of mobile equipment by an auto owned, entrustment to others in the Auto exclusion.
operated, rented, leased or borrowed by any protected
person. Nuclear energy liability We won't cover bodily injury or
property damage for which any protected person:
[ILLEGIBLE] we cover bodily injury, property damage or . is covered by a nuclear energy liability insurance
medical expenses that result from the use of racing mobile policy; or
equipment. . would have been covered by such policy if that policy's
limits of coverage hadn't been used up.
Mobile equipment means any land vehicle [ILLEGIBLE]:
. designed for use primarily off public streets or roads; Nor will we cover bodily injury or property damage that
. [ILLEGIBLE] for use only on or next to premises you results from the hazardous properties of nuclear material
[ILLEGIBLE] rent or lease; and for which:
. [ILLEGIBLE] on crawler treads; . any person or organization is required by law to maintain
. [ILLEGIBLE] kept primarily for the ready movement of financial protection in accordance with the federal Atomic
permanently attached construction equipment. Energy Act, or any of its amendments; or
. any protected person is entitled, or would have been
Mobile equipment includes any land vehicle not described entitled had this agreement not been issued, to indemnity
above that's kept primarily for purposes other than from the United States government, or any of its agencies,
carrying people or cargo. [ILLEGIBLE] consider which a under any contract or agreement between the government, or
vehicle to be [ILLEGIBLE] if it: any of its agencies, and any person organization.
. [ILLEGIBLE] under its own power;
. [ILLEGIBLE] like an auto during travel on a public We also won't cover medical expenses that result from:
street or road; and . the hazardous properties of nuclear material; and
. [ILLEGIBLE] permanently attached specialized equipment; . the operation of a nuclear facility by any person or
or organization.
[ILLEGIBLE] permanently attached equipment designed
[ILLEGIBLE] removal, street cleaning, or street or road
maintenance - but not construction or [ILLEGIBLE].
</TABLE>
[ILLEGIBLE] 5-91 Printed in U.S.A. Insuring Agreement 51 Page 11 of 16
St. Paul Fire and Marine Liability Coverage
Insurance Co. 1991
<PAGE>
The ST. PAUL
<TABLE>
<S> <C>
[ILLEGIBLE] means: Workers' compensation. We won't cover any obligation that
. [ILLEGIBLE] work that you're performing or others are the protected person has under a workers' compensation
performing for you; or disability benefits or unemployment compensation law, or any
. [ILLEGIBLE] that you're providing or others are similar law.
providing for you. Wrong price description. We won't cover advertising injury
that results from making known to any person or organization
[ILLEGIBLE] includes: the wrong description of the price of your products, work or
. [ILLEGIBLE] equipment, materials or parts provided with completed work.
[ILLEGIBLE] your work; We explain what we mean by your products, your work and your
. [ILLEGIBLE] warranty provided with or for your work; completed work in the Products and completed work exclusion.
. [ILLEGIBLE] made, or which should have [ILLEGIBLE] about
the durability, fitness, [ILLEGIBLE] maintenance, Other Insurance
operation, performance, [ILLEGIBLE] safety or use of your ---------------
work; and This Agreement is primary insurance. If there is any other
. [ILLEGIBLE] instructions or directions provided, or valid and collectible insurance for injury or damage covered
which should have been provided with or for your work. by this agreement, the following applies:
We explain what we mean by loading or unloading in the Auto Other primary insurance. When there is other primary
exclusion. insurance, we'll share any damages with that insurance using
one of the methods of sharing described in the methods of
[ILLEGIBLE] what we mean by impaired property sharing section.
[ILLEGIBLE] impaired property exclusion.
However, we'll apply this agreement as excess insurance over
[ILLEGIBLE] We won't cover bodily injury, property damage any part of any other insurance which provides:
or medical expenses that result from the: . property or similar coverage for property damage to your
. ownership, maintenance, use or operation; work;
. [ILLEGIBLE] or unloading; or . coverage for property damage to premises you rent, lease
. [ILLEGIBLE] to others; or borrow from others; or
. [ILLEGIBLE] watercraft owned, operated, rented, . coverage for bodily injury or property damage that
[ILLEGIBLE] or borrowed by any protected person. results from the maintenance, use, operation or loading or
unloading of any auto, aircraft or watercraft that's not
[ILLEGIBLE] won't apply this exclusion to liability for specifically excluded by the Auto, Aircraft or Watercraft
bodily injury or property damaged assumed [ILLEGIBLE] any exclusions.
covered contract for the ownership, maintenance or use of
watercraft. We explain how we'll apply this agreement as excess
insurance in the Excess insurance section.
[ILLEGIBLE] we apply this exclusion to bodily [ILLEGIBLE]
property damage or medical expenses [ILLEGIBLE] from: Excess insurance. When this agreement is excess insurance,
we'll have no duty to defend any claim or suit. However,
[ILLEGIBLE] aircraft you don't own that is less than 50 we'll defend a claim or suit for covered injury or damage if
feet long and isn't being used to carry persons the other insurers won't. In return we'll require that
[ILLEGIBLE] for a charge; or operation of specialized
equipment.
We explain what we mean by entrustment to [ILLEGIBLE] and
loading or unloading in the Auto exclusion.
We explain what we mean by specialized equipment in the
Mobile equipment exclusion.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
[ILLEGIBLE]. 5-91 Printed in U.S.A. Insuring Agreement 51 Page 15 of 16
St. Paul Fire and Marine Liability Coverage
Insurance Co. 1991
<PAGE>
The ST. PAUL
AUTO CONTRACT LIABILITY ENDORSEMENT - MASSACHUSETTS
This endorsement changes your Commercial
[ILLEGIBLE] Protection.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
How Coverage Is Changed Other Terms
<S> <C>
The following is added to the Auto exclusion under the All other terms of your policy remain the same.
Exclusions - What This Agreement Doesn't Cover
section. This change broadens coverage.
We won't apply this exclusion to bodily injury,
property damage or medical expenses that [ILLEGIBLE]
from ability for bodily injury or property damage
assumed under any covered contract for the ownership,
maintenance or use of any auto.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
[ILLEGIBLE]. 1-89 Printed in U.S.A. Endorsement
St. Paul Fire and Marine Insurance Co. 1989 Page __ of __
<PAGE>
The ST. PAUL
<TABLE>
<S> <C>
We [ILLEGIBLE] designed this agreement to protect against This agreement is excess insurance and covers claims after
two kinds of liability claims: any other insurance that applies to the claim has been used
1. Claims resulting from bodily injury to others. up. Of course there are some limitations which are
2. Claims resulting from damage to property of others. explained later in this agreement.
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Table of Contents Page What This Agreement Covers
--------------------------
What This Agreement Covers 1 Bodily injury and property damage liability. We'll pay
[ILLEGIBLE] injury and property damage liability. 1 amounts any protected person is legally required to pay as
[ILLEGIBLE] on cost or expense. 1 damages for covered bodily injury or property damage that:
[ILLEGIBLE] duty to defend. 2 . results from the maintenance, use, loading or unloading
Additional payments. 3 of a covered auto; and
Right to appeal. 3 . is caused by an accident that happens while this
Out of state coverage. 3 agreement is in effect.
What Autos Are Covered 3 Pollution cost or expense. We'll pay amounts any protected
Hired autos 4 person is legally required to pay as covered pollution cost
Nonowned autos 4 or expense only if it results from an accident which also
causes bodily injury or property damage covered by this
When This Agreement Covers 4 agreement.
Where This Agreement Covers 4 Protected person means any person or organization who
qualifies as a protected person under the Who Is Protected
Who Is Protected Under This Agreement 4 Under This Agreement section.
Individual. 4
Partnership or joint venture. 4 Bodily injury means any physical harm, including sickness or
Corporation or other organization. 4 disease, to the physical health of other persons. It
Any permitted user. 4 includes any of the following that results at any time from
Anyone legally responsible for the actions of a such physical harm, sickness or disease:
protected person. 4 . Mental anguish, injury or illness.
[ILLEGIBLE] of protected persons. 5 . Emotional distress.
. Care, loss of services or death.
Limit Of Coverage 5
Property damage means
Exclusions - What This Agreement Won't Cover 5 . physical damage to tangible property of others, including
Contract liability. loss of use of such property; or
[ILLEGIBLE] property. 5 . loss of use of tangible property of others that isn't
[ILLEGIBLE] liability 6 physically damaged.
Injury to a fellow employee. 6
Intentional or expected bodily injury or property 6 We'll consider all loss of use of tangible property to
damage. 6 happen at the time of the accident which caused it.
[ILLEGIBLE] energy liability. 6
[ILLEGIBLE]. 7 Accident includes continuous or repeated exposure to the
[ILLEGIBLE] equipment. 8 same conditions.
[ILLEGIBLE] compensation. 8
Other Insurance
Insurance provided by another insurer. Insurance 8
provided under another policy with us or any of our 9
member insurance companies.
9
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
44471 Ed. 4-91Printed in U.S.A. Insuring Agreement 63
(C)St. Paul Fire and Marine
Insurance Co. 1991 All Rights Reserved Page 1 of 9
<PAGE>
The St Paul
<TABLE>
<S> <C>
The person causes an accident which results in covered to substantially the same conditions to be the result of one
bodily injury and property damage. We'll consider you, accident.
that employee, and the other company that employs the
other person to be protected persons. Exclusions - What This Agreement Won't Cover
--------------------------------------------
Be we won't consider the owner or anyone else from whom you
rent, lease, hire or borrow a [ILLEGIBLE] auto to be a Contract liability. We won't cover the protected person's
protected person unless [ILLEGIBLE] connected to a covered liability for bodily injury or property damage assumed under
auto [ILLEGIBLE]. any contract or agreement.
[ILLEGIBLE] of protected persons. We'll apply this However, we won't apply this exclusion to liability for
agreement: bodily injury or property damage the protected person would
have without the contract or agreement. Nor will we apply
[ILLEGIBLE] each protected person named in the Introduction this exclusion to the protected person's liability for
as if that protected person was the only [ILLEGIBLE] named bodily injury or property damage assumed under a covered
there; and contract made before the bodily injury or property damage
happens.
[ILLEGIBLE] to each other protected person.
Covered contract means any:
However, the limit of coverage shown in the Coverage . lease of premises;
Summary is shared by all protected [ILLEGIBLE]. We explain . sidetrack agreement;
how in the Limits Of [ILLEGIBLE] Section. Also, any right . easement or license agreement;
or duty specifically assigned to the first Name Insured . obligation to indemnify a municipality if the obligation
remains unchanged. We explain those rights [ILLEGIBLE] is required by ordinance and isn't connected with work for
duties in the General Rules, which is a part of your the municipality;
policy., . contract or agreement under which you assume the tort
liability of a municipality to pay damages for covered
Limit of Coverage bodily injury or property damage that is sustained by others
- ----------------- and results from work for the municipality ;
. other contract or agreement under which you assume the
The Coverage Summary shows the limit of coverage that tort liability of another to pay damages for covered bodily
applies to this agreement. injury or property damage that's sustained by others; or
. contract or agreement which you or any of your employees
[ILLEGIBLE] each accident limit is the most we'll pay for enter into for the rental or lease of any auto.
[ILLEGIBLE] total of all covered bodily injury, property
damage and pollution cost or expense that results from any Tort liability means a liability that would be imposed by
one accident. This limit applies regardless of the law without any contract or agreement.
premiums paid or [ILLEGIBLE] of:
But we won't consider the following parts of any contract or
. protected persons; agreement to be a covered contract:
. premiums paid; Auto with driver. That part which has to do with the
rental, lease or loan of an auto to you or any of your
. claims made or suits brought; employees if the auto is rented, leased or loaned with a
driver.
. covered autos;
[ILLEGIBLE] involved in the accident; or persons or
organizations making claims or bringing suits.
[ILLEGIBLE] consider all covered bodily injury, property
[ILLEGIBLE] and pollution cost or expense that
[ILLEGIBLE] from continuous or repeated exposure
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
44471 Ed. 4-91 Printed in U.S.A. Insuring Agreement 63
(C)St. Paul Fire and Marine
Insurance Co. 1991 All Rights Reserved Page 5 of 9
<PAGE>
THE ST PAUL
<TABLE>
<S> <C>
Other Insurance excess basis as this agreement, we'll pay only our share of
- ---------------
This agreement provides excess insurance for covered autos your accident. We'll pay the same proportion of such
you don't own. damages or pollution cost or expense that our limit is to
the total of all [ILLEGIBLE] policy limits. But we won't
Excess insurance applies after other collectible insurance pay more than our limit.
has been used up.
This agreement is primary insurance for liability for Insurance provided under another policy with us [ILLEGIBLE]
covered bodily injury or property damage assumed under a of our member insurance companies.
coverage contract. [ILLEGIBLE] this agreement and other insurance contained in
a policy from us or another member insurance company of The
We explain what we mean by covered contract in the Contract St. Paul Group both apply to the same accident, the
liability exclusion. [ILLEGIBLE] we will pay is the highest limit of coverage
that applies under any one policy. When [ILLEGIBLE]
Insurance provided by another insurer. When insurance insurance written by us or the member insurance company is
provided by another insurer applies to covered bodily intended to be excess of this agreement, this section does
injury or property damage that results from an accident on not apply.
the same primary or
</TABLE>
44471 Ed. 4-91 Printed in U.S.A. Insuring Agreement 63
(C)St. Paul Fire and Marine Insurance Co. 1991 All Rights Reserved Page 9 of 9
<PAGE>
COVER PAGE
WAVERLY INSURANCE AGENCY, INC.
COMPLETE INSURANCE SERVICE
493 Trapelo Road . Belmont, MA 02178
(619) 484-5216
<PAGE>
Eastern Casualty Insurance Company
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY
INFORMATION PAGE
<TABLE>
<S> <C>
NCCI Carrier 16942 Risk I.D. # ____________
Policy No. WC P0007199 Federal I.D. # 77-____________
1. The Insured/Mailing address: [_] Individual [_] Partnership
SEQUENOM INC. [_] Corporation or ___________
101 ARCH STREET SUITE 1950 ______________________________
BOSTON, MA 021110
Other workplaces not shown above:
2. Policy Period: The policy period is from 10/27/94 to 10/27/95 12:01 A.M. Standard Time,
at the insured's mailing address.
3. Coverage:
A. Worker's Compensation Insurance: Part One of the policy applies to the
Workers Compensation Law of the states listed here: Massachusetts
B. Employers Liability Insurance: Part Two of the policy applies to work in each state listed in item 3.A.
The limits of our liability under Part Two are: Bodily Injury by Accident 100,000 each accident
Bodily Injury by Disease 500,000 policy limit
Bodily Injury by Disease 100,000 each employee
C. Other States Insurance: Part Three of the policy applies to the states, if any, listed here: See
Endorsement WC 20 03___, WC242, WC332, WC350, WC367, WC441
D. This policy includes these endorsements and schedules:
See Information Page III for other applicable endorsements.
Total Estimated Annual Premium $ 1,489
Pro Rata Premium (If Applicable) $
ANNUAL
Countersigned WAVERLY INSURANCE AGENCY
493 TRAPELO ROAD
BELMONT, MA 02178
Date 01-10-95 By /s/
----------------------------------
ARC: 104.33 Authorized Signature
</TABLE>
THIS INFORMATION PAGE WITH THE WORKERS COMPENSATION AND EMPLOYERS LIABILITY
INSURANCE POLICY AND ENDORSEMENTS, IF ANY, ISSUED TO FORM A PART
THEREOF COMPLETES THE ABOVE NUMBERED POLICY
<PAGE>
Eastern Casualty Insurance Company
- --------------------------------------------------------------------------------
WC174
(Ed. 4-84)
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY
EXTENSION OF INFORMATION PAGE
Policy Number: WCP0007199 SEQUENOM
4. Premium: The premium for this policy will be determined by our Manuals of
Rules, Classification, Rates and Rating Plans. All information
required below is subject to verification and change by audit.
<TABLE>
<CAPTION>
Classifications Code Premium Basis Rate Per Estimated Annual
No. Total Estimated $100 of Premiums
Annual Remuneration Remuneration
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ANALYTICAL CHEMISTS 4511 98,000 1.28 1,254
CLERICAL OFFICE EMPLOYEES 8810 10,400 .33 34
COVERAGE B-EMPLOYERS LIABILITY 9345 0
STANDARD PREMIUM SUBJECT TO DIA [ILLEGIBLE]
EXPENSE CONSTANT 0900 160
DIA ASSESSMENT 3.2% OF STANDARD PREMIUM 41
- ------------------------------------------------------------------------------------------------------------------------------
Minimum Premium $ 135 Total Estimated Annual Premium: $ 1,439
Pro-Rata Premium (if applicable): $
ANNUAL
</TABLE>
INSURED COPY
<PAGE>
Eastern Casualty Insurance Company
INFORMATION PAGE III POLICY NO. WCP0007199
----------
These endorsements apply only if so indicated by an "X" in the box below.
[_] WC100 Defense Base Act Endorsement
[_] WC103 Federal Employers' Liability Act Endorsement
[_] WC111 Voluntary Compensation Maritime Coverage Endorsement
[_] WC113 Designated Workplaces Exclusion Endorsement
[_] WC124 Waiver of Our Right to Recover from Others Endorsement
[_] WC127 Anniversary Rating Date Endorsement
[_] WC128 Experience Rating Modification Factor Endorsement
[_] WC129 Pending Rate Change Endorsement
[_] WC131 Premium Discount Endorsement
[_] WC132 Rate Change Endorsement
[_] WC133 Retrospective Premium Endorsement (I, II, III, IV-One Year)
[_] WC137 Retrospective Premium Endorsement
Rating Option V -- One Year Plan
[_] WC236 Domestic and Agricultural Workers Exclusion Endorsement
[_] WC269 Alternate Employer Endorsement
[_] WC331 Aircraft Premium Endorsement
[_] WC418 Massachusetts Qualified Loss Management Program Endorsement
[_] WC419 Longshore & Harborworkers Act Endorsement
[_] WC421 Outer Continental Shelf Lands Act Coverage Endorsement
[_] WC422 Maritime Coverage Endorsement
[_] WC443 MA Exclusion of Coverage for Leased Employers Endorsement
[_] WC444a Massachusetts Employee Leasing Endorsement
[_] WC474 Massachusetts Benefits Deductible Endorsement
INSURED
<PAGE>
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 20 03 06
WC 20 03 06
MASSACHUSETTS LIMITED OTHER STATES INSURANCE
This endorsement changes the policy to which it is attached effective on the
inception date of the policy unless a different date is indicated below.
(The following "attaching clause" need to be completed only when this
endorsement is issued subsequent to preparation of the policy)
This endorsement, effective on 10/27/94 at 12:01 A.M. standard time, forms
(Date)
a part of
Policy No. WCP007199 of the Eastern Casualty Insurance Company
(Name of Insurance Company)
issued to SEQUENOM INC.
Premium $ 1,448.00 ____________________________________
Authorized Representative
"PART THREE - OTHER STATES INSURANCE" is amended to read:
A. How This Insurance Applies:
1. We will pay promptly, when due, the benefits required of you by the
workers' compensation law of any state other than Massachusetts, but only
if the claim for such benefits involves work performed by a Massachusetts
employee.
2. If we are not permitted to pay the benefits directly to persons entitled
to them under circumstances described in item 1 above, we will reimburse
you for the benefits required to be paid.
IMPORTANT NOTICE
If you hire any employees outside Massachusetts or begin operations in any state
other than Massachusetts, you must obtain insurance coverage in that state and
so whatever else may be required under that state's law, as this endorsement
does not satisfy the requirements of that state's workers' compensation law.
Copyright 1994
National Council on Compensation Insurance
[LOGO]
<PAGE>
EXHIBIT 6.6
-----------
Form of Stock Restriction Agreement
-----------------------------------
<PAGE>
STOCK RESTRICTION AGREEMENT
This Agreement made as of December 22, 1995 by and among Sequenom, Inc., a
Delaware corporation (the "Corporation"); Hubert Koster ("Koster"), Nola E.
Masterson ("Masterson") and Robert E. Patterson ("Patterson," and together with
Koster and Masterson, the "Founders"); and the purchasers of shares of the
Corporation's Series B Convertible Preferred Stock, par value $.001 per share
("Series B Preferred Stock"), pursuant to the Series B Convertible Preferred
Stock Purchase Agreement dated as of the date hereof (the "Purchase Agreement"),
including any Additional Investors as defined in the Purchase Agreement (such
purchasers being hereinafter referred to as the "Investors").
W I T N E S S E T H T H A T
WHEREAS, the Investors wish to purchase from the Corporation certain shares
of Series B Preferred Stock;
WHEREAS, the Investors' purchase of the Series B Preferred Stock would
materially benefit the Founders as holders of certain shares of the
Corporation's capital stock and rights to acquire such capital stock;
WHEREAS, it is a condition to the obligations of the Investors under the
Purchase Agreement that this Agreement be executed by the Founders, and the
Founders are willing to execute this Agreement and to be bound by the provisions
hereof;
NOW, THEREFORE, in consideration of the foregoing, the agreements set forth
below, and the parties', desire to provide for continuity of ownership of the
Corporation to further the interests of the Corporation and its present and
future stockholders, the parties hereby agree with each other as follows:
1. Certain Defined Terms. As used in this Agreement, the following terms
---------------------
shall have the following respective meanings:
(a) "Stock" shall mean and include all shares of the Corporation's
Common Stock, par value $.001 per share ("Common Stock"), any evidences of
indebtedness, shares of capital stock or other securities directly or indirectly
convertible into or exchangeable for Common Stock ("Convertible Securities"),
including without limitation the Series A Convertible Preferred Stock, par value
$.001 per share, of the Corporation, and any rights, options or warrants to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities ("Options"), and all other securities of the Corporation which may be
issued in exchange for or in respect of shares of Common Stock, Convertible
Securities or Options (whether by way of stock split, stock dividend,
combination of shares, reclassification, recapitalization, reorganization, or
any other means).
(b) "Shares" shall mean and include all shares of Stock now owned or
hereafter acquired by any Founder or any investor.
<PAGE>
2. Prohibited Transfers. None of the Founders shall sell or otherwise
--------------------
transfer, by gift or otherwise, all or any part of his Shares except in
compliance with the terms of this Agreement.
3. Offer of Sale; Notice of Proposed Sale or Transfer. If any Founder
--------------------------------------------------
desires to sell or otherwise transfer any of his Shares, or of any interest
therein, whether voluntarily or by operation of law, in any transaction other
than pursuant to clauses (iii) or (iv) of Section 7(a) of this Agreement, such
Founder (the "Selling Founder") shall first deliver written notice of his desire
to do so (the "Notice") to the Corporation and each of the Investors. The
Notice must specify: (i) the name and address of the party to which the Selling
Founder proposes to sell or otherwise transfer the Shares or an interest in the
Shares (the "Proposed Transferee"), (ii) the number of Shares the Selling
Founder proposes to sell or otherwise transfer (the "Offered Shares"), (iii) the
consideration per Share to be delivered to the Selling Founder for the proposed
sale or transfer, and (iv) all other material terms and conditions of the
proposed transaction, which must be bona fide.
4. Corporation's Option to Purchase.
--------------------------------
(a) Except as set forth in Section 7(a), the Corporation shall have
the first option to purchase all or any part of the Offered Shares for the
consideration per Share and on the terms and conditions specified in the Notice.
The Corporation must exercise such option, no later than fifteen (15) business
days after such Notice is deemed to have been delivered to it, by written notice
to the Selling Founder.
(b) In the event the Corporation does not exercise its option within
such fifteen-business-day period with respect to all of the offered Shares, the
Chief Financial officer of the corporation shall, by the last day of such
period, give written notice of that fact to the Investors (the "Investor
Notice"). The Investor Notice shall specify the number of Offered Shares the
Corporation has elected not to purchase (the "Remaining Shares").
(c) In the event the Corporation duly exercises its option to purchase
all or a portion of the Offered Shares, the closing of such purchase shall take
place at the offices of the Corporation on the later of (i) the date five
business days after the expiration of such fifteen-business-day period or (ii)
the date that the Investors consummate their purchase of Offered shares under
Section 5(c) hereof.
(d) To the extent that the consideration proposed to be paid by the
Proposed Transferee for the Offered Shares consists of property other than cash
or a promissory note, the consideration required to be paid by the Corporation
and/or the Investors exercising their options under Sections 4 and 5 hereof,
respectively, may consist of cash equal to the value of such property, as
determined in good faith by agreement of the selling Founder and the Corporation
and/or the Investors acquiring such Offered Shares.
-2-
<PAGE>
5. Investors' Option to Purchase and Right to Participate in Sales.
---------------------------------------------------------------
(a) Except as set forth in Section 7(a), each Investor shall have an
option, exercisable for a period of fifteen (15) business days from the date of
delivery of the Investor Notice, to purchase, on a pro rata basis, its
Proportionate Percentage (as defined below) of the Remaining Shares, for the
consideration per Share and on the terms and conditions set forth in the Notice.
Such option shall be exercised by delivery of written notice to the Chief
Financial Officer of the Corporation. Alternatively, each Investor may, within
the same fifteen-business-day period, notify the Chief Financial Officer of the
Corporation of its desire to participate in the sale of Shares and to sell, on
the terms as set forth in the Notice including at the same price per share on a
common equivalent basis, up to an equivalent proportion of the Stock owned by
such Investor as the proposed sale of the Remaining Shares represents with
respect to the Shares then owned by the Selling Founder.
(b) In the event options to purchase have been exercised by the
Investors with respect to some but not all of the Remaining Shares, the Chief
Financial Officer of the Corporation shall promptly give written notice of that
fact to those Investors who have exercised their options within such period (the
"Second Investor Notice"). The Second Investor Notice shall specify the number
of Remaining Shares the Investors have not elected to purchase. The Investors
who have exercised their options within the fifteen-business-day period
specified in Section 5(a) shall have an additional option, for a period of ten
(10) business days after delivery of the Second Investor Notice, to purchase all
or any part of the balance of such Remaining Shares on the terms and conditions
set forth in the Notice, which option shall be exercised by the delivery of
written notice to the Chief Financial Officer of the Corporation. In the event
that there are two or more such Investors that choose to exercise the last-
mentioned option for a total number of Remaining Shares in excess of the number
available, the Remaining Shares available for each such Investor's option shall
be allocated to such Investors pro rata based on the amount of Stock owned by
the Investors so electing on a common equivalent basis.
(c) Promptly after the expiration of the last period for exercise of
an Investor's purchase option, the Chief Financial Officer of the Corporation
shall give written notice to the Selling Founder and the purchasing Investors,
specifying the number of Remaining Shares to be purchased by each purchasing
Investor. The closing of the purchase of the Remaining Shares shall take place
at the offices of the Corporation no later than five (5) business days after
delivery of such notice to the Selling Founder and the purchasing Investors.
(d) As used in this Section 5, the term "Proportionate Percentage"
shall mean with respect to each Investor a fraction, the numerator of which
shall be the amount of Stock owned by such Investor, and the denominator of
which shall be the total amount of Stock owned by all Investors, in each case on
a common equivalent basis.
6. Co-Sale.
-------
(a) If the Corporation and the Investors do not exercise their options
to purchase all of the Offered Shares within the periods described in this
Agreement (the "Option Period"), then each Investor which has, pursuant to
Section 5(a), expressed a desire to sell shares
-3-
<PAGE>
in the transaction (a "Participating Investor") shall be entitled to do so
pursuant to this Section. The Chief Financial Officer of the Corporation shall
promptly, on expiration of the Option Period, notify the Selling Founder of the
aggregate amount of Stock the Participating Investors wish to sell. The Selling
Founder shall use his best efforts to interest the Proposed Transferee in
purchasing, in addition to the Remaining Shares not subscribed for by the
Investors, the Stock the Participating Investors wish to sell. If the Proposed
Transferee does not wish to purchase all of the Stock made available by the
Selling Founder and the Participating Investors, then each Participating
Investor and the Selling Founder shall be entitled to sell, on the terms and
conditions set forth in the Notice and on the same price per share on a common
equivalent basis, a portion of the Stock being sold to the Proposed Transferee,
in the same proportion as such Selling Founder or Participating Investor's
ownership of Stock on a common equivalent basis bears to the aggregate amount of
Stock owned by the Selling Founder and the Participating Investors on a common
equivalent basis. The transaction contemplated by the Notice shall be
consummated not later than 60 days after the expiration of the Option Period.
(b) If the Participating Investors do not elect to sell the full
amount of Stock which they are entitled to sell pursuant to Section 6(a), the
Selling Founder shall be entitled to sell to the Proposed Transferee, according
to the terms set forth in the Notice, that number of his Shares which equals the
difference between the amount of Stock desired to be purchased by the Proposed
Transferee and the number of Shares the Participating Investors wish to sell, in
each case on a common equivalent basis.
(c) If the Selling Founder wishes to sell or otherwise transfer any of
his Shares at a price per Share which differs from that set forth in the Notice,
upon terms different from those previously offered to the Corporation and the
Investors, or more than 60 days after the expiration of the Option Period, then,
as a condition precedent to such transaction, such Shares must first be offered
to the Corporation and the Investors on the same terms and conditions as given
the Proposed Transferee, and the Investors must first be offered the opportunity
to participate in such transaction, in accordance with the procedures and time
periods set forth above.
7. Permitted Transfers.
-------------------
(a) Subject to the provisions of Section 7(b) and Section 8, the
Corporation's and the Investors' right of first refusal and the Investors' right
of co-sale described in Sections 4 through 6 shall not apply to: (i) any
transfer of Shares by a Founder by gift or bequest or through inheritance to, or
for the benefit of, any member or members of such Founder's immediate family;
(ii) any transfer of Shares by an Founder to a trust (A) in respect of which
such Founder serves as trustee, provided that the trust instrument governing
such trust shall provide that such Founder, as trustee, shall retain sole and
exclusive control over the voting and disposition of such Shares until the
termination of this Agreement or (B) for the benefit solely of any member or
members of such Founder's immediate family; (iii) any sale or transfer of Shares
to the Corporation; (iv) any underwritten public offering of Common Stock
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"); and (v) with respect to sales or other
transfers of up to an aggregate of the following number of shares (as adjusted
to reflect any stock split, stock dividend, combination of shares or other
-4-
<PAGE>
similar transaction), but subject in any case to the restrictions set forth in
Section 8: (A) in the case of each of Koster and Masterson, 130,000 Shares; and
(B) in the case of Patterson, 50,000 Shares;
(b) In the event of any sale or transfer described in clauses (i) or
(ii) of Section 7(a), the transferee of the Shares shall hold the Shares so
acquired subject to all the restrictions imposed by this Agreement and shall be
deemed a Founder for all purposes hereof, and as a condition to such transfer,
any such transferee shall, at the request of the Corporation or any Investor,
execute and deliver a written instrument agreeing to be bound by the provisions
of this Agreement.
8. Consent of the Corporation to Transfer. As a condition to selling or
--------------------------------------
otherwise transferring any Shares proposed to be sold or transferred by the
Selling Founder and any Participating Investor to any Proposed Transferee, other
than a sale or transfer described in clause (iii) or (iv) of Section 7(a), the
Selling Founder shall have obtained the written consent to such transfer by the
Board of Directors of the Corporation by majority vote at a meeting or by
unanimous consent in lieu of a meeting. Such consent shall not be unreasonably
withheld, and shall be based on the Board of Directors' determination, after
such inquiry as it deems appropriate, but within thirty days of the date of the
Selling Founder's notice to the Corporation under Section 3, that the Proposed
Transferee is not a competitor of the Corporation and is not otherwise an
inappropriate investor in the Corporation. In the event the Selling Founder
disagrees with such determination, and the Board of Directors and the Selling
Founder are unable to resolve the disagreement, an independent third party
selected and agreed upon by the Board of Directors and the Selling Founder shall
arbitrate and finally resolve the disagreement.
9. Lock-up. Each Founder agrees that upon the request of the Corporation
-------
or the underwriters managing an underwritten offering of the Corporation's
securities, such Founder will not sell, make any short sale or loan of, grant
any option for the purchase of, or otherwise dispose of any Shares held by him
without the prior written consent of the Corporation or such underwriters, as
the case may be, for a period of up to 180 days from effective date of the
applicable registration statement.
10. Sale or Transfer in Violation of this Agreement. If any sale or other
-----------------------------------------------
transfer of Shares is made or attempted in violation of any provision of this
Agreement, or if any Shares are not offered to the Corporation or the Investors
as required hereby, the Corporation and the Investors, as the case may be, shall
have the right to purchase such Shares from the owner thereof or his transferee
at any time before or after the transfer, as herein provided. In addition to
any other legal or equitable remedies which it or they may have, the Corporation
and the Investors may enforce their respective rights hereunder by actions for
specific performance (to the extent permitted by law). The Corporation shall
not be required (i) to transfer on its books any Shares or other Stock which has
been sold or transferred in violation of any provision of this Agreement or (ii)
to treat as the owner of such Shares or Stock, or to pay dividends to, any
transferee to whom any such Shares or Stock have been so sold or transferred.
If a Founder becomes obligated to sell any Shares to the Corporation under this
Agreement and fails to deliver such Shares in accordance with the terms of this
Agreement, the Corporation may, at its option, in addition to all other remedied
it may have, send to such Founder the purchase price for such
-5-
<PAGE>
Shares as is herein specified and cancel on its books the certificate or
certificates representing the Shares to be sold. Thereafter, all of the
Founder's rights in and to such Shares shall terminate.
11. Disposition of Shares. Any Shares that the Corporation elects to
---------------------
purchase hereunder may be disposed of by it in such manner as it deems
appropriate with or without restrictions on the transfer thereof, and the
Corporation may require their transfer to a nominee or designee as part of any
purchase of the Shares from the Founders.
12. Restrictive Legend. All certificates representing Shares held by the
------------------
Founders which are subject to this Agreement shall have affixed thereto a legend
in substantially the following form, in addition to any other legends that may
be required by the Corporation in connection with compliance with federal or
state securities laws or otherwise:
"The shares of stock represented by this certificate are
subject to restrictions on transfer and/or an option to
purchase set forth in a Stock Restriction Agreement between
the Corporation and the registered owner of the shares
represented by this certificate (or his predecessor in
interest). The Corporation will furnish a copy of such
agreement to the holder of this certificate upon written
request without charge."
The Founders shall cause such legend to be affixed to any of such certificates
not so legended.
13. Term. This Agreement shall terminate upon the closing of a firm
----
commitment underwritten public offering of Common Stock pursuant to an effective
registration statement under the securities Act in which (i) the public offering
price per share is not less than $4.50 (appropriately adjusted to take account
of any stock split, stock dividend, combination of shares or similar event) and
(ii) the aggregate gross proceeds to the Corporation are not less than
$10,000,000.
14. Specific Enforcement. Each Founder expressly agrees that a violation
--------------------
of this Agreement by such Founder could not be adequately compensated by money
damages alone and that the Investors and the Corporation will be irreparably
damaged if this Agreement is not specifically enforced. Upon a breach or
threatened breach of the terms, covenants and/or conditions of this Agreement by
any Founder, the Investors and the Corporation shall, in addition to all other
remedies, each be entitled to a temporary or permanent injunction, and/or a
decree for specific performance, in accordance with the provisions hereof.
15. Other Agreements. The restrictions on the Founders' right to dispose
----------------
of their Shares pursuant to this Agreement are in addition to and to be
construed consistently with the Founders' rights and obligations (including
restrictions on the Founders' right to dispose of shares of the Corporation's
capital stock) contained in any other agreement relating to restrictions on the
transferability of such Shares that the Founders execute before, on, or after
the date hereof; provided, that this Agreement shall supersede and replace (i)
the Stock Restriction Agreement dated October 16, 1995 between the Corporation
and Nola E. Masterson, which shall
-6-
<PAGE>
no longer be of any force or effect, and (ii) the form of Stock Restriction
Agreement attached to the outstanding options to purchase Common Stock held by
Koster and Patterson.
16. Waiver, Modification and Termination. No provision of this Agreement
------------------------------------
shall be deemed to have been waived by the corporation or any Investor in the
absence of a written agreement executed by such party with respect to such
waiver. This Agreement may be modified or terminated only with the written
consent of the Founders, the Corporation, and the holders of a majority in
voting power of the Shares then held by the Investors.
17. Accession. Any Additional Investors as defined in the Purchase
---------
Agreement shall automatically become an Investor hereunder by delivering to the
Corporation a written instrument in the form of Exhibit A hereto, by which such
---------
Additional Investor agrees to be bound by the obligations imposed under this
Agreement, whereupon such Additional Investor shall automatically become a party
to this Agreement and shall thereupon be deemed an "Investor" for all purposes
of this Agreement.
18. Binding Effect; Assignment. This Agreement shall be binding upon the
--------------------------
parties hereto and their heirs, legal representatives, successors and assigns.
The rights and obligations of the Founders hereunder may not be assigned or
delegated without the written consent of the Corporation.
19. Notices. All notices, requests, consents, deliveries and other
-------
communications hereunder shall be in writing and shall be delivered in person or
duly sent by first class mail, postage prepaid, or by any internationally
recognized express courier service, to the Corporation at its principal place of
business, and to the Investors and the Founders at their respective last known
address or at their respective address, if any, appearing on the books of the
Corporation.
20. Severability. If any provision of this Agreement shall be held to be
------------
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
21. Governing Law. This Agreement shall be governed by, and construed and
-------------
enforced in accordance with, the substantive law of The Commonwealth of
Massachusetts, without regard to its principles of conflicts of laws.
22. Captions. Captions are for convenience only and are not deemed to be
--------
part of this Agreement.
23. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute a single instrument. Each such counterpart may
contain one or more signature pages.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as a
contract under seal as of the day and year first above written.
SEQUENOM, INC.
By: ______________________________________
FOUNDERS:
___________________________________________
Hubert Koster
___________________________________________
Nola E. Masterson
___________________________________________
Robert E. Patterson
-8-
<PAGE>
SEQUENOM, INC.
Stock Restriction Agreement
Investor Signature Page
-----------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Investor" as defined in the Stock Restriction Agreement dated
as of _______, 1995, by and among Sequenom, Inc. and the parties named therein,
(ii) that it is a party to the Stock Restriction Agreement for all purposes and
(iii) that it is bound by all terms and conditions of the Stock Restriction
Agreement.
EXECUTED this ____ day of __________, 1995.
___________________________________________
(print name)
By: _____________________________________
Title: ___________________________________
Address: _________________________________
<PAGE>
Exhibit A
---------
SEQUENOM, INC.
Stock Restriction Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Additional Investor" as defined in the Series B Convertible
Preferred Stock Purchase Agreement dated as of December 22, 1995 and an
"Investor" as defined in the Stock Restriction Agreement dated as of __________
__, 1995, each by and among Sequenom, Inc. and the parties named therein, (ii)
that it is a party to the Stock Restriction Agreement for all purposes and (iii)
that it is bound by all terms and conditions of the Stock Restriction Agreement.
EXECUTED this __ day of __________, 1995.
___________________________________________
(print name)
By: ______________________________________
Title: ___________________________________
Address: __________________________________
<PAGE>
EXHIBIT 4.16A
-------------
Form of Registration Rights Agreement
-------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is entered into as of December 22, 1995
by and among Sequenom, Inc., a Delaware corporation (the "Corporation"), and the
purchasers of shares of the Corporation's Series B Convertible Preferred Stock,
par value $.001 per share (the "Series B Preferred Stock"), pursuant to the
Series B Convertible Preferred Stock Purchase Agreement dated as of the date
hereof (the "Purchase Agreement"), including any Additional Investors as defined
in the Purchase Agreement (such purchasers of Series B Preferred Stock being
hereinafter sometimes referred to individually as an "Investor" and collectively
as the "Investors").
WHEREAS, the Corporation has previously issued to certain of the Investors
certain shares of the Corporation's Series A Convertible Preferred Stock, $.001
par value per share (the "Series A Preferred Stock" and, together with the
Series B Preferred Stock, the "Preferred Stock");
WHEREAS, the Corporation now wishes to sell to the Investors certain shares
of its Series B Preferred Stock;
WHEREAS, the Preferred Stock is convertible into shares of the
Corporation's Common Stock, par value $.001 per share ("Common Stock"); and
WHEREAS, as a condition to entering into the Purchase Agreement, the
Investors have required that the Corporation execute this Agreement to provide
the Investors rights to register the shares of Common Stock into which their
Preferred Stock is convertible;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
-----------
have the following meanings:
(a) The term "Act" means the Securities Act of 1933, as amended;
(b) The term "Holder" means any Investor and any other person or
entity holding Registrable Securities to whom the registration rights granted in
this Agreement have been transferred pursuant to Section 14 hereof;
(c) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act and the declaration or ordering of effectiveness of such
registration statement; and
(d) The term "Registrable Securities" means (1) the Common Stock issuable
upon conversion of the Preferred Stock, (2) Common Stock purchased by an
Investor pursuant to Section 8.1 of the Purchase Agreement (or Common Stock for
or into which New Securities
<PAGE>
(as therein defined) purchased by the Investor pursuant to such Section 8.1 may
be exercised or converted) or pursuant to the Stock Restriction Agreement
referred to in Section 6.6 of the Purchase Agreement, and (3) any Common Stock
of the Corporation issued as a dividend or other distribution with respect to,
or in exchange or in replacement of, such Preferred Stock or Common Stock.
In addition, for purposes of all calculations and notices under this
Agreement, and all other provisions of this Agreement where the context permits,
the term "Registrable Securities" shall include securities issuable upon
conversion of the Preferred Stock, a holder of the Preferred Stock shall be
deemed the Holder of such securities and such securities shall be deemed
outstanding Registrable Securities hereunder. Notwithstanding the foregoing,
nothing in this Agreement shall require the Corporation actually to register any
shares of the Preferred Stock.
2. Request for Registration. If at any time after the earlier of (i) the
------------------------
first underwritten public offering of securities for the account of the
Corporation, and (ii) the date three (3) years from the date hereof, the
Corporation shall receive a written request (specifying that it is being made
pursuant to this Section 2) from the Holder or Holders at least fifty percent
(50%) of the then outstanding Registrable Securities that the Corporation file a
registration statement under the Act, or a similar document pursuant to any
other statute then in effect corresponding to the Act, covering the registration
of at least the lesser of (i) at least twenty-five percent (25%) of the then
outstanding Registrable Securities and (ii) Registrable Securities the expected
price to the public of which equals or exceeds $10,000,000, then the Corporation
shall promptly notify all other Holders of such request and shall use its best
efforts to cause all Registrable Securities that Holders have requested be
registered to be registered under the Act.
Notwithstanding the foregoing, (a) the Corporation shall not be obligated
to effect a registration pursuant to this Section 2 during the period starting
with the date sixty (60) days prior to the Corporation's estimated date of
filing of, and ending on a date six (6) months following the effective date of,
a registration statement pertaining to an underwritten public offering of
securities for the account of the Corporation, provided that the Corporation is
actively employing in good faith its best efforts to cause such registration
statement to become effective and that the Corporation's estimate of the date of
filing such registration statement is made in good faith; (b) the Corporation
shall not be obligated to effect a registration pursuant to this Section 2
within six (6) months after the effective-date of a prior registration under
such Section; (c) if the Corporation shall furnish to the Holders a certificate
signed by the President of the Corporation stating that in the good faith
judgment of the Board of Directors it would be seriously detrimental to the
Corporation or its shareholders for a registration statement to be filed in the
near future, then the Corporation's obligation to use its best efforts to file a
registration statement shall be deferred for a period not to exceed three (3)
months; and (d) the Corporation may postpone a registration pursuant to this
election for such period of time as may be required to permit the use of regular
audited year-end financial statements with supplemental short period figures for
a period not exceeding six (6) months unless the Holders agree to bear the costs
of any special audit.
-2-
<PAGE>
The Corporation shall not be obligated to effect more than two (2)
registrations pursuant to this Section 2. Any request for registration under
this Section 2 must be for a firm commitment underwritten public offering to be
managed by an underwriter or underwriters of recognized national standing
reasonably acceptable to the Corporation.
3. Corporation Registration. Subject to Section 8 of this Agreement, if
------------------------
at any time the Corporation proposes to register any of its Common Stock under
the Act in connection with the public offering of such securities for its own
account or for the accounts of other shareholders, solely for cash on a form
that would also permit the registration of the Registrable Securities, the
Corporation shall, each such time, promptly give each Holder written notice of
such determination. Upon the written request of any Holder given within thirty
(30) days after mailing of any such notice by the Corporation, the Corporation
shall, subject to the limitations set forth in Section 8(a), use its best
efforts to cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested be registered.
4. Obligations of the Corporation. Whenever required under
------------------------------
Section 2, 3, or 11 to use its best efforts to effect the registration of any
Registrable Securities, the Corporation shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the Securities and Exchange Commission ("SEC") a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become and remain
effective; provided, however, that in connection with any proposed registration
intended to permit an offering of any securities from time to time (i.e., a so-
called "shelf registration the Corporation shall in no event be obligated to
cause any such registration to remain effective for more than one hundred eighty
(180) days.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably appropriate for the distribution of the
securities covered by the registration statement, provided that the Corporation
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions, and further provided that (anything in this
Agreement to the contrary notwithstanding with respect to the bearing of
expenses) if any jurisdiction in which the securities shall be qualified shall
require that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by selling shareholders, then such
-3-
<PAGE>
expenses shall be payable by selling shareholders pro rata, to the extent
required by such jurisdiction.
(e) Provide a transfer agent for the Common Stock no later than the
effective date of the first registration of any Registrable Securities.
5. Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Corporation to take any action pursuant to this Agreement
that the Holders shall furnish to the Corporation such information regarding
them, the Registrable Securities held by them, and the intended method of
disposition of such securities as the Corporation shall reasonably request and
as shall be required in connection with the action to be taken by the
Corporation.
6. Expenses of Demand Registration. All expenses incurred in connection
-------------------------------
with registrations pursuant to Section 2 (excluding underwriters, discounts and
commissions), including, without limitation, all registration and qualification
fees, printers, and accounting fees, fees and disbursements of counsel for the
Corporation, and the reasonable fees and disbursements of one special counsel
for the selling Holders, shall be borne by the corporation.
7. Corporation Registration Expenses. All expenses (excluding
---------------------------------
underwriters, discounts and commissions) incurred in connection with a
registration pursuant to Section 3 (other than a registration on Form S-3 filed
pursuant to Section 11), including, without limitation, any additional
registration and qualification fees and any additional fees and disbursements of
counsel to the Corporation that result from the inclusion of securities held by
the Holders in such registration and the reasonable fees and disbursements of
one special counsel for the selling stockholders, shall be borne by the
Corporation; provided, however, that if the registration is of exclusively a
secondary offering, the holders shall bear their proportionate share of the
expenses incurred in connection with any registration (provided all shareholders
registering shares thereunder bear their proportionate share of expenses),
except expenses which the Corporation would have incurred whether or not the
securities held by the Holders were included in such registration (including,
without limitation, the expense of preparing normal audited or unaudited
financial statements).
8. Underwriting Requirements.
-------------------------
(a) In connection with any offering involving an underwriting of shares
being issued by the Corporation, the Corporation shall not be required under
Section 3 to include any of the Holders' Registrable Securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Corporation and the underwriters selected by it, and then only in
such quantity as will not, in the reasonable opinion of the underwriters,
jeopardize the success of the offering by the Corporation. If the total amount
of securities that all Holders request to be included in an underwritten
offering exceeds the amount of securities that the underwriters reasonably
believe compatible with the success of the offering, the Corporation shall only
be required to include in the offering so many of the securities of the selling
Holders as the underwriters reasonably believe will not jeopardize the success
of the offering (the securities so included to be apportioned pro rata among the
selling Holders according to the total amount of securities owned by said
selling Holders, or in such other proportions as shall
-4-
<PAGE>
mutually be agreed to by such selling Holders), provided that in the case of an
offering involving shares being issued by the Corporation, no such reduction
shall be made with respect to any securities offered by the Corporation for its
own account, and provided further that no securities of any shareholder who is
not a Holder shall be included in such offering, other than securities of
shareholders who have initiated such registration pursuant to the exercise of
contractual rights to do so, unless all securities which the Holders have
requested to be included are included on a pro rata basis with the securities of
any other shareholders who have a contractual right to include their securities
in such offering.
(b) With respect to any underwriting of shares to be registered under
Section 2, or an underwriting of shares to be registered under Section 11 if the
Holders of a majority of the then outstanding Registrable Securities have
requested registration thereunder, such Holders shall have the right to
designate the managing underwriter or underwriters, subject to the consent of
the Corporation. In all other circumstances under such Sections and in
connection with registrations under Section 3, the Corporation shall have the
right to designate the managing underwriter or underwriters; subject to the
consent of the Holders of a majority of the Registrable Securities participating
in the underwriting. In any such case, such consent shall not be unreasonably
withheld or delayed.
9. Delay of Registration. No Holder shall have any right to take any
---------------------
action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
10. Indemnification. In the event any Registrable securities are included
---------------
in a registration statement under this Agreement:
(a) To the extent permitted by law, the Corporation will indemnify and
hold harmless each Holder requesting or joining in a registration, any
underwriter (as defined in the Act) for it, and each person, if any, who
controls such Holder or underwriter within the meaning of the Act, against any
losses, claims, damages or liabilities, joint or several, to which they may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
on any untrue or alleged untrue statement of any material fact contained in such
registration statement, including, without limitation, any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading or arise out of any
violation by the Corporation of any rule or regulation promulgated under the Act
applicable to the Corporation and relating to action or inaction required of the
Corporation in connection with any such registration; and will reimburse each
such Holder, such underwriter, or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action, provided, however,
that the indemnity agreement contained in this Section 10(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the corporation (which
consent shall not be unreasonably withheld or delayed) nor shall the Corporation
be liable in any such case for any such loss, claim, damage, liability or action
to the extent that it arises out of or is based upon an
-5-
<PAGE>
untrue statement or alleged untrue statement or omission or alleged omission
made in connection with such registration statement, preliminary prospectus,
final prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each Holder requesting or joining in a
registration will indemnify and hold harmless the Corporation, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Corporation within the meaning of the Act, and
any underwriter for the Corporation (within the meaning of the Act) against any
losses, claims, damages or liabilities to which the corporation or any such
director, officer, controlling person or underwriter may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary prospectus or final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and will reimburse the Corporation or any such director,
officer, controlling person or underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 10(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld) and provided further that no Holder shall have any
liability under this Section 10(b) in excess of the net proceeds actually
received by such Holder in the relevant public offering.
(c) Promptly after receipt by an indemnified party under this Section 10
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 10, notify the indemnifying party in writing of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to notify an indemnifying party
promptly, of the commencement of any such action, if prejudicial to his ability
to defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 10, but the omission so to notify the
indemnifying party will not relieve him of any liability that he may have to any
indemnified party otherwise than under this Section 10.
-6-
<PAGE>
11. Registrations on Form S-3.
-------------------------
(a) If (i) the Corporation shall receive a written request (specifying
that it is being made pursuant to this Section 11) from the Holder or Holders of
at least twenty-five percent (25%) of the then outstanding Registrable
Securities that the Corporation file a registration statement on Form S-3 (or
any successor form to Form S-3 regardless of its designation) for a public
offering of shares of the Registrable Securities the reasonably anticipated
aggregate price to the public of which would exceed Two Million Dollars
($2,000,000), and (ii) the corporation is a registrant entitled to use Form S-3
to register such shares, then the Corporation shall use its best efforts to
cause such shares to be registered on Form S-3 (or any successor form to Form
S-3).
(b) All expenses (excluding underwriters' discounts and commissions)
incurred in connection with the first two registrations requested pursuant to
Section 11(a), including, without limitation, all registration, qualification,
printing, and accounting fees, and fees and disbursements of one special counsel
to the selling Holder or Holders and counsel to the Corporation, shall be borne
by the Corporation. All such expenses for registrations pursuant to Section
11(a) after the first two such registrations shall be borne by the Corporation,
except that the selling Holders shall pay all fees of their legal counsel, if
any, in connection therewith.
(c) Holders' rights to registration under this Section 11 are in addition
to, and not in lieu of, their rights to registration under Sections 2 and 3 of
this Agreement.
12. Reports Under Securities Exchange Act of 1934. With a view to making
---------------------------------------------
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Corporation to the public without registration, the
corporation agrees to use its best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to ninety (90) days
after the effective date of the first registration statement covering an
underwritten public offering filed by the Corporation;
(b) file with the SEC in a timely manner all reports and other documents
required of the Corporation under the Act and the Securities Exchange Act of
1934, as amended (the "1934 Act"); and
(c) furnish to any Holder forthwith upon request a written statement by
the Corporation that it has complied with the reporting requirements of Rule 144
(at any time after ninety (90) days after the effective date of said first
registration statement filed by the Corporation), and of the Act and the 1934
Act (at any time after it has become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Corporation, and such
other reports and documents so filed by the Corporation as may be reasonably
requested in availing any such holder to take advantage of any rule or
regulation of the SEC permitting the selling of any such securities without
registration.
-7-
<PAGE>
13. Limitations in Connection with Future Grants of Registration Rights.
-------------------------------------------------------------------
Without the prior written consent of the Holder or Holders of a majority of the
then outstanding Registrable Securities issued or issuable upon conversion of
the Series B Preferred Stock, the Corporation shall not grant rights to cause
the Corporation to register any of its securities to any person or entity.
14. Transfer of Registration Rights. The registration rights of any
-------------------------------
Investor (and of any permitted transferee of any Investor or its permitted
transferees) under this Agreement with respect to any shares of Registrable
Securities may be transferred to any Affiliate of such Investor or such
permitted transferee, or to any transferee who acquires (otherwise than in a
registered public offering) at least five percent (5%) of the Registrable
Securities held or acquired as of the date hereof by such Investor, provided,
however, that the Corporation is given written notice by the Holder at the time
of such transfer stating the name and address of the transferee and identifying
the securities with respect to which the rights under this Agreement are being
assigned. For such purpose, an "Affiliate" of any Investor (or any such
transferee) means any partner of such Investor (or transferee) if it is a
partnership, or any person or entity that, directly or indirectly, through one
or more intermediaries, controls or is controlled by, or is under common control
with, such Investor or transferee.
15. Mergers, Etc. The Corporation shall not, directly or indirectly,
------------
enter into any merger, consolidation or reorganization in which the Corporation
shall not be the surviving corporation unless the proposed surviving corporation
shall, prior to such merger, consolidation or reorganization, agree in writing
to assume the obligations of the Corporation under this Agreement, and for that
purpose references hereunder to "Registrable Securities" shall be deemed to be
references to the securities which the Holders would be entitled to receive in
exchange for Registrable Securities under any such merger, consolidation or
reorganization; provided, however, that the provisions of this Agreement shall
not apply in the event of any merger, consolidation or reorganization in which
the Corporation is not the surviving corporation if the Holders of Registrable
Securities are entitled to receive in exchange therefor (i) cash, or (ii)
securities of the acquiring corporation which may be immediately sold to the
public without registration under the Act.
16. Accession. Any Additional Investors as defined in the Purchase
---------
Agreement shall automatically become an Investor hereunder by delivering to the
Corporation a written instrument in the form of Exhibit A hereto, by which such
---------
Additional Investor agrees to be bound by the obligations imposed under this
Agreement, whereupon such Additional Investor shall automatically become a party
to this Agreement and shall thereupon be deemed an "Investor" for all purposes
of this Agreement.
17. Notices. All notices, requests, consents and other communications
-------
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by first class mail, postage
prepaid, or by any internationally recognized courier service, addressed to such
party at the address set forth below or such other address as may hereafter be
designated in writing by the addressee to the addressor listing all parties:
-8-
<PAGE>
(i) if to the Corporation, to:
Sequenom, Inc.
c/o TVM Techno Venture Management
101 Arch Street
Suite 1950
Boston, MA 02110
Attention: President
with a copy to:
David R. Pierson, Esq.
Foley, Hoag & Eliot
One Post office Square
Boston, Massachusetts 02109
(ii) if to the Investors (or their transferees), to their respective
last known address or their respective address, if any, appearing
in the books of the Corporation.
18. Miscellaneous.
-------------
(a) This Agreement states the entire agreement of the parties concerning
the subject matter hereof, and supersedes all prior agreements, written or oral,
between or among them concerning such subject matter.
(b) This Agreement may be amended, and compliance with any provision of
this Agreement may be omitted or waived, only by the written agreement of the
Corporation and the Holders of at least eighty-five percent (85%) in voting
power of the then outstanding Registrable Securities issued or issuable upon
conversion of the Series B Preferred Stock to be bound thereby.
(c) This Agreement shall be governed by, and construed and enforced in
accordance with, the substantive laws of The Commonwealth of Massachusetts,
without regard to its principles of conflicts of laws.
(d) This Agreement may be executed in any number of counterparts, each
such counterpart shall be deemed to be an original instrument, and all such
counterparts together shall constitute but one agreement. Any such counterpart
may contain one or more signature pages.
-9-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as a contract
under seal as of the date first written above.
SEQUENOM, INC.
By: ________________________________________
-10-
<PAGE>
SEQUENOM, INC.
Registration Rights Agreement
Investor Signature Page
-----------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Investor" as defined in the Registration Rights Agreement
dated as of __________ __, 1995, by and among Sequenom, Inc. and the parties
named therein, (ii) that it is a party to the Registration Rights Agreement for
all purposes and (iii) that it is bound by all terms and conditions of the
Registration Rights Agreement.
EXECUTED this __ day of __________, 1995.
________________________________________
(print name)
By: _________________________________
Title: _________________________________
Address: _______________________________
<PAGE>
EXHIBIT 4.16B
-------------
Form of Voting Agreement
------------------------
<PAGE>
VOTING AGREEMENT
Agreement made as of December 22, 1995 by and among Sequenom, Inc., a
Delaware corporation (the "Corporation"); Hubert Koster, Nola E. Masterson and
Robert E. Patterson (the "Founders"); TVM Techno Venture Enterprises No. II
Limited Partnership, TVM Intertech Limited Partnership TVM Zweite Beteiligung-
U.S. Limited Partnership, TVM Eurotech Limited Partnership, TVM Techno Venture
Investors No. 1 Limited Partnership and *** (the "Original Investors"); the
purchasers of shares of the Corporation's Series B Convertible Preferred Stock,
$.001 par value per share ("Series B Preferred Stock"), pursuant to the Series B
Convertible Preferred Stock Purchase Agreement dated as of the date hereof (the
"Purchase Agreement"), including Boston University Nominee Partnership ("BU")
and any Additional Investors as defined in the Purchase Agreement (all such
purchasers of Series B Preferred Stock under the Purchase Agreement being
referred to as the "Investors," and all such Founders, Original Investors and
Investors being referred to as the "Stockholders").
AGREEMENT
---------
In consideration of the mutual covenants herein contained, the parties
hereto agree as follows:
1. Board of Directors. The Stockholders agree to vote all shares of the
------------------
Corporation's Common Stock, $.001 par value per share ("Common Stock"), Series A
Convertible Preferred Stock, $.001 par value per share ("Series A Preferred
Stock"), Series B Preferred Stock and any other class of voting security of the
Corporation (the "Shares") now or hereafter owned or controlled by them, and
otherwise to use their respective best efforts as stockholders of the
Corporation, to set the number of directors of the Corporation at seven and to
elect as directors, on the date of this Agreement and in any subsequent election
of directors of the Corporation: the Chief Executive Officer of the Corporation,
who shall initially be Randall R. Lunn; one person designated by the Founders,
who shall initially be Hubert Koster; one person designated by the Original
Investors, who shall initially be Helmut Schuhsler; one person designated by BU,
who shall initially be William Golden; one person designated by the Investors,
who shall be designated and elected after the date of this Agreement; and two
persons who are not employees of the Corporation, who have experience in the
Corporation's industry and who are reasonably acceptable to a majority of the
other directors, and who shall initially be Nola E. Masterson and Ernst Gunter
Afting.
Any party or parties making director designations (a "Designating Party")
shall furnish written notice to the other parties at least 10 days prior to any
election of directors of their director-designee or director-designees. In the
absence of such notice, the director-designee or director-designees of such
Designating Party then serving and previously designated shall be reelected if
still eligible to, serve as provided herein. No party hereto shall vote to
remove any member of the Board of Directors designated in accordance with the
aforesaid procedure unless the Designating Party who designated such director so
votes, and if such Designating party so votes then the other parties shall
likewise so vote.
Any vacancy on the Board of Directors created by the resignation, removal,
incapacity, or death of any person designated under this Section 1 shall be
filled by another person designated
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
by the original Designating Party. The Stockholders shall vote their respective
Shares in accordance with such new designation, and any such vacancy shall not
be filled in the absence of a new designation by the original Designating Party.
This Section 1 shall terminate and be of no further force and effect upon
the closing of a firm commitment underwritten public offering of Common Stock of
the Corporation pursuant to an effective registration statement under the
Securities Act of 1933, as amended, in which the aggregate gross proceeds to the
Corporation from such offering are not less than $10,000,000 and the offering
price per share is not less than $4.50, appropriately adjusted to take account
of any stock split, stock dividend, combination of shares or similar event.
In the event that any Designating Party (or its or their respective
partners, stockholders and affiliates) owns, in the aggregate, fewer than
200,000 shares of the Corporation's Common Stock, subject to adjustment for
stock splits, stock dividends, combinations of shares and similar events, such
Designating Party's right to make designations under this Section 1 shall
terminate, and the obligation of the other parties under this Section 1 to vote
for any members of the Board of Directors designated by such Designating Party
shall terminate, but all other obligations of all parties hereunder shall
continue unless otherwise terminated. For purposes of this paragraph, in
determining the number of shares of Common Stock owned by a Designating Party,
ownership by such Designating Party of shares of Series A Preferred Stock and
Series B Preferred Stock shall be deemed to be ownership by it of that number of
shares of Common Stock into which such shares of Series B Preferred Stock are
convertible.
In the event that any group of Stockholders constituting a Designating
Party cannot agree upon a director-designee, the identity of the director-
designee of such Designating Party shall be determined by a plurality in voting
power of the outstanding capital stock of the Corporation held by such
Stockholders.
In the event that BU shall fail to participate in any future equity
financing for the Corporation for its full pro rata share of the portion of such
financing purchased by the then-existing institutional investors in the
Corporation, (i) BU's right to make designations under this Section 1 shall-
terminate, and the obligation of the other parties under this Section 1 to vote
for any member of the Board of Directors designated by BU shall terminate, but
all other rights and obligations of all parties hereunder, including the right
of BU to participate as an Investor in the designation of any person to the
Board of Directors, shall continue unless otherwise terminated; and (ii)
thereafter the Investors shall have the right to designate two persons for
election to the Board of Directors.
2. Director Indemnification. In the event that any director contemplated
------------------------
by this Agreement shall be made or threatened to be made a party to any action,
suit or proceeding with respect to which he may be entitled to indemnification
by the Corporation pursuant to its Certificate of Incorporation, By-Laws or
otherwise, he shall be entitled to be represented in such action, suit or
proceeding by counsel of his choice and the expenses of such representation
shall be reimbursed by the Corporation to the extent provided in or authorized
by said Certificate of Incorporation or other provision and permitted by
applicable law.
-2-
<PAGE>
The Corporation and the Stockholders agree not to take any action to amend
any provision of the Certificate of Incorporation or By-Laws of the Corporation
relating to indemnification of directors, as presently in effect, without the
prior written consent of a majority in voting power of the Investors.
3. Accession. Any Additional Investors as defined in the Purchase
---------
Agreement shall automatically become an Investor hereunder by delivering to the
Corporation a written instrument in the form of Exhibit A hereto, by which such
---------
Additional Investor agrees to be bound by the obligations imposed under this
Agreement, whereupon such Additional Investor shall automatically become a party
to this Agreement and shall thereupon be deemed an "Investor" and a
"Stockholder" for all purposes of this Agreement.
4. Notices. All notices, requests, consents and other
-------
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or duly sent by first
class mail, postage prepaid, or by any internationally recognized express
courier service, addressed to such party at the address set forth below or such
other address as may hereafter be designated in writing by the addressee to the
addressor listing all parties:
(i) if to the Corporation, to:
Sequenom, Inc.
c/o TVM Techno Venture Management
101 Arch Street
Suite 1950
Boston, MA 02110
Attention: President
with a copy to:
David R. Pierson, Esq.
Foley, Hoag & Eliot
One Post office Square
Boston, Massachusetts 02109
(ii) if to the Stockholders, to their respective last known address or
their respective address, if any, appearing in the books of the
Corporation.
5. Assignment; Binding Effect. No Designating Party may assign its or
--------------------------
their rights hereunder. Subject to termination or partial termination as
provided in Section 1, this Agreement shall be binding on the parties hereto and
their respective legal representatives, successors and permitted assigns and on
the transferees of any Shares now owned or hereafter acquired by them.
6. Entire Agreement; Amendment and Waiver. This Agreement contains the
--------------------------------------
sole and entire understanding of the parties with respect to its subject matter
and supersedes all prior negotiations, commitments, agreements and
understandings heretofore had among any of them with respect thereto. Without
limiting the generality of the foregoing, this Agreement supersedes
-3-
<PAGE>
and replaces the Voting Agreement among the Founders and the Original Investors
dated May 26, 1994, which shall no longer have any force or effect. This
Agreement may not be changed or terminated or any performance or condition
waived, in whole or in part, except by the written agreement of the Corporation
and Stockholders or transferees of their rights hereunder holding two-thirds in
voting power of the Shares held by the Founders, two-thirds in voting power of
the Shares held by the Original Investors, eighty-five percent (85%) in voting
power of the Shares held by the Investors, and two-thirds in voting power of the
Shares held by the Stockholders or such transferees. A waiver on one occasion
shall not constitute a waiver on any further occasion.
7. Counterparts. This Agreement may be executed in more than one
------------
counterpart, each of which shall be deemed to be an original and which,
together, shall constitute one and the same instrument. Any such counterpart may
contain one or more signature pages.
8. Applicable Law. This Agreement shall be governed by, and construed
--------------
and enforced in accordance with, the substantive laws of The Commonwealth of
Massachusetts, without regard to its principles of conflicts of laws.
9. Legend. Each certificate for Shares shall bear a legend stating in
------
substance as follows, and each of the Stockholders shall cause its certificates
to be so legended promptly after the execution and delivery of this Agreement:
The shares of stock represented by this certificate are subject to the
terms and provisions of a Voting Agreement dated December 22, 1995 among
the Corporation and certain stockholders of the Corporation. The
Corporation will furnish a copy of the Voting Agreement to the holder
hereof upon written request and without charge.
* * *
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as a
contract under seal as of the date-first written above.
SEQUENOM, INC.
By:___________________________________
FOUNDERS:
______________________________________
Hubert Koster
______________________________________
Nola E. Masterson
______________________________________
Robert E. Patterson
ORIGINAL INVESTORS:
TVM Techno Venture Enterprises
No. II Limited Partnership
By:___________________________________
TVM Intertech Limited Partnership
By:___________________________________
TVM Zweite Beteiligung-U.S.
Limited Partnership
By:___________________________________
<PAGE>
TVM Eurotech Limited Partnership
By:___________________________________
TVM Techno Venture Investors
No. 1 Limited Partnership
By:___________________________________
KBL Founder Ventures SCA
By:___________________________________
<PAGE>
SEQUENOM, INC.
Stock Restriction Agreement
Investor Signature Page
-----------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Investor" as defined in the Stock Restriction Agreement dated
as of December 22, 1995, by and among Sequenom, Inc. and the parties named
therein, (ii) that it is a party to the Stock Restriction Agreement for all
purposes and (iii) that it is bound by all terms and conditions of the Stock
Restriction Agreement.
EXECUTED this ___ day of ___________, 1995.
______________________________________
(print name)
By: ________________________________
Title: ______________________________
Address: ____________________________
<PAGE>
Exhibit A
---------
SEQUENOM, INC.
Voting Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned hereby
agrees (i) that it is an "Additional Investor", as defined in the Series B
Convertible Preferred Stock Purchase Agreement dated as of ____________ ___,
1995, and an "Investor" and a "Stockholder" as defined in the Voting Agreement
dated as of ____________ ___, 1995, each by and among Sequenom, Inc. and the
parties named therein, (ii) that it is a party to the Voting Agreement for all
purposes and (iii) that it is bound by all terms and conditions of the Voting
Agreement.
EXECUTED this _____ day of _____________, 1995.
______________________________________
(print name)
By:___________________________________
Title:________________________________
Address:______________________________
<PAGE>
EXHIBIT 4.19
------------
Related Transactions
--------------------
Loan from the Corporation to Nola Masterson, a director, in the
outstanding principal amount of $8,800.
<PAGE>
EXHIBIT 4.20
------------
Governmental Consents
---------------------
None.
<PAGE>
EXHIBIT 4.23
------------
Commitments from German Government
----------------------------------
See attachment hereto.
<PAGE>
Sequenom, Inc. (the "Inc.") and Sequenom Instruments GmbH (the "GmbH")
Description of agreements with Technologie-Beteiligungs-Gesellschaft m.b.H. der
Deutschen Ausgleichsbank ("TBG")
1. The May 1995 "BJTU" Agreement
-----------------------------
The TBG has provided DM 1 million silent partnership financing to the GmbH,
which matches DM 1 million of capital invested in the GmbH by the Inc. The terms
of the silent partnership arrangement are as follows:
Interest rate of 6% on the principal amount of the silent partnership loan.
Interest payable beginning June 30, 1997.
Additional compensation as follows:
9% of any annual profits, beginning with fiscal year 1997, if the profits
exceed DM 100,000, up to a maximum compensation amount of 6% of the silent
partnership loan.
Principal payment due on December 31, 2005
This agreement has no "downside protection" which is contained in the 1995
agreement.
2. The December 1995 "BJTU" Agreement
----------------------------------
The TBG has committed to provide up to DM 3 million silent partnership financing
to the GmbH, which will match up to DM 3 million of capital invested in the GmbH
by the Inc. To date the TBG has matched DM 250,000 of capital which has been
invested by the Inc.
The terms of the silent partnership arrangement are as follows:
Interest rate of 6% on the principal amount of the silent partnership loan.
Interest payable beginning June 30, 1997.
Additional compensation as follows:
9% of any annual profits, beginning with fiscal year 1997 if the profits
exceed DM 100,000, up to a maximum compensation amount of 6% of the silent
partnership loan.
Principal payment due on December 31, 2005
This agreement also contains a "50% downside protection" for the investors in
the Inc. as follows: Under certain circumstances, if the Inc. exercises its "put
option" to the TBG of its equity interest in the GmbH, the TBG will pay to the
Inc. 50% of the amount of the silent partnership.
<PAGE>
Description of the grant programs for which Sequenom Instruments GmbH has
received approvals:
1. Grant from the "Biotechnology 2000" grant scheme from the Ministry of
Research and Technology ("BMBF"):
The BMBF has approved a grant (which is a non-repayable contribution) in
the amount of DM 2.2 million based on the application for the financing of
a total research and development project of DM 4.4 million. The grant
coverage is therefore 50% of total estimated project cost. The company will
call the money quarterly in arrears based on actual cost attributable to
the project. The project started on September 1, 1995 and has a duration of
three years.
2. Grant from Freie und Hansestadt Hamburg, (City of Hamburg):
The City of Hamburg has approved a grant of DM 800,000 based on a list of
equipment for Sequenom's laboratory to be purchased after September 1,
1995. Total expected cash outflows for the equipment purchases is DM 1.6.
million. Grant coverage is also 50% of estimated cost.
Both grants do not have to be repaid.
<PAGE>
EXHIBIT 6.5
-----------
Form of opinion of Counsel to Corporation
-----------------------------------------
<PAGE>
[LETTERHEAD OF FOLEY, HOAG & ELIOT]
December 22, 1995
To the Persons listed in the Schedule
of Investors to the Series B
Convertible Preferred Stock Purchase
Agreement dated as of December 22, 1995
Gentlemen:
We are counsel to Sequenom, Inc., a Delaware corporation (the
"Corporation"). This opinion is rendered to you pursuant to Section 6.5 of the
Series B Convertible Preferred Stock Purchase Agreement (including the exhibits
thereto, the "Agreement") dated as of December 22, 1995, among the Corporation
and each of you relating to the issuance and sale by the Corporation to you of
2,333,333 shares (the "Initial Shares") of its Series B Convertible Preferred
Stock, par value $.001 per share (the "Transaction"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Agreement.
In connection with our rendering this opinion, we have reviewed (i) the
Certificate of Incorporation and By-Laws of the Corporation, each as amended to
date; (ii) a certificate issued by the Secretary of State of the State of
Delaware on December 15, 1995, with respect to the due incorporation, legal
existence and good standing of the Corporation in the State of Delaware (the
"Legal Existence Certificate"); (iii) a certificate issued by the Secretary of
State of The Commonwealth of Massachusetts on December 15, 1995, with respect to
the qualification of the Corporation to do business in Massachusetts (the
"Foreign Qualification Certificate"); (iv) counterparts of the Agreement and the
related Registration Rights Agreement of even date herewith (the "Registration
Rights Agreement"); and (v) originals or copies, certified or otherwise,
identified to our satisfaction, of such other documents, certificates,
instruments and corporate records that we considered necessary for the purposes
of this opinion.
In rendering the opinion expressed herein, we have also examined and have
relied completely as to matters of fact upon the representations and warranties
made by the Corporation and each of you in the Agreement, the Registration
Rights Agreement and the other agreements, instruments and documents delivered
in connection with the Initial Closing; and we have assumed the completeness and
accuracy of all factual matters described in such representations and
warranties.
We have not, except as specifically noted above, made any independent
review or investigation of facts relating to the Corporation, including but
without limiting the generality of the foregoing, any investigation as to the
existence of any actions, suits or proceedings pending or threatened against the
Corporation or notes, indentures, mortgages, leases, contracts, instruments,
documents, agreements, judgments, injunctions, orders, writs or decrees to which
<PAGE>
To the Persons listed in the Schedule
of Investors to the Series B
Convertible Preferred Stock Purchase
Agreement dated as of December 22, 1995
the Corporation is a party, which are binding upon the Corporation or which
might result in the imposition of any lien or other encumbrance on any asset of
the Corporation.
We have assumed the authenticity and completeness of all documents
furnished to us as originals, the genuineness of all signatures, the legal
capacity of natural persons, and the conformity to the originals of all
documents furnished to us as copies.
In rendering the opinions expressed in paragraph 1 below with respect to
the due incorporation, legal existence and good standing of the Corporation in
Delaware and in paragraph 2 below with respect to the qualification of the
Corporation to do business in The Commonwealth of Massachusetts, we have relied
solely on the Legal Existence Certificate and the Foreign Qualification
Certificate, respectively.
You have not asked us to pass upon your power and authority to enter into
the Agreement or the Registration Rights Agreement. Accordingly, for the
purposes of this opinion, we have assumed that you have all requisite power and
authority to enter into the Agreement and the Registration Rights Agreement and
to effect the transactions contemplated thereby, and that each of the Agreement
and the Registration Rights Agreement constitutes the valid and legally binding
obligation of all parties thereto other than the Corporation.
We have made such examination of Massachusetts and federal Law and of the
General Corporation Law of Delaware as we deem necessary for the purposes of
this opinion. We do not purport to pass herein on the laws of any state or
jurisdiction other than the United States of America and The Commonwealth of
Massachusetts, and as to its General Corporation Law only, the State of
Delaware.
The opinions herein expressed are qualified to the extent that (i) the
validity or enforceability of any provisions of any agreement or instrument or
of any rights granted thereunder may be subject to or affected by any
bankruptcy, reorganization, insolvency, moratorium or similar law from time to
time in effect and relating to or affecting the rights or remedies of creditors
generally, (ii) the remedy of specific performance or any other equitable remedy
may be unavailable in any jurisdiction or may be withheld as a matter of
judicial discretion; and (iii) a court may apply equitable principles in
construing or enforcing the provisions of any agreement or instrument.
The phrase "of which we have knowledge" means the actual knowledge of the
lawyer signing this opinion letter and the other lawyers in our office who have
had active involvement in negotiating the Transaction and preparing the
Agreement and the Registration Rights Agreement.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Corporation is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has
the requisite corporate power to carry on its business as it is
currently being conducted.
2
<PAGE>
To the Persons listed in the Schedule
of Investors to the Series B
Convertible Preferred Stock Purchase
Agreement dated as of December 22, 1995
2. The Corporation is qualified to do business in The Commonwealth of
Massachusetts.
3. The execution and delivery of the Agreement and the Registration
Rights Agreement and the performance by the Corporation of its
obligations thereunder have been duly authorized by all necessary
corporate action on the part of the Corporation and do not violate or
cause any default under any provision of (i) the Corporation's
Certificate of Incorporation or By-Laws, or (ii) except where any such
violation or default would not have a material adverse effect on the
Corporation, any note, indenture, mortgage, lease, contract or other
instrument, document or agreement to which the Corporation is a party
and of which we have knowledge, or any writ, injunction, order,
judgment or decree of any court, administrative agency or other
governmental body to which the Company is a party and of which we have
knowledge. Each of the Agreement and the Registration Rights
Agreement constitutes a valid and legally binding obligation of the
Corporation, enforceable against the Corporation in accordance with
its terms; provided, however, that we express no opinion as to the
enforceability of the indemnification provisions contained in Section
10 of the Registration Rights Agreement.
4. The sale of Initial Shares to each of you is not required to be
registered under the Securities Act of 1933 or the Massachusetts
Uniform Securities Act.
5. Upon receipt by the Corporation of the purchase price therefor, the
Initial Shares will be validly issued, fully-paid and non-assessable.
6. No authorization, consent, approval or other order of, declaration to,
or filing with, any governmental agency or body is required to be made
or obtained by the Corporation for or in connection with the valid and
lawful authorization, execution and delivery by the Corporation of the
Agreement and the Registration Rights Agreement, for or in connection
with the valid and lawful authorization, issuance, sale and delivery
of the Initial Shares or for or in connection with the valid and
lawful authorization, reservation, issuance, sale and delivery of the
Reserved Shares to be issued upon the conversion of the Initial
Shares, except such exemptive filings, if any, as are required to be
made under applicable securities laws.
Very truly yours,
FOLEY, HOAG & ELIOT
3
<PAGE>
EXHIBIT 10.2
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
THIS AGREEMENT made as of the 8th day of May, 1997, by and among Sequenom,
Inc., a Delaware corporation (the "Corporation"); the several investors named on
the Schedule of Investors attached hereto (individually, an "Initial Investor",
---------------------
and collectively, the "Initial Investors"); such additional investors as may be
identified on such addenda to the Schedule of Investors as may be agreed upon by
---------------------
the Corporation and such additional investors in accordance with the terms of
this Agreement (individually, an "Additional Investor", and collectively, the
"Additional Investors")(the Initial Investors and the Additional Investors being
hereinafter sometimes referred to individually as an "Investor" and collectively
as the "Investors"); and, solely for purposes of Section 8.1 hereof, Hubert
Koster, Nola E. Masterson, and Robert E. Patterson (individually a "Founder" and
collectively the "Founders") and each holder of the Corporation's Series B
Convertible Preferred Stock (the "Series B Investors).
WHEREAS, the Initial Investors wish to purchase from the Corporation, and
the Corporation wishes to sell to the Investors, up to an aggregate of 1,904,770
shares of the Corporation's Series C Convertible Preferred Stock, par value
$.001 per share (the "Series C Preferred"), and warrants to purchase up to an
aggregate of 190,477 shares of Series C Preferred;
WHEREAS, the Corporation wishes to sell to the Additional Investors up to
an aggregate number of shares of Series C Preferred equal to the difference
between 3,174,604 and the number of shares of Series C Preferred sold at the
Initial Closing (as hereinafter defined); and
WHEREAS, pursuant to that certain Stock Purchase Agreement dated December
22, 1995 (the "Series B Purchase Agreement") the Corporation granted certain
rights of first refusal to the Series B Investors and the Founders, and the
Corporation, such Series B Investors and the Founders now desire to replace such
rights of first refusal in the Series B Purchase Agreement with the rights of
first refusal set forth in Section 8.1 hereof.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereby agree as follows:
SECTION 1. Amendment of Certificate of Incorporation. Immediately prior
--------- -----------------------------------------
to the execution and delivery of this Agreement, the Corporation filed with the
Secretary of State of Delaware a Certificate of Amendment (the "Certificate of
Amendment"), a copy of which is attached hereto as Exhibit 1, to its Certificate
---------
of Incorporation (the Certificate of Incorporation of the Corporation, as
amended by the Certificate of Amendment and in effect on the date hereof being
hereinafter referred to as the "Certificate of Incorporation"), for the purpose
of increasing and amending the authorized capital stock of the Corporation and
setting forth the designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions thereof, granted to or imposed upon
the capital stock of the Corporation or the holders thereof.
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<PAGE>
SECTION 2. Purchase and Sale of the Series C Preferred and Warrants.
--------- --------------------------------------------------------
2.1 Initial Shares and Warrants. Subject to the terms and conditions
---------------------------
of this Agreement, at the Initial Closing (as defined in Section 3.1), the
Corporation agrees to issue and sell to each Initial Investor the number of
shares of Series C Preferred set forth opposite the name of such Initial
Investor on the Schedule of Investors and a warrant in the form of Exhibit 2.1
--------------------- -----------
(a "Warrant") to purchase a number of shares of Series C Preferred equal to the
largest whole number less than or equal to ten percent (10%) of the number of
shares of Series C Preferred being purchased by such Initial Investor at the
Initial Closing, at a purchase price equal to $3.15 per share of Series C
Preferred and associated warrant right to purchase one-tenth of a share of
Series C Preferred and an aggregate purchase price as set forth on the Schedule
--------
of Investors, and each Initial Investor, acting severally and not jointly,
- ------------
hereby agrees to purchase from the Corporation such number of shares of Series C
Preferred and such Warrant at such purchase price. The shares of Series C
Preferred sold at the Initial Closing are hereafter referred to as the "Initial
Shares."
2.2 Additional Shares. Subject to the terms and conditions of this
-----------------
Agreement, from time to time after the Initial Closing, but on or before June
30, 1997, the Corporation agrees to issue and sell to one or more Additional
Investors who enter into this Agreement by executing one or more counterparts
hereof up to an aggregate number of shares of Series C Preferred equal to
3,174,604 minus the number of Initial Shares (the "Additional Shares"). By
executing such a counterpart, each such Additional Investor shall agree to
purchase that number of Additional Shares as may be set forth opposite its name
on such addenda to the Schedule of Investors which may be agreed upon between
---------------------
the Corporation and each such Additional Investor, at the purchase price of
$3.15 per share and at the aggregate purchase price set forth opposite such
Additional Investor's name on such addenda. Each such addendum shall be
executed by the Corporation and each such Additional Investor, a copy of each
such addendum shall be delivered to each Investor, and each such addendum shall
be deemed a part of this Agreement ab initio. Initial Investors may become
-- ------
Additional Investors.
The Initial Shares and the Additional Shares are referred to collectively
hereinafter as the "Shares". The shares of Series C Preferred issuable upon
exercise of Warrants are referred to collectively hereinafter as the "Warrant
Shares".
SECTION 3. Closings.
--------- --------
3.1 Initial Closing. The closing of the sale and purchase of the
---------------
Initial Shares and the Warrants (the "Initial Closing") shall take place
simultaneously with the execution of this Agreement at the offices of Foley,
Hoag & Eliot LLP, One Post Office Square, Boston, Massachusetts 02109, on May
___, 1997 (the "Initial Closing Date"), or at such other location, date and time
as may be agreed upon between the Initial Investors and the Corporation. At the
Initial Closing, the Corporation shall issue and deliver to each Initial
Investor (i) a certificate or certificates registered in the name of such
Initial Investor, representing the Initial Shares being purchased by it at the
Initial Closing, and (ii) the Warrant being purchased by it at the Initial
Closing, registered in the name of such Initial Investor, against payment by
such Initial Investor to the Corporation of the purchase price therefor in the
form of (a) a check payable to the order
-2-
<PAGE>
of the Corporation, (b) a wire transfer to the account of the Corporation, (c)
cancellation of indebtedness of the Corporation to such Investor or an affiliate
of such Investor, (d) conversion of convertible promissory notes issued by the
Corporation to such Investor or an affiliate of such Investor, or (e) any
combination thereof.
3.2 Additional Closings. The closings of the sale and purchase of
-------------------
the Additional Shares under this Agreement (the "Additional Closings") shall
take place at such time, date and place as are mutually agreeable to the
Corporation and any Additional Investor, but such Additional Closings, if any,
shall take place on or before June 30, 1997. At the Additional Closings, the
Corporation shall issue and deliver to each Additional Investor a certificate or
certificates registered in the name of such Additional Investor, representing
the Additional Shares being purchased by it at the Additional Closing, against
payment by such Additional Investor to the Corporation of the purchase price
therefor in the form of (a) a check payable to the order of the Corporation, (b)
a wire transfer to the account of the Corporation, (c) cancellation of
indebtedness of the Corporation to such Additional Investor or an affiliate of
such Additional Investor, (d) conversion of convertible promissory notes issued
by the Corporation to such Additional Investor or an affiliate of such
Additional Investor, or (e) any combination thereof.
SECTION 4. Representations and Warranties of the Corporation. The
--------- -------------------------------------------------
Corporation hereby represents and warrants to the Investors as follows:
4.1 Organization. The Corporation is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own and lease its
properties, to carry on its business as presently conducted and as proposed to
be conducted and to carry out the transactions contemplated hereby. Except as
set forth in Exhibit 4.1, the Corporation is duly qualified as a foreign
-----------
corporation and is in good standing in all such other jurisdictions (which
jurisdictions are listed in Exhibit 4.1) in which the conductor its business or
-----------
its ownership or leasing of property requires such qualification and in which
the failure so to qualify or so to be in good standing would have a materially
adverse effect on the Corporation's operations or financial condition. Exhibit
-------
4.1 contains true, complete and accurate copies of the Certificate of
- ---
Incorporation and the By-Laws, as amended to date, of the Corporation (the
"ByLaws").
4.2 Capitalization. The entire authorized capital stock of the
--------------
Corporation consists of:
(a) 9,218,000 shares of Common Stock, par value $.001 per share
(the "Common Stock');
(b) 1,650,000 shares of Series A Convertible Preferred Stock, par
value $.001 per share (the "Series A Preferred");
(c) 2,976,663 shares of Series B Convertible Preferred Stock, par
value $.001 per share (the "Series B Preferred"); and
-3-
<PAGE>
(d) 3,365,081 shares of Series C Preferred.
The number of shares of Common Stock, Series A Preferred and Series B
Preferred that are issued and outstanding or held as treasury shares as of the
date hereof is as set forth in Exhibit 4.2. All issued and outstanding shares
-----------
of Common Stock, Series A Preferred and Series B Preferred are validly issued,
fully paid and nonassessable. The number of shares of Common Stock reserved for
issuance upon the exercise of options granted and to be granted, and upon
conversion of the Series A Preferred, the Series B Preferred and the Series C
Preferred, is as set forth in Exhibit 4.2. Prior to the Initial Closing, no
-----------
shares of Series C Preferred were issued or outstanding.
Exhibit 4.2 contains a list of all holders of capital stock of the
-----------
Corporation and options, warrants or rights to purchase such capital stock, in
each case including the number of shares of capital stock held by, or subject to
purchase pursuant to the exercise of any option, warrant or right held by, each
such holder. Except as set forth in Exhibit 4.2, there are no outstanding
-----------
shares of capital stock of the Corporation or warrants, options, agreements,
convertible securities or other commitments pursuant to which the Corporation is
or may become obligated to issue any shares of its capital stock or other
securities of the Corporation. Except as set forth in Exhibit 4.2, the number
-----------
of shares of capital stock, if any, reserved for issuance in connection with the
securities described in the immediately preceding sentence is not subject to
adjustment by reason of the issuance of the Shares, the Warrants, the Warrant
Shares or the Reserved Shares (as defined in Section 4.16). Except as set forth
in Section 8.1 or in Exhibit 4.2, there are no preemptive or similar rights to
-----------
purchase or otherwise acquire shares of capital stock of the Corporation
pursuant to any provision of law, the Certificate of Incorporation or the By-
Laws or any agreement to which the Corporation is a party, or otherwise, and
except as set forth in the Voting Agreement, the Registration Rights Agreement
and the Stock Restriction Agreement described in Section 4.16 of this Agreement,
there is no agreement, restriction or encumbrance with respect to the sale or
voting of any shares of the Corporation's capital stock (whether outstanding or
issuable upon conversion or exercise of outstanding securities) imposed by or
through the Certificate of Incorporation, By-Laws or any agreement to which
the Corporation is a party.
4.3 Equity Investments. Except as set forth on Exhibit 4.3, the
------------------ -----------
Corporation does not currently have any subsidiaries nor currently own any
capital stock or other proprietary interest, directly or indirectly, in any
corporation, association, trust, partnership, joint venture or other entity.
4.4 Financial Statements. Attached as Exhibit 4.4 are the unaudited
-------------------- -----------
balance sheet for the Corporation as of December 31, 1996 (the "Balance Sheet"),
and the related unaudited statement of income for the year ended December 31,
1996. (the "Balance Sheet"). (December 31, 1996 is hereinafter sometimes
referred to as the "Balance Sheet Date.") The December 31, 1996 financial
statements are in accordance with the books and records of the Corporation and
present fairly the financial position and results of operations of the
Corporation as of the dates and for the periods indicated.
-4-
<PAGE>
4.5 Absence of Undisclosed Liabilities. Except as set forth in
----------------------------------
Exhibit 4.5 or as reflected in the Balance Sheet, at the Balance Sheet Date (a)
- -----------
the Corporation had no material liabilities of any nature (matured or unmatured,
fixed or contingent) of a type required by generally accepted accounting
principles to be disclosed on a balance sheet of the Corporation which were not
so disclosed; (b) all reserves established by the Corporation and set forth in
the Balance Sheet were adequate; and (c) there were no loss contingencies (as
such term is used in Statement of Financial Accounting Standards No. 5 issued by
the Financial Accounting Standards Board in March 1975) which were not
adequately disclosed in the Balance Sheet as required by such Statement No. 5.
4.6 Absence of Changes. Except as set forth in Exhibit 4.6, since
------------------ -----------
the Balance Sheet Date there has not been (a) any material adverse change in the
financial condition, results of operations, assets, liabilities, business or
prospects of the Corporation, (b) any material asset or property of the
Corporation made subject to a lien of any kind, (c) any waiver of any valuable
right of the Corporation, or the cancellation of any debt or claim held by the
Corporation, (d) any payment of dividends on, or other distribution with respect
to, or any direct or indirect redemption or acquisition of, any shares of the
capital stock of the Corporation, or any agreement or commitment therefor, (e)
any mortgage, pledge, sale, assignment or transfer of any tangible or intangible
assets of the Corporation, except in the ordinary course of business, (f) any
loan by the Corporation to, or any loan to the Corporation from, any officer,
director, employee or stockholder of the Corporation, or any agreement or
commitment therefor, (g) any damage, destruction or loss (whether or not covered
by insurance) materially and adversely affecting the assets, property or
business of the Corporation, or (h) any change in the accounting methods or
practices followed by the Corporation.
4.7 Encumbrances. Except as set forth in Exhibit 4.7, the
------------ -----------
Corporation has good title to all of its property and assets, real, personal or
mixed, tangible or intangible, free and clear of all liens, security interests,
charges and other encumbrances of any kind.
4.8 Intellectual Property Rights. Except in each case as set forth
----------------------------
in Exhibit 4.8:
-----------
(a) the Corporation owns or has the right to use all Intellectual
Property Rights (as hereinafter defined) necessary or required for the conduct
of its business as presently conducted or as proposed to be conducted, which
Intellectual Property Rights are identified in said Exhibit 4.8;
-----------
(b) to the Corporation's knowledge, no royalties or other amounts
are payable by the Corporation to other persons by reason of the ownership or
use of said Intellectual Property Rights; and
(c) to the Corporation's knowledge, no product marketed or sold
or proposed to be marketed or sold by the Corporation violates or will violate
any license or infringes any Intellectual Property Rights of another, nor has
the Corporation received any notice that any of such Intellectual Property
Rights or the operation or proposed operation of the Corporation's business
conflicts or will conflict with the rights of others.
-5-
<PAGE>
As used herein, the term "Intellectual Property Rights" means all patents,
trademarks, service marks, trade names, copyrights, inventions, trade secrets,
proprietary processes and formulae, applications for patents, trademarks,
service marks and copyrights, and other industrial and intellectual property
rights.
Dr. Hubert Koster has entered into agreements with the Company
relating to protection of proprietary information and invention assignment in
the form referred to in Exhibit 4.8.
-----------
4.9 Litigation. There is no action, suit, claim, proceeding or
----------
investigation, at law, in equity or otherwise, or by or before any governmental
instrumentality or other agency, now pending, or, to the Corporation's
knowledge, threatened against the Corporation.
4.10 No Defaults. The Corporation is not in violation or breach of,
-----------
or in default under, any provision of (a) the Certificate of Incorporation or
the By-Laws or (b) except where any such violation, breach or default would not
have a material adverse effect on the Corporation, any note, indenture,
mortgage, lease, contract, purchase order or other instrument, document or
agreement to which the Corporation is a party or by which it or any of its
property is bound or affected or any ruling, writ, injunction, order, judgment
or decree of any court, administrative agency or other governmental body. To
the Corporation's knowledge, there exists no condition, event or act which after
notice, lapse of time, or both, would constitute a violation or breach of, or a
default under, any of the foregoing.
4.11 Employment of Officers Employees and Consultants. No third
------------------------------------------------
party may assert any valid claim against the Corporation, any Investor, or
any Designated Person (as hereinafter defined) with respect to (a) the continued
employment by or association with the Corporation of any of the present officers
or key employees of, or consultants to, the Corporation (collectively, the
"Designated Persons"), or (b) the use or disclosure by the Corporation or any
Designated Person of any information which the Corporation or any Designated
Person would be prohibited from using or disclosing under any prior agreements
or arrangements or under any laws, including, without limitation, laws
applicable to unfair competition, trade secrets or proprietary information.
4.12 Taxes. The Corporation has filed all Federal, state, local and
-----
foreign tax returns which are required to be filed by it and all such returns
are true and correct. The Corporation has paid all taxes pursuant to such
returns or pursuant to any assessments received by it or which it is obligated
to withhold from amounts owing to any employee, creditor or third party, except,
in each case, for those which are not yet due and payable pursuant to such
returns.
4.13 Agreements. Except as set forth in Exhibit 4.13, the
---------- ------------
Corporation is not a party to any written or oral (a) contract with any labor
union; (b) contract for the future purchase of fixed assets or for the future
purchase of materials, supplies or equipment in excess of normal operating
requirements; (c) contract for the employment of any officer, individual
employee or other person or any contract with any person on a consulting basis;
(d) bonus, pension, profit-sharing, retirement, stock purchase, stock option,
hospitalization, medical insurance or similar
-6-
<PAGE>
plan, contract or understanding in effect with respect to employees or any of
them or the employees of others; (e) agreement or indenture relating to the
borrowing of money or to the mortgaging, pledging or otherwise placing a lien on
any assets of the Corporation; (f) guaranty of any obligation for borrowed money
or otherwise; (g) lease or agreement under which the Corporation is lessee of or
holds or operates any property, real or personal, owned by any other party; (h)
lease or agreement under which the Corporation is lessor of or permits any third
party to hold or operate any property, real or personal, owned or controlled by
the Corporation; (i) license or lease agreement with respect to any Intellectual
Property Rights; (j) agreement or other commitment for capital expenditures in
excess of $25,000; or (k) contract, agreement or commitment under which the
Corporation is obligated to pay any broker's fees, finder's fees or any such
similar fees, to any third party. Except as set forth in Exhibit 4.13, the
------------
Corporation is not engaged in any negotiations which could lead to any such
contract, agreement, arrangement, understanding or commitment. The Corporation
has furnished to the Investors true and correct copies of all such agreements
and other documents requested by the Investors or its authorized
representatives.
4.14 Compliance. The Corporation has complied in all material
----------
respects with all Federal, state, local or foreign laws applicable to its
business. The Corporation has all Federal, state, local and foreign
governmental licenses, registrations and permits material to or necessary for
the conduct of its business, and such licenses, registrations and permits are in
full force and effect and there have been no violations in any material respect
of any such licenses, registrations or permits. No proceeding is pending or, to
the Corporation's knowledge, threatened, to revoke or limit any thereof.
4.15 Insurance. Exhibit 4.15 sets forth each insurance policy
--------- ------------
(specifying the insurer, the amount of coverage, the type of insurance, the
policy number, the expiration date, the annual premium and any pending claims
thereunder) maintained by the Corporation on its properties, assets, business or
personnel. The insurance maintained by the Corporation on its properties,
assets, business and personnel is in amounts deemed adequate by the Corporation,
is in accordance with the standards of the industry in which the Corporation
operates, and is under policies currently in effect and issued by insurers of
recognized responsibility.
4.16 Authorization of this Agreement. The execution, delivery and
-------------------------------
performance by the Corporation of this Agreement, the Registration Rights
Agreement of even date herewith by and among the Corporation, the Investors and
certain additional parties identified therein, which agreement is in the form of
Exhibit 4.16A (the "Registration Rights Agreement"), the Voting Agreement of
- -------------
even date herewith by and among the Corporation, the Investors and certain
additional parties identified therein, which agreement is in the form of Exhibit
-------
4.16B (the "Voting Agreement"), and the Stock Restriction Agreement of even date
- -----
herewith by and among the Corporation, the Investors and certain additional
parties identified therein, which agreement is in the form of Exhibit 4.16C (the
-------------
"Stock Restriction Agreement"; this Agreement, the Registration Rights
Agreement, the Voting Agreement and the Stock Restriction Agreement are
hereinafter referred to collectively as the "Transaction Documents") have been
duly authorized by all requisite corporate action. The Transaction Documents
have been duly executed and delivered on behalf of the Corporation and
constitute the valid and binding obligations of the Corporation, enforceable in
accordance with their respective terms.
-7-
<PAGE>
The execution, delivery and performance of the Transaction Documents, the
issuance, sale and delivery of the Shares, the Warrants, the Warrant Shares and
the shares of Common Stock issuable upon conversion of the Shares and the
Warrant Shares (collectively, the "Reserved Shares"), and compliance with the
provisions hereof and thereof by the Corporation, do not and will not, with or
without the passage of time or the giving of notice or both, (a) violate any
provision of law, statute, rule or regulation or any ruling, writ, injunction,
order, judgment or decree of any court, administrative agency or other
governmental body or (b) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default (or give rise to any
right of termination, cancellation or acceleration) under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Corporation under, the Certificate of Incorporation
or By-Laws or any note, indenture, mortgage, lease, contract, purchase order or
other instrument, document or agreement to which the Corporation is a party or
by which it or any of its property is bound or affected.
4.17 Authorization of Shares and Warrants. The issuance, sale and
------------------------------------
delivery hereunder by the Corporation of the Shares and the Warrants have been
duly authorized by all requisite corporate action, and when so issued, sold and
delivered, the Shares will be fully paid and nonassessable and the Shares and
the Warrants will be validly issued and outstanding and not subject to
preemptive or any other similar rights of the stockholders of the Corporation or
others.
4.18 Authorization of Warrant Shares and Reserved Shares. The
---------------------------------------------------
issuance, sale and delivery by the Corporation of the Warrant Shares and the
Reserved Shares have been duly authorized by all requisite corporate action of
the Corporation, and the Warrant Shares and the Reserved Shares have been duly
reserved for issuance upon exercise of the Warrants and conversion of the Shares
and the Warrant Shares, and when so issued, sold and delivered upon exercise of
the Warrants and conversion of the Shares and the Warrant Shares, the Warrant
Shares and the Reserved Shares will be validly issued and outstanding, fully
paid and nonassessable, and not subject to preemptive or any other similar
rights of the stockholders of the Corporation or others.
4.19 Related Transactions. Except as set forth in Exhibit 4.19, no
-------------------- ------------
director, officer or employee of the Corporation nor any "associate" (as defined
in the rules and regulations promulgated under the Securities Exchange Act of
1934 (the "Exchange Act") of any such person is indebted to the Corporation, nor
is the Corporation indebted (or committed to make loans or extend or guarantee
credit) to any such person, nor is any such person a party to any transaction
(other than as an employee or consultant) with the Corporation providing for the
furnishing of services by, or rental of real or personal property from, or
otherwise requiring cash payments to, any such person.
4.20 No Governmental Consent or Approval Required. Except as set
--------------------------------------------
forth in Exhibit 4.20, no authorization, consent, approval or other order of,
------------
declaration to, or filing with, any governmental agency or body is required to
be made or obtained by the Corporation for or in connection with the valid and
lawful authorization, execution and delivery by the Corporation of the
Transaction Documents, for or in connection with the valid
-8-
<PAGE>
and lawful authorization, issuance, sale and delivery of the Shares or the
Warrants or for or in connection with the valid and lawful authorization,
reservation, issuance, sale and delivery of the Reserved Shares, except such
exemptive filings as are required to be made under applicable securities laws
and have been and shall be made on a timely basis.
4.21 Registration Rights. Except as contemplated by the Registration
-------------------
Rights Agreement, no person has any right to cause the Corporation to effect the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of any securities of the Corporation.
4.22 Exemptions from Securities Laws. Subject to the accuracy of the
-------------------------------
representations and warranties of the Investors set forth in Section 5 hereof,
the provisions of Section 5 of the Securities Act are inapplicable to the
offering, issuance, sale and delivery of the Shares, the Warrants and the
Reserved Shares, and no consent, approval, qualification or registration or
filing under any state securities laws is required in connection therewith,
except such exemptive filings as are required to be made under applicable
securities laws and have been and shall be made on a timely basis.
4.23 Commitments from German Government. Exhibit 4.23 accurately
---------------------------------- ------------
describes certain commitments from certain German governmental authorities made
with respect to the Corporation and its subsidiary Sequenom Instruments GmbH.
SECTION 5. Representations and Warranties of the Investors. Each
--------- -----------------------------------------------
Investor, severally and not jointly, represents and warrants to the Corporation
as follows:
5.l Organization. Such Investor is an entity duly organized, validly
------------
existing and in good standing under the laws of the jurisdiction of its
organization, with all requisite power and authority to own and lease its
properties, to carry on its business, and to carry out the transactions
contemplated hereby.
5.2 Purchase for Investment. Such Investor is acquiring the Shares,
-----------------------
any Warrant purchasable by it hereunder, and, in the event such Investor should
acquire Warrant Shares upon exercise of such Warrant or Reserved Shares upon
conversion of the Shares or Warrant Shares, such Investor will be acquiring such
Warrant Shares and Reserved Shares, for its own account, for investment and not
for, with a view to, or in connection with, any distribution or public offering
thereof within the meaning of the Securities Act.
5.3 Unregistered Securities; Legend. Such Investor understands that
-------------------------------
the Shares and the Warrants have not been, and the Warrant Shares and Reserved
Shares will not be, registered under the Securities Act or any state securities
law, by reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act and such laws, and that they must be held
indefinitely unless they are subsequently registered under the Securities Act
and such laws or a subsequent disposition thereof is exempt from registration.
Such Investor further understands that such exemption depends upon, among other
things, the bona fide nature of such Investor's investment intent expressed
---- ----
herein. Such Investor acknowledges that the Warrants and the certificates for
the Shares, the Warrant Shares and the Reserved Shares shall bear a legend to
such effect, and appropriate transfer instructions may be issued.
-9-
<PAGE>
5.4 Status of the Investors. Such Investor has not been formed for
-----------------------
the specific purpose of acquiring Shares, Warrants, Warrant Shares or Reserved
Shares pursuant to this Agreement. Such Investor understands the term
"accredited investor," as used in Regulation D promulgated under the Securities
Act and represents and warrants to the Corporation that such Investor is an
"accredited investor" for purposes of acquiring Shares, Warrants, Warrant Shares
and Reserved Shares.
5.5 Knowledge and Experience; Economic Risk. Such Investor has
---------------------------------------
sufficient knowledge and experience in business and financial matters and
with respect to investment in securities of privately held companies so as to
enable it to analyze and evaluate the merits and risks of the investment
contemplated hereby and is capable of protecting its interest in connection with
this transaction. Such Investor is able to bear the economic risk of such
investment, including a complete loss of the investment.
5.6 Access to Information. Such Investor acknowledges that such
---------------------
Investor and its representatives have had the opportunity to ask questions and
receive answers from officers and representatives of the Corporation concerning
the transactions contemplated by this Agreement, and to obtain any additional
information which the Corporation possesses or can acquire that is necessary to
verify the accuracy of the information regarding the Corporation herein set
forth or otherwise desired in connection with its purchase of the Shares and any
Warrants purchasable by it.
5.7 Authorization. The execution, delivery and performance by such
-------------
Investor of this Agreement have been duly authorized by all requisite action of
such Investor and its partners or equity holders. This Agreement has been duly
executed and delivered on behalf of such Investor and constitutes the valid and
binding obligation of such Investor, enforceable in accordance with its terms.
The execution, delivery and performance of the Transaction Documents, the
purchase of the Shares and any Warrants purchasable by such Investor, the
exercise of any such Warrants, and compliance with the provisions hereof and
thereof by such Investor, do not and will not, with or without the passage of
time or the giving of notice or both, (a) violate any provision of law, statute,
rule or regulation or any ruling, writ, injunction, order, judgment or decree of
any court, administrative agency or other governmental body or (b) conflict with
or result in any breach of any of the terms, conditions or provisions of, or
constitute a default (or give rise to any right of termination, cancellation or
acceleration) under, such Investor's charter, by-laws, partnership agreement or
other organizational document, or any material note, indenture, mortgage, lease,
agreement, contract, purchase order or other instrument, document or agreement
to which such Investor is a party or by which it or any of its property is bound
or affected.
5.8 No Governmental Consent or Approval Required. No authorization,
--------------------------------------------
consent, approval or other order of, or declaration to, or filing with, any
governmental agency or body is required to be made or obtained by such Investor
for or in connection with the valid authorization, execution and delivery by
such Investor of the Transaction Documents or for the valid purchase by such
Investor of the Shares and any Warrants to be sold to it hereunder or for or in
connection with the valid exercise of any such Warrant or issuance to such
Investor of any Warrant Shares or Reserved Shares.
-10-
<PAGE>
5.9 Rule 144. Such Investor understands that the exemption from
--------
registration afforded by Rule 144 (the provisions of which are known to such
Investor) promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act depends upon the satisfaction of various
conditions, that such exemption is not currently available and that, if
applicable, Rule 144 affords the basis for sales only in limited amounts.
SECTION 6. Conditions Precedent to Closing by the Investor. The
--------- -----------------------------------------------
obligation of each Investor to purchase and pay for the Shares and any Warrants
being purchased by such Investor at the Initial Closing or any Additional
Closing (each a "Closing") is subject to satisfaction (or waiver by the
Investor) of the following conditions precedent at or before such Closing:
6.1 Corporate Proceedings. All corporate and other proceedings to be
---------------------
taken and all waivers and consents to be obtained in connection with the
transactions contemplated by this Agreement shall have been taken or obtained
and all documents incident to such transactions shall be satisfactory in form
and substance to the Investors and their counsel, who shall have received all
such originals or certified or other copies of such documents as they may
reasonably request.
6.2 Representations and Warranties Correct. The representations and
--------------------------------------
warranties made by the Corporation in Section 4 hereof shall be true and correct
when made, and shall be true and correct in all material respects at the time of
such Closing with the same force and effect as if they had been made at and as
of the time of such Closing.
6.3 Compliance with Covenants. The Corporation shall have duly
-------------------------
complied with and performed all covenants and agreements of the Corporation
herein which are required to be complied with and performed at or before such
Closing.
6.4 Certificate of Compliance. The Corporation shall have provided
-------------------------
to each of the Investors purchasing Shares at such Closing a certificate, dated
the date of such Closing, in form and substance reasonably satisfactory to such
Investor, confirming compliance with the conditions set forth in Sections 6.2
and 6.3.
6.5 Opinion of Counsel. At such Closing, each of the Investors
------------------
purchasing Shares at such Closing shall have received from Foley, Hoag & Eliot
LLP, counsel for the Corporation, an opinion addressed to such Investors, dated
the date of such Closing, to the effect set forth in Exhibit 6.5.
-----------
6.6 Related Agreements and Documents. At or before such Closing, the
--------------------------------
parties thereto shall have executed and delivered the Registration Rights
Agreement, the Voting Agreement and the Stock Restriction Agreement, and the
Corporation shall have delivered to the Investors such other documents as they
shall reasonably request.
6.7 Blue Sky Matters. All consents, approvals, qualifications,
----------------
registrations and filings required to be obtained or effected under any
applicable state securities or "blue sky" laws in connection with the issuance,
sale and delivery of the Shares and the Warrants prior to
-11-
<PAGE>
the sale of the Shares or the Warrants shall have been obtained or effected and
copies of the same delivered to each of the Investors.
6.8 Purchase by Other Investors. All of the Initial Shares and the
---------------------------
Warrants shall have been purchased and paid for at the Initial Closing.
SECTION 7. Financial Reports. Subject to the limitations set forth in
--------- -----------------
Section 7.6, the Corporation agrees to furnish each of the Investors and any
transferee to which any Investor transfers at least 100,000 Shares (a "Series C
Transferee") with the following:
7.1 Quarterly and Monthly Reports. Within 45 days after the end of
-----------------------------
each month and each fiscal quarter, an unaudited financial report of the
Corporation, which report shall be prepared in accordance with generally
accepted accounting principles consistently applied (except that the financial
report may (i) be subject to normal year-end audit adjustments neither
individually nor in the aggregate material and (ii) not contain all notes
thereto which may be required in accordance with generally accepted accounting
principles) and shall be certified by either the Chief Executive Officer or the
Chief Financial officer of the Corporation to have been so prepared, and which
shall include the following:
(a) an income statement for such month or quarter, together with a
cumulative income statement from the first day of the then-current fiscal year
to the last day of such month or quarter;
(b) a balance sheet as of the last day of such month or quarter;
(c) a statement of cash flows for such month or quarter;
(d) a comparison between the actual figures for such month or quarter,
the comparable figures (with respect to the foregoing clauses (a) and (b) only)
for the prior year (if any) and the comparable figures included in the Budget
(as hereinafter defined) for such month or quarter, with an explanation of any
material differences between them.
The financial report for each fiscal quarter shall be accompanied by a
report by the Chief Executive Officer of the Corporation explaining business
developments and problems occurring during the quarter.
7.2 Annual Reports. Within 120 days after the end of each fiscal
--------------
year of the Corporation, audited financial statements of the Corporation, which
shall include an income statement for such fiscal year and a balance sheet as of
the last day thereof, and statements of stockholders' equity and cash flows for
such fiscal year, each prepared in accordance with generally accepted accounting
principles consistently applied, certified by independent certified public
accountants of recognized national standing satisfactory to the Investors,
together with such accountants' annual management letter.
7.3 Consolidated Financial Statements. If for any period the
---------------------------------
Corporation shall have any subsidiary whose accounts are consolidated with those
of the Corporation, then in
-12-
<PAGE>
respect of such period the financial statements delivered pursuant to the
foregoing Sections 7.1 and 7.2 shall be the consolidated and consolidating
financial statements of the Corporation and all such consolidated subsidiaries.
7.4 Other Reports and Information. Promptly upon becoming available:
-----------------------------
(a) copies of all financial statements, reports, notices, press
releases, proxy statements and other documents sent by the Corporation to
its stockholders or released to the public and copies of all regular and
periodic reports, if any, filed by the Corporation with the Commission or
any securities exchange; and
(b) any other financial or other information available to
management of the Corporation as any of the Investors shall have reasonably
requested on a timely basis.
7.5 Budgets and Operating Plans. At least 30 days prior to the
---------------------------
beginning of each fiscal year of the Corporation, a monthly operating plan of
the Corporation, with monthly breakdowns, for such fiscal year (the "Budget").
The Budget shall be accepted as the Budget for such fiscal year when it has been
approved by the Board of Directors of the Corporation. The Budget shall be
reviewed by the Corporation periodically and all changes therein and all
material deviations therefrom which are proposed to be made by the Corporation
shall be resubmitted to its Board of Directors and to each of the Investors in
advance and shall be accepted when approved by, and the Corporation shall not
make any such changes or material deviations to or from the Budget without such
prior approval of, its Board of Directors. The Budget shall include an income
statement, balance sheet and cash flow information.
7.6 Limitations on Rights of Investors under Section 7. The
--------------------------------------------------
Corporation shall provide the information required by Sections 7.1 through 7.5
to each Investor and any Series C Transferee so long as such Investor or Series
C Transferee shall own at least 100,000 shares of the Common Stock (including in
such number shares of Common Stock issuable upon Conversion of Series C
Preferred) appropriately adjusted to take account of any stock split, stock
dividend, combination of shares or the like. The foregoing provisions of this
Section 7 to the contrary notwithstanding, the Investors shall not have any
rights and the Corporation shall not have any obligations under the foregoing
provisions of this Section 7 at such time that the Common Stock is registered
under Section 12 of the Exchange Act.
SECTION 8. Additional Agreements of the Corporation.
--------- ----------------------------------------
8.1 Right of First Refusal.
----------------------
(a) Subject to the limitations set forth in paragraph (i) of this
Section 8.1 and in Section 8.9, the Corporation hereby grants to each Investor,
each Series B Investor, each Founder, and any of their respective permitted
assignees described in paragraph (j) of this Section 8.1 (each a "Right Holder")
the right of first refusal to purchase, pro rata, all (or any part) of any New
Securities (as defined in this Section 8.1 (b)) that the Corporation may, from
time to time, propose to sell or issue. Each such Right Holder's pro rata
share, for purposes of
-13-
<PAGE>
this right of first refusal, is the ratio of (i) the number of shares of Common
Stock then held of record by, or issuable on conversion of Series C Preferred,
Series B Preferred or Series A Preferred (collectively, "Preferred Stock") then
held of record by, such Right Holder to (ii) the sum of the total number of
shares of the Common Stock issued and outstanding plus the total number of
shares of Common Stock issuable upon conversion of the Preferred Stock, in each
case at such time (the "Basic Amount").
(b) "New Securities" shall mean any equity securities of the
Corporation, whether now authorized or not, and rights, options, or warrants to
purchase said equity securities, and securities of any type whatsoever that are,
or may become, convertible into said equity securities; provided, however, that
-------- -------
"New Securities" does not include (i) securities offered to the public pursuant
to a registration statement filed under the Securities Act, the gross proceeds
to the Corporation from the sale of which would equal or exceed $20,000,000;
(ii) securities issued pursuant to the acquisition of another corporation by the
Corporation by merger, purchase of substantially all of the assets, or other
reorganization whereby the Corporation acquires not less than 51 % of the voting
power of such corporation; (iii) up to 1,200,000 shares (appropriately adjusted
to take account of any stock split, stock dividend, combination of shares or the
like) of Common Stock (or related options) issued to employees, officers or
other persons performing services for the Corporation pursuant to any stock
offering, plan or arrangement approved by the Board of Directors of the
Corporation, which number may be adjusted upward by the affirmative vote of two-
thirds of the whole Board of Directors; (iv) securities issued in connection
with any stock split, stock dividend or recapitalization by the Corporation; (v)
shares of Common Stock issued upon conversion of the Shares or the Warrant
Shares; (vi) securities issuable upon exercise or conversion of any rights,
options, warrants or convertible securities outstanding on the date of this
Agreement; (vii) securities issued to any financial institution in connection
with a loan transaction approved by the Board of Directors of the Corporation;
(viii) securities issued to vendors or customers or to other persons in similar
commercial situations with the Corporation, provided such issuance is approved
by the Board of Directors of the Corporation; (ix) securities issued in
connection with obtaining lease financing, whether issued to a lessor, guarantor
or other person involved in the financing, provided such issuance is approved by
the Board of Directors of the Corporation; (x) the Additional Shares; or (xi)
any right, option or warrant to acquire any security convertible into securities
excluded from the definition of New Securities pursuant to clauses (i) through
(x) above.
(c) The Corporation shall not issue, sell or exchange, agree to issue,
sell or exchange, or reserve or set aside for issuance, sale or exchange any New
Securities unless the Corporation shall deliver to each Right Holder a written
notice of any proposed or intended issuance, sale or exchange of New Securities
(the "Offer"), which Offer shall (i) identify and describe the New Securities,
(ii) describe the price and other terms upon which they are to be issued, sold
or exchanged, and the number or amount of the New Securities to be issued, sold
or exchanged, (iii) identify the persons or entities to which or with which the
New Securities are to be offered, issued, sold or exchanged and (iv) offer to
issue and sell to or exchange with such Right Holder (a) such Right Holder's
Basic Amount, and (b) any additional portion of the New Securities as such Right
Holder shall indicate it will purchase or acquire should the other Right Holders
subscribe for less than their Basic Amounts (the "Undersubscription Amount").
Each Right Holder shall have the right, for a period of 30 days following
delivery of the Offer, to
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<PAGE>
purchase or acquire, at a price and upon the other terms specified in the Offer,
the number or amount of New Securities described above. The Offer by its terms
shall remain open and irrevocable for such 30-day period.
(d) To accept an Offer, in whole or in part, a Right Holder must
deliver a written notice to the Corporation prior to the end of the 30-day
period of the Offer, setting forth the portion of the Right Holder's Basic
Amount that such Right Holder elects to purchase and, if such Right Holder shall
elect to purchase all of its Basic Amount, the Undersubscription Amount (if any)
that such Right Holder elects to purchase (the "Notice of Acceptance"). If the
Basic Amounts subscribed for by all Right Holders are less than the total New
Securities, then each Right Holder who has set forth an Undersubscription Amount
in its Notice of Acceptance shall be entitled to purchase, in addition to the
Basic Amount subscribed for, the Undersubscription Amount it has subscribed for;
provided, however, that should the Undersubscription Amounts subscribed for
- -----------------
exceed the difference between the New Securities and the Basic Amounts
subscribed for (the "Available Undersubscription Amount"), each Right Holder who
has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the
Undersubscription Amount subscribed for by such Right Holder bears to the total
Undersubscription Amounts subscribed for by all Right Holders, subject to
rounding by the Board of Directors to the extent it reasonably deems necessary.
(e) In the event that Notices of Acceptance are not given by the Right
Holders in respect of all the New Securities, the Corporation shall have 90 days
from the expiration of the period set forth in paragraph (c) above to issue,
sell or exchange all or any part of such New Securities as to which a Notice of
Acceptance has not been given by the Right Holders (the "Refused Securities"),
but only to the offerees or purchasers and only upon terms and conditions
(including, without limitation, unit prices and interest rates) which are
described in the Offer.
(f) In the event the Corporation shall propose to sell less than all
the Refused Securities (any such sale to be in the manner and on the terms
specified in paragraph (e) above), then each Right Holder may, at its sole
option and in its sole discretion, reduce the number or amount of the New
Securities specified in its Notice of Acceptance to an amount that shall be not
less than the number or amount of the New Securities that the Right Holder
elected to purchase pursuant to paragraph (d) above multiplied by a fraction,
(i) the numerator of which shall be the number or amount of New Securities the
Corporation actually proposes to issue, sell or exchange (including New
Securities to be issued or sold to Right Holders pursuant to paragraph (d) above
prior to such reduction) and (ii) the denominator of which shall be the amount
of all New Securities. In the event that any Right Holder so elects to reduce
the number or amount of New Securities specified in its Notice of Acceptance,
the Corporation may not issue, sell or exchange more than the reduced number or
amount of the New Securities unless and until such securities have again been
offered to the Right Holders in accordance with paragraph (c) above.
(g) Upon the closing of the issuance, sale or exchange of all or less
than all the Refused Securities, the Right Holders shall acquire from the
Corporation, and the
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<PAGE>
Corporation shall issue to the Right Holders, the number or amount of New
Securities specified in the Notices of Acceptance, as reduced pursuant to
paragraph (f) above if the Right Holders have so elected, upon the terms and
conditions specified in the Offer. The purchase by the Right Holders of any New
Securities is subject in all cases to the preparation, execution and delivery by
the Corporation and the Right Holders of a purchase agreement relating to such
New Securities reasonably satisfactory in form and substance to the Right
Holders and their respective counsel.
(h) Any New Securities not acquired by the Right Holders or other
persons in accordance with paragraph (e) above may not be issued, sold or
exchanged until they are again offered to the Right Holders under the procedures
specified in this Agreement.
(i) This right of first refusal shall run to each Investor, each
Series B Investor, each Founder and any of their respective permitted assignees
under paragraph (j) of this Section 8.1 only for so long as they hold the
following number of shares of Common Stock (including in such number shares of
Common Stock issuable upon conversion of Preferred Stock):
(i) in the case of the Founders and the Series B Investors who
were parties to the Stock Purchase Agreement dated May 26, 1994, and their
respective permitted assignees, 50,000 shares; and
(ii) in the case of all other Series B Investors and the
Investors, and their respective permitted assignees, 200,000 shares (including
shares held by their respective Affiliates (as hereinafter defined)).
(j) This right of first refusal may be assigned, in whole or in part,
(i) to any Affiliate (as hereinafter defined) of any Right Holder or (ii) to any
assignee who acquires not less than 50,000 shares of Common Stock in the case of
an assignment from assignor described in clause (i) of paragraph (i) of this
Section 8.1, or 200,000 shares of Common Stock in the case of an assignment from
an assignor described in clause (ii) of paragraph (i) of this Section 8.1 (in
each case, including in such number shares of Common Stock issuable upon
conversion of Preferred Stock and appropriately adjusted to take account of any
stock split, stock dividend, combination of shares, or the like). As used in
this Section, an Affiliate of a Right Holder shall mean any partner of the Right
Holder that is a partnership or any person or entity that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Right Holder.
(k) This Section 8.1 shall supersede and replace Section 8.1 of the
Series B Purchase Agreement, which Section 8.1 shall no longer have any force or
effect. Without limiting the generality of the foregoing, the Right Holders
under Section 8.1 of the Series B Purchase Agreement hereby consent to the sale
of the Shares and the Warrants and waive their rights of first refusal under
Section 8.1 of the Series B Purchase Agreement (including their rights to notice
thereunder) in connection with the issuance and sale of the Shares and the
Warrants, the issuance of the Warrant Shares upon exercise of the Warrants, and
the issuance of the Reserved Shares upon conversion of the Shares and the
Warrant Shares.
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<PAGE>
8.2 Keeping of Records and Books of Account. The Corporation shall keep,
---------------------------------------
and cause each subsidiary to keep, adequate records and books of account, in
which complete entries will be made in accordance with generally accepted
accounting principles consistently applied, reflecting all financial
transactions of the Corporation and such subsidiary, and in which, for each
fiscal year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection with its
business shall be made.
8.3 Insurance. The Corporation will do or cause to be done all things
---------
necessary to preserve and maintain in full force and effect fire and casualty
insurance policies, with extended coverage, on its properties, assets, business
and personnel, in amounts deemed adequate by the Corporation, and in accordance
with the standards of the industry in which the Corporation operates, sufficient
in amount to allow it to replace any of its properties which might be damaged or
destroyed.
8.4 Key Man Life Insurance. The Corporation shall use its best efforts to
----------------------
maintain in force a policy of life insurance, naming the Corporation as
beneficiary, on the life of Dr. Hubert Koster, in the amount of US$1,000,000.
8.5 Maintenance of Corporate Existence, etc. The Corporation will do or
---------------------------------------
cause to be done all reasonable things necessary to preserve and keep in full
force and effect its existence and all of its rights (charter and statutory),
subject in all cases to the exercise by the Board of Directors of the
Corporation of their fiduciary obligations. The Corporation shall comply in all
respects with the provisions of its Certificate of Incorporation and By-laws.
8.6 Maintenance of Facilities. The Corporation will cause all facilities
-------------------------
owned or leased in the conduct of its business to be maintained and kept in good
condition and repair and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Corporation may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
--------
however, that nothing in this Section shall prevent the Corporation from
- -------
discontinuing the lease or maintenance of any such facilities if such
discontinuance is, in the good faith judgment of the Board of Directors of the
Corporation, desirable in the conduct of its business and would not have a
material adverse effect on the Corporation.
8.7 Payment of Taxes. The Corporation will pay or discharge or cause to
----------------
be paid or discharged, before the same shall become delinquent, (1) all material
taxes, assessments and governmental charges levied or imposed upon the
Corporation or upon the income, profits or property of the Corporation; and (2)
all material liabilities of the Corporation; provided, however, that the
-------- -------
Corporation shall not be required to pay or discharge or cause to be paid or
discharged any such tax assessment, liability, or charge, whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings if adequate reserves therefor have been established in accordance
with generally accepted accounting principles.
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<PAGE>
8.8 Compliance with Applicable Laws. The Corporation shall conduct its
-------------------------------
business in compliance in all material respects with all laws and valid
requirements of governmental authorities relating to the conduct of its business
or to its properties or assets.
8.9 Limitation On Rights of Investors. The rights of Right Holders other
---------------------------------
than the Investors under Section 8.1, and the obligations of the Corporation to
Right Holders other than the Investors under Section 8.1, shall terminate and be
of no effect upon and following the closing of a firm commitment underwritten
public offering of the Corporation's Common Stock pursuant to an effective
registration statement under the Securities Act in which (i) the offering price
per share is not less than $4.50 (prior to underwriter's discounts and
commissions), appropriately adjusted to take account of any stock split, stock
dividend, combination of shares, or the like, and (ii) the aggregate gross
proceeds to the Corporation from such offering are not less than $10 million.
The rights of the Investors under Sections 8.1 through 8.8, inclusive, and the
obligations of the Corporation to Investors under Sections 8.1 through 8.8,
inclusive, shall terminate and be of no effect upon and following the closing of
a firm commitment underwritten public offering of the Corporation's Common Stock
pursuant to an effective registration statement under the Securities Act in
which (i) the offering price per share is not less than $9.45 (prior to
underwriter's discounts and commissions), appropriately adjusted to take account
of any stock split, stock dividend, combination of shares, or the like, and (ii)
the aggregate gross proceeds to the Corporation from such offering are not less
than $20 million.
8.10 Proprietary Information and Invention Assignment Agreements. As soon
-----------------------------------------------------------
as practicable after the Initial Closing, the Corporation will use reasonable
efforts to cause each senior technical employee who has not already signed an
agreement with the Corporation relating to the protection of proprietary
information and the assignment of inventions to sign such an agreement in a form
acceptable to the Board of Directors of the Corporation.
SECTION 9. Expenses.
--------- --------
9.1 Expenses. The Corporation shall pay the reasonable fees and
--------
disbursements of one or more special counsel to the Investors in connection with
the transactions contemplated by this Agreement, up to a maximum aggregate
amount of $10,000. Otherwise, the Corporation and the Investors shall each bear
their own expenses, including the fees and disbursements of their respective
counsel, incurred in connection with the purchase and sale of the Shares and the
Warrants.
9.2 Brokers. No party to this Agreement has employed any broker or finder
-------
in connection with the transactions contemplated hereby. No person or entity
will have, as a result of the transactions contemplated by this Agreement, any
right, interest or valid claim against or upon any such party of any commission,
fee or other compensation as a finder or broker because of any act or omission
by such party or any agent of such party. Each party to this Agreement agrees
to indemnify and hold the others harmless from payment of any brokerage fee,
finders fee, or commission claimed by any third party who claims to have been
involved because of association with such party.
-18-
<PAGE>
SECTION 10. Exchanges; Lost, Stolen or Mutilated Certificates. Upon
---------- -------------------------------------------------
surrender by any Investor to the Corporation of a Warrant or a certificate or
certificates representing shares of Series C Preferred purchased or acquired by
such Investor hereunder or under the Warrants, or representing Reserved Shares
received upon conversion of any such shares of Series C Preferred, the
Corporation at its expense shall issue in exchange therefor, and deliver to such
Investor, a new Warrant or a new certificate or certificates representing such
shares, in such denomination or denominations as may be requested by such
Investor. Upon receipt of evidence satisfactory to the Corporation of the loss,
theft, destruction or mutilation of any Warrant or any certificate representing
any shares of Series C Preferred purchased or acquired by the Investor hereunder
or under the Warrants, or representing Reserved Shares received upon conversion
of any such shares of Series C Preferred and in case of any such loss, theft or
destruction, upon delivery of any indemnity agreement satisfactory to the
Corporation, or in case of any such mutilation, upon surrender and cancellation
of such Warrant or such certificate, the Corporation at its expense shall issue
and deliver to such Investor a new Warrant or a new certificate for such shares
of Series C Preferred or Reserved Shares, of like tenor, in lieu of such lost,
stolen or mutilated certificate.
SECTION 11. Survival of Representations, Warranties and Agreements. The
---------- ------------------------------------------------------
covenants, representations and warranties of the parties contained herein shall
survive any Closing hereunder. Each of the parties may rely on such covenants,
representations and warranties irrespective of any investigation made, or notice
or knowledge held by, it or any other person. All statements contained in any
certificate or other instrument delivered by any party pursuant to this
Agreement or in connection with the transactions contemplated by this Agreement
shall constitute representations and warranties by such party under this
Agreement.
SECTION 12. Remedies. In case any one or more of the covenants or
---------- --------
agreements set forth in this Agreement shall have been breached by the
Corporation, the Investors may proceed to protect and enforce their rights
either by suit in equity or by action at law, including, but not limited to, an
action for damages as a result of any such breach or an action for specific
performance of any such covenant or agreement contained in this Agreement.
SECTION 13. Successors and Assigns. This Agreement shall be binding upon,
---------- ----------------------
and inure to the benefit of, each of the parties hereto and, except as otherwise
expressly provided herein, each other person who shall become a registered
holder named in any Warrant or any certificate evidencing shares of Common Stock
or Series C Preferred transferred to such holder by any of the Investors or
their permitted transferees, and (except as aforesaid) their respective legal
representatives, successors and assigns.
SECTION 14. Entire Agreement; Effect on Prior Documents. This Agreement
---------- -------------------------------------------
and the other documents referred to herein or delivered pursuant hereto contain
the entire agreement among the parties with respect to the financing
transactions contemplated hereby and supersede all prior negotiations,
commitments, agreements and understandings among them with respect thereto.
SECTION 15. Notices. All notices, requests, consents and other
---------- -------
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument
-19-
<PAGE>
delivered in person or duly sent by first class mail postage prepaid (other than
to non-U.S. parties) or fax or DHL, Federal Express or other internationally
recognized express courier service, addressed to such party at the address set
forth below or such other address as may hereafter be designated in writing by
the addressee to the addressor listing all parties:
(i) if to the Corporation, to:
Sequenom, Inc.
11555 Sorrento Valley Road
Suite C
San Diego, California 92121
Attention: President
Fax: (619) 350-0344
with a copy to:
David R. Pierson, Esq.
Foley, Hoag & Eliot LLP
One Post office Square
Boston, Massachusetts 02109
Fax: (617) 832-7000
(ii) if to the Investors, to their respective addresses set forth on
the Schedule of Investors.
---------------------
SECTION 16. Amendments; Waivers. This Agreement may be amended, and
---------- -------------------
compliance with the provisions of this Agreement may be omitted or waived, by
the written agreement of the Corporation and Investors or assignees of their
rights hereunder holding two thirds in voting power of the Series C Preferred
(and Common Stock issued upon conversion thereof) held by the Investors and such
assignees. Sections 8.1 and 8.9 hereof and this Section 16 may be amended only
with the further written agreement of Series B Investors or assignees of their
rights hereunder holding 85 % of the voting power of the Series B Preferred (or
Common Stock issued upon conversion thereof) held by the Series B Investors or
such assignees.
SECTION 17. Counterparts. This Agreement may be executed in any number of
---------- ------------
counterparts, each such counterpart shall be deemed to be an original
instrument, and all such counterparts together shall constitute but one
agreement. Any such counterpart may contain one or more signature pages.
SECTION 18. Headings. The headings of the various sections of this
---------- --------
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a pan of this Agreement.
SECTION 19. Nouns and Pronouns. Whenever the context may require, any
---------- ------------------
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice-versa.
-20-
<PAGE>
SECTION 20. Governing Law. This Agreement shall be governed by, and
---------- -------------
construed and enforced in accordance with, the substantive laws of The
Commonwealth of Massachusetts, without regard to its principles of conflicts of
laws.
SECTION 21. Severability. Any provision of this Agreement that is
---------- ------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 22. Information Confidential. Each Investor acknowledges that the
---------- ------------------------
information received by it pursuant hereto (including without limitation under
Section 7 hereof) is confidential and for its use only and such Investor will
not reproduce, disclose or disseminate such information to any other person
(other than its employees or agents having a need to know the contents of such
information), except in connection with the exercise of rights under this
Agreement, unless the Corporation has made such information available to the
public generally or such Investor is required to disclose such information by
law or by any court or other governmental body; provided, however, that an
--------
Investor may make general statements concerning the nature and progress of the
Corporation's business and may include summary financial information concerning
the Corporation in such Investor's reports to its partners or shareholders. The
obligation of confidentiality set forth in this Section shall not apply to
information (i) generally known on a non-confidential basis (without fault of an
Investor) to companies in the Corporation's line of business; (ii) lawfully
obtained by an Investor without restriction on disclosure; (iii) known to an
Investor prior to receipt from the Corporation without restriction on
disclosure; or (iv) independently developed by an Investor without use of
information provided by the Corporation.
* * *
-21-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Series C Convertible
Preferred Stock Agreement as of the day and year first written above.
SEQUENOM, INC.
By: /s/ illegible
----------------------------------------
Its President
For purposes of Sections 8.1 and 8.9 only:
FOUNDERS:
/s/ Hubert Koster
---------------------------------------------
Hubert Koster
/s/ Nola Masterson
---------------------------------------------
Nola E. Masterson
/s/ Robert Patterson
---------------------------------------------
Robert E. Patterson
SERIES B INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: /s/ illegible
-----------------------------------------
Name:
Title:
-22-
<PAGE>
TVM INTERTERTECH LIMITED
PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: /s/ illegible
-----------------------------------------
Its:
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: /s/ illegible
-----------------------------------------
Its:
-23-
<PAGE>
TVM EUROTECH LIMITED
PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
Its General Partner
By: TVM Management Corporation
Its General Partner
By: /s/ illegible
-----------------------------------------
Its:
TVM TECHNO VENTURE
INVESTORS NO. 1 LIMITED
PARTNERSHIP
By: /s/ illegible
-----------------------------------------
General Partner
KBL FOUNDER VENTURES SCA
By: ______________________________________
Its:
ALPINVEST INTERNATIONAL B. V.
By: /s/ illegible /s/ illegible
---------------------------------------
Its: authorized signatories
BOSTON UNIVERSITY NOMINEE PARTNERSHIP
By: ______________________________________
General Partner
-24-
<PAGE>
/s/ Gerald E. Coughlan
---------------------------------------------
Gerald E. Coughlan
/s/ Charles P. Floe
---------------------------------------------
Charles P. Floe
/s/ Hellmut Kirchner
---------------------------------------------
Hellmut Kirchner
/s/ Herwig Brunner
---------------------------------------------
Herwig Brunner
/s/ Franz A. Wirtz
---------------------------------------------
Franz A. Wirtz
/s/ Hannemarie Wirtz
--------------------------------------------
Hannemarie Wirtz
/s/ Hubert Koster
---------------------------------------------
Hubert Koster
/s/ Ernst-Gunter Afting
---------------------------------------------
Ernst-Gunter Afting
SVE STAR VENTURES ENTERPRISES NO. III Gbr,
A GERMAN CIVIL LAW PARTNERSHIP
(with limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mBH Nr. 3
By: /s/ illegible
---------------------------------------
Managing Partner
-25-
<PAGE>
SVE STAR VENTURES
ENTERPRISES NO. IIIa GbR,
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: /s/ [ILLEGIBLE]^^
--------------------------------
Managing Partner
SVE STAR VENTURES
MANAGEMENTGESELLSCHAFT MBH
Nr. 3 & CO. BETEILIGUNGS KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: /s/ [ILLEGIBLE]^^
--------------------------------
Managing Partner
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i.) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997 among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
76,064
- ------------------------
Shares Purchased By: TVM Techno Venture Management
Limited Partnership,
its general partner
7,606 By: TVM Management Corporation
- ------------------------ its general partner
Number of Shares subject
to Warrants Purchased
$239,601.60 By: /s/ illegible
- ------------------------ ------------------------------------
Total Purchase Price Its: Treasurer
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
TVM INTERTECH
LIMITED PARTNERSHIP
50,709 By: TVM Techno Venture Management
- ------------------------ Limited Partnership,
Shares Purchased its general partner
5,070
- ------------------------
Number of Shares subject By: TVM Management Corporation,
to Warrants Purchased its general partner
$159,733.35
- ------------------------
Total Purchase Price By: /s/ illegible
-------------------------------------
Its: Treasurer
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
152,127 By: TVM Techno Venture Management
- ----------------------- Limited Partnership,
Shares Purchased its general partner
15,212
- -----------------------
Number of Shares subject By: TVM Management Corporation,
to Warrants Purchased its general partner
$479,200.15
- -----------------------
Total Purchase Price By: /s/ illegible
---------------
Its: Treasurer
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
TVM EUROTECH
LIMITED PARTNERSHIP
101,418 By: TVM Techno Venture Management
----------------------- Limited Partnership,
Shares Purchased its general partner
10,141
- ------------------------
Number of Shares subject By: TVM Management Corporation,
to Warrants Purchased its general partner
$319,466.70
- ------------------------
Total Purchase Price By: /s/ illegible
----------------------------------
Its: Treasurer
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
TVM TECHNO VENTURE
INVESTORS NO. 1
LIMITED PARTNERSHIP
8,253 By: TVM Techno Venture Management
- ------------------------- Limited Partnership,
Shares Purchased its general partner
825
- -------------------------
Number of Shares subject By: TVM Management Corporation,
to Warrants Purchased its general partner
$25,996.95
- -------------------------
Total Purchase Price By: /s/ illegible
-------------------------------------
Its:
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
/s/ KBL Founders SCA
---------------------------------------
(print name)
_____________________
Shares Purchases By: /s/ [SIGNATURE ILLEGIBLE]^^
----------------------------------
_____________________ Title: J. WEYNANDT M. LOGELIN
Number of Shares subject ----------------------------------
Director Director Director
to Warrants Purchases
Address:_______________________________
_____________________
Total Purchase Price ______________________________________
______________________________________
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
ALPINVEST INTERNATIONAL B.V.
----------------------------
(print name)
317,460 By: /s/ J.M. Davids /s/ J.H.M. Dols
- ------------------------ -----------------------------------------
Shares Purchases
31,746 Title: authorized signatories
- ------------------------ ---------------------------------------
Number of Shares subject
to Warrants Purchases
Address: Gooimeer 3
------------------------------------
USD 999,999 1411 DC NAARDEN
-------------- ----------------------------------------------
Total Purchase Price The Netherlands
----------------------------------------------
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
Hellmut Kirchner
---------------------------
15,873 (print name)
- ----------------------
Shares Purchases
By: /s/ ILLEGIBLE^^
------------------------
1,587 Title:_____________________
- ----------------------
Number of Shares subject
to Warrants Purchases
Address: MARTELSGRABEN
-------------------
USD 50,000.00 D-82327 [illegible]
--------------------- ---------------------------
Total Purchase Price
___________________________
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
Hellmut Kirchner
--------------------------------------------
(print name)
222,222
- -----------------------
Shares Purchases By: /s/ Hellmut Kirchner
----------------------------------------
22,222 Title: as Trustee
- ----------------------- --------------------------------------
Number of Shares subject
to Warrants Purchases
USD 700,000.00 Address: MARTELSGRABEN 2
- ----------------------- ------------------------------------
Total Purchase Price D-82327 TUTZING
--------------------------------------------
--------------------------------------------
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
Franz Wirtz
--------------------------------------------
(print name)
16,667
- ------------------------
Shares Purchases By: /s/ Franz Wirtz
----------------------------------------
1,666 Title:
- ------------------------
Number of Shares subject
to Warrants Purchases
Address: Atzenach 37
----------------------------------
$52,501.05 D-52223 Stolberg
- ------------------------- --------------------------------------------
Total Purchase Price Germany
--------------------------------------------
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
EXECUTED this 8th day of May, 1997.
Hannemarie Wirtz
------------------------------------------
(print name)
16,667
- ------------------------
Shares Purchases By: /s/ Hannemarie Wirtz
--------------------------------------
1,666 Title:
- ------------------------ ------------------------------------
Number of Shares subject
to Warrants Purchases
Address: Atzenach 37
-------------------------------
$52,501.05 D-52223 Stolberg
- ------------------------ ------------------------------------------
Total Purchase Price Germany
------------------------------------------
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series C Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 15th day of December, 1997.
SVE Star Ventures Managementgesellschaft
GmbH Nr 3 & Co. Beteiligungs KG
---------------------------------------------
(print name)
By: /s/ Meir Barel
-----------------------------------------
By: SVM Star Ventures Managementgesellschaft
mbH Nr 3- Managing Partner
-----------------------------------------
By: Dr. Meir Barel - Managing Partner
-----------------------------------------
Address: Star Ventures Management
------------------------------------
Possartstrasse 9
---------------------------------------------
D-81679 Munich, Germany
---------------------------------------------
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series C Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 15th day of December, 1997.
SVE Star Ventures Enterprises No. IIIA,
a German Civil Law Partnership
(with limitation of liability)
---------------------------------------------
(print name)
By: /s/ Meir Barel
-----------------------------------------
By: SVM Star Ventures Managmentgesellschaft
mbH Nr. 3 Managing Partner
Dr. Meir Barel - Managing Partner
-----------------------------------------
By: Dr. Meir Barel - Managing Partner
-----------------------------------------
Address:
Star Venture Management
------------------------------------
Possartstrasse 9
---------------------------------------------
D-81679 Munich, Germany
---------------------------------------------
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series C Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 15th day of December, 1997.
SVE Star Ventures Enterprises No. III,
a German Civil Law Partnership
(with limitation of liability)
--------------------------------------------
(print name)
By: /s/ Meir Barel
----------------------------------------
By: SVM Star Ventures Managementgesellschaft mhH Nr. 3 - Managing
Partner
By: Dr. Meir Barel - Managing Partner
----------------------------------------
Address: Star Ventures Management
----------------------------------
Possartstrasse 9
--------------------------------------------
D-81679 Munich, Germany
--------------------------------------------
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series C Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 16th day of December, 1997.
S.R. One, Limited
-----------------------------------------
(print name)
By: /s/ Raymond Whitaker
-------------------------------------
Raymond J. Whitaker, Ph.D
Title: Vice President
----------------------------------
Address: 565 E. Swedesford Rd., Suite 315
---------------------------------
Wayne, PA 19087
-----------------------------------------
-----------------------------------------
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series C Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 17th day of December, 1997.
GLS LP INVESTMENT III LIMITED
Laurence McNairn
---------------------------------------
(print name)
By: /s/ illegible
---------------------------------------
Title: Director
--------------------------------
Address: Barfield House
------------------------------
St. Julian's Avenue
---------------------------------------
St. Peter Port Guernsey GY13QL
---------------------------------------
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series C Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 8th day of January, 1998.
KLEINWORT BENSON LIMITED
__________________________________
(print name)
By: /s/ Christopher Wright
--------------------------------
Christopher Wright
Title: Managing Director
Address: 20 Fenchurch Street
---------------------------
London EC3P 3DB
------------------------------------
United Kingdom
------------------------------------
With copies of all correspondence to:
- ------------------------------------
Dresdner Kleinwort Benson
75 Wall Street
New York, NY 10005
Attn: C. Wright & J.S. Walker
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series C Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 8th day of January, 1998.
LOMBARD ODIER 4 CIE
---------------------------------------------
(print name) par procuration:
By: /s/ illegible
-----------------------------------------
Title: Vice-President Assistant V.P.
----------------------------------------
Address: 11 Rue de la Corraterie
-------------------------------------
CH-1204 Geneva Switzerland
----------------------------------------------
----------------------------------------------
<PAGE>
SEQUENOM, INC.
Series C Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series C
Convertible Preferred Stock Purchase Agreement dated as of May 8, 1997, among
Sequenom, Inc. (the "Corporation") and certain investors named on the Schedule
--------
of Investors thereto (the "Purchase Agreement"), (ii) that it is a party to the
- ------------
Purchase Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series C Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 8th day of January, 1998.
Merifin Capital N.V.
-----------------------------------
(print name)
By: /s/ Christopher Wright
--------------------------------
Christopher Wright
Title: Attorney-in-fact
-----------------------------
Address: c/o Finabel SA
--------------------------
254 Route de Lausanne
-----------------------------------
CH-1292 Geneva, Chambasy
-----------------------------------
Switzerland
Attn: Guillaume de Rham
With copies to: Merifin Capital N.V.
- --------------
Avenue Lloyd George 6
Boite 8
B-1000 Brussels, Belgium
ATTN: Coen N. Teulings
<PAGE>
SCHEDULE OF INVESTORS
<TABLE>
<CAPTION>
Number of Shares of
Series C Preferred Number of Shares Aggregate Purchase
Initial Investor Stock Subject to Warrant Price
_________________________________________________ ___________________ __________________ ___________________
<S> <C> <C> <C>
TVM Techno Venture 76,064 7,606 $ 239,601.60
Enterprises No. 11
Limited Partnership
c/o TVM Techno Venture
Management ("TVM")
101 Arch Street, Suite 1950
Boston, MA 02210
TVM Intertech 50,709 5,070 $ 159,733.35
Limited Partnership
c/o TVM
TVM Zweite Beteiligung-US 152,127 15,212 $ 479,200.05
Limited Partnership
c/o TVM
TVM Eurotech Limited 101,418 10,141 $ 319,466.70
Partnership
c/o TVM
TVM Techno Venture 8,253 825 $ 25,996.95
Investors No. 1
Limited Partnership
c/o TVM
KBL Founder Ventures SCA 87,619 8,761 $ 275,999.85
43, Boulevard Royal
L - XX55 Luxembourg
Alpinvest International B.V. 317,460 31,746 $ 999,999.00
Gooimeer 3
NL-1410 AB Naarden
The Netherlands
Hellmut Kirchner 15,873 1,587 $ 49,999.95
Martelsgraben 2
82327 Tutzing
Germany
Hellmut Kirchner, 222,222 22,222 $ 699,999.30
as Trustee
Martelsgraben 2
82327 Tutzing
Germany
Franz A. Wirtz 16,667 1,666 $ 52,501.05
Atzenach 37
D-52223 Stolberg
Germany
Hannemarie Wirtz 16,667 1,666 $ 52,501.05
Atzenach 37
D-52223 Stolberg
Germany
TOTAL 1,065,079 106,502 $3,354,998.85
</TABLE>
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF MAY 8, 1997
<TABLE>
<CAPTION>
Number of Shares of Series C
Investor Preferred Stock Aggregate Purchase Price
- -------------------- ----------------------------- -------------------------
<S> <C> <C>
SVM Star Ventures -68,762- USD216,600-
Managementgesellschaft
mbH Nr. 3 & Co. Beteiligungs
KG
</TABLE>
SVM Star Ventures Managementgesellschaft
mbH Nr. 3 & Co. Beteiligungs KG
- --------------------------------------
Print Name of Investor
By /s/ illegible
------------------------------------
By: SVM Star Ventures Managementgesellschaft mbH Nr. 3 - Managing Partner
By: Dr. Meir Barel - Managing Partner
Date: December 15, 1997
---------------------------------
Accepted and agreed to this
12 day of January , 1998
- -- -----------
SEQUENOM, INC.
By: /s/ Hubert Koster
-----------------------------------
Its: President
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF MAY 8, 1997
<TABLE>
<CAPTION>
Number of Shares of Series C
Investor Preferred Stock Aggregate Purchase Price
- --------------------- ---------------------------- ------------------------
<S> <C> <C>
SVE Star Ventures -13,047 USD41,100.-
Enterprises No. IIIA, a
German Civil Law Partnership
(with limitation of liability)
</TABLE>
SVE Star Ventures Enterprises No. IIIA,
a German Civil Law Partnership
(with limitation of liability)
- ----------------------------------------
Print Name of Investor
By /s/ illegible
--------------------------------------
By: SVM Star Ventures Managementgesellschaft mbH Nr. 3 - Managing Partner
By: Dr. Meir Barel - Managing Partner
Date: December 15, 1997
---------------------------------
Accepted and agreed to this
12th day of January, 1998
- ---- -------
SEQUENOM, INC.
By: /s/ Hubert Koster
-------------------------------------
Its: President
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF MAY 8, 1997
<TABLE>
<CAPTION>
Number of Shares of Series C
Investor Preferred Stock Aggregate Purchase Price
- ---------------- ---------------------------- ------------------------
<S> <C> <C>
SVE Star Ventures -156,286- USD492,300.
Enterprises No. III, a German
Civil Law Partnership (with
limitation of liability)
</TABLE>
SVE Star Ventures Enterprises No. III,
a German Civil Law Partnership
(with limitation of liability)
- ------------------------------------
Print Name of Investor
By /s/ illegible
----------------------------------
By: SVM Star Ventures Managementgesellschaft mbH Nr. 3 - Managing Partner
By: Dr. Meir Barel - Managing Partner
Date: December 15, 1997
-----------------------------
Accepted and agreed to this
12th day of January, 1998
- ---- -------
SEQUENOM, INC.
By: /s/ Hubert Koster
---------------------------------
Its: President
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF MAY 8, 1997
Number of Shares of Series C
Investor Preferred Stock Aggregate Purchase Price
- -------------------- ------------------------------ ------------------------
S.R. One, Limited 507,936 $1,599,998.40
S.R. One, Limited
- ----------------------
Print Name of Investor
By /s/ illegible
------------------------------------
Its: Vice President
Date: December 16, 1997
-------------------------------
Accepted and agreed to this
12th day of January, 1998
- ---- -------
SEQUENOM, INC.
By: /s/ Hubert Koster
---------------------------------
Its: President
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF MAY 8, 1997
<TABLE>
<CAPTION>
Number of Shares of Series C
Investor Preferred Stock Aggregate Purchase Price
- -------------------- ----------------------------- ---------------------------
<S> <C> <C>
793,650 $2,500,000
</TABLE>
GLS LP INVESTMENT III LIMITED
- -----------------------------------
Print Name of Investor
By /s/ illegible
---------------------------------
Its: Director
Date: 17 December 1997
----------------------------
Accepted and agreed to this
12th day of January, 1998
- ---- -------
SEQUENOM, INC.
By: /s/ Hubert Koster
--------------------------------
Its:
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF MAY 8, 1997
<TABLE>
<CAPTION>
Number of Shares of Series C
Investor Preferred Stock Aggregate Purchase Price
- ------------------- ---------------------------- ------------------------
<S> <C> <C>
317,460 1,000,000
</TABLE>
Kleinwort Benson Limited
- --------------------------------------
Print Name of Investor
By /s/ illegible
------------------------------------
Its: Managing Partner
Date: 8 January 1998
----------------------------------
Accepted and agreed to this
12th day of January, 1998
- ---- -------
SEQUENOM, INC.
By: /s/ Hubert Koster
-----------------------------------
Its:
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF MAY 8, 1997
<TABLE>
<CAPTION>
Number of Shares of Series C
Investor Preferred Stock Aggregate Purchase Price
- --------------------- ----------------------------- ------------------------
<S> <C> <C>
Lombard Odier & Cie 952,381 $3,000,000
</TABLE>
Lombard Odier & Cie
- ----------------------
Print Name of Investor
By /s/ illegible /s/ illegible
--------------------------------------
Vice-Pres. Assistant V.P.
Date: January 8, 1998
---------------------------------
Accepted and agreed to this
12th day of January, 1998
- ---- -------
SEQUENOM, INC.
By: /s/ Hubert Koster
-------------------------------------
Its: President
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF MAY 8, 1997
<TABLE>
<CAPTION>
Number of Shares of Series C
Investor Preferred Stock Aggregate Purchase Price
- -------------------- ----------------------------- ------------------------
<S> <C> <C>
158,730 500,000
</TABLE>
/s/ Merifin Capital N.V.
- -------------------------------------
Print Name of Investor
By /s/ illegible
---------------------------------
Its: Attorney-in-fact
Date: 8 January 1998
------------------------------
Accepted and agreed to this
12th day of January, 1998
- ---- -------
SEQUENOM, INC.
By: /s/ Hubert Koster
----------------------------------
Its:
<PAGE>
EXHIBIT 1
---------
Certificate of Amendment
------------------------
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF SEQUENOM, INC.
Sequenom, Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of said corporation
resolutions were duly adopted proposing and declaring advisable that
the Certificate of Incorporation of said corporation be amended and
that such amendment be submitted to the stockholders of the
Corporation for their consideration, as follows:
RESOLVED: That the Board of Directors of this Corporation recommends and
deems it advisable that the Certificate of Incorporation of this
Corporation, as heretofore amended, be further amended by
deleting Article FOURTH thereof and substituting for said
Article FOURTH the new Article FOURTH set forth on Exhibit A
---------
attached hereto; and
RESOLVED: That the aforesaid proposed amendment be submitted to the
stockholders of the Corporation for their consideration; and
RESOLVED: That following the approval by the stockholders of the aforesaid
amendment as required by law, the officers of this Corporation
be, and they hereby are, and each of them hereby is, authorized
and directed (i) to prepare, execute and file with the Secretary
of State of the State of Delaware a Certificate of Amendment
setting forth the aforesaid amendment in the form approved by
the stockholders and (ii) to take any and all other actions
necessary, desirable or convenient to give effect to the
aforesaid amendment or otherwise to carry out the purposes of
the foregoing Resolutions.
SECOND: That in lieu of a meeting and vote of stockholders, the stockholders
have given written consent to said amendments in accordance with the
provisions of section 228 of the General Corporation Law of the State
of Delaware, and written notice of the adoption of the amendments has
been given as provided in section 228 of the General Corporation Law
of the State of Delaware to every stockholder entitled to such notice.
THIRD: That the aforesaid amendments were duly adopted in accordance with the
applicable provisions of sections 228 and 242 of the General
Corporation Law of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, said Sequenom, Inc. has caused this certificate to be
signed by Fareed Kureshy, its President, and attested by David R. Pierson, its
Secretary, this 8th day of May, 1997.
<TABLE>
<CAPTION>
ATTEST: SEQUENOM, INC.
<S> <C>
By: /s/ David Pierson By: /s/ Fareed Kureshy
______________________ _______________________
Its Secretary Its President
</TABLE>
-2-
<PAGE>
EXHIBIT A
---------
FOURTH: The total number of shares of all classes of stock which the
- ------
Corporation has authority to issue is 17,209,774 shares, consisting of 9,218,000
shares of Common Stock, par value $.001 per share (the "Common Stock"),
1,650,000 shares of Series A Convertible Preferred Stock, par value $.001 per
share (the "Series A Preferred Stock"), 2,976,663 shares of Series B Convertible
Preferred Stock, par value $.001 per share (the "Series B Preferred Stock") and
3,3651,081 shares of Series C Convertible Preferred Stock, par value $.001 per
share (the "Series C Preferred Stock", and, together with the Series A Preferred
Stock and the Series B Preferred Stock, the "Preferred Stock"), amounting to an
aggregate par value of $17,209,774.
The powers, preferences and rights, and the qualifications, limitations or
restrictions thereof, in respect of each class or series of stock of the
Corporation shall be as follows:
Section 1. Liquidation Rights.
--------- ------------------
(a) Liquidation Payments.
--------------------
(i) In the event of any liquidation, dissolution or winding
up of the affairs of the Corporation, whether voluntary or involuntary, the
holders of shares of the Series C Preferred Stock and the Series B Preferred
Stock shall be entitled to be paid first out of the assets of the Corporation
available for distribution to holders of the Corporation's capital stock of all
classes the following amounts:
(1) in the case of the- Series C Preferred Stock, an
amount equal to the greater of:
(A) $3.15 per share of the Series C Preferred Stock
(which amount shall be subject to equitable adjustment whenever there shall
occur a stock dividend, stock split, combination of shares, reclassification or
other similar event with respect to the Series C Preferred Stock) plus all
dividends declared but unpaid thereon, to and including the date full payment
shall be tendered to the holders of the Series C Preferred Stock with respect to
such liquidation, dissolution or winding up, or
(B) such amount per share of the Series C Preferred
Stock as would have been payable had all shares of Preferred Stock been
converted to Common Stock immediately prior to such event of liquidation,
dissolution or winding up pursuant to the provisions of Section 2 hereof, plus
all dividends declared but unpaid on each share of the Series C Preferred Stock
to and including the date full payment shall be tendered to the holders of the
Series C Preferred Stock with respect to such liquidation, dissolution or
winding up.
(2) in the case of the Series B Preferred Stock, an
amount equal to the greater of:
<PAGE>
(A) $1.50 per share of the Series B Preferred Stock
(which amount shall be subject to equitable adjustment whenever there shall
occur a stock dividend, stock split, combination of shares, reclassification or
other similar event with respect to the Series B Preferred stock) plus all
dividends declared but unpaid thereon, to and including the date full payment
shall be tendered to the holders of the Series B Preferred Stock with respect to
such liquidation, dissolution or winding up, or
(B) such amount per share of the Series B Preferred
Stock as would have been payable had all shares of Preferred Stock been
converted to Common Stock immediately prior to such event of liquidation,
dissolution or winding up pursuant to the provisions of Section 2 hereof, plus
all dividends declared but unpaid on each share of the Series B Preferred Stock
to and including the date full payment shall be tendered to the holders of the
Series B Preferred Stock with respect to such liquidation, dissolution or
winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to the holders of the Series C Preferred Stock and the Series B
Preferred Stock of all amounts so distributable to them, then the entire assets
of the Corporation available for such distribution shall be distributed ratably
among the holders of the Series C Preferred Stock and the Series B Preferred
Stock in proportion to the full preferential amount each such holder is
otherwise entitled to receive under this Subsection l(a)(i).
(ii) After such payments shall have been made in full to the
holders of the Series C Preferred Stock and the Series B Preferred Stock or
funds necessary for such payments shall have been set aside by the Corporation
in trust for the account of holders of the Series C Preferred Stock and the
Series B Preferred Stock so as to be available for such payments, the holders of
shares of the Series A Preferred Stock shall be entitled to be paid out of the
assets of the Corporation available for distribution to holders of the
Corporation's capital stock of all classes an amount equal to the greater of:
(1) $0.50 per share of the Series A Preferred Stock
(which amount shall be subject to equitable adjustment whenever there shall
occur a stock dividend, stock split, combination of shares, reclassification or
other similar event with respect to the Series A Preferred Stock) plus all
dividends declared but unpaid thereon, to and including the date full payment
shall be tendered to the holders of the Series A Preferred Stock with respect to
such liquidation, dissolution or winding up, or
(2) such amount per share of the Series A Preferred
Stock as would have been payable had all shares of the Preferred Stock been
converted to Common Stock immediately prior to such event of liquidation,
dissolution or winding up pursuant to the provisions of Section 2 hereof, plus
all dividends declared but unpaid on each share of the Series A Preferred Stock
to and including the date full payment shall be tendered to the holders of the
Series A Preferred Stock with respect to such liquidation, dissolution or
winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to the holders of the Series A Preferred Stock of all amounts so
distributable to them, then the entire remaining assets of the Corporation
available for such distribution shall be distributed ratably
-2-
<PAGE>
among the holders of the Series A Preferred Stock in proportion to the full
preferential amount each such holder is otherwise entitled to receive under this
Subsection 1(a)(ii).
(iii) After such payments shall have been made in full to the
holders of the Preferred Stock, or funds necessary for such payments shall have
been set aside by the Corporation in trust for the account of holders of
Preferred Stock so as to be available for such payments, the remaining assets
available for distribution shall be distributed among the holders of the Common
Stock ratably in proportion to the number of shares of Common Stock held by
them.
(iv) Upon conversion of shares of Preferred Stock into shares
of Common Stock pursuant to Section 2 below, the holders of such Common Stock
shall not be entitled to any preferential payment or distribution in case of any
liquidation, dissolution or winding up, but shall share ratably in any
distribution of the assets of the Corporation to all the holders of Common
Stock.
(v) The amounts payable with respect to shares of Preferred
Stock under this Subsection l(a) are sometimes hereinafter referred to as
"Series C Liquidation Payments", "Series B Liquidation Payments" and "Series A
Liquidation Payments", respectively, and together are sometimes hereinafter
referred to as the "Liquidation Payments".
(b) Distributions Other than Cash. Whenever the distributions
-----------------------------
provided for in this Section 1 shall be payable in property other than cash, the
value of such distributions shall be the fair market value of such property as
determined in good faith by the Board of Directors of the Corporation.
(c) Merger as Liquidation, etc. The merger or consolidation of
--------------------------
the Corporation into or with another corporation (except one in which the
holders of capital stock of the Corporation immediately prior to such merger or
consolidation continue to hold at least eighty percent (80%) in voting power of
the capital stock of the surviving corporation, in which case the provisions of
Subsection 2(h) shall apply), or the sale of all or substantially all of the
assets of the Corporation, shall be deemed to be a liquidation, dissolution or
winding up of the affairs of the Corporation for purposes of this Section 1 (i)
with respect to the Series C Preferred Stock, unless the holders of at least
two-thirds of the then outstanding shares of the Series C Preferred Stock elect
to the contrary, (ii) with respect to the Series B Preferred Stock, unless the
holders of at least eighty-five percent (85%) of the then outstanding shares of
the Series B Preferred Stock elect to the contrary, and (iii) with respect to
the Series A Preferred Stock, unless the holders of at least eighty percent
(80%) of the then outstanding shares of the Series A Preferred Stock elect to
the contrary, such election in each such case to be deemed made upon receipt of
notice thereof by the Corporation at least three days before the effective date
of such event. If such notice is given with respect to any series of Preferred
Stock, the provisions of Subsection 2(h) shall apply to such series of Preferred
Stock. Unless such election is made, any amounts received by the holders of the
Preferred Stock as a result of such merger or consolidation shall be deemed to
be applied toward, and all consideration received by the Corporation in such
asset sale together with all other available assets of the Corporation shall be
-3-
<PAGE>
distributed toward, the Liquidation Payments attributable to such shares of
Preferred Stock in the order of preference set forth in Subsection 1(a).
(d) Notice. Notice of any proposed liquidation, dissolution or
------
winding up of the affairs of the Corporation (including any merger,
consolidation or sale of assets which may be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation under Subsection 1
(c)), stating a payment date, the amount of the Liquidation Payments and the
place where said Liquidation Payments shall be payable, shall be sent to the
holders of record of the Preferred Stock not less than twenty (20) days prior to
the payment date stated therein. Any holder of outstanding shares of Preferred
Stock may waive any notice required by this Subsection by a written document
specifically indicating such waiver.
Section 2. Conversion. The holders of Preferred Stock shall have
--------- ----------
conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert; Conversion Price. Each share of Preferred Stock
----------------------------------
shall be convertible, without the payment of any additional consideration by the
holder thereof and at the option of the holder thereof, at any time after the
date of issuance of such share, at the office of the Corporation or any transfer
agent for the Preferred Stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined in accordance with the following:
(i) in the case of the Series C Preferred Stock, by dividing
$3.15 by the Series C Conversion Price, determined as hereinafter provided, in
effect at the time of conversion. The Conversion Price at which shares of Common
Stock shall be deliverable upon conversion of the Series C Preferred Stock
without the payment of any additional consideration by the holder thereof (the
"Series C Conversion Price") shall initially be $3.15 per share of Common Stock.
Such initial Series C Conversion Price shall be subject to adjustment, in order
to adjust the number of shares of Common Stock into which the Series C Preferred
Stock is convertible, as hereinafter provided.
(ii) in the case of the Series B Preferred Stock, by dividing
$1.50 by the Series B Conversion Price, determined as hereinafter provided, in
effect at the time of conversion. The Conversion Price at which shares of Common
Stock shall be deliverable upon conversion of the Series B Preferred Stock
without the payment of any additional consideration by the holder thereof (the
"Series B Conversion Price") shall initially be $1.50 per share of Common Stock.
Such initial Series B Conversion Price shall be subject to adjustment, in order
to adjust the number of shares of Common Stock into which the Series B Preferred
Stock is convertible, as hereinafter provided.
(iii) in the case of the Series A Preferred Stock, by dividing
$0.50 by the Series A Conversion Price, determined as hereinafter provided, in
effect at the time of conversion. The Conversion Price at which shares of Common
Stock shall be deliverable upon conversion of the Series A Preferred Stock
without the payment of any additional consideration by the holder thereof (the
"Series A Conversion Price") shall initially be $0.50 per shares of Common
Stock. Such initial Series A Conversion Price shall be subject to adjustment, in
order
-4-
<PAGE>
to adjust the number of shares of Common Stock into which the Series A Preferred
Stock is convertible, as hereinafter provided.
(b) Automatic Conversion. Each share of Preferred Stock shall
--------------------
automatically be converted into shares of Common Stock at the applicable
Conversion Price for its series then in effect upon:
(i) the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of the Corporation to the public at an offering price per share (prior
to underwriter commissions and discounts) of not less than (1) in the case of
the Series C Preferred Stock, $9.45, (2) in the case of the Series B Preferred
Stock, $4.50, and (3) in the case of the Series A Preferred Stock, $2.50 (in
each case as adjusted pursuant to Subsection 2(e)(vi) hereof to reflect any
stock dividends, distributions, combinations, reclassifications or other like
transactions effected by the Corporation in respect of its Common Stock) and
with gross proceeds to the Corporation of not less than (1) $20,000,000 in the
case of the Series C Preferred Stock and (2) $10,000,000 in the case of either
the Series B Preferred Stock or the Series A Preferred Stock (in the event of
which offering, the person(s) entitled to receive the Common Stock issuable upon
such conversion of the Preferred Stock shall not be deemed to have converted
that Preferred Stock until the closing of such offering); or
(ii) (1) in the case of the Series C Preferred Stock, the written
election of the holders of not less than two-thirds, (2) in the case of the
Series B Preferred Stock, the written election of the holders of not less than
eighty-five percent (85 %), and (3) in the case of the Series A Preferred Stock,
the written election of the holders of not less than eighty percent (80%), of
the then outstanding shares of the applicable series of Preferred Stock to
require such mandatory conversion.
(c) Mechanics of Optional Conversions. Before any holder of
---------------------------------
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, the holder shall surrender the certificate or certificates therefor at
the office of the Corporation or of any transfer agent for the Preferred Stock,
and shall send notice to the Corporation at such office that the holder elects
to convert the same and shall state therein the holder's name or the name or
names of the holder's nominees in which the holder wishes the certificate or
certificates for shares of Common Stock to be issued. On the date of conversion,
all rights with respect to the Preferred Stock so converted shall terminate,
except any of the rights of the holder thereof, upon surrender of the holder's
certificate or certificates therefor, to receive certificates for the number of
shares of Common Stock into which such Preferred Stock has been converted and
cash in an amount equal to all dividends declared but unpaid thereon and any and
all other amounts owing with respect thereto at such time. If so required by the
Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or by
the holder's attorney duly authorized in writing. No fractional share of Common
Stock shall be issued upon the optional conversion of Preferred Stock. In lieu
of any fractional share to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the applicable
Conversion Price then in effect. The Corporation shall, as soon as practicable
after
-5-
<PAGE>
surrender of the certificate or certificates for conversion, issue and deliver
at such office to such holder of Preferred Stock, or to the holder's nominee or
nominees, a certificate or certificates for the number of shares of Common Stock
to which the holder shall be entitled as aforesaid, together with cash in lieu
of any fraction of a share and cash in an amount equal to all dividends declared
but unpaid thereon and any and all other amounts owing with respect thereto at
such time. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock on such
date.
(d) Mechanics of Automatic Conversions. Upon the occurrence of an
----------------------------------
event specified in Subsection 2(b), the affected Series of Preferred Stock shall
be converted automatically without any further action by the holders of shares
thereof and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided, however, that
all holders of shares of Preferred Stock being converted shall be sent notice of
the occurrence of an event specified in Subsection 2(b) including the date such
event occurred (the "Automatic Conversion Date"), and the Corporation shall not
be obligated to issue certificates evidencing the shares of Common Stock
issuable upon such conversion unless certificates evidencing such shares of the
Preferred Stock being converted are either delivered to the Corporation or its
transfer agent, or the holder notifies the Corporation or any transfer agent
that such certificates have been lost, stolen, or destroyed and executes an
agreement satisfactory to the Corporation to indemnify the Corporation from any
loss incurred by it in connection therewith and, if the Corporation so elects,
provides an appropriate indemnity bond. On the Automatic Conversion Date, all
rights with respect to the Preferred Stock so converted shall terminate, except
any of the rights of the holder thereof, upon surrender of the holder's
certificate or certificates therefor, to receive certificates for the number of
share of Common Stock into which such Preferred Stock has been converted,
together with cash in an amount equal to all dividends declared but unpaid on,
and any and all other amounts owing with respect to, the shares of Preferred
Stock converted to and including the time of conversion. Upon the automatic
conversion of the Preferred Stock, the holders of such Preferred Stock shall
surrender the certificates representing such shares at the office of the
Corporation or of its transfer agent. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or by the holder's attorney
duly authorized in writing. Upon surrender of such certificates there shall be
issued and delivered to such holder, promptly at such office and in the holder's
name as shown on such surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which the shares of
the Preferred Stock surrendered were convertible on the date on which such
automatic conversion occurred; together with cash in an amount equal to all
dividends declared but unpaid on, and any and all other amounts owing with
respect to, the shares of Preferred Stock converted to and including the time of
conversion. No fractional share of Common Stock shall be issued upon the
automatic conversion of the Preferred Stock. In lieu of any fractional share to
which the holder would otherwise be entitled, the Corporation shall pay cash
equal to such fraction multiplied by the applicable Conversion Price then in
effect.
-6-
<PAGE>
(e) Adjustments to Conversion Price for Diluting Issues.
---------------------------------------------------
(i) Special Definitions. For purposes of this Subsection 2(e),
-------------------
the following definitions shall apply:
(1) "Option" shall mean rights, options or warrants to
------
subscribe for, purchase or otherWise acquire either Common Stock or Convertible
Securities.
(2) "Original Issue Date" shall mean, with respect to each
-------------------
series of Preferred Stock, the first date on which a share of such series of
Preferred Stock was issued.
(3) "Convertible Securities" shall mean any evidences of
----------------------
indebtedness, shares of capital stock (other than Common Stock) or other
securities directly or indirectly convertible into or exchangeable for Common
Stock.
(4) "Additional Shares of Common Stock" shall mean all
---------------------------------
shares of Common Stock issued (or, pursuant to Subsection 2(e)(iii), deemed to
be issued) by the Corporation after the Original Issue Date, other than:
(A) shares of Common Stock or Convertible Securities
issued or issuable upon exercise of Options outstanding on the Original Issue
Date;
(B) up to 1,200,000 shares of Common Stock issued or
issuable to officers or employees or directors of, or consultants to, the
Corporation pursuant to a stock purchase or option plan or other employee stock
bonus arrangement (collectively, the "Plans") approved by the Board of
Directors; and
(C) shares of Common Stock issued or issuable upon
conversion of shares of Preferred Stock.
(ii) No Adjustment of Conversion Price. Except as set forth in
---------------------------------
Subsection 2(e)(vi), no adjustment in the number of shares of Common Stock into
which a series of Preferred Stock is convertible shall be made, by adjustment in
the Conversion Price for such series of Preferred Stock in respect of the
issuance of Additional Shares of Common Stock, unless the consideration per
share for an Additional Share of Common Stock (determined pursuant to Subsection
2(e)(v)) issued or deemed to be issued by the Corporation is less than the
Conversion Price for such series of Preferred Stock in effect on the date of,
and immediately prior to, the issue of such Additional Share.
(iii) Issue of Securities Deemed Issue of Additional Shares of
--------------------------------------------------------
Common Stock.
- ------------
(1) Options and Convertible Securities. In the event the
----------------------------------
Corporation at any time or from time to time after the applicable Original Issue
Date shall issue any Options or Convertible Securities or shall fix a record
date for the determination of holders
-7-
<PAGE>
of any class of securities entitled to receive any such Options or Convertible
Securities, then the maximum number of shares (as set forth in the instrument
relating thereto without regard to any provisions contained therein for a
subsequent adjustment of such number) of Common Stock issuable upon the exercise
of such Options or, in the case of Convertible Securities and Options therefor,
the conversion or exchange of such Convertible Securities, shall be deemed to be
Additional Shares of Common Stock issued as of the time of such issue or, in
case such a record date shall have been fixed, as of the close of business on
such record date, provided that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(A) no further adjustment in the Conversion Price of
any series of Preferred Stock adjusted as a result of such deemed issuance shall
be made upon the subsequent issue of Convertible Securities or shares of Common
Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Corporation, or decrease in the number of shares of
Common Stock issuable, upon the exercise, conversion or exchange thereof, the
Conversion Price of any series of Preferred Stock adjusted upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be readjusted to reflect such increase or decrease
insofar as it affects such Options or the rights of conversion or exchange under
such Convertible Securities;
(C) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the Conversion Price of any series of Preferred Stock
adjusted upon the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based thereon, shall,
upon such expiration, be readjusted as if:
(I) In the case of Convertible Securities or
Options for Common Stock the only Additional Shares of Common Stock issued were
the shares of Common Stock, if any, actually issued upon the exercise of such
Options or the conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually received by the
Corporation for the issue of all such Options, whether or not exercised, plus
the consideration actually received by the Corporation upon such exercise, or
for the issue of all such Convertible Securities which were actually converted
or exchanged, plus the additional consideration, if any, actually received by
the Corporation upon such conversion or exchange; and
(II) in the case of Options for Convertible
Securities only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options, and the
consideration received by the Corporation for the Additional Shares of Common
Stock deemed to have been then issued was the consideration actually received by
the Corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the Corporation
(determined pursuant to
-8-
<PAGE>
Subsection 2(e)(v)) upon the issue of the Convertible Securities with respect to
which such Options were actually exercised;
(D) no readjustment pursuant to clause (B) or (C)
above shall have the effect of increasing the Conversion Price of any series of
Preferred Stock to an amount which exceeds the lower of (i) the Conversion Price
of such series of Preferred Stock immediately prior to the original adjustment
for such deemed issuance, or (ii) the Conversion Price of such series of
Preferred Stock that would have resulted from any issuance of Additional Shares
of Common Stock between the original adjustment for such deemed issuance and
such readjustment date;
(E) in the case of any Options which expire by their
terms not more than 30 days after the date of issue thereof, no adjustment of
the Conversion Price of any series of Preferred Stock shall be made until the
expiration or exercise of all such Options, whereupon such adjustment shall be
made in the same manner provided in clause (C) above; and
(F) if such record date shall have been fixed and such
Options or Convertible Securities are not issued on the date fixed therefor, the
adjustment previously made in the Conversion Price of any series of Preferred
Stock which became effective on such record date shall be cancelled as of the
close of business on such record date, and thereafter the Conversion Price of
such series of Preferred Stock shall be adjusted pursuant to this Subsection
2(e)(iii) as of the actual date of their issuance.
(2) Stock Dividends, Stock Distributions and Subdivisions.
-----------------------------------------------------
In the event the Corporation at any time or from time to time after the
applicable Original Issue Date shall declare or pay any dividend or make any
other distribution on the Common Stock payable in Common Stock or effect a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common Stock), then and in any such
event, Additional Shares of Common Stock shall be deemed to have been issued:
(A) in the case of any such dividend or distribution,
immediately after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such dividend or
distribution, or
(B) in the case of any such subdivision, at the close
of business on the date immediately prior to the date upon which such corporate
action becomes effective.
If such record date she have been fixed and no part of such dividend shall been
paid on the date fixed therefor, the adjustment previously made in the
Conversion Price of any series of Preferred Stock which became effective on such
record date shall be cancelled as of the close of business; on such record date,
and thereafter the Conversion Price of such series of Preferred Stock shall be
adjusted pursuant to this Section 2(e)(iii) as of the time of actual payment of
such dividend.
-9-
<PAGE>
(iv) Adjustment of Conversion Price Upon Issuance of Additional Shares
-----------------------------------------------------------------
of Common Stock. In the event that at any time or from time to time after the
- ---------------
applicable Original Issue Date, the Corporation shall issue Additional Shares of
Common Stock (including, without limitation, Additional Shares of Common Stock
deemed to be issued pursuant to Subsection 2(e)(iii)(1) but excluding Additional
Shares of Common Stock deemed to be issued pursuant to Subsection 2(e)(iii)(2),
which event is dealt with in Subsection 2(e)(vi)(1)), without consideration or
for a consideration per share less than the Conversion Price of any series of
Preferred Stock in effect on the date of and immediately prior to such issue,
then and in such event, the Conversion Price of such series of Preferred Stock
shall be reduced, concurrently with such issue, to a price (calculated to the
nearest cent) determined in accordance with the following formula:
(P1) (Q1) + (P2) (Q2)
NCP =
_____________________
Q1 + Q2
where:
NCP = New Conversion Price of the affected series of
Preferred Stock.
P(1) = Conversion Price for such series of Preferred
Stock in effect immediately prior to new issue.
Q1 = Number of shares of Common Stock outstanding, or
deemed to be outstanding as set forth below,
immediately prior to such issue.
P2 = Weighted average price per share received by the
Corporation upon such issue.
Q2 = Number of shares of Common Stock issued, or deemed
to have been issued, in the subject transaction.
provided that for the purpose of this Subsection 2(e)(iv), all shares of Common
- --------
Stock issuable upon exercise or conversion of any Options or Convertible
Securities outstanding immediately prior to such issue shall be deemed to be
outstanding, and immediately after any Additional Shares of Common Stock are
deemed issued pursuant to Subsection 2(e)(iii), such Additional Shares of Common
Stock shall be deemed to be outstanding; and provided further, that the
-------- --------
applicable Conversion Price shall not be so reduced at any time if the amount of
such reduction would be an amount less than $.01, but any such amount shall be
carried forward and reduction with respect thereto made at the time of and
together with any subsequent reduction which, together with such amount and any
other amount or amounts so carried forward, shall aggregate $.0l or more.
(v) Determination of Consideration. For purposes of this Subsection
------------------------------
2(e), the consideration received by the Corporation for the issue of any
Additional Shares of Common Stock shall be computed as follows:
-10-
<PAGE>
(1) Cash and Property: Such consideration shall:
-----------------
(A) insofar as it consists of cash, be computed at the
aggregate amounts of cash received by the Corporation excluding amounts paid or
payable for accrued interest or accrued dividends;
(B) insofar as it consists of property other than cash, be
computed at the fair value thereof at the time of such issue, as determined in
good faith by the Board of Directors; and
(C) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of the
Corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (A) and (B) above, as
determined in good faith by the Board of Directors.
(2) Options and Convertible Securities. The consideration per
----------------------------------
share received by the Corporation for Additional Shares of Common Stock deemed
to have been issued pursuant to Subsection 2(e)(iii)(1), relating to Options and
Convertible Securities, shall be determined by dividing (x) the total amount, if
any, received or receivable by the Corporation as consideration for the issue of
such Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Corporation upon the exercise of such Options
or the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by (y)
the maximum number of shares of Common Stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such Options
or the conversion or exchange of such Convertible Securities.
(vi) Adjustment for Dividends, Distributions, Subdivisions,
------------------------------------------------------
Combinations or Consolidations of Common Stock.
- ----------------------------------------------
(1) Stock Dividends, Distributions or Subdivisions. In the event
----------------------------------------------
the Corporation shall be deemed to issue Additional Shares of Common Stock
pursuant to Subsection 2(e)(iii)(2) in a stock dividend, stock distribution or
subdivision, the Conversion Price of each series of Preferred Stock in effect
immediately before such deemed issuance shall, concurrently with the
effectiveness of such deemed issuance, be proportionately decreased.
(2) Combinations or Consolidations. In the event the
------------------------------
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Conversion Price of each series of Preferred Stock in effect immediately
prior to such combination or consolidation shall,
-11-
<PAGE>
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
(f) Adjustments for Certain Dividends and Distributions. In the
---------------------------------------------------
event that at any time or from time to time after the applicable Original Issue
Date the Corporation shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Corporation other than shares of
Common Stock, then and in each such event provision shall be made so that the
holders of Preferred Stock shall receive upon conversion thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Corporation that they would have received had their Preferred
Stock been converted into Common Stock on the date of such event and had they
thereafter, during the period from the date of such event to and including the
conversion date, retained such securities receivable by them as aforesaid during
such period, giving application during such period to all adjustments called for
herein.
(g) Adjustment for Reclassification, Exchange, or Substitution. In
----------------------------------------------------------
the event that at any time or from time to time after the applicable Original
Issue Date, the Common Stock issuable upon the conversion of Preferred Stock
shall be changed into the same or a different number of shares of any class or
classes of stock, whether by capital reorganization, reclassification, or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for above, or a merger, consolidation, or sale of assets provided for
below), then and in each such event the holder of any share or shares of
Preferred Stock shall have the right thereafter to convert such shares into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification, or other change, by the holder of a
number of shares of Common Stock equal to the number of shares of Common Stock
into which such shares of Preferred Stock might have been converted immediately
prior to such reorganization, reclassification, or change, all subject to
further adjustment as provided herein.
(h) Adjustment for Merger, Consolidation or Sale of Assets. In the
------------------------------------------------------
event that at any time or from time to time after the applicable Original Issue
Date, the Corporation shall merge or consolidate with or into another entity or
sell all or substantially all of its assets, each share of Preferred Stock as to
which such consolidation, merger or sale is not treated as a liquidation under
Subsection l(c) shall thereafter be convertible into the kind and amount of
shares of stock or other securities or property to which a holder of the number
of shares of Common Stock of the Corporation deliverable upon conversion of such
Preferred Stock would have been entitled to receive upon such consolidation,
merger or sale; and, in such case, appropriate adjustment (as determined in good
faith by the Board of Directors) shall be made in the application of the
provisions set forth in this Section 2 with respect to the rights and interest
thereafter of the holders of Preferred Stock, to the end that the provisions set
forth in this Section 2 (including provisions with respect to changes in and
other adjustments of the Conversion Price) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the conversion of Preferred Stock.
(i) No Impairment. The Corporation shall not, by amendment of its
-------------
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation,
-12-
<PAGE>
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the term to be
observed or performed hereunder by the Corporation but shall at all times in
good faith assist in the carrying out of all the provisions of this Section 2
and in the taking of all such action as may be necessary or appropriate in order
to protect the Conversion Rights of the holders of Preferred Stock against
impairment.
(j) Certificate as to Adjustments. Upon the occurrence of each
-----------------------------
adjustment or readjustment of the Conversion Price of any series of Preferred
Stock pursuant to this Section 2, the Corporation at its expense shall promptly
compute such adjustment or readjustment in accordance with the terms hereof and
furnish to each holder of such series of Preferred Stock a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Corporation shall, upon the
written request at any time of any holder of any such series of Preferred Stock,
furnish or cause to be furnished to such holder a like certificate setting forth
(i) such adjustments and readjustments, (ii) the Conversion Price of such series
of Preferred Stock at the time in effect, and (iii) the number of shares of
Common Stock and the amount, if any, of other property which at the time would
be received upon the conversion of each share of such series of Preferred Stock.
(k) Notices of Record Date. In the event of any taking by the
----------------------
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the Corporation shall send notice to
each holder of Preferred Stock at least ten (10) days prior to such record date
specifying the date on which any such record is to be taken for the purpose of
such dividend or distribution.
(l) Common Stock Reserved. The Corporation shall reserve and keep
---------------------
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect conversion of
the Preferred Stock.
(m) Certain Taxes. The Corporation shall pay any issue or transfer
-------------
taxes payable in connection with the conversion of Preferred Stock, provided,
however, that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer to a name other than that of the holder of
the Preferred Stock.
(n) Closing of Books. The Corporation shall at no time close its
----------------
transfer books against the transfer of any Preferred Stock or of any shares of
Common Stock issued or issuable upon the conversion of any shares of Preferred
Stock in any manner which interferes with the timely conversion or transfer of
such Preferred Stock or Common Stock.
Section 3. Restrictions.
--------- ------------
(a) At any time when shares of Preferred Stock are outstanding,
except where the vote of the holders of a greater number of shares of the
Corporation is required by law
-13-
<PAGE>
or by this Certificate of Incorporation, and in addition to any other vote
required by law or this Certificate of Incorporation, without the affirmative
vote of the holders of at least sixty percent (60%) of the then outstanding
shares of Preferred Stock (with calculations based upon the number of shares of
Common Stock into which such shares of Preferred Stock are then convertible),
voting collectively as a single class, the Corporation will not:
(i) consent to any liquidation, dissolution or winding up of
the Corporation or merge or consolidate with or into any other entity or
entities;
(ii) sell, abandon, transfer, lease or otherwise dispose of all
or any substantially portion of its properties and other assets; or
(iii) amend this Certificate of Incorporation or the
Corporation's By-Laws.
(b) At any time when shares of Series C Preferred Stock are
outstanding, except where the vote of the holders of a greater number of shares
of the Corporation is required by law or by this Certificate of Incorporation,
and in addition to any other vote required by law or this Certificate of
Incorporation, without the affirmative vote of the holders of at least two-
thirds of the then outstanding shares of the Series C Preferred Stock, the
Corporation will not:
(i) amend, alter or change the designation or any preferences,
voting powers, qualifications, or special or relative rights or privileges of
the Series C Preferred Stock in a manner adverse to the interests of the holders
of the Series C Preferred stock in any material respect;
(ii) increase the authorized number of shares of Series C
Preferred Stock;
(iii) create or authorize the creation of any additional class or
series of shares of stock unless such class or series ranks junior to the Series
C Preferred Stock as to both dividends and the distribution of assets on the
liquidation, dissolution, winding up or insolvency of the Corporation, or
increase the authorized amount of any other class or series of shares of stock
unless the same ranks junior to the Series C Preferred Stock as to dividends and
the distribution of assets on the liquidation, dissolution, winding up or
insolvency of the Corporation, or create or authorize any obligation or security
convertible into shares of the Series C Preferred Stock or into shares of any
other class or series of shares of stock unless the same ranks junior to the
Series C Preferred Stock as to dividends and the distribution of assets on the
liquidation, dissolution, winding up or insolvency of the Corporation, Whether
any such creation, authorization or increase shall be by means of amendment to
this Certificate of Incorporation or by merger, consolidation or otherwise.
(c) At any time when shares of Series B Preferred Stock are
outstanding, except where the vote of the holders of a greater number of shares
of the Corporation is required by law or by this Certificate of Incorporation,
and in addition to any
-14-
<PAGE>
other vote required by law or this Certificate of Incorporation, without the
affirmative vote of the holders of at least eighty-five percent (85%) of the
then outstanding shares of the Series B Preferred Stock, the Corporation will
not:
(i) amend, alter or change the designation or any preferences,
voting powers, qualifications, or special or relative rights or privileges of
the Series B Preferred Stock in a manner adverse to the interests of the holders
of the Series B Preferred Stock in any material respect;
(ii) increase the authorized number of shares of the Series
B Preferred Stock;
(iii) create or authorize the creation of any additional class or
series of shares of stock unless such class or series ranks junior to the Series
B Preferred Stock to both dividends and the distribution of assets on the
liquidation, dissolution, winding up or insolvency of the Corporation, or
increase the authorized amount of any other class or series of shares of stock
unless the same ranks junior to the Series B Preferred Stock as to dividends and
the distribution of assets on the liquidation, dissolution, winding up or
insolvency of the Corporation, or create or authorize any obligation or security
convertible into shares of the Series B Preferred Stock or into shares of any
other class or series of shares of stock unless the same ranks junior to the
Series B Preferred Stock as to dividends and the distribution of assets on the
liquidation, dissolution, winding up or insolvency of the Corporation, whether
any such creation, authorization or increase shall be by means of amendment to
this Certificate of Incorporation or by merger, consolidation or otherwise.
(d) At any time when shares of Series A Preferred Stock are
outstanding, except where the vote of the holders of a greater number of shares
of the Corporation is required by law or by this Certificate of Incorporation,
and in addition to any other vote required by law or this Certificate of
Incorporation, without the affirmative vote of the holders of at least eighty
percent (80%) of the then outstanding shares of the Series A Preferred Stock,
the Corporation will not:
(i) amend, alter or change the designation or any
preferences, voting powers, qualifications, or special or relative rights or
privileges of the Series A Preferred stock in a manner adverse to the interests
of the holders of the Series A Preferred Stock in any material respect;
(ii) increase the authorized number of shares of the
Series A Preferred Stock;
(iii) create or authorize the creation of any additional
class or series of shares of stock unless such class or series ranks junior to
the Series A Preferred Stock to both dividends and the distribution of assets on
the liquidation, dissolution, winding up or insolvency of the
-15-
<PAGE>
Corporation, or increase the authorized amount of any other class or series of
shares of stock unless the same ranks junior to the Series A Preferred Stock as
to dividends and the distribution of assets on the liquidation, dissolution,
winding up or insolvency of the Corporation, or create or authorize any
obligation or security convertible into shares of the Series A Preferred Stock
or into shares of any other class or series of shares of stock unless the same
ranks junior to the Series A Preferred Stock as to dividends and the
distribution of assets on the liquidation, dissolution, winding up or insolvency
of the Corporation, whether any such creation, authorization or increase shall
be by means of amendment to this Certificate of Incorporation or by merger,
consolidation or otherwise.
Section 4. Voting Rights. Except as otherwise required by law or
--------- -------------
hereinafter set forth, the holders of Preferred Stock shall be entitled to
notice of any meeting of stockholders and shall vote together with the holders
of Common Stock as a single class upon any matter submitted to the stockholders
for a vote, on the following basis:
(a) Holders of Common Stock shall have one vote per share; and
(b) Holders of Preferred Stock shall have that number of votes
per share as is equal to the number of shares of Common Stock (including
fractions of a share) into which each such share of Preferred Stock held by such
holder could be converted on the date for determination of stockholders entitled
to vote at the meeting or on the date of any written consent.
With respect to all questions as to which, under law, stockholders are
required to vote by classes or series, each series of Preferred Stock shall vote
separately as a single class and series apart from each other and from the
Common Stock.
Section 5. Dividends.
--------- ---------
(a) Dividends may be declared and paid on the Preferred Stock
and the Common Stock from funds lawfully available therefor as and when
determined by the Board of Directors.
(b) If, when and as dividends are declared and paid on shares of
the Series B Preferred Stock, the Corporation shall declare and pay at the same
time to each holder of the Series C Preferred Stock, a dividend at the same
rate, based on the number of shares of Common Stock into which the Series C
Preferred Stock and the Series B Preferred Stock are convertible on the record
date for the determination of holders of the Series B Preferred Stock entitled
to receive such dividend.
(c) If, when and as dividends are declared and paid on shares of
the Series A Preferred Stock, the Corporation shall declare and pay at the same
time to each holder of the Series C Preferred Stock and the Series B Preferred
Stock, a dividend at the same rate, based on the number of shares of Common
Stock into which each series of Preferred Stock is convertible on the record
date for the determination of holders of the Series A Preferred Stock entitled
to receive such dividend.
(d) If, when and as dividends are declared and paid on shares of
Common Stock, the Corporation shall declare and pay at the same time to each
holder of the
-16-
<PAGE>
Preferred Stock, a dividend equal to the dividend which would have been payable
to such holder if the shares of the Preferred Stock held by such holder had been
converted into Common Stock on the record date for the determination of holders
of Common Stock entitled to receive such dividend.
Section 6. Redemption.
--------- ----------
(a) Series B Preferred Stock.
------------------------
(i) In the event that the Corporation shall exercise its
put option to sell shares of capital stock of Sequenom Instruments GmbH to
Technologie-Beteiligungs-Gesellschaft mbH der Deutschen Ausgleichsbank ("TBG")
pursuant to that certain Kooperationsvertrag between the Corporation and TBG
relating to the investment by the Corporation of DM 3 million in Sequenom
Instruments GmbH, the Corporation shall, within 30 days after receipt of the
proceeds of the sale of such shares to the TBG, send notice of such exercise
(the "Series B Put Exercise Notice") to each holder of record of Series B
Preferred Stock, specifying (A) the amount of proceeds so received from the TBG
net of any expenses incurred in connection therewith (the "Series B Put Net
Proceeds"), (B) the date (the "Series B Redemption Date") on which the
Corporation will redeem shares of Series B Preferred Stock from electing holders
of the Series B Preferred Stock in accordance with this Section 6, which Series
B Redemption Date shall be not less than 45 days nor more than 90 days after the
date of such notice (the "Series B Notice Date") and (C) each such holder's
Series B Pro Rata Redemption Amount (as hereinafter defined).
(ii) Each holder of Series B Preferred Stock may elect to
have the Corporation redeem from it on the Series B Redemption Date, to the
extent the Corporation has funds legally available for such purpose, up to a
number of shares of Series B Preferred Stock equal to such holder's Series B Pro
Rata Redemption Amount (as hereinafter defined) at a redemption price of $1.50
per share. Such election may be made only by delivering to the Corporation
within thirty (30) days after the Series B Notice Date (A) a written election
signed by such holder specifying the number of shares of Series B Preferred
Stock so to be redeemed (which number shall be not more than such holder's
Series B Pro Rate Redemption Amount), and (B) certificates for the shares of
Series B Preferred Stock so to be redeemed, together with stock powers therefor
duly executed by such holder in blank.
(iii) For purposes of this Subsection 6(a), each holder of
Series B Preferred Stock's "Series B Pro Rata Redemption Amount" shall be the
greatest whole number represented by a fraction, the numerator or which is the
product of the number of shares of Series B Preferred Stock held by such holder
times the Series B Put Net Proceeds, and the denominator or which is the product
of the total number of shares of Series B Preferred Stock issued and outstanding
times $1.50.
(iv) On the Series B Redemption Date the Corporation shall
redeem from the electing holders of Series B Preferred Stock the shares of
Series B Preferred Stock as to which election notices have been properly sent,
to the extent the Corporation has funds legally available for such purpose.
-17-
<PAGE>
(v) If the funds of the Corporation legally available for redemption
of shares of Series B Preferred Stock on the Series B Redemption Date are
insufficient to redeem the total number of shares of Series B Preferred Stock
submitted for redemption, those funds which are legally available will be used
to redeem the maximum possible number of whole shares ratably among the holders
of such shares in accordance with the manner of determining the Series B Pro
Rata Redemption Amount set forth above. The shares of Series B Preferred Stock
not redeemed shall remain outstanding and entitled to all rights and preferences
provided herein.
(b) Series C Preferred Stock.
------------------------
(i) In the event that (x) the Corporation shall use proceeds from the
financing contemplated by the Series C Convertible Preferred Stock Purchase
Agreement dated on or about May __, 1997 to acquire additional shares of the
capital stock of Sequenom Instruments GmbH and in connection therewith shall
acquire a put option to sell such shares of Sequenom Instruments GmbH to TBG,
and (y) thereafter the Corporation shall exercise such put option, then the
Corporation shall, within 30 days after receipt of the Proceeds of the sale of
such shares to the TBG, send notice of such exercise (the "Series C Put Exercise
Notice") to each holder of record of Series C Preferred Stock, specifying (A)
the amount of proceeds so received from the TBG net of any expenses incurred in
connection therewith (the "Series C Put Net Proceeds"), (B) the date (the
"Series C Redemption Date") on which the Corporation will redeem shares of
Series C Preferred Stock from electing holders of the Series C Preferred Stock
in accordance with this Section 6, which Series C Redemption Date shall be not
less than 45 days nor more than 90 days after the date of such notice (the
"Series C Notice Date") and (C) each such holder's Series C Pro Rata Redemption
Amount (as hereinafter defined).
(ii) Each holder of Series C Preferred Stock may elect to have the
Corporation redeem from it on the Series C Redemption Date, to the extent the
Corporation has funds legally available for such purpose, up to a number of
shares of Series C Preferred Stock equal to such holder's Series C Pro Rata
Redemption Amount (as hereinafter defined) at a redemption price of $3.15 per
share. Such election may be made only by delivering to the Corporation within
thirty (30) days after the Series C Notice Date (A) a written election signed by
such holder specifying the number of shares of Series C Preferred Stock so to be
redeemed (which number shall be not more than such holder's Series C Pro Rata
Redemption Amount), and (B) certificates for the shares of Series C Preferred
Stock so to be redeemed, together with stock powers therefor duly executed by
such holder in blank.
(iii) For purposes of this Subsection 6(b), each holder of Series C
Preferred Stock's "Series C Pro Rata Redemption Amount" shall be the greatest
whole number represented by a fraction, the numerator or which is the product of
the number of shares of Series C Preferred Stock held by such holder times the
Series C Put Net Proceeds, and the denominator or which is the product of the
total number of shares of Series C Preferred Stock issued and outstanding times
$1.50.
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<PAGE>
(iv) On the Series C Redemption Date the Corporation shall redeem from
the electing holders of Series C Preferred Stock the shares of Series C
Preferred Stock as to which election notices have been properly sent, to the
extent the Corporation has funds legally available for such purpose.
(v) If the funds of the Corporation legally available for redemption
of shares of Series C Preferred Stock on the Series C Redemption Date are
insufficient to redeem the total number of shares of Series C Preferred Stock
submitted for redemption, those funds which are legally available will be used
to redeem the maximum possible number of whole shares ratably among the holders
of such shares in accordance with the manner of determining the Series C Pro
Rata Redemption Amount set forth above. The shares of Series C Preferred Stock
not redeemed shall remain outstanding and entitled to all rights and preferences
provided herein.
(c) Concurrent Redemption of Series B Preferred Stock and Series C
--------------------------------------------------------------
Preferred Stock. If the Corporation shall become obligated under this Section 6
- ---------------
to redeem shares of both Series B Preferred Stock and Series C Preferred Stock
at a time when the funds of the Corporation legally available for redemption of
such shares on the Series B Redemption Date and the Series C Redemption Date
would be insufficient to redeem the total number of shares of Series B Preferred
Stock and Series C Preferred Stock submitted for redemption, those funds which
are legally available will be used to redeem the maximum possible number of
whole shares of Series B Preferred Stock and Series C Preferred Stock ratably
among the holders of such shares in accordance with the manner of determining
their respective Series B Pro Rata Redemption Amount and Series C Pro Rata
Redemption Amount set forth above. The shares of Series B Preferred Stock and
Series C Preferred Stock not redeemed shall remain outstanding and entitled to
all rights and preferences provided herein.
Section 7. Residual Rights. All rights accruing to the outstanding shares
--------- ---------------
of the Corporation not expressly provided for to the contrary herein shall be
vested in the Common Stock.
Section 8. Notices. All notices required or permitted to be sent
--------- -------
pursuant to this Article Fourth shall be deemed sufficient if contained in a
written instrument and delivered in person or duly sent by first-class mail
postage prepaid (other than in the case of notices to non-U.S. residents) or by
fax or DHL, Federal Express or other recognized express international courier
service, addressed to the intended recipient at the recipient's address as it
appears on the books of the Corporation.
-19-
<PAGE>
EXHIBIT 2.1
-----------
Form of Warrant
---------------
<PAGE>
NEITHER THIS WARRANT NOR THE SHARES OF CAPITAL STOCK PURCHASABLE HEREUNDER HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW AND, ACCORDINGLY, NEITHER THIS WARRANT NOR SUCH SHARES MAY BE
OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS
THE REGISTRATION PROVISIONS OF SUCH ACT AND ALL APPLICABLE STATE SECURITIES LAWS
HAVE BEEN COMPLIED WITH OR UNLESS THE CORPORATION HAS RECEIVED AN OPINION OF
COUNSEL ACCEPTABLE TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES OF CAPITAL STOCK PURCHASABLE HEREUNDER ARE SUBJECT TO THE TERMS AND
PROVISIONS OF A VOTING AGREEMENT AMONG THE CORPORATION AND CERTAIN STOCKHOLDERS
OF THE CORPORATION. THE CORPORATION SHALL FURNISH A COPY OF SUCH VOTING
AGREEMENT TO ANY REGISTERED HOLDER OF THIS WARRANT OR SUCH SHARES OF CAPITAL
STOCK UPON WRITTEN REQUEST AND WITHOUT CHARGE.
SEQUENOM, INC.
STOCK PURCHASE WARRANT
Warrant to Purchase _____ Shares of
Series C Convertible Preferred Stock
Issued to ________________
Void after May __, 2004
Sequenom, Inc., a Delaware corporation (the "Corporation"), hereby
covenants and agrees with ____________ as follows:
1. The Warrant.
-----------
1.01 For value received and subject to the terms and conditions
hereinafter set forth, the registered holder of this Warrant (the
"Warrantholder") is entitled upon its surrender, with the subscription form
annexed hereto duly executed, at the office of the Corporation at 11555 Sorrento
Valley Road, Suite C, San Diego, California 92121, or at such other office as
the Corporation shall notify the Warrantholder in writing, to purchase from the
Corporation __________ fully paid and non-assessable shares of the Series C
Convertible Preferred Stock, par value $.001 per share ("Series C Preferred
Stock"), of the Corporation for $3.15 per share (the "Exercise Price"), subject
to adjustment as set forth in Sections 2 and 4 hereof. This Warrant may be
exercised in full or in part from time to time. As promptly as practicable
after surrender of this Warrant and receipt of payment of the Exercise Price,
the Corporation shall issue and deliver to the Warrantholder a certificate or
certificates for shares of Series C Preferred
<PAGE>
Stock, in certificates of such denominations and in such name as the
Warrantholder may specify, together with any other stock, securities or property
that such holder may be entitled to receive pursuant hereto. This Warrant shall
expire at the close of business on May 8, 2004, and shall be void thereafter.
Upon and after the Automatic Conversion Effective Time (as defined in Section
4), the right to purchase Series C Preferred Stock granted herein shall
terminate, and this Warrant shall represent the right to purchase shares of the
Common Stock, par value $.001 per share, of the Corporation ("Common Stock") as
provided in Section 4 hereof. The shares of Series C Preferred Stock, Common
Stock or securities or other property purchasable upon exercise of this Warrant
are sometimes referred to hereinafter as "Warrant Shares".
1.02 Prior to the Automatic Conversion Effective Time (as defined in
Section 4), the Corporation shall at all times have authorized and reserved for
purposes of issue upon exercise of the rights evidenced hereby, a sufficient
number of shares of its Series C Preferred Stock to provide for the exercise of
such rights, and shall at all times have authorized and reserved a sufficient
number of shares of its Common Stock for purposes of issue upon conversion of
such shares of Series C Preferred Stock under the terms of the Charter (as
defined in Subsection 2.05). From and after the Automatic Conversion Effective
Time, the Corporation shall at all times have authorized and reserved for
purposes of issue upon exercise of the rights evidenced hereby, a sufficient
number of shares of its Common Stock to provide for the exercise of such rights.
Upon surrender for exercise, this Warrant shall be cancelled and shall not be
reissued; provided, however, that upon the partial exercise hereof a substitute
Warrant of like tenor and date to the original Warrant representing the rights
to subscribe for and purchase any such unexercised portion hereof shall be
issued.
1.03 This Warrant may be subdivided into one or more stock purchase
warrants entitling the Warrantholder to purchase Warrant Shares in multiples of
one or more whole shares, upon surrender of the Warrant by the Warrantholder for
such purpose at the office of the Corporation.
1.04 The Corporation shall maintain at its office (or at such other office
or agency of the Corporation as it may from time to time designate in writing to
the Warrantholder), a register containing the names and address of the holder of
this Warrant. The registered holder of this Warrant shall be the person in
whose name this Warrant is originally issued and registered, unless a subsequent
holder shall have presented to the Corporation the Warrant, duly assigned to
him, for inspection, and a written notice of his acquisition of the Warrant and
designating in writing the address of such holder, in which case such subsequent
holder of the Warrant shall become a subsequent registered holder, and a
Warrantholder as defined herein. Any Warrantholder may change his address as
shown on such register by written notice to the Corporation requesting such
change. Any written notice required or permitted to be given to any
Warrantholder shall be delivered in person or duly sent by first class mail
postage prepaid (other than to non-U.S. parties) or fax or DHL, Federal Express
or other internationally recognized express courier service, to such
Warrantholder at his address as shown on such register.
1.05 If any shares of Common Stock issuable hereunder upon and after the
Corporation's initial public offering of Common Stock require listing on any
domestic securities exchange, before such shares may be issued upon exercise of
this Warrant, the Corporation shall,
-2-
<PAGE>
at its expense and as expeditiously as possible, use its best efforts to cause
such shares to be duly approved for listing on such domestic securities
exchange.
2. Adjustment Rights.
-----------------
The Exercise Price and the number of Warrant Shares purchasable hereunder
are subject to adjustment, as follows:
2.01 If the Corporation shall effect a subdivision or combination or
consolidation of shares (whether by way of stock split, reverse stock split or
otherwise) or other capital reorganization or reclassification of any class or
series of the capital stock of the Corporation for which this Warrant is then
exercisable, or the payment of a stock dividend or other distribution of stock
with respect to any such class or series of capital stock, then the number of
Warrant Shares purchasable hereunder and the Exercise Price shall be
appropriately adjusted in such a manner as to entitle the Warrantholder to
receive upon exercise of this Warrant, for the same aggregate consideration, the
same total number, type, class and series of securities and other property as
such Warrantholder would have received as a result of the event requiring the
adjustment had such Warrantholder exercised this Warrant in full immediately
prior to such event.
2.02 If there shall occur any consolidation or merger of the Corporation
or sale of all or substantially all of the Corporation's assets, then as a
condition of such consolidation, merger or sale, lawful and adequate provision
shall be made whereby the Warrantholder shall thereafter have the right to
purchase and receive upon the basis and upon the terms and conditions herein
specified and in lieu of the Warrant Shares immediately theretofore purchasable
and receivable upon exercise of this Warrant, such securities and other property
as such Warrantholder would have received as a result of the event requiring the
adjustment had such Warrantholder exercised this Warrant in full immediately
prior to such event, and in any such case appropriate provision shall be made
with respect to the rights and interests of the Warrantholder to the end that
the provisions hereof shall thereafter be applicable, as nearly as may be, in
relation to the securities and other property thereafter deliverable upon the
exercise hereof.
2.03 Upon the occurrence of any event specified in Subsection 2.01 or
Subsection 2.02, then, and in each such case, the Corporation shall give written
notice thereof to the Warrantholder in accordance with Subsection 1.04, which
notice shall state the adjustment in the Warrant Shares and the Exercise Price
resulting from such event, and shall set forth in reasonable detail the method
of calculation and the facts upon which such calculation is based.
2.04 In case at any time: (1) the Corporation shall pay any dividend or
make any distribution (other than regular cash dividends from earnings or earned
surplus paid at an established rate) to the holders of its Series C Preferred
Stock or Common Stock or offer to all holders of its Series C Preferred Stock or
Common Stock the right to subscribe for the purchase of any shares of capital
stock or securities convertible into or exercisable for such shares of capital
stock; (2) there shall be any capital reorganization or reclassification of the
capital stock of the Corporation, or consolidation or merger of the Corporation,
or sale of all or substantially all of its assets; or (3) there shall be a
voluntary or involuntary dissolution, liquidation or
-3-
<PAGE>
winding-up of the Corporation; then, in any one or more of such cases, the
Corporation shall give written notice thereof to the Warrantholder in accordance
with Subsection 1.04, which notice shall state the date on which (a) the books
of the Corporation shall close or a record date shall be fixed for determining
the stockholders entitled to such dividend, distribution or subscription rights,
or (b) such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up shall take place, as the case may be.
Such notice shall also provide reasonable details of the proposed transaction
and specify the date as of which the record holders of Series C Preferred Stock
or Common Stock shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their Series C Preferred Stock or
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, as the case may be. Such written notice shall be
given at least fifteen (15) days prior to the action in question and not less
than fifteen (15) days prior to the record date or the date on which the
Corporation's transfer books are closed in respect thereto.
2.05 Antidilution rights applicable to the Series C Preferred Stock
purchasable hereunder are set forth in the Corporation's Certificate of
Incorporation, as amended through the date hereof, a true and complete copy of
which has been furnished to Warrantholder (the "Charter"). The Corporation
shall promptly provide the Warrantholder with any restatement, amendment,
modification or waiver of the Charter and with any Certificate of Adjustment
sent to the holders of Series C Preferred Stock in accordance with the Charter
relating to any adjustment or readjustment of the Conversion Price of the Series
C Preferred Stock.
3. Payment of Exercise Price. The Exercise Price may be paid at the
-------------------------
Warrantholder's election either (i) by cash, certified or official bank check,
or wire transfer of funds to an account designated by the Corporation, or (ii)
by surrender of Warrants ("Net Issuance") as determined below. If the
Warrantholder elects the Net Issuance method, the Corporation shall issue Series
C Preferred Stock or Common Stock as follows:
(A) Prior to the Automatic Conversion Effective Time (as defined in Section
4), the Corporation shall issue Series C Preferred Stock in accordance with the
following formula:
<TABLE>
<S> <C> <C>
X = (Y)(A-B)/A
Where: X = the number of shares of Series C Preferred Stock to be issued to the Warrantholder
Y = the number of shares of Series C Preferred Stock requested to be exercised under this Warrant
A = the current fair market value of one (1) share of Series C Preferred Stock
B = the Exercise Price
</TABLE>
-4-
<PAGE>
As used herein, the current fair market value of a share of Series C
Preferred Stock shall mean the price per share which the Corporation could
obtain from a willing buyer for shares of Series C Preferred Stock, as
determined in good faith by the Corporation's Board of Directors, unless the
Corporation shall become subject to a merger, acquisition or other consolidation
pursuant to which the holders of Series C Preferred Stock receive securities
and/or other property in exchange for their Series C Preferred Stock, in which
case the fair market value of Series C Preferred Stock shall be deemed to be the
value of the securities and other property received by the holders of the
Corporation's Series C Preferred Stock per share of Series C Preferred Stock
pursuant to such merger, acquisition or other consolidation.
(B) Upon and after the Automatic Conversion Effective Time, the Corporation
shall issue Common Stock in accordance with the following formula:
<TABLE>
<S> <C> <C>
X = (Y)(A-B)/A
Where: X = the number of shares of Common Stock to be issued to the Warrantholder
Y = the number of shares of Common Stock requested to be exercised under this Warrant
A = the fair market value of one (1) share of Common Stock
B = the Exercise Price
</TABLE>
As issued herein, current fair market value of Common Stock shall mean with
respect to each share of Common Stock:
(i) if the exercise is in connection with the Corporation's initial
public offering of Common Stock, and if the Corporation's Registration
Statement relating to such public offering has been declared effective by
the SEC, then the initial "Price to Public" specified in the final
prospectus with respect to the offering;
(ii) if this Warrant is exercised after, and not in connection with,
the Corporation's initial public offering of Common Stock and
(a) if the Common Stock is traded on a national securities
exchange or quoted on the Nasdaq Stock Market, the fair market value
shall be deemed to be the average of the closing prices over a twenty-
one (21) day period ending three days before the day the current fair
market value of the Common Stock is being determined; or
(b) if the Common Stock is not listed on a national securities
exchange or quoted on the Nasdaq Stock Market but is actively traded
over-the-counter, the fair market value shall be deemed to be the
average of the closing bid and asked prices reported by the National
Quotation Bureau (or similar system) over the
-5-
<PAGE>
twenty-one (21) day period ending three days before the day the
current fair market value of the Common Stock is being determined;
(iii) if at any time the Common Stock is not listed on any national
securities exchange or quoted on the Nasdaq Stock Market or actively traded
or in the over-the-counter market, the current fair market value of Common
Stock shall be the price per share which the Corporation could obtain from
a willing buyer (not a current employee or director) for shares of Common
Stock sold by the Corporation, from authorized but unissued shares, as
determined in good faith by its Board of Directors, unless the Corporation
shall become subject to a merger, acquisition or other consolidation
pursuant to which the holders of Common Stock receive securities and/or
other property in exchange for their Common Stock, in which case the fair
market value of Common Stock shall be deemed to be the value of the
securities and other property received by the holders of the Corporation's
Common Stock per share of Common Stock pursuant to such merger, acquisition
or other consolidation.
Upon partial exercise of this Warrant, the Corporation shall promptly issue
an amended Warrant representing the remaining number of shares purchasable
hereunder. All other terms and conditions of such amended Warrant shall be
identical to those contained herein, including, but not limited to the Effective
Date hereof.
4. Automatic Conversion of Series C Preferred Stock. If at any time the
------------------------------------------------
issued and outstanding shares of the Corporation's Series C Preferred Stock
shall be automatically converted into shares of Common Stock under the terms of
the Charter, then upon and after the effective time of such automatic conversion
of the Series C Preferred Stock (the "Automatic Conversion Effective Time"), the
right to purchase Series C Preferred Stock granted herein shall terminate, and
this Warrant shall represent the right to purchase a number of shares of Common
Stock calculated as follows:
<TABLE>
<S> <C> <C>
X = (Y)(Z)
where: X = the number of shares of Common Stock purchasable under this Warrant upon and after such
Automatic Conversion Effective Time
Y = the number of shares of Series C Preferred Stock purchasable under this Warrant
immediately prior to such Automatic Conversion Effective Time
Z = the number of shares of Common Stock issuable upon conversion of each share of Series C
Preferred Stock immediately prior to such Automatic Conversion Effective Time
</TABLE>
and the Exercise Price per share of Common Stock shall be a price
calculated as follows:
-6-
<PAGE>
<TABLE>
<S> <C> <C>
A = (B) (X) /Y
where: A = the Exercise Price per share of Common Stock upon and after such Automatic Conversion
Effective Time
B = the Exercise Price per share of Series C Preferred Stock immediately prior to such
Automatic Conversion Effective Time
X = the number of shares of Series C Preferred Stock purchasable under this Warrant
immediately prior to such Automatic Conversion Effective Time
Y = the number of shares of Common Stock purchasable under this Warrant upon and after such
Automatic Conversion Effective Time
</TABLE>
Thereafter, the number of shares of Common Stock purchasable hereunder and
the Exercise Price per share shall be subject to adjustment for the types of
events described in Section 2 above that occur with respect to the Common Stock.
5. Restrictions. The Warrant Shares issuable u upon exercise of this Warrant
------------
are subject to the terms and provisions of a Voting Agreement among the
Corporation and certain stockholders of the Corporation. The Corporation shall
furnish a copy of such Voting Agreement to any registered holder of this Warrant
or such Warrant Shares upon written request and without charge. Any certificate
or certificates representing Warrant Shares issued upon exercise of this Warrant
shall contain a legend to the foregoing effect.
6. Miscellaneous.
-------------
6.01 No Rights as Stockholder. This Warrant shall not entitle the
------------------------
Warrantholder to any voting rights or any other rights as a stockholder of the
Corporation, but upon presentation of this Warrant with the subscription form
annexed duly executed and the tender of payment of the Exercise Price at the
office of the Corporation pursuant to the provisions of this Warrant, the
Warrantholder shall forthwith be deemed a stockholder of the Corporation in
respect of the shares of Series C Preferred Stock or Common Stock so subscribed
and paid for.
6.02 Governing Law. This Warrant shall be governed by, and construed
-------------
and enforced in accordance with, the substantive laws of The Commonwealth of
Massachusetts, without regard to its principles of conflicts of laws.
6.03 Fractional Shares. No fractional shares or scrip representing
-----------------
fractional shares shall be issued upon exercise of this Warrant. If, upon
exercise of this Warrant, the Warrantholder would, except for the provisions of
this Subsection 6.03, be entitled to receive a fractional share of Series C
Preferred Stock or Common Stock, then the Corporation shall pay
-7-
<PAGE>
the exercising Warrantholder in cash an amount equal to such fractional share
multiplied by the fair market value (as reasonably determined by the
Corporation's Board of Directors) of one share of Series C Preferred Stock or
Common Stock, as the case may be.
6.04 Headings. The headings in the Warrant are inserted for convenience
--------
of reference only and shall not affect the interpretation of this Warrant.
Whenever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in either the masculine or the neuter gender shall include the masculine,
the feminine and the neuter.
6.05 Substitution. In case this Warrant shall be mutilated, lost, stolen
------------
or destroyed, the Corporation shall issue a new Warrant of like tenor and
denomination and deliver the same (a) in exchange and substitution for and upon
surrender and cancellation of any mutilated Warrant, or (b) in lieu of any
Warrant lost, stolen or destroyed, upon receipt of evidence satisfactory to the
Corporation of the loss, theft, or destruction of such Warrant (including a
reasonably detailed affidavit with respect to the circumstances of any loss,
theft or destruction), and an indemnity agreement reasonably satisfactory to the
Corporation.
6.06 Modification. This Warrant and any term hereof may be changed,
------------
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is or may be sought.
IN WITNESS WHEREOF, the Corporation has caused this Stock Purchase Warrant
to be signed by its President thereunto duly authorized and its corporate seal
to be hereunto affixed and attested by its Secretary.
Dated: ________________________ SEQUENOM,, INC
(Corporate Seal)
Attest: By:___________________________
Its President
________________________________
Secretary
-8-
<PAGE>
WARRANTHOLDER'S ACCEPTANCE
--------------------------
The undersigned hereby accepts the foregoing warrant and agrees to the
terms and conditions thereof.
WARRANTHOLDER
By:____________________________
<PAGE>
SUBSCRIPTION FORM
-----------------
The undersigned, the registered holder of the within Stock Purchase
Warrant, hereby irrevocably elects to exercise the purchase right represented by
such Warrant for, and to purchase thereunder, _______ shares of Series C
Convertible Preferred Stock, par value $.001 per share, of Sequenom, Inc., and
herewith makes payment of $ ____________ therefor and requests that the
certificates representing such shares be issued in the name of and delivered to
____________ and if such shares shall not include all of the shares issuable
under this Warrant, that a new Warrant of like tenor and date be delivered to
the undersigned for the shares not issued.
Dated:_______________________________ _______________________________
Name of Registered Holder
_______________________________
Authorized Signature
<PAGE>
FORM OF ASSIGNMENT
------------------
For value received the undersigned hereby sells, assigns and transfers unto
________________________, whose address is __________________________________,
the within Stock Purchase Warrant with respect to _________ shares of Series C
Convertible Preferred Stock purchasable thereby, and does hereby irrevocably
constitute and appoint _______________ attorney to transfer the within Warrant
on the books of Sequenom, Inc. with full power of substitution in the premises.
Dated:_________________________ _______________________________
Name of Registered Holder
In the presence of:
_______________________________ _______________________________
Authorized Signature
<PAGE>
EXHIBIT 4.1
-----------
Foreign Qualification; Certificate of Incorporation; By-Laws
------------------------------------------------------------
The Corporation is qualified to do business in Massachusetts and
California.
Copies of the Certificate of Incorporation (not including the Certificate
of Amendment contained in Exhibit 1) and By-Laws are attached hereto.
<PAGE>
CERTIFICATE OF INCORPORATION
OF
SEQUENOM, INC.
FIRST: The name of the corporation is Sequenom, Inc. (the
"Corporation").
SECOND: The address of the Corporation's registered office in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle 19801. The name of its registered agent at
such address is The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or
promoted by the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware.
FOURTH: The Corporation is authorized to issue one class of shares to be
designated "Common Stock". The number of shares of Common Stock authorized to
be issued is Fifteen Million (15,000,000). The Common Stock shall have a par
value of $0.001 per share, and the aggregate par value of all shares of Common
Stock shall be $15,000.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Bylaws of the corporation.
SEVENTH: The number of directors which constitute the entire Board of
Directors of the Corporation shall be as specified in the Bylaws of the
Corporation.
EIGHTH: To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or as may hereafter be amended, no director
of the Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Neither any amendment nor repeal of this Article Eighth, nor the adoption of any
provision of this Restated Certificate of Incorporation inconsistent with this
Article Eighth, shall eliminate or reduce the effect of this Article Eighth in
respect of any matter occurring, or any cause of action, suit or claim that, but
for this Article Eighth, would accrue or arise, prior to such amendment, repeal
or adoption of an inconsistent provision.
NINTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
<PAGE>
The undersigned incorporator hereby acknowledges that the foregoing
Certificate of Incorporation is his act and deed and that the facts stated
herein are true.
Dated: February 14, 1994 /s/ Joe C. Sorenson
-------------------
Joe C. Sorenson
Incorporator
525 University Avenue
14th Floor
Palo Alto, California 94301
2.
<PAGE>
SEQUENOM, INC.
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
Sequenom, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That the Board of Directors of Sequenom, Inc., by the unanimous
written consent of its members, filed with the minutes of the board, duly
adopted resolutions setting forth a proposed amendment to the Certificate of
Incorporation of said corporation, declaring said amendment to be advisable and
authorizing the officers of said corporation to solicit the approval of the
stockholders of said corporation for consideration thereof. The resolution
setting forth the proposed amendment is as follows:
RESOLVED: That the Certificate of Incorporation of this corporation
be amended by changing Article FOURTH thereof so that, as amended said
Article shall be and read as follows:
"The Corporation is authorized to issue one class of shares to be
designated "Common Stock." The number of shares of Common Stock
authorized to be issued is Two Million One Hundred Thousand
(2,100,000). The Common Stock shall have a value of $0.001 per share,
and the aggregate par value of all shares of Common Stock shall be
$2,100. Upon the amendment of this article to read as herein set
forth, each ten (10) outstanding shares of Common Stock shall be
combined and converted into one (1) share."
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, the written consents of the stockholders of said corporation were
solicited pursuant to authority to act without a meeting in accordance With
Section 228(a) of the General Corporation Law of
<PAGE>
Delaware and Section 2.11 of the bylaws of said corporation; and that the
stockholders unanimously consented to the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said Sequenom, Inc. has caused this certificate to
be signed by Nola E. Masterson, its President, and attested by Robert E.
Patterson, its Secretary, this 23rd day of May, 1994.
BY: /s/ Nola Masterson
------------------
Nola E. Masterson,
President
ATTEST:
By: /s/ Robert Patterson
--------------------
Robert E. Patterson, Secretary
2.
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF SEQUENOM, INC.
Sequenom, Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation by unanimous
written consent duly adopted resolutions proposing and declaring
advisable that the Certificate of Incorporation of said
corporation be amended and that such amendment be submitted to
the stockholders of the Corporation for their consideration, as
follows:
RESOLVED: That the Board of Directors of this Corporation
recommends and deems it advisable that the
Certificate of Incorporation of this Corporation,
as heretofore amended, be further amended by
deleting Article FOURTH thereof and substituting
for said Article FOURTH the new Article FOURTH
set forth on Exhibit A attached hereto; and
---------
RESOLVED: That the aforesaid proposed amendment be
submitted to the stockholders of the Corporation
for their consideration; and
RESOLVED: That following the approval by the stockholders
of the aforesaid amendment as required by law,
the officers of this Corporation be, and they
hereby are, and each of them hereby is,
authorized and directed (i) to prepare, execute
and file with the Secretary of State of the State
of Delaware a Certificate of Amendment setting
forth the aforesaid amendment in the form
approved by the stockholders and (ii) to take any
and all other actions necessary, desirable or
convenient to give effect to the aforesaid
amendment or otherwise to carry out the purposes
of the foregoing Resolutions.
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given written consent to said amendments in
accordance with the provisions of section 228 of the General
Corporation Law of the State of Delaware, and written notice of
the adoption of the amendments has been given as provided in
section 228 of the General Corporation Law of the State of
Delaware to every stockholder entitled to such notice.
<PAGE>
THIRD: That the aforesaid amendments were duly adopted in accordance
with the applicable provisions of sections 228 and 242 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Sequenom, Inc. has caused this certificate to be
signed by Russell D. Hays, its President, and attested by Robert E. Patterson,
its Secretary, this 7th day of March, 1995.
ATTEST: SEQUENOM, INC.
By: /s/ illegible By: /s/ illegible
--------------- ---------------
Secretary President
-2-
<PAGE>
EXHIBIT A
---------
FOURTH: The total number of shares of all classes of stock which the
- ------
Corporation has authority to issue is 4,399,000 shares, consisting of 2,301,000
shares of Common Stock, par value $.001 per share (the "Common Stock"), and
2,098,000 shares of Series A Convertible Preferred Stock, par value $.001 per
share (the "Series A Preferred Stock"), amounting to an aggregate par value of
$4,399.
The powers, preferences and rights, and the qualifications, limitations or
restrictions thereof, in respect of each class or series of stock of the
Corporation shall be as follows:
Section 1. Liquidation Rights.
--------- ------------------
(a) Treatment at Liquidation, Dissolution or Winding Up. In the event
---------------------------------------------------
of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, the holders of each share of the Series A
Preferred Stock shall be entitled to be paid first out of the assets of the
Corporation available for distribution to holders of the Corporation's capital
stock of all classes an amount equal to the greater of:
(i) $0.50 per share of Series A Preferred Stock (which amount
shall be subject to equitable adjustment whenever there shall occur a stock
dividend, stock split, combination of shares, reclassification or other
similar event with respect to the Series A Preferred Stock) plus all
dividends declared but unpaid thereon, to and including the date full
payment shall be tendered to the holders of the Series A Preferred Stock
with respect to such liquidation, .dissolution or winding up, or
(ii) such amount per share of Series A Preferred Stock as would
have been payable had all shares of Series A Preferred Stock been converted
to Common Stock immediately prior to such event of liquidation, dissolution
or winding up pursuant to the provisions of Section 2 hereof, plus all
dividends declared but unpaid on each share of Series A Preferred Stock to
and including the date full payment shall be tendered to the holders of the
Series A Preferred Stock with respect to such liquidation, dissolution or
winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to the holders of the Series A Preferred Stock of all amounts
distributable to them under this Subsection 1(a), then the entire assets of the
Corporation available for such distribution shall be distributed ratably among
the holders of the Series A Preferred Stock in proportion to the full
preferential amount each such holder is otherwise entitled to receive.
After such payments shall have been made in full to the holders of the
Series A Preferred Stock or funds necessary for such payments shall have been
set aside by the Corporation in trust for the account of holders of Series A
Preferred Stock so as to be available for such payments, the remaining assets
available for distribution shall be distributed among the holders of the Common
Stock ratably in proportion to the number of shares of Common Stock held by
them.
<PAGE>
Upon conversion of shares of Series A Preferred Stock into shares of Common
Stock pursuant to Section 2 below, the holder of such Common Stock shall not be
entitled to any preferential payment or distribution in case of any liquidation,
dissolution or winding up, but shall share ratably in any distribution of the
assets of the Corporation to all the holders of Common Stock.
The amounts payable with respect to shares of Series A Preferred Stock
under this Section 1 are sometimes hereinafter referred to as "Liquidation
Payments."
(b) Distributions Other than Cash. Whenever the distribution provided
-----------------------------
for in this Section 1 shall be payable in property other than cash, the value of
such distribution shall be the fair market value of such property as determined
in good faith by the Board of Directors of the Corporation.
(c) Merger as Liquidation, etc. The merger or consolidation of the
--------------------------
Corporation into or with another corporation (except one in which the holders of
capital stock of the Corporation immediately prior to such merger or
consolidation continue to hold at least eighty percent (80%) in voting power of
the capital stock of the surviving corporation, in which case the provisions of
Subsection 2(h) shall apply), or the sale of all or substantially all of the
assets of the Corporation, shall be deemed to be a liquidation, dissolution or
winding up of the affairs of the Corporation for purposes of this Section 1
unless the holders of at least eighty percent (80%) of the then outstanding
shares of Series A Preferred Stock elect to the contrary by giving written
notice thereof to the Corporation at least three days before the effective date
of such event. If such notice is given, the provisions of Subsection 2(h) shall
apply. Any amounts received by the holders of Series A Preferred Stock as a
result of such merger or consolidation shall be deemed to be applied toward, and
all consideration received by the Corporation in such asset sale together with
all other available assets of the Corporation shall be distributed toward, the
Liquidation Payments attributable to such shares of Series A Preferred Stock
unless such election is made
(d) Notice. Written notice of any proposed liquidation, dissolution
------
or winding up of the affairs of the Corporation (including any merger,
consolidation or sale of assets which may be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation under Subsection
l(c)), stating a payment date, the amount of the Liquidation Payments and the
place where said Liquidation Payments shall be payable, shall be given by first
class mail, postage prepaid, or by telex to non-U.S. residents, not less than
twenty (20) days prior to the payment date stated therein, to the holders of
record of Series A Preferred Stock, such notice to be addressed to each such
holder at its address as shown by the records of the Corporation.
Section 2. Conversion. The holders of the Series A Preferred Stock shall
--------- ----------
have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert; Conversion Price. Each share of Series A
----------------------------------
Preferred Stock shall be convertible, without the payment of any additional
consideration by the holder thereof and at the option of the holder thereof, at
any time after the date of issuance of such share, at the office of the
Corporation or any transfer agent for the Series A Preferred Stock, into such
number of fully paid and nonassessable shares of Common Stock as is determined
by
-2-
<PAGE>
dividing $0.50 by the Conversion Price, determined as hereinafter provided,
in effect at the time of conversion. The Conversion Price at which shares of
Common Stock shall be deliverable upon conversion without the payment of any
additional consideration by the holder of Series A Preferred Stock (the
"Conversion Price") shall initially be $0.50 per share of Common Stock. Such
initial Conversion Price shall be subject to adjustment, in order to adjust the
number of shares of Common Stock into which the Series A Preferred Stock is
convertible, as hereinafter provided.
(b) Automatic Conversion. Each share of Series A Preferred Stock
--------------------
shall automatically be converted into shares of Common Stock at the then
effective Conversion Price upon:
(i) the closing of a firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of Common Stock for the
account of the Corporation to the public at an initial public offering
price per share not less than $2.50 (as adjusted pursuant to Subsection
2(e)(vi) hereof to reflect any stock dividends, distributions,
combinations, reclassifications or other like transactions effected by the
Corporation in respect of its Common Stock) and with gross proceeds to the
Corporation of not less than $10,000,000 (in the event of which offering,
the person(s) entitled to receive the Common Stock issuable upon such
conversion of the Series A Preferred Stock shall not be deemed to have
converted that Series A Preferred Stock until the closing of such
offering); or
(ii) the written election of the holders of not less than eighty
percent (80%) of the then outstanding shares of Series A Preferred Stock to
require such mandatory conversion.
(c) Mechanics of Mandatory Conversions. Upon the occurrence of an
----------------------------------
event specified in Subsection 2(b), the Series A Preferred Stock shall be
converted automatically without any further action by the holders of such shares
and whether or not the certificates representing such shares are surrendered to
the Corporation or its transfer agent; provided, however, that all holders of
shares of Series A Preferred Stock shall be given written notice of the
occurrence of an event specified in Subsection 2(b) including the date such
event occurred (the "Mandatory Conversion Date"), and the Corporation shall not
be obligated to issue certificates evidencing the shares of Common Stock
issuable upon such conversion unless certificates evidencing such shares of the
Series A Preferred Stock being converted are either delivered to the corporation
or its transfer agent, or the holder notifies the Corporation or any transfer
agent that such certificates have been lost, stolen, or destroyed and executes
an agreement satisfactory to the Corporation to indemnify the Corporation from
any loss incurred by it in connection therewith and, if the Corporation so
elects, provides an appropriate indemnity bond. On the Mandatory Conversion
Date, all rights with respect to the Series A Preferred Stock so converted shall
terminate, except any of the rights of the holder thereof, upon surrender of the
holder's certificate or certificates therefor, to receive certificates for the
number of shares of Common Stock into which such Series A Preferred Stock has
been converted, together with cash in an amount equal to all dividends declared
but unpaid on, and any and all other amounts owing with respect to, the shares
of Series A Preferred Stock converted to and including the time of
-3-
<PAGE>
conversion. Upon the automatic conversion of the Series A Preferred Stock, the
holders of such Series A Preferred Stock shall surrender the certificates
representing such shares at the office of the Corporation or of its transfer
agent. If so required by the Corporation, certificates surrendered for
conversion shall be endorsed or accompanied by written instrument, or
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the registered holder or by the holder's attorney duly authorized in writing.
Upon surrender of such certificates there shall be issued and delivered to such
holder, promptly at such office and in the holder's name as shown on such
surrendered certificate or certificates, a certificate or certificates for the
number of shares of Common Stock into which the shares of the Series A Preferred
Stock surrendered were convertible on the date on which such automatic
conversion occurred, together with cash in an amount equal to all dividends
declared but unpaid on, and any and all other amounts owing with respect to, the
shares of Series A Preferred Stock converted to and including the time of
conversion. No fractional share of Common Stock shall be issued upon the
mandatory conversion of the Series A Preferred Stock. In lieu of any fractional
share to which the holder would otherwise be entitled, the Corporation shall pay
cash equal to such fraction multiplied by the then effective Conversion Price.
(d) Mechanics of Optional Conversions. Before any holder of Series A
---------------------------------
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, the holder shall surrender the certificate or certificates therefor at
the office of the Corporation or of any transfer agent for the Series A
Preferred Stock, and shall give written notice to the Corporation at such office
that the holder elects to convert the same and shall state therein the holder's
name or the name or names of the holder's nominees in which the holder wishes
the certificate or certificates for shares of Common Stock to be issued. On the
date of conversion, all rights with respect to the Series A Preferred Stock so
converted shall terminate, except any of the rights of the holder thereof, upon
surrender of the holder's certificate or certificates therefor, to receive
certificates for the number of shares of Common Stock into which such Series A
Preferred Stock has been converted and cash in an amount equal to all dividends
declared but unpaid thereon and any and all other amounts owing with respect
thereto at such time. If so required by the Corporation, certificates
surrendered for conversion shall be endorsed or accompanied by written
instrument or instruments of transfer, in form satisfactory to the Corporation,
duly executed by the registered holder or by the holder's attorney duly
authorized in writing. No fractional share of Common Stock shall be issued upon
the optional conversion of the Series A Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price. The Corporation shall, as soon as practicable after
surrender of the certificate or certificates for conversion, issue and deliver
at such office to such holder of Series A Preferred Stock, or to the holder's
nominee or nominees, a certificate or certificates for the number of shares of
Common Stock to which the holder shall be entitled as aforesaid, together with
cash in lieu of any fraction of a share and cash in an amount equal to all
dividends declared but unpaid thereon and any and all other amounts owing with
respect thereto at such time. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series A Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on such date.
-4-
<PAGE>
(e) Adjustments to Conversion Price for Diluting Issues.
---------------------------------------------------
(i) Special Definitions. For purposes of this Subsection 2(e),
-------------------
the following definitions shall apply:
(1) "Option" shall mean rights, options or warrants to
------
subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.
(2) "Original Issue Date" shall mean the first date on which
-------------------
a share of Series A Preferred Stock was issued.
(3) "Convertible Securities" shall mean any evidences of
----------------------
indebtedness, shares of capital stock (other than Common Stock) or
other securities directly or indirectly convertible into or
exchangeable for Common Stock.
(4) "Additional Shares of Common Stock" shall mean all
---------------------------------
shares of Common Stock issued (or, pursuant to Subsection 2(e)(iii),
deemed to be issued) by the Corporation after the original Issue Date,
other than:
(A) shares of Series A Preferred Stock issuable upon
exercise of Options outstanding on the Original Issue Date;
(B) up to 200,000 shares of Series A Preferred Stock
issuable upon exercise of Options which may be issued in
connection with equipment lease financing provided to the
Corporation by Comdisco, Inc. or its affiliates;
(C) shares of Common Stock issued or issuable upon
conversion of shares of Series A Preferred Stock;
(D) shares of Common Stock issued or issuable to
officers or employees or directors of, or consultants to, the
Corporation pursuant to a stock purchase or option plan or other
employee stock bonus arrangement (collectively, the "Plans")
approved by the Board of Directors; and
(E) shares of Common Stock issued as a dividend or
distribution on Series A Preferred Stock.
(ii) No Adjustment of Conversion Price. Except as set forth in
---------------------------------
Subsection 2(e)(vi), no adjustment in the number of shares of Common Stock
into which the Series A Preferred Stock is convertible shall be made, by
adjustment in the Conversion Price in respect of the issuance of Additional
Shares of Common Stock, unless the consideration per share for an
Additional Share of Common Stock (determined pursuant to Subsection
2(e)(v)) issued or deemed to be issued by the Corporation is less
-5-
<PAGE>
than the Conversion Price in effect on the date of, and immediately prior
to, the issue of such Additional Share.
(iii) Issue of Securities Deemed Issue of Additional Shares of
--------------------------------------------------------
Common Stock.
------------
(1) Options and Convertible Securities. In the event the
----------------------------------
Corporation at any time or from time to time after the Original Issue
Date shall issue any Options or Convertible Securities or shall fix a
record date for the determination of holders of any class of
securities entitled to receive any such options or Convertible
Securities, then the maximum number of shares (as set forth in the
instrument relating thereto without regard to any provisions contained
therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or
exchange of such Convertible Securities, shall be deemed to be
Additional Shares of Common Stock issued as of the time of such issue
or, in case such a record date shall have been fixed, as of the close
of business on such record date, provided that in any such case in
which Additional Shares of Common Stock are deemed to be issued:
(A) no further adjustment in the Conversion Price shall
be made upon the subsequent issue of Convertible Securities or
shares of Common Stock upon the exercise of such Options or
conversion or exchange of such Convertible Securities;
(B) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any
increase in the consideration payable to the corporation, or
decrease in the number of shares of Common Stock issuable, upon
the exercise, conversion or exchange thereof, the Conversion
Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such
increase or decrease becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options or
the rights of conversion or exchange under such Convertible
Securities;
(C) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible
Securities which shall not have been exercised, the Conversion
Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon such
expiration, be recomputed as if:
(I) In the case of Convertible Securities or
Options for Common Stock the only Additional Shares of
Common Stock issued were the shares of Common Stock, if any,
actually issued upon the exercise of such Options or the
conversion
-6-
<PAGE>
or exchange of such Convertible Securities and the
consideration received therefor was the consideration
actually received by the Corporation for the issue of all
such Options, whether or not exercised, plus the
consideration actually received by the Corporation upon such
exercise, or for the issue of all such Convertible
Securities which were actually converted or exchanged, plus
the additional consideration, if any, actually received by
the Corporation upon such conversion or exchange; and
(II) in the case of Options for Convertible
Securities only the Convertible Securities, if any, actually
issued upon the exercise thereof were issued at the time of
issue of such Options, and the consideration received by the
Corporation for the Additional Shares of Common Stock deemed
to have been then issued was the consideration actually
received by the Corporation for the issue of all such
Options, whether or not exercised, plus the consideration
deemed to have been received by the Corporation (determined
pursuant to Subsection 2(e)(v)) upon the issue of the
Convertible Securities with respect to which such Options
were actually exercised;
(D) no readjustment pursuant to clause (B) or (C) above
shall have the effect of increasing the Conversion Price to an
amount which exceeds the lower of (i) the Conversion Price on the
original adjustment date, or (ii) the Conversion Price that would
have resulted from any issuance of Additional Shares of Common
Stock between the original adjustment date and such readjustment
date;
(E) in the case of any Options which expire by their
terms not more than 30 days after the date of issue thereof, no
adjustment of the Conversion Price shall be made until the
expiration or exercise of all such Options, whereupon such
adjustment shall be made in the same manner provided in clause
(C) above; and
(F) if such record date shall have been fixed and such
Options or Convertible Securities are not issued on the date
fixed therefor, the adjustment previously made in the Conversion
Price which became effective on such record date shall be
cancelled as of the close of business on such record date, and
thereafter the Conversion Price shall be adjusted pursuant to
this Subsection 2(e)(iii) as of the actual date of their
issuance.
(2) Stock Dividends, Stock Distributions and Subdivisions.
-----------------------------------------------------
In the event the Corporation at any time or from time to time after
the Original Issue Date shall declare or pay any dividend or make any
other distribution on the Common Stock payable in Common Stock or
effect a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise than by
-7-
<PAGE>
payment of a dividend in Common Stock), then and in any such event,
Additional Shares of Common Stock shall be deemed to have been issued:
(A) in the case of any such dividend or distribution,
immediately after the close of business on the record date for
the determination of holders of any class of securities entitled
to receive such dividend or distribution, or
(B) in the case of any such subdivision, at the close
of business on the date immediately prior to the date upon which
such corporate action becomes effective.
If such record date shall have been fixed and no part of
such dividend shall have been paid on the date fixed therefor, the
adjustment previously made in the Conversion Price which became
effective on such record date shall be cancelled as of the close of
business on such record date, and thereafter the Conversion Price
shall be adjusted pursuant to this Section 2(e)(iii) as of the time of
actual payment of such dividend.
(iv) Adjustment of Conversion Price Upon Issuance of Additional
----------------------------------------------------------
Shares of Common Stock. In the event that at any time or from time to time
----------------------
after the Original Issue Date, the Corporation shall issue Additional
Shares of Common Stock (including, without limitation, Additional Shares of
Common Stock deemed to be issued pursuant to Subsection 2(e)(iii)(1) but
excluding Additional Shares of Common Stock deemed to be issued pursuant to
Subsection 2(e)(iii)(2), which event is dealt with in Subsection
2(e)(vi)(1)), without consideration or for a consideration per share less
than the applicable Conversion Price in effect on the date of and
immediately prior to such issue, then and in such event, such Conversion
Price shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined in accordance with the
following formula:
(P1) (Ql) + (P2) (Q2)
NPC = ______________________
Q1 + Q2
where:
NPC = New Conversion Price.
P1 = Conversion Price of Series A Preferred Stock in effect
immediately prior to new issue.
Q1 = Number of shares of Common Stock outstanding, or deemed to be
outstanding as set forth below, immediately prior to such
issue.
P2 Weighted average price per share received by the Corporation
upon such issue.
-8-
<PAGE>
Q2 Number of shares of Common Stock issued, or deemed to have
been issued, in the subject transaction.
provided that for the purpose of this Subsection 2(e)(iv), all shares of
-------------
Common Stock issuable upon exercise or conversion of any Options or
Convertible Securities outstanding immediately prior to such issue shall be
deemed to be outstanding, and immediately after any Additional Shares of
Common Stock are deemed issued pursuant to Subsection 2(e)(iii), such
Additional Shares of Common Stock shall be deemed to be outstanding; and
provided further, that the applicable Conversion Price shall not be so
----------------
reduced at any time if the amount of such reduction would be an amount less
than $.0l, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent
reduction which, together with such amount and any other amount or amounts
so carried forward, shall aggregate $.0l or more.
(v) Determination of Consideration. For purposes of this
------------------------------
Subsection 2(e), the consideration received by the Corporation for the
issue of any Additional Shares of Common Stock shall be computed as
follows:
(1) Cash and Property: Such consideration shall:
-----------------
(A) insofar as it consists of cash, be computed at the
aggregate amounts of cash received by the Corporation excluding
amounts paid or payable for accrued interest or accrued
dividends;
(B) insofar as it consists of property other than cash,
be computed at the fair value thereof at the time of such issue,
as determined in good faith by the Board of Directors; and
(C) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets
of the Corporation for consideration which covers both, be the
proportion of such consideration so received, computed as
provided in clauses (A) and (B) above, as determined in good
faith by the Board of Directors.
(2) Options and Convertible Securities. The consideration
----------------------------------
per share received by the Corporation for Additional Shares of Common
Stock deemed to have been issued pursuant to Subsection 2(e)(iii)(1),
relating to Options and Convertible Securities, shall be determined by
dividing (x) the total amount, if any, received or receivable by the
Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to the
Corporation upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, or in the case of Options for
Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such
-9-
<PAGE>
Convertible Securities, by (y) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent adjustment
of such number) issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.
(vi) Adjustment for Dividends, Distributions, Subdivisions,
------------------------------------------------------
Combinations or Consolidations of Common Stock.
----------------------------------------------
(1) Stock Dividends, Distributions or Subdivisions. In the
----------------------------------------------
event the Corporation shall be deemed to issue Additional Shares of
Common Stock pursuant to Subsection 2(e)(iii)(2) in a stock dividend,
stock distribution or subdivision, the Conversion Price in effect
immediately before such deemed issuance shall, concurrently with the
effectiveness of such deemed issuance, be proportionately decreased.
(2) Combinations or Consolidations. In the event the
------------------------------
outstanding shares of Common Stock shall be combined or consolidated,
by reclassification or otherwise, into a lesser number of shares of
Common Stock, the Conversion Price in effect immediately prior to such
combination or consolidation shall, concurrently with the
effectiveness of such combination or consolidation, be proportionately
increased.
(f) Adjustments for Certain Dividends and Distributions. In the event
---------------------------------------------------
that at any time or from time to time after the original Issue Date the
Corporation shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation other than shares of Common Stock, then
and in each such event provision shall be made so that the holders of Series A
Preferred Stock shall receive upon conversion thereof in addition to the number
of shares of Common Stock receivable thereupon, the amount of securities of the
Corporation that they would have received had their Series A Preferred Stock
been converted into Common Stock on the date of such event and had they
thereafter, during the period from the date of such event to and including the
conversion date, retained such securities receivable by them as aforesaid during
such period, giving application during such period to all adjustments called for
herein.
(g) Adjustment for Reclassification, Exchange, or Substitution. In
----------------------------------------------------------
the event that at any time or from time to time after the Original Issue Date,
the Common Stock issuable upon the conversion of the Series A Preferred Stock
shall be changed into the same or a different number of shares of any class or
classes of stock, whether by capital reorganization, reclassification, or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for above, or a merger, consolidation, or sale of assets provided for
below), then and in each such event the holder of each such share of Series A
Preferred Stock shall have the right thereafter to convert such share into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification, or other change, by holders of the
number of shares of Common Stock into which such shares of Series A Preferred
Stock might have been converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as provided
herein.
-10-
<PAGE>
(h) Adjustment for Merger, Consolidation or Sale of Assets. In the
------------------------------------------------------
event that at any time or from time to time after the Original Issue Date, the
Corporation shall merge or consolidate with or into another entity or sell all
or substantially all of its assets (other than a consolidation, merger or sale
which is treated as a liquidation pursuant to Subsection 1(c)), each share of
Series A Preferred Stock shall thereafter be convertible into the kind and
amount of shares of stock or other securities or property to which a holder of
the number of shares of Common Stock of the Corporation deliverable upon
conversion of such Series A Preferred Stock would have been entitled upon such
consolidation, merger or sale; and, in such case, appropriate adjustment (as
determined in good faith by the Board of Directors) shall be made in the
application of the provisions set forth in this Section 2 with respect to the
rights and interest thereafter of the holders of Series A Preferred Stock, to
the end that the provisions set forth in this Section 2 (including provisions
with respect to changes in and other adjustments of the Conversion Price) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the conversion of
the Series A Preferred Stock.
(i) No Impairment. The Corporation shall not, by amendment of its
-------------
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation but shall at
all times in good faith assist in the carrying out of all the provisions of this
Section 2 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series A Preferred Stock against impairment.
(j) Certificate as to Adjustments. Upon the occurrence of each
-----------------------------
adjustment or readjustment of the Conversion Price pursuant to this Section 2,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each affected
holder of Series A Preferred Stock a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any affected holder of Series A Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such adjustments
and readjustments, (ii) the Conversion Price at the time in effect, and (iii)
the number of shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of each share of Series
A Preferred Stock.
(k) Notices of Record Date. In the event of any taking by the
----------------------
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the Corporation shall mail to each
holder of Series A Preferred Stock at least ten (10) days prior to such record
date a notice specifying the date on which any such record is to be taken for
the purpose of such dividend or distribution.
(1) Common Stock Reserved. The Corporation shall reserve and keep
---------------------
available out of its authorized but unissued Common Stock such number of shares
of Common
-11-
<PAGE>
Stock as shall from time to time be sufficient to effect conversion of
the Series A Preferred Stock.
(m) Certain Taxes. The Corporation shall pay any issue or transfer
-------------
taxes payable in connection with the conversion of the Series A Preferred Stock,
provided, however, that the corporation shall not be required to pay any tax
which may be payable in respect of any transfer to a name other than that of the
holder of the Series A Preferred Stock.
(n) Closing of Books. The Corporation shall at no time close its
----------------
transfer books against the transfer of any Series A Preferred Stock or of any
shares of Common Stock issued or issuable upon the conversion of any shares of
Series A Preferred Stock in any manner which interferes with the timely
conversion or transfer of such Series A Preferred Stock or Common Stock.
Section 3. Voting Rights. Except as otherwise required by law or
--------- -------------
hereinafter set forth, the holders of Series A Preferred Stock shall be entitled
to notice of any meeting of stockholders and shall vote together with the
holders of Common Stock as a single class upon any matter submitted to the
stockholders for a vote, on the following basis:
(a) Holders of Common Stock shall have one vote per share; and
(b) Holders of Series A Preferred Stock shall have that number
of votes per share as is equal to the number of shares of Common Stock
(including fractions of a share) into which each such share of Series A
Preferred Stock held by such holder could be converted on the date for
determination of stockholders entitled to vote at the meeting or on the
date of any written consent.
With respect to all questions as to which, under law, stockholders are
required to vote by classes, the Series A Preferred Stock shall vote together as
a single class separately from the Common Stock.
Section 4. Dividends. Dividends may be declared and paid on Common Stock
--------- ---------
and Series A Preferred Stock from funds lawfully available therefor as and when
determined by the Board of Directors of the Corporation. If, when and as
dividends are declared and paid on shares of Common Stock, the Corporation shall
declare and pay at the same time to each holder of Series A Preferred Stock, a
dividend equal to the dividend which would have been payable to such holder if
the shares of Series A Preferred Stock held by such holder had been converted
into Common Stock on the record date for the determination of holders of Common
Stock entitled to receive such dividend.
Section 5. No Reissuance of Preferred Stock. No share or shares of Series
--------- --------------------------------
A Preferred Stock acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
cancelled, retired and eliminated from the shares which the Corporation shall be
authorized to issue.
Section 6. Residual Rights. All rights accruing to the outstanding shares
--------- ---------------
of the Corporation not expressly provided for to the contrary herein shall be
vested in the Common Stock.
-12-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF SEQUENOM, INC.
Sequenom, Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of said corporation
resolutions were duly adopted proposing and declaring advisable
that the Certificate of Incorporation of said corporation be
amended and that such amendment be submitted to the stockholders
of the Corporation for their consideration, as follows:
RESOLVED: That the Board of Directors of this Corporation
recommends and deems it advisable that the
Certificate of Incorporation of this Corporation,
as heretofore amended, be further amended by
deleting Article FOURTH thereof and substituting
for said Article FOURTH the new Article FOURTH
set forth on Exhibit A attached hereto; and
---------
RESOLVED: That the aforesaid proposed amendment be
submitted to the stockholders of the Corporation
for their consideration; and
RESOLVED: That following the approval by the stockholders
of the aforesaid amendment as required by law,
the officers of this Corporation be, and they
hereby are, and each of them hereby is,
authorized and directed (i) to prepare, execute
and file with the Secretary of State of the State
of Delaware a Certificate of Amendment setting
forth the aforesaid amendment in the form
approved by the stockholders and (ii) to take any
and all other actions necessary, desirable or
convenient to give affect to the aforesaid
amendment or otherwise to carry out the purposes
of the foregoing Resolutions.
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given written consent to said amendments in
accordance with the provisions of section 228 of the General
Corporation Law of the state of Delaware, and written notice of
the adoption of the amendments has been given as provided in
section 228 of the General Corporation Law of the State of
Delaware to every stockholder entitled to such notice.
<PAGE>
THIRD: That the aforesaid amendments were duly adopted in accordance with
the applicable provisions of sections 228 and 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Sequenom, Inc. has caused this certificate to be
signed by Randall R. Lunn, its President, and attested by David R. Pierson, its
Secretary, this 22nd, day of December, 1995.
ATTEST: SEQUENOM, INC.
By: /s/ illegible By: /s/ illegible
--------------- ---------------
Secretary President
-2-
<PAGE>
EXHIBIT A
---------
FOURTH: The total number of shares of all classes of
- ------
stock which the Corporation has authority to issue is 10,753,366 shares,
consisting of 5,726,700 shares of Common Stock, par value $.001 per share (the
"Common Stock"), 1,650, 000 shares of Series A Convertible Preferred Stock, par
value $.001 per share (the "Series A Preferred Stock"), and 3,376,666 shares of
Series B Convertible Preferred Stock, par value $.001 per share (the "Series B
Preferred Stock", and, together with the Series A Preferred Stock, the
"Preferred Stock"), amounting to an aggregate par value of $10,753.37.
The powers, preferences and rights, and the qualifications, limitations or
restrictions thereof, in respect of each class or series of stock of the
Corporation shall be as follows:
Section 1. Liquidation Rights.
--------- ------------------
(a) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders of
each share of the Series B Preferred Stock shall be entitled to be paid first
out of the assets of the Corporation available for distribution to holders of
the Corporation's capital stock of all classes an amount equal to the greater
of:
(i) $1.50 per share of series B Preferred Stock (which amount
shall be subject to equitable adjustment whenever there shall occur a stock
dividend, stock split, combination of shares, reclassification or other
similar event with respect to the Series B Preferred Stock) plus all
dividends declared but unpaid thereon, to and including the date full
payment shall be tendered to the holders of the Series B Preferred Stock
with respect to such liquidation, dissolution or winding up, or
(ii) such amount per share of Series B Preferred Stock as would
have been payable had all shares of Series B Preferred Stock been converted
to Common Stock immediately prior to such event of liquidation, dissolution
or winding up pursuant to the provisions of Section 2 hereof, plus all
dividends declared but unpaid on each shares of Series B Preferred Stock to
and including the date full payment shall be tendered to the holders of the
Series B Preferred Stock with respect to such liquidation, dissolution or
winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to the holders of the Series B Preferred Stock of all amounts so
distributable to them, then the entire assets of the Corporation available for
such distribution shall be distributed ratably among the holders of the Series B
Preferred Stock in proportion to the full preferential amount each such holder
is otherwise entitled to receive.
After such payments shall have been made in full to the holders of the
Series B Preferred Stock or funds necessary for such payments shall have been
set aside by the Corporation in trust for the account of holders of Series B
Preferred Stock so as to be available for such payments, the holders of each
share of the Series A Preferred Stock shall be entitled to be paid out of the
<PAGE>
assets of the Corporation available for distribution to holders of the
Corporation's capital stock of all classes an amount equal to the greater of:
(i) $0.50 per share of Series A Preferred Stock (which amount
shall be subject to equitable adjustment whenever there shall occur a stock
dividend, stock split, combination of shares, reclassification or other
similar event with respect to the Series A Preferred Stock) plus all
dividends declared but unpaid thereon, to and including the date full
payment shall be tendered to the holders of the Series A Preferred Stock
with respect to such liquidation, dissolution or winding up, or
(ii) such amount par share of Series A Preferred Stock as would
have been payable had all shares of Series A Preferred Stock been converted
to Common Stock immediately prior to such event of liquidation, dissolution
or winding up pursuant to the provisions of Section 2 hereof, plus all
dividends declared but unpaid on each share of Series A Preferred Stock to
and including the date full payment shall be tendered to the holders of the
Series A Preferred Stock with respect to such liquidation, dissolution or
winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to the holders of the Series A Preferred Stock of all amounts so
distributable to them, then the entire remaining assets of the Corporation
available for such distribution shall be distributed ratably among the holders
of the Series A Preferred Stock in proportion to the full preferential amount
each such holder is otherwise entitled to receive.
After such payments shall have been made in full to the holders of the
Series B Preferred Stock and to the holders of the Series A Preferred Stock, or
funds necessary for such payments shall have been set aside by the Corporation
in trust for the account of holders of Preferred Stock so as to be available for
such payments, the remaining assets available for distribution shall be
distributed among the holders of the Common Stock ratably in proportion to the
number of shares of Common Stock held by them.
Upon conversion of shares of Series B Preferred Stock or Series A Preferred
Stock into shares of Common Stock pursuant to Section 2 below, the holder of
such Common Stock shall not be entitled to any preferential payment or
distribution in case of any liquidation, dissolution or winding up, but shall
share ratably in any distribution of the assets of the Corporation to all the
holders of Common Stock.
The amounts payable with respect to shares of Series B Preferred Stock and
Series A Preferred Stock under this Section l(a) are sometimes hereinafter
referred to as "Series B Liquidation Payments" and "Series A Liquidation
Payments," respectively, and together are sometimes hereinafter referred to as
the "Liquidation Payments."
(b) Distributions Other than Cash. Whenever the distributions
-----------------------------
provided for in this Section 1 shall be payable in property other than cash, the
value of such distributions shall be the fair market value of such property as
determined in good faith by the Board of Directors of the Corporation.
-2-
<PAGE>
(c) Merger as Liquidation, etc. The merger or consolidation of the
--------------------------
Corporation into or with another corporation (except one in which the holders of
capital stock of the Corporation immediately prior to such merger or
consolidation continue to hold at least eighty percent (80%) in voting power of
the capital stock of the surviving corporation, in which case the provisions of
Subsection 2(h) shall apply), or the sale of all or substantially all of the
assets of the Corporation, shall be deemed to be a liquidation, dissolution or
winding up of the affairs of the Corporation for purposes of this Section 1 with
respect to the Series B Preferred Stock unless the holders of at least eighty-
five percent (85%) of the then outstanding shares of the Series B Preferred
Stock elect to the contrary, and with respect to the Series A Preferred Stock
unless the holders of at least eighty percent (80%) of the then outstanding
shares of the Series A Preferred Stock elect to the contrary, such election in
either case to be made by giving written notice thereof to the Corporation at
least three days before the effective date of such event. If such notice is
given with respect to the Series B Preferred Stock or the Series A Preferred
Stock, the provisions of Subsection 2(h) shall apply to such Series B Preferred
Stock or Series A Preferred Stock, as the case may be. Unless such election is
made, any amounts received by the holders of the Series B Preferred Stock and
the Series A Preferred Stock as a result of such merger or consolidation shall
be deemed to be applied toward, and all consideration received by the
Corporation in such asset sale together with all other available assets of the
Corporation shall be distributed toward, the Liquidation Payments attributable
to such shares of Series B Preferred Stock and Series A Preferred Stock,
respectively, in the order of preference set forth in Section 1.
(d) Notice. Written notice of any proposed liquidation, dissolution
------
or winding up of the affairs of the Corporation (including any merger,
consolidation or sale of assets which may be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation under Subsection
l(c)), stating a payment date, the amount of the Liquidation Payments and the
place where said Liquidation Payments shall be payable, shall be given by first
class mail, postage prepaid, or by telex to non-U.S. residents, not less than
twenty (20) days prior to the payment date stated therein, to the holders of
record of the Series B Preferred Stock and the Series A Preferred Stock, such
notice to be addressed to each such holder at its address an shown by the
records of the Corporation.
Section 2. Conversion. The holders of Preferred Stock shall have
--------- ----------
conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert; Conversion Price. Each share of Preferred Stock
----------------------------------
shall be convertible, without the payment of any additional consideration by the
holder thereof and at the option of the holder thereof, at any time after the
data of issuance of such share, at the office of the Corporation or any transfer
agent for the Preferred Stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined in accordance with the following:
(i) in the case of the Series B Preferred Stock, by dividing
$1.50 by the Series B Conversion Price determined as hereinafter provided,
in affect at the time of conversion. The Conversion Price at which shares
of Common Stock shall be deliverable upon conversion of Series B Preferred
Stock without the payment of any additional consideration by the holder
thereof (the "Series B Conversion Price") shall initially be $1.50 per
share of Common Stock. Such initial Series B Conversion Price shall be
-3-
<PAGE>
subject to adjustment, in order to adjust the number of shares of Common
Stock into which the Series B Preferred Stock in convertible, as
hereinafter provided.
(ii) in the case of the Series A Preferred Stock, by dividing
$0.50 by the Series A Conversion Price, determined as hereinafter provided,
in effect at the time of conversion. The Conversion Price at which shares
of Common Stock shall be deliverable upon conversion of Series A Preferred
Stock without the payment of any additional consideration by the holder
thereof (the "Series A Conversion Price") shall initially be $0.50 per
share of Common Stock. Such initial Series A Conversion Price shall be
subject to adjustment, in order to adjust the number of shares of Common
Stock into which the Series A Preferred Stock is convertible, as
hereinafter provided.
(b) Automatic Conversion. Each share of Series B Preferred Stock
--------------------
shall automatically be converted into shares of Common Stock at the applicable
Series B conversion Price then in effect upon:
(i) the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the
Securities Act of 1933, an amended, covering the offer and sale of Common
Stock for the account of the Corporation to the public at an offering price
per share (prior to underwriter commissions and discounts) of not less than
$4.50 (an adjusted pursuant to Subsection 2 (e) (vi) hereof to reflect any
stock dividends, distributions, combinations, reclassifications or other
like transactions effected by the Corporation in respect of its Common
Stock) and with gross proceeds to the Corporation of not less than
$10,000,000 (in the event of which offering, the person(s) entitled to
receive the Common Stock issuable upon such conversion of the Series B
Preferred Stock shall not be deemed to have converted that Series B
Preferred Stock until the closing of such offering); or
(ii) the written election of the holders of not less than
eighty-five percent (85%) of the then outstanding shares of the Series B
Preferred Stock to require such mandatory conversion.
Each share of Series A Preferred Stock shall automatically be converted
into shares of Common Stock at the applicable Series A Conversion Price then in
effect upon:
(i) the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, covering the offer and sale of Common
Stock for the account of the Corporation to the public at an offering price
per share (prior to underwriter commissions and discounts) of not less than
$2.50 (as adjusted pursuant to Subsection 2 (e) (vi) , hereof to reflect
any stock dividends, distributions, combinations, reclassifications or
other like transactions effected by the Corporation in respect of its
Common Stock) and with gross proceeds to the Corporation of not lose than
$10,000,000 (in the event of which offering, the person(s) entitled to
receive the Common Stock issuable upon such conversion of the Series A
Preferred Stock shall not be deemed to have converted that Series A
Preferred Stock until the closing of such offering); or
-4-
<PAGE>
(ii) the written election of the holders of not less than eighty
percent (80%) of the then outstanding shares of the Series A Preferred
Stock to require such mandatory conversion.
(c) Mechanics of Automatic Conversions. Upon the occurrence of an
----------------------------------
event specified in Subsection 2(b), the Series B Preferred Stock or the Series A
Preferred Stock, as applicable, or both, shall be converted automatically
without any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent; provided, however, that all holders of shares of Preferred Stock
being converted shall be given written notice of the occurrence of an event
specified in Subsection 2(b) including the date such event occurred (the
"Mandatory Conversion Date"), and the Corporation shall not be obligated to
issue certificates evidencing the shares of Common Stock issuable upon such
conversion unless certificates evidencing such shares of the Preferred Stock
being converted are either delivered to the Corporation or its transfer agent,
or the holder notifies the Corporation or any transfer agent that such
certificates have been lost, stolen, or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection therewith and, if the Corporation so elects,
provides an appropriate indemnity bond. On the Mandatory Conversion Date, all
rights with respect to the Preferred Stock so converted shall terminate, except
any of the rights of the holder thereof, upon surrender of the holder's
certificate or certificates therefor, to receive certificates for the number of
shares of Common Stock into which such Preferred Stock has been converted,
together with cash in an amount equal to all dividends declared but unpaid on,
and any and all other amounts owing with respect to, the shares of Preferred
Stock converted to and including the time of conversion. Upon the automatic
conversion of the Preferred Stock, the holders of such Preferred Stock shall
surrender the certificates representing such shares at the office of the
Corporation or of its transfer agent. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or by the holder's attorney
duly authorized in writing. Upon surrender of such certificates there shall be
issued and delivered to such holder, promptly at such office and in the holder's
name as shown on such surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which the shares of
the Preferred Stock surrendered were convertible on the date on which such
automatic conversion occurred, together with cash in an amount equal to all
dividends declared but unpaid on, and any and all other amounts owing with
respect to, the shares of Preferred Stock converted to and including the time of
conversion. No fractional share of Common Stock shall be issued upon the
mandatory conversion of the Preferred Stock. In lieu of any fractional share to
which the holder would otherwise be entitled, the Corporation shall pay cash
equal to such fraction multiplied by the applicable Conversion Price then in
effect.
(d) Mechanics of Optional Conversions. Before any holder of Preferred
---------------------------------
Stock shall be entitled to convert the same into shares of Common Stock, the
holder shall surrender the certificate or certificates therefor at the office of
the Corporation or of any transfer agent for the Preferred Stock, and shall give
written notice to the Corporation at such office that the holder elects to
convert the same and shall state therein the holder's name or the name or names
of the holder's nominees in which the holder wishes the certificate or
certificates for shares of Common Stock to be issued. On the date of
conversion, all rights with respect to the Preferred Stock so
-5-
<PAGE>
converted shall terminate, except any of the rights of the holder thereof, upon
surrender of the holder's certificate or certificates therefor, to receive
certificates for the number of shares of Common Stock into which such Preferred
Stock has been converted and cash in an amount equal to all dividends declared
but unpaid thereon and any and all other amounts owing with respect thereto at
such time. If so required by the Corporation, certificates surrendered for
conversion shall be endorsed or accompanied by written instrument or instruments
of transfer, in form satisfactory to the Corporation, duly executed by the
registered holder or by the holder's attorney duly authorized in writing. No
fractional share of Common Stock shall be issued upon the optional conversion of
Preferred Stock. In lieu of any fractional share to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such fraction
multiplied by the applicable Conversion Price then in effect. The Corporation
shall, as soon as practicable after surrender of the certificate or certificates
for conversion, issue and deliver at such office to such holder of Preferred
Stock, or to the holder's nominee or nominees, a certificate or certificates for
the number of shares of Common Stock to which the holder shall be entitled as
aforesaid, together with cash in lieu of any fraction of a share and cash in an
amount equal to all dividends declared but unpaid thereon and any and all other
amounts owing with respect thereto at such time. Such conversion shall be deemed
to have been made immediately prior to the close of business on the date of such
surrender of the shares of Preferred Stock to be converted, and the person or
persons entitled to receive the shares of Common Stock issuable upon conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date.
(e) Adjustments to Conversion Price for Diluting Issues.
---------------------------------------------------
(i) Special Definitions. For purposes of this Subsection 2(e),
-------------------
the following definitions shall apply:
(1) "Option" shall mean rights, options or warrants to
------
subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.
(2) "Original Issue Date" shall mean, with respect to the
-------------------
Series A Preferred Stock, the first date on which a share of Series A
Preferred Stock was issued, and shall mean, with respect to the Series
B Preferred Stock, the first of such Additional Share.
(iii) Issue of Securities Deemed Issue of Additional Shares
-----------------------------------------------------
of Common Stock.
---------------
(1) Options and Convertible Securities. In the event the
----------------------------------
Corporation at any time or from time to time after the Original Issue
Date shall issue any Options or Convertible Securities or shall fix a
record date for the determination of holders of any class of
securities entitled to receive any such Options or Convertible
Securities, then the maximum number of shares (as act forth in the
instrument relating thereto without regard to any provisions contained
therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of
Convertible Securities and
-6-
<PAGE>
Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue or, in case such a record date
shall have been fixed, as of the close of business on such record
date, provided that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(A) no further adjustment in the Series B Conversion
Price or the Series A Conversion Price shall be made upon the
subsequent issue of Convertible Securities or shares of Common
Stock upon the exercise of such Options or conversion or exchange
of such Convertible Securities;
(B) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any
increase in the consideration payable to the Corporation, or
decrease in the number of shares of Common Stock issuable, upon
the exercise, conversion or exchange thereof, the Series B
Conversion Price and the Series A Conversion Price computed upon
the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based
thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease
insofar as it affects such Options or the rights of conversion or
exchange under such Convertible Securities;
(C) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible
Securities which shall not have been exercised, the Series B
Conversion Price and the Series A Conversion Price computed upon
the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based
thereon, shall, upon such expiration, be recomputed as if:
(I) In the case of Convertible Securities or
Options for common stock the only Additional Shares of
Common Stock issued were the shares of Common Stock, if any,
actually issued upon the exercise of such Options or the
conversion or exchange of such Convertible Securities and
the consideration received therefor was the consideration
actually received by the Corporation for the issue of all
such Options, whether or not exercised, plus the
consideration actually received by the Corporation upon such
exercise, or for the issue of all such Convertible
Securities which were actually converted or exchanged, plus
the additional consideration, if any, actually received by
the Corporation upon such conversion or exchange; and
-7-
<PAGE>
(II) in the case of Options for Convertible
Securities only the Convertible Securities, if any, actually
issued upon the exercise thereof were issued at the time of
issue of such Options, and the consideration received by the
Corporation for the Additional Shares of Common Stock deemed
to have been then issued was the consideration actually
received by the Corporation for the issue of all such
Options, whether or not exercised, plus the consideration
deemed to have been received by the Corporation (determined
pursuant to Subsection 2 (e) (v)) upon the issue of the
Convertible securities with respect to which such Options
were actually exercised;
(D) no readjustment pursuant to clause (B) or (C) above
shall have the effect of increasing the Series B Conversion Price
or the Series A Conversion Price to an amount which exceeds the
lower of (i) the respective Conversion Price on the original
adjustment date, or (ii) the respective Conversion Price that
would have resulted from any issuance of Additional Shares of
Common Stock between the original adjustment date and such
readjustment date;
(E) in the case of any Options which expire by their
terms not more than 30 days after the date of issue thereof, no
adjustment of the Series B Conversion Price or the Series A
Conversion Price shall be made until the expiration or exercise
of all such Options, whereupon such adjustment shall be made in
the same manner provided in clause (C) above; and
(F) if such record date shall have been fixed and such-
Options or Convertible Securities are not issued on the date
fixed therefor, the adjustment previously made in the Series B
Conversion Price and the Series A Conversion Price which became
effective on such record date shall be cancelled as of the close
of business an such record date, and thereafter the respective
Conversion Prices shall be adjusted pursuant to this Subsection
2(e)(iii) as of the actual date of their issuance.
(2) Stock Dividends, Stock Distribution and Subdivisions.
----------------------------------------------------
In the event the Corporation at any time or from time to time after
the Original Issue Date shall declare or pay any dividend or make any
other distribution on the Common Stock payable in Common Stock or
effect a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in Common
Stock), then and in any such event, Additional Shares of Common Stock
shall be deemed to have been issued:
(A) in the case of any such dividend or distribution,
immediately after the close of business on the record date for
the determination of holders of any class of securities entitled
to receive such dividend or distribution, or
-8-
<PAGE>
(B) in the case of any such subdivision, at the close
of business on the date immediately prior to the date upon which
such. corporate action becomes effective.
If such record date shall have been fixed and no part
of such dividend shall have been paid on the date fixed therefor, the
adjustment previously made in the Series B Conversion Price and the
Series A Conversion Price which became effective on such record date
shall be cancelled as of the close of business on such record date,
and thereafter the respective Conversion Prices shall be adjusted
pursuant to this Section 2 (e) (iii) as of the time of actual payment
of such dividend.
(iv) Adjustment of Conversion Price Upon Issuance of Additional
----------------------------------------------------------
Shares of Common Stock. In the event that at any time or from time to time
----------------------
after the Original Issue Date, the Corporation shall issue Additional
Shares of Common Stock (including, without limitation, Additional Shares of
Common Stock deemed to be issued pursuant to Subsection 2 (e) (iii) (1) but
excluding Additional Shares of Common Stock deemed to be issued pursuant to
Subsection 2(e) (iii) (2), which event is dealt with in subsection 2 (e)
(vi) (1), without consideration or for a consideration per share less than
the applicable Series B Conversion Price or Series A Conversion Price in
effect on the date of and immediately prior to such issue, then and in such
event, such Series B Conversion Price or Series A Conversion Price, as the
case may be, shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined in accordance with the
following formula:
<TABLE>
<CAPTION>
(P1) (Ql) + (P2) (Q2)
NPC = _________________________
Q1 + Q2
<S> <C> <C>
where:
NCP = New Series B Conversion Price or Series A Conversion
Price, as applicable.
P1 = Series B Conversion Price or Series A Conversion Price,
an applicable, in affect immediately prior to new
issue.
Ql = Number of shares of Common Stock outstanding, or deemed
to be outstanding as set forth below, immediately prior
to such issue.
P2 = Weighted average price per share received by the
Corporation upon such issue.
Q2 = Number of shares of Common Stock issued, or deemed to
have been issued, in the subject transaction.
</TABLE>
provided that for the purpose of this Subsection 2 (e) (iv), all shares of
--------
Common Stock issuable upon exercise or conversion of any Options or
Convertible Securities outstanding immediately prior to such issue shall be
deemed to be outstanding, and
-9-
<PAGE>
immediately after any Additional Shares of Common Stock are deemed issued
pursuant to Subsection 2 (e) (iii), such Additional Shares of Common Stock
shall be deemed to be outstanding; and provided further, that the
-------- -------
applicable Conversion Price shall not be so reduced at any time if the
amount of such reduction would be an amount less than $.01, but any such
amount shall be carried forward and reduction with respect thereto made at
the time of and together with any subsequent reduction which, together with
such amount and any other amount or amounts so carried forward, shall
aggregate $.0l or more.
(v) Determination of Consideration. For purposes of this
------------------------------
Subsection 2(e), the consideration received by the Corporation for the
issue of any Additional Shares of Common stock shall be computed as
follows:
(1) Cash and Property. Such consideration shall:
-----------------
(A) insofar as it consists of cash; be computed at
the aggregate amounts of cash received by the Corporation
excluding amounts paid or payable for accrued interest or accrued
dividends;
(B) insofar as it consists of property other than
cash, be computed at the fair value thereof at the time of such
issue, as determined in good faith by the Board of Directors; and
(C) in the event Additional Shares of Common Stock
are issued together with other shares or securities or other
assets of the Corporation for consideration which covers both, be
the proportion of such consideration so received, computed as
provided in clauses (A) and (B) above, as determined in good
faith by the Board of Directors.
(2) Options and Convertible Securities. The consideration
----------------------------------
per share received by the Corporation for Additional shares of Common
Stock deemed to have been issued pursuant to Subsection 2 (e) (iii)
(1) , relating to Options and Convertible securities, shall be
determined by dividing (x) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such
Options or Convertible Securities, plus the minimum aggregate amount
of additional consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to the
Corporation upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, or in the case of Options for
Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible
Securities, by (y) the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the conversion
or exchange of such Convertible Securities.
-10-
<PAGE>
(vi) Adjustment for Dividends, Distributions, Subdivisions,
------------------------------------------------------
Combinations or Consolidations of Common Stock.
----------------------------------------------
(1) Stock Dividends, Distributions or Subdivisions. In the
----------------------------------------------
event the Corporation shall be deemed to issue Additional Shares of
Common Stock pursuant to Subsection 2(e)(iii)(2) in a stock dividend,
stock distribution or subdivision, the Series B Conversion Price and
the Series A Conversion Price in effect immediately before such deemed
issuance shall, concurrently with the effectiveness of such deemed
issuance, be proportionately decreased.
(2) Combinations or Consolidations. In the event the
------------------------------
outstanding shares of Common Stock shall be combined or consolidated,
by reclassification or otherwise, into a lesser number of shares of
Common Stock, the Series B Conversion Price and the Series A
Conversion Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such
combination or consolidation, be proportionately increased.
(f) Adjustments for Certain Dividends and Distributions. In the event
---------------------------------------------------
that at any time or from time to time after the Original Issue Date the
Corporation shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation other than shares of Common Stock, then
and in each such event provision shall be made so that the holders of Preferred
Stock shall receive upon conversion thereof in addition to the number of shares
of Common Stock receivable thereupon, the amount of securities of the
Corporation that they would have received had their Preferred Stock been
converted into Common Stock an the date of such event and had they thereafter,
during the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during such
period, giving application during such period to all adjustments called for
herein.
(g) Adjustment for Reclassification, Exchange, or Substitution. In
----------------------------------------------------------
the event that at any time or from time to time after the Original Issue Date,
the Common Stock issuable upon the conversion of Preferred Stock shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification, or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
above, or a merger, consolidation, or sale of assets provided for below), then
and in each such event the holder of any share or shares of Preferred Stock
shall have the right thereafter to convert such shares into the kind and amount
of shares of stock and other securities and property receivable upon such
reorganization, reclassification, or other change, by the holder of a number of
shares of Common Stock equal to the number of shares of Common Stock into which
such shares of Preferred Stock might have been converted immediately prior to
such reorganization, reclassification, or change, all subject to further
adjustment as provided herein.
(h) Adjustment for Merger, Consolidation or Sale of Assets. In the
------------------------------------------------------
event that at any time or from time to time after the Original Issue Date, the
Corporation shall merge or consolidate with or into another entity or sell all
or substantially all of its assets, each share of Preferred Stock as to which
such consolidation, merger or sale is not treated as a liquidation
-11-
<PAGE>
under Subsection l(c) shall thereafter be convertible into the kind and amount
of shares of stock or other securities or property to which a holder of the
number of shares of Common Stock of the Corporation deliverable upon conversion
of such Preferred Stock would have been entitled to receive upon such
consolidation, merger or sale; and, in such case, appropriate adjustment (as
determined in good faith by the Board of Directors) shall be made in the
application of the provisions set forth in this Section 2 with respect to the
rights and interest thereafter of the holders of Preferred Stock, to the end
that the provisions set forth in this Section 2 (including provisions with
respect to changes in and other adjustments of the Conversion Price) shall
thereafter be applicable, as nearly an reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the conversion of
Preferred Stock.
(i) No Impairment. The corporation shall not, by amendment of its
-------------
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation but shall at
all times in good faith assist in the carrying out of all the provisions of this
Section 2 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of
Preferred Stock against impairment.
(j) Certificate as to Adjustment. Upon the occurrence of each
----------------------------
adjustment or readjustment of the Series B Conversion Price or the Series A
Conversion Price pursuant to this Section 2, the Corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each affected holder of Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Corporation
shall, upon the written request at any time of any affected holder of Preferred
Stock, furnish or cause to be furnished to such holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) the Conversion Price
at the time in effect, and (iii) the number of shares of Common Stock and the
amount, if any, of other property which at the time would be received upon the
conversion of each share of Preferred Stock.
(k) Notices of Record Date. In the event of any taking by the
----------------------
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the Corporation shall mail to each
holder of Preferred Stock at least ten (10) days prior to such record date a
notice specifying the date on which any such record is to be taken for the
purpose of such dividend or distribution.
(1) Common Stock Reserved. The Corporation shall reserve and keep
---------------------
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to affect conversion of
the Preferred Stock.
(m) Certain Taxes. The Corporation shall pay any issue or transfer
-------------
taxes payable in connection with this conversion of Preferred Stock, provided,
however, that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer to a name other than that of the holder of
the Preferred Stock.
-12-
<PAGE>
(n) Closing of Books. The Corporation shall at no time close its
----------------
transfer books against the transfer of any Preferred Stock or of any shares of
Common Stock issued or issuable upon the conversion of any shares of Preferred
Stock in any manner which interferes with the timely conversion or transfer of
such Preferred Stock or Common Stock.
Section 3. Restrictions.
--------- ------------
(a) At any time when shares of Preferred Stock are outstanding, except
where the vote of the holders of a greater number of shares of the Corporation
is required by law or by this Certificate of Incorporation, and in addition to
any other vote required by law or this Certificate of Incorporation, without the
affirmative vote of the holders of at least sixty percent (60%) of the then
outstanding shares of Preferred Stock (with calculations based upon the number
of shares of Common Stock into which such shares of Preferred Stock are then
convertible), voting collectively as a single class, the Corporation will not:
(i) consent to any liquidation, dissolution or winding up of
the Corporation or merge or consolidate with or into any other entity or
entities;
(ii) sell, abandon, transfer, lease or otherwise dispose of all
or any substantially portion of its properties and other assets; or
(iii) amend this Certificate of Incorporation or the
Corporation's By-Laws.
(b) At any time when shares of Series B Preferred Stock are
outstanding, except where the vote of the holders of a greater number of shares
of the Corporation is required by law or by this Certificate of Incorporation,
and in addition to any other vote required by law or this Certificate of
Incorporation, without the affirmative vote of the holders of at least eighty-
five percent (85%) of the then outstanding shares of Series B Convertible
Preferred Stock, the Corporation will not:
(i) amend, alter or change the designation or any preferences,
voting powers, qualifications, or special or relative rights or privileges
of the Series B Convertible Preferred Stock in a manner adverse to the
interests of the holders of the Series B Convertible Preferred Stock in any
material respect;
(ii) increase the authorized number of shares of Series B
Preferred Stock;
(iii) create or authorize the creation of any additional series
of shares of stock unless such series ranks junior to the Series B
Convertible Preferred Stock as to both dividends and the distribution of
assets on the liquidation, dissolution, winding up or insolvency of the
Corporation, or increase the authorized amount of any other class or series
of shares of stock unless the same ranks junior to the Series B Convertible
Preferred Stock as to dividends and the distribution of assets on the
liquidation, dissolution, winding up or insolvency of the Corporation, or
create or authorize any obligation or security convertible into shares of
Series B Convertible Preferred Stock or into shares of any other class or
series of shares of stock unless the same ranks junior to
-13-
<PAGE>
the Series B Convertible Preferred Stock as to dividends and the
distribution of assets on the liquidation, dissolution, winding up or
insolvency of the Corporation, whether any such creation, authorization or
increase shall be by means of amendment to this Certificate of
Incorporation or by merger, consolidation or otherwise;
(c) At any time when shares of Series A Preferred Stock are
outstanding, except where the vote of the holders of a greater number of shares
of the Corporation in required by law or by this Certificate of Incorporation,
and in addition to any other vote required by law or this Certificate of
Incorporation, without the affirmative vote of the holders of at least sixty
percent (60%) of the then outstanding shares of Series A Convertible Preferred
Stock, the Corporation will not:
(i) amend, alter or change the designation or any preferences,
voting powers, qualifications, or special or relative rights or privileges
of the Series A Convertible Preferred Stock in a manner adverse to the
interests of the holders of the Series A Convertible Preferred Stock in any
material respect;
(ii) increase the authorized number of shares of Series A
Preferred Stock;
(iii) create or authorize the creation of any additional series
of shares of stock unless such series ranks junior to the Series A
Convertible Preferred Stock as to both dividends and the distribution of
assets on the liquidation, dissolution, winding up or insolvency of the
corporation, or increase the authorized amount of any other class or series
of shares of stock unless the same ranks junior to the Series A Convertible
Preferred Stock as to dividends and the distribution of assets on the
liquidation, dissolution, winding up or insolvency of the Corporation, or
create or authorize any obligation or security convertible into shares of
Series A Convertible Preferred Stock or into shares of any other class or
series of shares of stock unless the same ranks junior to the Series A
Convertible Preferred Stock as to dividends and the distribution of assets
on the liquidation, dissolution, winding up or insolvency of the
Corporation, whether any such creation, authorization or increase shall be
by means of amendment to this Certificate of Incorporation or by merger,
consolidation or otherwise.
Section 4. Voting Rights. Except as otherwise required by law or
-------------
hereinafter set forth, the holders of Preferred Stock shall be entitled to
notice of any meeting of stockholders and shall vote together with the holders
of Common Stock as a single class upon any matter submitted to the stockholders
for a vote, on the following basis:
(a) Holders of Common Stock shall have one vote per share; and
(b) Holders of Preferred Stock shall have that number of votes per
share as is equal to the number of shares of Common Stock (including fractions
of a share) into which each such share of Preferred Stock held by such holder
could be converted on the date for determination of stockholders entitled to
vote at the meeting or an the date of any written consent.
-14-
<PAGE>
With respect to all questions as to which, under law, stockholders are
required to vote by classes, each of the Series A Preferred Stock and Series B
Preferred Stock shall vote separately as a single class apart from each other
and from the Common Stock.
Section 5. Dividends.
--------- ---------
(a) The holders of Series B Preferred Stock shall be entitled to
receive, from funds legally available therefor, a noncumulative dividend at the
rate of $.05 per share per annum, payable when and as declared by the Board of
Directors. No dividends shall be declared or paid to the holders of Series A
Preferred Stock or Common Stock unless the holders of Series B Preferred Stock
have been paid in full all of the dividends to which they are entitled, nor
shall any dividends be declared or paid to the holders of Series A Preferred
Stock or Common Stock at a rate greater than the rate paid to the holders of
Series B Preferred Stock.
(b) Subject to Subsection 5(a), dividends may be declared and paid on
Series A Preferred Stock from funds lawfully available therefor as and when
determined by the Board of Directors of the Corporation. If, when and as
dividends are declared and paid on shares of Series A Preferred Stock, the
Corporation shall, after making payment in full to the holders of Series B
Preferred Stock the amounts to which they are entitled pursuant to Subsection
5(a), declare and pay at the same time to each holder of Series B Preferred
Stock, a dividend at the same rate, based on the number of shares of Common
Stock into which the Series B Preferred Stock and the Series A Preferred Stock
are convertible on the record date for the determination of holders of Series A
Preferred Stock entitled to receive such dividend.
(c) Subject to Subsection 5(a), dividends may be declared and paid an
Common Stock from funds lawfully available therefor as and when determined by
the Board of Directors of the Corporation. If, when and as dividends are
declared and paid on shares of Common Stock, the Corporation shall, after making
payment in full to the holders of Series B Preferred Stock the amounts to which
they are entitled pursuant to Subsection 5(a), declare and pay at the same time
to each holder of Preferred Stock, a dividend equal to the dividend which would
have been payable to such holder if the shares of Preferred Stock held by such
holder had been converted into Common Stock on the record date for the
determination of holders of Common Stock entitled to receive such dividend.
Section 6. Redemption.
--------- ----------
(a) In the event that the Corporation shall exercise its put option to
sell shares of capital stock of Sequenom Instruments GmbH to Technologie-
Beteiligungs-Gesellschaft mbH der Deutschen Auesgleichsbank ("TBG") pursuant to
that certain Kooperationsvertrag between the Corporation and TBG relating to the
investment by the Corporation of DM 3 million in Sequenom Instruments GmbH, the
Corporation shall, within 30 days after receipt of the proceeds of the sale of
such shares to the TBG, send notice of such exercise (the "Put Exercise Notice")
by first class mail, postage prepaid, to each holder of record of the Series B
Preferred Stock at its address as it appears on the books of the Corporation,
specifying (i) the amount of proceeds so received from the TBG net of any
expenses incurred in connection therewith (the "Put Net Proceeds"), (ii) the
date (the "Redemption Date") on which the Corporation will redeem shares of
Series B Preferred Stock from electing holders of the Series B Preferred Stock
in accordance
-15-
<PAGE>
with this Section 6, which Redemption Date shall be not less than 45 days nor
more than 90 days after the date of such notice (the "Notice Date") and (iii)
each such holder's Pro Rata Redemption Amount (as hereinafter defined).
(b) Each holder of Series B Preferred Stock may elect to have the
Corporation redeem from it on the Redemption Date, to the extent the Corporation
has funds legally available for such purpose, up to a number of shares of Series
B Preferred Stock equal to such holder's Pro Rata Redemption Amount (as
hereinafter defined) at a redemption price of $1.50 per share. Such election
may be made only by delivering to the Corporation within thirty (30) days after
the Notice Date (i) a written election signed by such holder specifying the
number of shares of Series B Preferred Stock so to be redeemed (which number
shall be not more than such holder's Pro Rata Redemption Amount), and (ii)
certificates for the shares of Series B Preferred Stock so to be redeemed,
together with stock powers therefor duly executed by such holder in blank.
(c) For purposes of this Section 6, each holder of Series B Preferred
Stock's "Pro Rata Redemption Amount" shall be the greatest whole number
represented by a fraction, the numerator or which is the product of the number
of shares of Series B Preferred Stock held by such holder times the Put Net
Proceeds, and the denominator or which is the product of the total number of
shares of Series B Preferred Stock issued and outstanding times $1.50.
(d) On the Redemption Date the Corporation shall redeem from the
electing holders of Series B Preferred Stock the shares of Series B Preferred
Stock as to which election notices have been properly given, to the extent the
Corporation has funds legally available for such purpose.
(e) If the funds of the Corporation legally available for redemption
of shares of Series B Preferred Stock on the Redemption Date are insufficient to
redeem the total number of shares of Series B Preferred Stock submitted for
redemption, those funds which are legally available will be used to redeem the
maximum possible number of whole shares ratably among the holders of such shares
in accordance with the manner of determining the "Pro Rata Redemption Amount"
set forth above. The shares of Series B Preferred Stock not redeemed shall
remain outstanding and entitled to all rights and preferences provided herein.
Section 7. Residual Rights. All rights accruing to the outstanding shares
--------- ---------------
of the Corporation not expressly provided for to the contrary herein shall be
vested in the Common Stock.
-16-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF SEQUENOM, INC.
Sequenom, Inc., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of said corporation
resolutions were duly adopted proposing and declaring advisable
that the Certificate of Incorporation of said corporation be
amended and that such amendment be submitted to the stockholders
of the Corporation for their consideration, as follows;
RESOLVED: That the Board of Directors of this Corporation recommends and
deems it advisable that the Certificate of Incorporation of this
Corporation, as heretofore amended, be further amended by
replacing the number "10,753,366" in the first paragraph of
Article FOURTH thereof with the number "10,396,696," by
replacing the number "3,376,666" in such first paragraph of
Article FOURTH thereof with the number "3,019,996," and by
replacing the number "$10,753.37" in such first paragraph of
Article FOURTH thereof with the number "$10,396.696," so that
such first paragraph reads as follows:
"The total number of shares of all classes of stock
which the Corporation has authority to issue is
10,396,696 shares, consisting of 5,726,700 shares of
Common Stock, par value $.001 per share (the "Common
Stock"), 1,650,000 shares of Series A Convertible
Preferred Stock, par value $.00l per share (the "Series
A Preferred Stock"), and 3,019,996 shares of Series B
Convertible Preferred Stock, par value $.001 per share
(the "Series B Preferred Stock", and, together with the
Series A Preferred Stock, the "Preferred Stock"),
amounting to an aggregate par value of $10,396.696."
RESOLVED: That the Board of Directors of this Corporation recommends and
deems it advisable that the Certificate of Incorporation of this
Corporation, as heretofore amended, be further amended by
replacing the number "700,000" in Section 2(e)(i)(4)(C) of
Article FOURTH thereof with the number "1,000,000" so that such
section reads an follows
(C) up to 1,000,000 shares of Common Stock issued or
issuable to officers or employees or directors of, or
consultants to, the Corporation pursuant to a stock
purchase or option plan or other employee stock bonus
arrangement
<PAGE>
(collectively, the "Plans") approved by the Board of
Directors;"
RESOLVED: That the aforesaid proposed amendments be submitted to the
stockholders of the Corporation for their consideration; and
RESOLVED: That following the approval by the stockholders of the aforesaid
amendments as required by law, the officers of this Corporation
be, and they hereby are, and each of them hereby is, authorized
and directed (i) to prepare, execute and file with the Secretary
of State of the State of Delaware a Certificate of Amendment
setting forth the aforesaid amendments in the form approved by
the stockholders and (ii) to take any and all other actions
necessary, desirable or convenient to give effect to the
aforesaid amendments or otherwise to carry out the purposes of
the foregoing Resolutions.
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given written consent to said amendments in
accordance with the provisions of section 228 of the General
Corporation Law of the State of Delaware, and written notice of
the adoption of the amendments has been given as provided in
section 228 of the General Corporation Law of the State of
Delaware to every stockholder entitled to such notice.
THIRD: That the aforesaid amendments were duly adopted in accordance
with the applicable provisions of sections 228 and 242 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Sequenom, Inc. has caused this certificate to be
signed by Fareed Kureshy, its President, and attested by John J. DiBello, its
Assistant Secretary, this 18th day of November, 1996.
ATTEST: SEQUENOM, INC.
By: /s/ illegible By: /s/ illegible
--------------------------- ---------------------------
Assistant Secretary President
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<PAGE>
By-Laws
of
Sequenom, Inc.
<PAGE>
Exhibit A
---------
BY-LAWS
OF
SEQUENOM, INC.
Section 1. CERTIFICATE OF INCORPORATION AND BY-LAWS
1.1 These by-laws are subject to the certificate of incorporation of the
corporation. In these by-laws, references to the certificate of incorporation
and by-laws mean the provisions of the certificate of incorporation and the by-
laws as are from time to time in effect.
Section 2. OFFICES
2.1 Registered Office. The registered office shall be in the City of
-----------------
Wilmington, County of New Castle, State of Delaware.
2.2 Other Offices. The corporation may also have offices at such other
-------------
places both within and without the State of Delaware as the board of directors
may from time to time determine or the business of the corporation may require.
Section 3. STOCKHOLDERS
3.1 Location of Meetings. All meetings of the stockholders shall be held
--------------------
at such place either within or without the State of Delaware as shall be
designated from time to time by the board of directors. Any adjourned session
of any meeting shall be held at the place designated in the vote of adjournment.
3.2 Annual Meeting. The annual meeting of stockholders shall be held at
--------------
10:00 a.m. on the second Wednesday in May in each year, unless that day be a
legal holiday at the place where the meeting is to be held, in which case the
meeting shall be held at the same hour on the next succeeding day not a legal
holiday, or at such other date and time as shall be designated from time to time
by the board of directors, at which they shall elect a board of directors and
transact such other business as may be required by law or these by-laws or as
may properly come before the meeting.
3.3 Special Meeting in Place of Annual Meeting. If the election for
------------------------------------------
directors shall not be held on the day designated by these by-laws, the
directors shall cause the election to be held as soon thereafter as convenient,
and to that end, if the annual meeting is omitted on the day herein provided
therefor or if the election of directors shall not be held thereat, a special
meeting of the stockholders may be held in place of such omitted meeting or
election, and any business transacted or election held at such special meeting
shall have the same effect as if transacted or held at the annual meeting, and
in such case all references in these by-laws to the annual meeting of the
stockholders, or to the annual election of directors, shall be deemed to refer
to or include such special meeting. Any such special meeting shall be called
and the purposes thereof shall be specified in the call, as provided in Section
3.4.
<PAGE>
3.4 Notice of Annual Meeting. Written notice of the annual meeting
------------------------
stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting. Such notice may specify the business
to be transacted and actions to be taken at such meeting. No action shall be
taken at such meeting unless such notice is given, or unless waiver of such
notice is given by the holders of outstanding stock having not less than the
minimum number of votes necessary to take such action at a meeting at which all
shares entitled to vote thereon were voted. Prompt notice of all action taken
in connection with such waiver of notice shall be given to all stockholders not
present or represented at such meeting.
3.5 Other Special Meetings. Special meetings of the stockholders, for any
----------------------
purpose or purposes, unless otherwise prescribed by law or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of the holders of at least ten percent
of all capital stock of the corporation issued and outstanding and entitled to
vote at such meeting. Such request shall state the purpose or purposes of the
proposed meeting and business to be transacted at any special meeting of the
stockholders.
3.6 Notice of Special Meeting. Written notice of a special meeting
-------------------------
stating the place, date and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be given not less than ten nor more than
sixty days before the date of the meeting, to each stockholder entitled to vote
at such meeting. No action shall be taken at such meeting unless such notice is
given, or unless waiver of such notice is given by the holders of outstanding
stock having not less than the minimum number of votes necessary to take such
action at a meeting at which all shares entitled to vote thereon were voted.
Prompt notice of all action taken in connection with such waiver of notice shall
be given to all stockholders not present or represented at such meeting.
3.7 Stockholder List. The officer who has charge of the stock ledger of
----------------
the corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
3.8 Quorum of Stockholders. The holders of a majority of the stock issued
----------------------
and outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise required by law, or by the
certificate of incorporation or by these by-laws. Except as otherwise provided
by law, no stockholder present at a meeting may withhold his shares from the
quorum count by declaring his shares absent from the meeting.
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<PAGE>
3.9 Adjournment. Any meeting of stockholders may be adjourned from time
-----------
to time to any other time and to any other place at which a meeting of
stockholders may be held under these by-laws, which time and place shall be
announced at the meeting, by a majority of votes cast upon the question, whether
or not a quorum is present. At such adjourned meeting at which a quorum shall
be present or represented any business may be transacted which might have been
transacted at the original meeting. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
3.10 Proxy Representation. Every stockholder may authorize another person
--------------------
or persons to act for him by proxy in all matters in which a stockholder is
entitled to participate, whether by waiving notice of any meeting, objecting to
or voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy must be signed by the stockholder or by his
attorney-in-fact. No proxy shall be voted or acted upon after three years from
its date unless such proxy provides for a longer period. Except as provided by
law, a revocable proxy shall be deemed revoked if the stockholder is present at
the meeting for which the proxy was given. A duly executed proxy shall be
irrevocable if it states that it is irrevocable and, if, and only as long as, it
is coupled with an interest sufficient in law to support an irrevocable power.
A proxy may be made irrevocable regardless of whether the interest with which it
is coupled is an interest in the stock itself or an interest in the corporation
generally. The authorization of a proxy may but need not be limited to
specified action, provided, however, that if a proxy limits its authorization to
a meeting or meetings of stockholders, unless otherwise specifically provided
such proxy shall entitle the holder thereof to vote at any adjourned session but
shall not be valid after the final adjournment thereof.
3.11 Inspectors. The directors or the person presiding at the meeting
----------
may, but need not, appoint one or more inspectors of election and any substitute
inspectors to act at the meeting or any adjournment thereof. Each inspector,
before entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum and the validity and effect of proxies, and shall receive votes, ballots
or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the person
presiding at the meeting, the inspectors shall make a report in writing of any
challenge, question or matter determined by them and execute a certificate of
any fact found by them.
3.12 Action by Vote. When a quorum is present at any meeting, whether the
--------------
same be an original or an adjourned session, a plurality of the votes properly
cast for election to any office shall elect to such office and a majority of the
votes properly cast upon any question other than an election to an office shall
decide the question, except when a larger vote is required by law, by the
certificate of incorporation or by these by-laws. No ballot shall be required
for any election unless requested by a stockholder present or represented at the
meeting and entitled to vote in the election.
-2-
<PAGE>
3.13 Action Without Meetings. Unless otherwise provided in the
-----------------------
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
Section 4. DIRECTORS
4.1 Number. The number of directors which shall constitute the whole
------
board shall not be less than three nor more than seven, except that whenever
there shall be only one stockholder or prior to issuance of any stock, the
number of directors which shall constitute the whole board shall be not less
than one. Within the foregoing limits, the stockholders at the annual meeting
shall determine the number of directors, and within such limits, the number of
directors may be increased or decreased at any time or from time to time by the
stockholders or by the directors by vote of a majority of directors then in
office, except that any such decrease by vote of the directors shall only be
made to eliminate vacancies existing by reason of the death, resignation or
removal of one or more directors. The directors shall be elected at the annual
meeting of the stockholders, except as provided in Section 4.4 of these by-laws.
Directors need not be stockholders.
4.2 Tenure. Except as otherwise provided by law, by the certificate of
------
incorporation or by these by-laws, each director shall hold office until the
next annual meeting and until his successor is elected and qualified, or until
he sooner dies, resigns, is removed or becomes disqualified.
4.3 Powers. The business of the corporation shall be managed by or under
------
the direction of the board of directors which shall have and may exercise all
the powers of the corporation and do all such lawful acts and things as are not
by law, the certificate of incorporation or these by-laws directed or required
to be exercised or done by the stockholders.
4.4 Vacancies. Vacancies and any newly created directorships resulting
---------
from any increase in the number of directors may be filled by vote of the
stockholders at a meeting called for the purpose, or by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. When one or more directors shall resign from the board, effective at
a future date, a majority of the directors then in office, including those who
have resigned, shall have power to fill such vacancy or vacancies, the vote or
action by writing thereon to take effect when such resignation or resignations
shall become effective. The directors shall have and may exercise all their
powers notwithstanding the existence of one or more vacancies in their number,
subject to any requirements of law or of the certificate of incorporation or of
these by-laws as to the number of directors required for a quorum or for any
vote or other actions.
4.5 Committees. The board of directors may, by vote of a majority of the
----------
whole board, (a) designate, change the membership of or terminate the existence
of any committee or
-3-
<PAGE>
committees, each committee to consist of one or more of the directors; (b)
designate one or more directors as alternate members of any such committee who
may replace any absent or disqualified member at any meeting of the committee;
and (c) determine the extent to which each such committee shall have and may
exercise the powers and authority of the board of directors in the management of
the business and affairs of the corporation, including the power to authorize
the seal of the corporation to be affixed to all papers which require it and the
power and authority to declare dividends or to authorize the issuance of stock;
excepting, however, such powers which by law, by the certificate of
incorporation or by these by-laws they are prohibited from so delegating. In the
absence or disqualification of any member of such committee and his alternate,
if any, the member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the board of directors to act at the meeting in the
place of any such absent or disqualified member. Except as the board of
directors may otherwise determine, any committee may make rules for the conduct
of its business, but unless otherwise provided by the board or such rules, its
business shall be conducted as nearly as may be in the same manner as is
provided by these by-laws for the conduct of business by the board of directors.
Each committee shall keep regular minutes of its meetings and report the same to
the board of directors upon request.
4.6 Regular Meeting. Regular meetings of the board of directors may be
---------------
held without call or notice at such place within or without the State of
Delaware and at such times as the board may from time to time determine,
provided that notice of the first regular meeting following any such
determination shall be given to absent directors. A regular meeting of the
directors may be held without call or notice immediately after and at the same
place as the annual meeting of the stockholders.
4.7 Special Meetings. Special meetings of the board of directors may be
----------------
held at any time and at any place within or without the State of Delaware
designated in the notice of the meeting, when called by the president, or by
one-third or more in number of the directors, reasonable notice thereof being
given to each director by the secretary or by the president or by any one of the
directors calling the meeting.
4.8 Notice. It shall be reasonable and sufficient notice to a director to
------
send notice by mail at least forty-eight hours or by telegram at least twenty-
four hours before the meeting, addressed to him at his usual or last known
business or residence address or to give notice to him in person or by telephone
at least twenty-four hours before the meeting. Notice of a meeting need not be
given to any director if a written waiver of notice, executed by him before or
after the meeting, is filed with the records of the meeting, or to any director
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him. Neither notice of a meeting nor a waiver of a notice
need specify the purposes of the meeting.
4.9 Quorum. Except as may be otherwise provided by law, by the
------
certificate of incorporation or by these by-laws, at any meeting of the
directors a majority of the directors then in office shall constitute a quorum;
a quorum shall not in any case be less than one-third of the total number of
directors constituting the whole board. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
-4-
<PAGE>
4.10 Action by Vote. Except as may be otherwise provided by law, by the
--------------
certificate of incorporation or by these by-laws, when a quorum is present at
any meeting the vote of a majority of the directors present shall be the act of
the board of directors.
4.11 Action Without a Meeting. Unless otherwise restricted by the
------------------------
certificate of incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting if all the members of the board or of such
committee, as the case may be, consent thereto in writing, and such writing or
writings are filed with the records of the meetings of the board or of such
committee. Such consent shall be treated for all purposes as the act of the
board or of such committee, as the case may be.
4.12 Participation in Meetings by Conference Telephone. Unless otherwise
-------------------------------------------------
restricted by the certificate of incorporation or these by-laws, members of the
board of directors or of any committee thereof may participate in a meeting of
such board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Such participation shall constitute presence in
person at such meeting.
4.13 Compensation. Unless otherwise restricted by the certificate of
------------
incorporation or these by-laws, the board of directors shall have the authority
to fix from time to time the compensation of directors. The directors may be
paid their expenses, if any, of attendance at each meeting of the board of
directors and the performance of their responsibilities as directors and may be
paid a fixed sum for attendance at each meeting of the board of directors and/or
a stated salary as director. No such payment shall preclude any director from
serving the corporation or its parent or subsidiary corporations in any other
capacity and receiving compensation therefor. The board of directors may also
allow compensation for members of special or standing committees for service on
such committees.
4.14 Interested Directors and Officers.
---------------------------------
(a) No contract or transaction between the corporation and one or more
of its directors or officers, or between the corporation and any other
corporation, partnership, association, or other organization in which one or
more of the corporations, directors or officers are directors or officers, or
have a financial interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or participates in the
meeting of the board or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if:
(1) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the board of directors
or the committee, and the board or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or
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<PAGE>
(2) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the corporation as of
the time it is authorized, approved or ratified, by the board of directors, a
committee thereof, or the stockholders.
(b) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.
4.15 Resignation or Removal of Directors. Unless otherwise restricted by
-----------------------------------
the certificate of incorporation or by law, any director or the entire board of
directors may be removed, with or without cause, by the holders of a majority of
the stock issued and outstanding and entitled to vote at an election of
directors. Any director may resign at any time by delivering his resignation in
writing to the president or the secretary or to a meeting of the board of
directors. Such resignation shall be effective upon receipt unless specified to
be effective at some other time; and without in either case the necessity of its
being accepted unless the resignation shall so state. No director resigning and
(except where a right to receive compensation shall be expressly provided in a
duly authorized written agreement with the corporation) no director removed
shall have any right to receive compensation as such director for any period
following his resignation or removal, or any right to damages on account of such
removal, whether his compensation be by the month or by the year or otherwise;
unless in the case of a resignation, the directors, or in the case of removal,
the body acting on the removal, shall in their or its discretion provide for
compensation.
Section 5. NOTICES
5.1 Form of Notice. Whenever, under the provisions of law, or of the
--------------
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, such notice may be given by mail, addressed to
such director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Unless written notice by mail is required by law, written notice may also be
given by telegram, cable, telecopy, commercial delivery service, telex or
similar means, addressed to such director or stockholder at his address as it
appears on the records of the corporation, in which case such notice shall be
deemed to be given when delivered into the control of the persons charged with
effecting such transmission, the transmission charge to be paid by the
corporation or the person sending such notice and not by the addressee. Oral
notice or other in-hand delivery (in person or by telephone) shall be deemed
given at the time it is actually given.
5.2 Waiver of Notice. Whenever notice is required to be given under the
----------------
provisions of law, the certificate of incorporation or these by-laws, a written
waiver thereof, signed by the person entitled to notice, whether before or after
the time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at
-6-
<PAGE>
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of the stockholders, directors or
members of a committee of the directors need be specified in any written waiver
of notice.
Section 6. OFFICERS AND AGENTS
6.1 Enumeration; Qualification. The officers of the corporation shall be
--------------------------
a president, a treasurer, a secretary and such other officers, if any, as the
board of directors from time to time may in its discretion elect or appoint
including without limitation one or more vice presidents. Any officer may be,
but none need be, a director or stockholder. Any two or more offices may be
held by the same person. Any officer may be required by the board of directors
to secure the faithful performance of his duties to the corporation by giving
bond in such amount and with sureties or otherwise as the board of directors may
determine.
6.2 Powers. Subject to law, to the certificate of incorporation and to
------
the other provisions of these by-laws, each officer shall have, in addition to
the duties and powers herein set forth, such duties and powers as are commonly
incident to his office and such additional duties and powers as the board of
directors may from time to time designate.
6.3 Election. The board of directors at its first meeting after each
--------
annual meeting of stockholders shall choose a president, a secretary and a
treasurer. Other officers may be appointed by the board of directors at such
meeting, at any other meeting or by written consent. At any time or from time
to time, the directors may delegate to any officer their power to elect or
appoint any other officer or any agents.
6.4 Tenure. Each officer shall hold office until the first meeting of the
------
board of directors following the next annual meeting of the stockholders and
until his successor is elected and qualified unless a shorter period shall have
been specified in terms of his election or appointment, or in each case until he
sooner dies, resigns, is removed or becomes disqualified. Each agent of the
corporation shall retain his authority at the pleasure of the directors, or the
officer by whom he was appointed or by the officer who then holds agent
appointive power.
6.5 President and Vice Presidents. The president shall be the chief
-----------------------------
executive officer and shall have direct and active charge of all business
operations of the corporation and shall have general supervision of the entire
business of the corporation, subject to the control of the board of directors.
He shall preside at all meetings of the stockholders and of the board of
directors at which he is present, except as otherwise voted by the board of
directors.
The president or treasurer shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.
Any vice presidents shall have such duties and powers as shall be
designated from time to time by the board of directors or by the president.
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<PAGE>
6.6 Treasurer and Assistant Treasurers. The treasurer shall be the chief
----------------------------------
financial officer of the corporation and shall be in charge of its funds and
valuable papers, and shall have such other duties and powers as may be assigned
to him from time to time by the board of directors or by the president.
Any assistant treasurers shall have such duties and powers as shall be
designated from time to time by the board of directors, the president or the
treasurer.
6.7 Secretary and Assistant Secretaries. The secretary shall record all
-----------------------------------
proceedings of the stockholders, of the board of directors and of committees of
the board of directors in a book or series of books to be kept therefor and
shall file therein all writings of, or related to, action by stockholder or
director consent. In the absence of the secretary from any meeting, an
assistant secretary, or if there is none or he is absent, a temporary secretary
chosen at the meeting, shall record the proceedings thereof. Unless a transfer
agent has been appointed, the secretary shall keep or cause to be kept the stock
and transfer records of the corporation, which shall contain the names and
record addresses of all stockholders and the number of shares registered in the
name of each stockholder. The secretary shall have such other duties and powers
as may from time to time be designated by the board of directors or the
president.
Any assistant secretaries shall have such duties and powers as shall be
designated from time to time by the board of directors, the president or the
secretary.
6.8 Resignation and Removal. Any officer may resign at any time by
-----------------------
delivering his resignation in writing to the president or the secretary or to a
meeting of the board of directors. Such resignation shall be effective upon
receipt unless specified to be effective at some other time, and without in any
case the necessity of its being accepted unless the resignation shall so state.
The board of directors may at any time remove any officer either with or without
cause. The board of directors may at any time terminate or modify the authority
of any agent. No officer resigning and (except where a right to receive
compensation shall be expressly provided in a duly authorized written agreement
with the corporation) no officer removed shall have any right to any
compensation as such officer for any period following his resignation or
removal, or any right to damages on account of such removal, whether his
compensation be by the month or by the year or otherwise; unless in the case of
a resignation, the directors, or in the case of removal, the body acting on the
removal, shall in their or its discretion provide for compensation.
6.9 Vacancies. If the office of the president or the treasurer or the
---------
secretary becomes vacant, the directors may elect a successor by vote of a
majority of the directors then in office. If the office of any other officer
becomes vacant, any person or body empowered to elect or appoint that office may
choose a successor. Each such successor shall hold office for the unexpired
term of his predecessor, and in the case of the president, the treasurer and the
secretary until his successor is chosen and qualified, or in each case until he
sooner dies, resigns, is removed or becomes disqualified.
Section 7. CAPITAL STOCK
7.1 Stock Certificates. Each stockholder shall be entitled to a
------------------
certificate stating the number and the class and the designation of the series,
if any, of the shares held by him, in such
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<PAGE>
form as shall, in conformity to law, the certificate of incorporation and the
by-laws, be prescribed from time to time by the board of directors. Such
certificate shall be signed by the president or a vice-president and (i) the
treasurer or an assistant treasurer or (ii) the secretary or an assistant
secretary. Any of or all the signatures on the certificate may be a facsimile.
In case an officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed on such certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if he were such
officer, transfer agent, or registrar at the time of its issue.
7.2 Lost Certificates. The board of directors may direct a new
-----------------
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 8. TRANSFER OF SHARES OF STOCK
8.1 Transfer on Books. Subject to any restrictions with respect to the
-----------------
transfer of shares of stock, shares of stock may be transferred on the books of
the corporation by the surrender to the corporation or its transfer agent of the
certificate therefor properly endorsed or accompanied by a written assignment
and power of attorney properly executed, with necessary transfer stamps affixed,
and with such proof of the authenticity of signature as the board of directors
or the transfer agent of the corporation may reasonably require. Except as may
be otherwise required by law, by the certificate of incorporation or by these
by-laws, the corporation shall be entitled to treat the record holder of stock
as shown on its books as the owner of such stock for all purposes, including the
payment of dividends and the ,right to receive notice and to vote or to give any
consent with respect thereto and to be held liable for such calls and
assessments, if any, as may lawfully be made thereon, regardless of any
transfer, pledge or other disposition of such stock until the shares have been
properly transferred on the books of the corporation.
It shall be the duty of each stockholder to notify the corporation of his
post office address.
Section 9. GENERAL PROVISIONS
9.1 Record Date. In order that the corporation may determine the
-----------
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than
-9-
<PAGE>
sixty days nor less than ten days before the date of such meeting, nor more than
sixty days prior to any other action to which such record date relates. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting. If no record date is fixed,
(a) The record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held;
(b) The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the board of directors is necessary, shall be the day on which the first
written consent is expressed; and
(c) The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the board of directors
adopts the resolution relating to such purpose.
9.2 Dividends. Dividends upon the capital stock of the corporation may be
---------
declared by the board of directors at any regular or special meeting or by
written consent, pursuant to law. Dividends may be paid in cash, in property,
or in shares of the capital stock, subject to the provisions of the certificate
of incorporation.
9.3 Payment of Dividends. Before payment of any dividend, there may be
--------------------
set aside out of any funds of the corporation available for dividends such sum
or sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to the interest of
the corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
9.4 Checks. All checks or demands for money and notes of the corporation
------
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
9.5 Fiscal Year. The fiscal year of the corporation shall begin on the
-----------
first of January in each year and shall end on the last day of December next
following, unless otherwise determined by the board of directors.
9.6 Seal. The board of directors may, by resolution, adopt a corporate
----
seal. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the word "Delaware." The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise. The seal may be altered from time to time by the board
of directors.
-10-
<PAGE>
Section 10. INDEMNIFICATION
10.1 It being the intent of the corporation to provide maximum protection
available under the law to its officers and directors, the corporation shall
indemnify its officers and directors to the full extent the corporation is
permitted or required to do so by the General Corporation Law of Delaware.
Section 11. AMENDMENTS
11.1 These by-laws may be altered, amended or repealed or new by-laws may
be adopted by the stockholders or by the board of directors when such power is
conferred upon the board of directors by the certificate of incorporation, at
any regular meeting of the stockholders or of the board of directors or at any
special meeting of the stockholders or of the board of directors. If the power
to adopt, amend or repeal by-laws is conferred upon the board of directors by
the certificate of incorporation, it shall not divest or limit the power of the
stockholders to adopt, amend or repeal by-laws.
-11-
<PAGE>
EXHIBIT 4.2
-----------
Capitalization
--------------
Attached hereto is a stockholder list dated March 1, 1997.
Also attached hereto is a list of outstanding stock options and warrants
dated March 18, 1997.
Other than shares reserved for issuance upon conversion of the Series C
Preferred and the Warrants, the Corporation has reserved the number of shares of
its capital stock set forth below:
<TABLE>
<CAPTION>
Common Stock:
-------------
<S> <C>
Exercise of Options: 1,078,000
Conversion of
Series A Preferred: 1,650,000
Series B Preferred: 2,976,333
---------
Total: 5,087,083
Series A Preferred:
------------------
Exercise of Comdisco Warrant: 70,000
</TABLE>
<PAGE>
SEQUENOM, INC.
Stockholder List
March 1, 1997
AUTHORIZED:
<TABLE>
<CAPTION>
Par Value Authorized Issued
--------- ---------- ------
<S> <C> <C> <C>
Common: $.001 5,726,700 148,251
Series A Convertible $.001 1,650,000 1,580,000
Preferred:
Series B Convertible $.001 3,019,996 2,976,663
Preferred:
</TABLE>
COMMON STOCK
------------
<TABLE>
<CAPTION>
Shareholder Shares Cert. No. Issue Date
----------- ------ --------- ----------
<S> <C> <C> <C>
Hubert Koster 1 C-10 03-08-95
Hallerstrasse 74
20146 Hamburg
Germany
Nola E. Masterson 90,000 C-11 10-16-95
Science Futures International
768 West California Way
Woodside, CA 94062
Russell D. Hays 26,250 C-12 10-31-95
136 Lark Court
Alamo, CA 94507
Randall R. Lunn 10,000 C-13 12-01-95
c/o TVM Techno Venture
Management
101 Arch Street
Suite 1950
Boston, MA 02110
Helmut Schuhsler 10,000 C-14 12-01-95
c/o TVM Techno Venture
Management
101 Arch Street
Suite 1950
Boston, MA 02110
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Patricia Dane 2,000 C-15 12-01-95
c/o TVM Techno Venture
Management
101 Arch Street
Suite 1950
Boston, MA 02110
Amy B. Crawford 2,000 C-16 12-01-95
c/o TVM Techno Venture
Management
101 Arch Street
Suite 1950
Boston, MA 02110
Monica Schlawinsky 2,000 C-17 12-01-95
c/o TVM Techno Venture
Management
101 Arch Street
Suite 1950
Boston, MA 02110
John J. DiBello 6,000 C-18 12-01-95
c/o TVM Techno Venture
Management
101 Arch Street
Suite 1950
Boston, MA 02110
TOTAL: 148,251
</TABLE>
<PAGE>
SERIES A CONVERTIBLE PREFERRED STOCK
------------------------------------
<TABLE>
<CAPTION>
Shareholder Shares Cert. No. Issue Date
<S> <C> <C> <C>
Hubert Koster 1,120,000 1 03-08-95
Hallerstrasse 74
20146 Hamburg
Germany
Nola Masterson 40,000 2 03-08-95
Science Futures International
768 West California Way
Woodside, CA 94062
Robert E. Patterson 20,000 3 03-08-95
Graham & James LLP
600 Hansen Way
Palo Alto, CA 94304-1043
TVM Techno Venture 8,000 10 08-18-95
Investors No. 1 Limited
Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Techno Venture 63,680 12 08-18-95
Enterprises No. II
Limited Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Intertech Limited 42,454 13 08-18-95
Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Zweite Beteiligung - 98,000 6 03-08-95
U.S. Limited Partnership 29,360 11 08-18-95
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Eurotech Limited 65,200 7 03-08-95
Partnership 19,706 9 08-18-95
101 Arch Street
Suite 1950
Boston, MA 02110
KBL Founder Ventures SCA 73,600 8 03-08-95
43, Boulevard Royal
L-2955 Luxembourg
TOTAL: 1,580,000
</TABLE>
<PAGE>
SERIES B CONVERTIBLE PREFERRED STOCK
------------------------------------
<TABLE>
<CAPTION>
Shareholder Shares Cert. No. Issue Date
----------- ------ --------- ----------
<S> <C> <C> <C>
TVM TechnoVenture 212,267 B-1 12-22-95
Enterprises No. II
Limited Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Intertech Limited 141,513 B-2 12-22-95
Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Zweite Beteiligung- 432,953 B-3 12-22-95
U.S. Limited Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Eurotech Limited 288,633 B-4 12-22-95
Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Techno Venture 12,634 B-5 12-22-95
Investors No. 1 Limited 6,666 B-13 2-29-96
Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
KBL Founder Ventures 245,333 B-6 12-22-95
SCA
43, Boulevard Royal
L-2955 Luxembourg
Alpinvest 666,667 B-7 12-22-95
International B.V.
Gooimeer 3
NL-1410 AB Naarden
The Netherlands
Boston University 333,333 B-8 12-22-95
Nominee Partnership 13,333 B-9 2-29-96
108 Bay State Road
Boston, MA 02215
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Gerald E. Coughlan 6,666 B-10 2-29-96
Lehman Brothers
One Broadgate
London EC2M 7HA
England
Charles P. Floe 66,666 B-11 2-29-96
Lehman Brothers
One Broadgate
London EC2M 7HA
England
Hellmut Kirchner 20,000 B-12 2-29-96
Martelsgraben 2
82327 Tutzing
Germany
Herwig Brunner 20,000 B-12 2-29-96
An der Betteleiche 6
70569 Stuttgart
Germany
Franz A. Wirtz 33,333 B-14 2-29-96
Atzenach 37
D-52223 Stolberg
Germany
Hannemarie Wirtz 33,333 B-15. 2-29-96
Atzenach 37
D-52223 Stolberg
Germany
Hubert Koster 100,000 B-16 2-29-96
Hallerstrasse 74
20146 Hamburg
Germany
Ernst-Gunter Afting 30,000 B-17 3-29-96
Maisenweg 21
82152 Krailing
Germany
SVE Star Ventures 218,768 B-18 3-29-96
Enterprises No. III GbR,
A German Civil Law Partnership
Possartstrasse 9
D-81679 Munich
Germany
SVE Star Ventures 18,294 B-19 3-29-96
Enterprises No. IIIa GbR,
A German Civil Law Partnership
Possartstrasse 9
D-81679 Munich
Germany
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
SVM Star Ventures 96,271 B-20 3-29-96
Managementgesellschaft
mbH Nr.3 & Co.
Beteiligungs KG
Possartstrasse 9
D-81679 Munich
Germany
TOTAL: 2,976,663
</TABLE>
<PAGE>
EXHIBIT 4.2
Sequenom, Inc.
Analysis of stock options and warrants outstanding
As of March 18, 1997
<TABLE>
<CAPTION>
Shares under Exercise price
Stock options: option/warrant per share
- -------------- ---------------- ----------------
Issued prior to 1996
- --------------------
<S> <C> <C>
Hubert Koster (founder) 80,000 0.05
Robert Patterson (founder) 30,000 0.05
Bob Cotter (technical advisory board) 42,000 0.05
Charles Cantor (technical advisory board) 66,000 0.05
Dong-Jing Fu (employee) 10,000 0.05
Maryanne Maloney (employee) 10,000 0.05
Kai Tang (employee) 10,000 0.05
Issued in 1996
- --------------
Dong-Jing Fu (employee - 1/96) 1,000 0.25
Maryanne Maloney (employee - 1/96) 1,000 0.25
Kai Tang (employee - 1/96) 1,000 0.25
Dr. Andreas Braun (employee - 1/96) 15,000 0.25
Dan Little (employee - 1/96) 10,000 0.25
Scott Higgins (employee - 1/96) 10,000 0.25
Fiona Craven (employee - 1/96) 2,000 0.25
Dagmar Ruhe (employee - 1/96) 2,000 0.25
Mrs. Leppin (employee - 1/96) 2,000 0.25
Brigitte Darnhofer (employee - 1/96) 3,000 0.25
Professor Ernst -Gnter Afting (bd member-1/96) 20,000 0.25
Dong-Jing Fu (employee - 3/96) 1,000 0.25
Maryanne Maloney (employee - 3/96) 1,000 0.25
Kai Tang (employee - 3/96) 1,000 0.25
Fareed Kureshy (employee - 9/96) 163,000 0.25
Toni Schuh (employee - 9/96) 109,000 0.25
Kai Tang (employee - 9/96) 5,000 0.25
Dong-Jing Fu (employee - 9/96) 5,000 0.25
Maryanne Maloney (employee - 9/96) 5,000 0.25
John J. DiBello (acting CFO- 9/96) 6,000 0.25
Tom Bologna (board member-12/96) -fully vested 18,000 0.25
Tom Bologna (board member-12/96) -stock only 27,000 0.25
Tom Bologna (board member- 12/96) -cash option 27,000 0.25
Total stock options outstanding 683,000
Stock warrants*:
- ---------------
Total options and warrants outstanding 753,000
===============
</TABLE>
*The stock warrants are for Series A preferred stock.
<PAGE>
EXHIBIT 4.3
-----------
Equity Investments
------------------
The Corporation has one subsidiary, Sequenom Instruments GmbH, all of the
outstanding equity interest in which is owned by the Corporation.
<PAGE>
EXHIBIT 4.4
-----------
Unaudited Financial Statements
as of December 31, 1996 and
for the year then ended
------------------------------
<PAGE>
DRAFT SEQUENOM, INC.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
<TABLE>
<CAPTION>
<S> <C> <C>
1996 1995
ASSETS ----------- -----------
Current Assets
Cash $ 1,327,592 $ 1,876,954
Investment in GmbH --
Refundable value added tax 32,922 109,016
Accounts receivable --
BMBF Grant 241,947
Other current assets and prepaid expenses 140,810 58,951
----------- -----------
Total current assets 1,743,271 2,044,921
----------- -----------
Fixed assets (net of accumulated depreciation of $328,191 in 1996
and 133,965 in 1995) 675,747 797,333
Organizational costs (net of accumulated
amortization of $22,000 in 1996 and $14,000 in 1995) 18,000 26,000
Note receivable from officer (Note I) 9,227
Other assets 32,834 33,820
----------- -----------
Total assets $ 2,469,852 $ 2,911,301
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued expenses 664,920 665,927
Long term debt (Note E) 2,597,600 891,008
Stockholders' equity (Note F):
Series A Convertible Preferred Stock, $0.001 par value;
1,650,000 shares authorized;
1,580,000 shares issued and outstanding (liquidation preference $790,000) 1,580 1,580
Series B Convertible Preferred Stock, $0.001 par value;
3,376,666 shares authorized;
2,333,333 shares issued and outstanding (liquidation preference
$3,500,000) 2,977 2,333
Common Stock, $0.001 par value; 5,726,700 shares authorized;
148,251 and 1 shares issued and outstanding in 1995 and 1994,
respectively 148 148
Additional-paid-in capital 5,178,577 4,224,929
Cumulative translation adjustment (124,184) (4,925)
Deficit accumulated in the development stage (5,851,766) (2,869,699)
----------- -----------
Total stockholders' equity (deficit) (792,668) 1,354,366
----------- -----------
Total liabilities and stockholders' equity (deficit) $ 2,469,852 $ 2,911,301
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
DRAFT SEQUENOM, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT'S OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
_________________ _________________
Income
Research & Development Grant 767,903
Other income 25,091
-----------------
$ 792,994
-----------------
Operating Expenses:
Research and development $ 2,978,954 $ 1,274,022
General and administrative expenses 931,917 420,077
----------------- -----------------
3,910,871 1,694,099
----------------- -----------------
Net loss from Operations (3,117,877) (1,694,099)
Interest income 72,918 2,419
Interest expense (293) (28,521)
foreign currency transaction gain Loss 63,185
----------------- -----------------
Net loss (2,982,067) $ (1,720,201)
================= =================
</TABLE>
<PAGE>
EXHIBIT 4.5
-----------
Undisclosed Liabilities
-----------------------
None.
<PAGE>
EXHIBIT 4.6
Changes Since December 31, 1996
-------------------------------
None.
<PAGE>
EXHIBIT 4.7
-----------
Encumbrances
------------
None, other than non-consensual liens arising in the ordinary course of
business by operation of law. The Corporation is not aware of the existence of
any such liens.
<PAGE>
EXHIBIT 4.8
-----------
Intellectual Property Rights
1. See attached listing of "US patents/patent applications assigned or to be
assigned to Sequenom, Inc." updated as of May 5, 1997. Further negotiations may
be required to obtain assignments of, or rights to use, the patents and patent
applications designated on such listing as not yet assigned to the Corporation.
2. Reference is made to the Assignment of Inventions agreement dated May 26,
1994 between Sequenom, Inc. and Dr. Hubert Koster, a copy of which has been made
available to the Investors.
3. Reference is made to the enclosed Consulting Agreement dated September 6,
1996 between Sequenom, Inc. and Dr. Hubert Koster, a copy of which has been made
available to the Investors.
4. Reference is made to the Executive Employment Agreement dated April 1, 1994
between Sequenom, Inc. and Dr. Hubert Koster, a copy of which has been made
available to the Investors.
5. With respect to royalties or other amounts payable by the Corporation to
third parties in relation to Intellectual Property Rights, reference is made to
the agreements listed under Item 4.13(i) of Exhibit 4.13. In addition, the
------------
Corporation could be required to pay royalties or deliver other consideration as
a result of the negotiations referred to in Item 1 above.
<PAGE>
(update as of 03/17/97)
U.S. PATENTS/PATENT APPLICATIONS ASSIGNED
-----------------------------------------
OR TO BE ASSIGNED TO SEQUENOM, INC.
-----------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Foley, Hoag & Eliot Serial No./ Title and Inventor(s) Filing Date Status
LLP Docket No. Patent No.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SQA-003.01 08/001,323 DNA Sequencing by Mass Spectrometry 01/07/93 Abandoned in Favor of SQA-
by Hubert Koster 003.02
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-003.02 08/178,216 DNA Sequencing by Mass Spectrometry 01/06/94 U.S. Patent No. 5,547,835
U.S. Patent No. by Hubert Koster Issued 08/20/96
5,547,835 (Sequencing Method)
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-003.26 08/617,010 DNA Sequencing by Mass Spectrometry 03/18/96 Awaiting First Office
by Hubert Koster Action
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-003.27 08/470,123 DNA Sequencing by Mass Spectrometry 06/06/95 Responded to Office Action
by Hubert Koster on 03/10/97
(Sequencing Kits)
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-003.28 08/467,208 DNA Sequencing by Mass Spectrometry 06/06/95 Awaiting First Office
by Hubert Koster Action
(Solid Supports)
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-003.29 08/481,033 DNA Sequencing by Mass Spectrometry 06/07/95 Responded to Restriction
by Hubert Koster Requirement on 11/4/96;
Awaiting First Office
Action
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-005.01 08/034,738 DNA Sequencing by Mass Spectrometry 03/19/93 Abandoned in Favor of SQA-
via Exonuclease Degradation 005.02
by Hubert Koster
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-005.02 08/338,171 DNA Sequencing by Mass Spectrometry 02/10/95 Patent to Issue
via Exonuclease Degradation
by Hubert Koster
(Sequencing Method)
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-005.28 08/744,590 DNA Sequencing by Mass Spectrometry 11/06/96 Awaiting First Office
via Exonuclease Degradation Action
by Hubert Koster
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-005.26 08/454,527 DNA Sequencing by Mass Spectrometry 05/30/95 Respond to First Office
via Exonuclease Degradation Action by 03/30/97
by Hubert Koster
(Multiplex Method; Kit)
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-005.27 08/453,499 DNA Sequencing by Mass Spectrometry 05/30/95 Respond to Second Office
via Exonuclease Degradation Action by 04/22/97
by Hubert Koster
(System for Exonuclease Mediated
Mass Specific Sequencing)
- ------------------------------------------------------------------------------------------------------------------------------------
* SQA-008.01 New Application Systems and Methods for Preparing Low 01/23/97 Awaiting First Office
Volume Analyte Array Elements Action
by Daniel P. Little, Maryanne J.
O'Donnell-Maloney, Charles R. Cantor
and Hubert Koster
- ------------------------------------------------------------------------------------------------------------------------------------
* SQA-009.01 New Application Systems and Methods for Preparing and 01/23/97 Awaiting First Office
Analyzing Low Volume Analyte Array Action
Elements by Daniel P. Little, Maryanne J.
O'Donnell-Maloney, Charles R. Cantor
and Hubert Koster
- ------------------------------------------------------------------------------------------------------------------------------------
* SQA-013.01 08/406,199 DNA Sequencing by Mass Spectrometry 03/17/95 U.S Patent No. 5,605,798
by Hubert Koster Issued 02/25/97
- ------------------------------------------------------------------------------------------------------------------------------------
* SQA-013.02 08/617,256 DNA Sequencing by Mass Spectrometry 03/18/96 Awaiting First Office
by Hubert Koster Action
- ------------------------------------------------------------------------------------------------------------------------------------
* SQA-013.26 08/744,481 DNA Sequencing by Mass Spectrometry 11/06/96 Awaiting First Office
by Hubert Koster Action
- ------------------------------------------------------------------------------------------------------------------------------------
* SQA-017.01 08/521,638 Filtration Processes, Kits and Devices 08/31/95 Awaiting First Office
for Isolating Plasmids Action
by Hubert Koster
- ------------------------------------------------------------------------------------------------------------------------------------
*+ SQA-020.01 08/647,368 Process for Direct Sequencing During 05/09/96 Awaiting First Office
Template Amplification Action
by Hubert Koster, Dirk Van den Boom,
and Andreas Ruppert
- ------------------------------------------------------------------------------------------------------------------------------------
*+ SQA-022.01 08/649,876 A Method for Dissociating Biotin 05/13/96 Awaiting First Office
Complexes Action
by Christian Jurinke, Dirk Van den
Boom, and Hubert Koster
- ------------------------------------------------------------------------------------------------------------------------------------
*+ SQA-032.01 08/710,565 Method and Apparatus for MALDI 09/19/96 Awaiting First Office
Analysis Action
by Franz Hillenkamp
- ------------------------------------------------------------------------------------------------------------------------------------
* SQA-033.01 08/746,055 High Density Immobilization of Nucleic 11/06/96 Awaiting First Office
Acid Molecules Action
by Maryanne J. O'Donnell-Maloney,
Charles R. Cantor, and Hubert Koster
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-034.01 New Mass Spectrometric Detection of To be In Preparation
Application Translated Polypeptides Filed
by Daniel P. Little, G. Scott Higgins, and
Hubert Koster
- ------------------------------------------------------------------------------------------------------------------------------------
* SQA-035.01 08/746,036 Bead Linkers for Immobilizing Nucleic 11/06/96 Awaiting First Office
Acid to Solid Supports Action
by David M. Lough and Hubert Koster
- ------------------------------------------------------------------------------------------------------------------------------------
SQA-039.01 New Sequencing by Mass Spectrometry Using To be In Preparation
Application Post-Biology Capture Filed
by G. Scott Higgins and David M. Lough
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Not yet assigned to Sequenom, Inc.
+ Other inventors have assigned rights to H. Koster.
<PAGE>
EXHIBIT 4.15
------------
Insurance
---------
1. St. Paul Fire and Marine Insurance Company
Policy Period: October 26, 1996-October 26, 1997
Premium $ 3,825
Policy number: FK06603871
Commercial General Liability Limits:
Each event: $2 million
Premises: $1,000,000
Medical expenses: $5,000
Personal injury and advertising injury: $2,000,000
General Total: $4,000,000
Loss of Earnings and Extra Expense Coverage, Limit: $500,000
Non-owned auto: $2,000,000
Business Contents Limits: San Diego: $600,000
Boston: $ 5,000
2. Zenith Insurance Company
Policy Period: October 1, 1996-October 1, 1997
Premium: $10,817
Policy number: Z042591701
Workers Compensation Insurance
Employers Liability Insurance
Limits: Bodily Injury by Accident: $1,000,000 each accident
Bodily Injury by Disease: $1,000,000 each employee
Bodily Injury by Disease: $1,000,000 Policy Limit
3. The Corporation also maintains life insurance coverage on Dr. Hubert Koster
in the amount of $1 million ($500,000 in term insurance and $500,000 in
whole life insurance). The Corporation is beneficiary of both of these
policies.
<PAGE>
EXHIBIT 4-l-6A
Form of Registration Rights Agreement
-------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is entered into as of May __,1997 by and
among Sequenom, Inc., a Delaware corporation (the "Corporation"); the holders
(the "Series B Investors") of shares of the Corporation's Series B Convertible
Preferred Stock, $.001 par value per share (the Series B Preferred Stock"); and
the purchasers of shares of the Corporation's Series C Convertible Preferred
Stock, par value $.001 per share (the "Series C Preferred Stock"), pursuant to
the Series C Convertible Preferred Stock Purchase Agreement dated as of the date
hereof (the "Purchase Agreement"), including any Additional Investors as defined
in the Purchase Agreement (such purchasers of Series C Preferred Stock being
hereinafter sometimes referred to individually as an "Investor" and collectively
as the "Investors").
WHEREAS, the Corporation and the Series B Investors are the parties to a
Registration Rights Agreement dated as of December 22, 1995 (the "Prior
Registration Rights Agreement"), pursuant to which the Corporation granted
certain registration rights to the Series B Investors and certain of their
transferees;
WHEREAS, the Corporation now wishes to sell to the Investors certain shares
of its Series C Preferred Stock and certain warrants to purchase shares of its
Series C Preferred Stock;
WHEREAS, the Series B Preferred Stock and the Series C Preferred Stock are
convertible into shares of the Corporation's Common Stock; and
WHEREAS, as a condition to entering into the Purchase Agreement, the
Investors have required that the Corporation and the Series B Investors execute
this Agreement to provide the Investors rights to register the shares of Common
Stock issuable upon conversion of their Series C Preferred Stock and certain
other securities of the Corporation described below;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
-----------
the following meanings:
(a) The term "Act" means the Securities Act of 1933, as amended;
(b) The term "Holder" means any Investor, any Series B Investor and any
other person or entity holding Registrable Securities to whom the registration
rights granted in this Agreement have been transferred pursuant to Section 14
hereof;
(c) The term "Preferred Stock" means the Series B Preferred Stock and the
Series C Preferred Stock;
(d) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act and the declaration or ordering of effectiveness of such
registration statement; and
<PAGE>
(e) The term "Registrable Securities" means (1) the Common Stock issuable
upon conversion of the Preferred Stock, (2) Common Stock purchased by an
Investor pursuant to Section 8.1 of the Purchase Agreement (or Common Stock for
or into which New Securities (as therein defined) purchased by the Investor
pursuant to such Section 8.1 may be exercised or converted) or pursuant to the
Stock Restriction Agreement dated as of the date hereof among the Corporation,
the Series B Investors, the Investors and certain additional parties identified
therein, and (3) any Common Stock of the Corporation issued as a dividend or
other distribution with respect to, or in exchange or in replacement of, such
Preferred Stock or Common Stock.
In addition, for purposes of all calculations and notices under this
Agreement, and all other provisions of this Agreement where the context permits,
the term "Registrable Securities" shall include securities issuable upon
conversion of the Preferred Stock, a holder of the Preferred Stock shall be
deemed the Holder of such securities and such securities shall be deemed
outstanding Registrable Securities hereunder. Notwithstanding the foregoing,
nothing in this Agreement shall require the Corporation actually to register any
shares of the Preferred Stock.
2. Request for Registration. If at any time after the earlier of (i) the
------------------------
first underwritten public offering of securities for the account of the
Corporation, and (ii) the date three (3) years from the date hereof, the
Corporation shall receive a written request (specifying that it is being made
pursuant to this Section 2) from the Holder or Holders at least fifty percent
(50%) of the then outstanding Registrable Securities that the Corporation file a
registration statement under the Act, or a similar document pursuant to any
other statute then in effect corresponding to the Act, covering the registration
of at least the lesser of (i) at least twenty-five percent (25%) of the then
outstanding Registrable Securities and (ii) Registrable Securities the expected
price to the public of which equals or exceeds $10,000,000, then the Corporation
shall promptly notify all other Holders of such request and shall use its best
efforts to cause all Registrable Securities that Holders have requested be
registered to be registered under the Act.
Notwithstanding the foregoing, (a) the Corporation shall not be obligated
to effect a registration pursuant to this Section 2 during the period starting
with the date sixty (60) days prior to the Corporation's estimated date of
filing of, and ending on a date six (6) months following the effective date of,
a registration statement pertaining to an underwritten public offering of
securities for the account of the Corporation, provided that the Corporation is
actively employing in good faith its best efforts to cause such registration
statement to become effective and that the Corporation's estimate of the date of
filing such registration statement is made in good faith; (b) the Corporation
shall not be obligated to effect a registration pursuant to this Section 2
within six (6) months after the effective date of a prior registration under
such Section; (c) if the Corporation shall furnish to the Holders a certificate
signed by the President of the Corporation stating that in the good faith
judgment of the Board of Directors it would be seriously detrimental to the
Corporation or its shareholders for a registration statement to be filed in the
near future, then the Corporation's obligation to use its best efforts to file a
registration statement shall be deferred for a period not to exceed three (3)
months; and (d) the Corporation may postpone a registration pursuant to this
election for such period of time as may be required to permit the use of regular
audited year-end financial statements with supplemental short period figures for
a period not exceeding six (6) months unless the Holders agree to bear the costs
of any special audit.
2
<PAGE>
The Corporation shall not be obligated to effect more than two (2)
registrations pursuant to this Section 2. Any request for registration under
this Section 2 must be for a for a firm commitment underwritten public offering
to be managed by an underwriter or underwriters of recognized national standing
reasonably acceptable to the Corporation.
3. Corporation Registration. Subject to Section 8 of this Agreement, if
------------------------
at any time the Corporation proposes to register any of its Common Stock under
the Act in connection with the public offering of such securities for its own
account or for the accounts of other shareholders, solely for cash on a form
that would also permit the registration of the Registrable Securities, the
Corporation shall, each such time, promptly give each Holder written notice of
such determination. Upon the written request of any Holder given within thirty
(30) days after mailing of any such notice by the Corporation, the Corporation
shall, subject to the limitations set forth in Section 8(a), use its best
efforts to cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested be registered.
4. Obligations of the Corporation. Whenever required under Section 2, 3,
------------------------------
or 11 to use its best efforts to effect the registration of any Registrable
Securities, the Corporation shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Securities and Exchange Commission ("SEC") a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become and remain
effective; provided, however, that in connection with any proposed registration
intended to permit an offering of any securities from time to time (i.e., a so-
called "shelf registration"), the Corporation shall in no event be obligated to
cause any such registration to remain effective for more than one hundred eighty
(180) days.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably appropriate for the distribution of the
securities covered by the registration statement, provided that the Corporation
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions, and further provided that (anything in this
Agreement to the contrary notwithstanding with respect to the bearing of
expenses) if any jurisdiction in which the securities shall be qualified shall
require that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by selling shareholders, then such
expenses shall be payable by selling shareholders pro rata, to the extent
required by such jurisdiction.
3
<PAGE>
(e) Provide a transfer agent for the Common Stock no later than the
effective date of the first registration of any Registrable Securities.
5. Furnish information. It shall be a condition precedent to the
-------------------
obligations of the Corporation to take any action pursuant to this Agreement
that the Holders shall furnish to the Corporation such information regarding
them, the Registrable Securities held by them, and the intended method of
disposition of such securities as the Corporation shall reasonably request and
as shall be required in connection with the action to be taken by the
Corporation.
6. Expenses of Demand Registration. All expenses incurred in connection
-------------------------------
with registrations pursuant to Section 2 (excluding underwriters' discounts and
commissions), including, without limitation, all registration and qualification
fees, printers, and accounting fees, fees and disbursements of counsel for the
Corporation, and the reasonable fees and disbursements of one special counsel
for the selling Holders, shall be borne by the Corporation.
7. Corporation Registration Expenses. All expenses (excluding
---------------------------------
underwriters' discounts and commissions) incurred in connection with a
registration pursuant to Section 3, including, without limitation, any
additional registration and qualification fees and any additional fees and
disbursements of counsel to the Corporation that result from the inclusion of
securities held by the Holders in such registration and the reasonable fees and
disbursements of one special counsel for the selling stockholders, shall be bore
by the Corporation; provided, however, that if the registration is of
exclusively a secondary offering, the holders shall bear their proportionate
share of the expenses incurred in connection with any registration (provided all
shareholders registering shares thereunder bear their proportionate share of
expenses), except expenses which the Corporation would have incurred whether or
not the securities held by the Holders were included in such registration
(including, without limitation, the expense of preparing normal audited or
unaudited financial statements).
8. Underwriting Requirements.
-------------------------
(a) In connection with any offering involving an underwriting of shares
being issued by the Corporation, the Corporation shall not be required under
Section 3 to include any of the Holders' Registrable Securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Corporation and the underwriters selected by it, and then only in
such quantity as will not, in the reasonable opinion of the underwriters,
jeopardize the success of the offering by the Corporation. If the total amount
of securities that all Holders request to be included in an underwritten
offering exceeds the amount of securities that the underwriters reasonably
believe compatible with the success of the offering, the Corporation shall only
be required to include in the offering so many of the securities of the selling
Holders as the underwriters reasonably believe will not jeopardize the success
of the offering (the securities so included to be apportioned pro rata among the
selling Holders according to the total amount of securities owned by said
selling Holders, or in such other proportions as shall mutually be agreed to by
such selling Holders), provided that in the case of an offering involving shares
being issued by the Corporation, no such reduction shall be made with respect to
any securities offered by the Corporation for its own account, and provided
further that no securities of any shareholder who is not a Holder shall be
included in such offering, other than securities of shareholders who have
initiated such registration pursuant to the exercise of contractual rights to
4
<PAGE>
do so, unless all securities which the Holders have requested to be included are
included on a pro rata basis with the securities of any other shareholders who
have a contractual right to include their securities in such offering.
(b) With respect to any underwriting of shares to be registered under
Section 2, or an underwriting of shares to be registered under Section 11 if the
Holders of a majority of the then outstanding Registrable Securities have
requested registration thereunder, such Holders shall have the right to
designate the managing underwriter or underwriters, subject to the consent of
the Corporation. In all other circumstances under such Sections and in
connection with registrations under Section 3, the Corporation shall have the
right to designate the managing underwriter or underwriters, subject to the
consent of the Holders of a majority of the Registrable Securities participating
in the underwriting. In any such case, such consent shall not be unreasonably
withheld or delayed.
9. Delay of Registration. No Holder shall have any right to take any
---------------------
action to restrain, enjoy, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
10. Indemnification. In the event any Registrable Securities are included
---------------
in a registration statement under this Agreement:
(a) To the extent permitted by law, the Corporation will indemnify and hold
harmless each Holder requesting or joining in a registration, any underwriter
(as defined in the Act) for it, and each person, if any, who controls such
Holder or underwriter within the meaning of the Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based on any untrue or alleged
untrue statement of any material fact contained in such registration statement,
including, without limitation, any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not
misleading or arise out of any violation by the Corporation of any rule or
regulation promulgated under the Act applicable to the Corporation and relating
to action or inaction required of the Corporation in connection with any such
registration; and will reimburse each such Holder, such underwriter, or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability, or action, provided, however, that the indemnity agreement contained
in this Section 10(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Corporation (which consent shall not be unreasonably withheld
or delayed) nor shall the Corporation be liable in any such case for any such
loss, claim, damage, liability or action to the extent that it arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in connection with such registration statement,
preliminary prospectus, final prospectus, or amendments or supplements thereto,
in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Holder, underwriter or
controlling person.
5
<PAGE>
(b) To the extent permitted by law, each Holder requesting or joining in a
registration will indemnify and hold harmless the Corporation, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Corporation within the meaning of the Act, and
any underwriter for the Corporation (within the meaning of the Act) against any
losses, claims, damages or liabilities to which the Corporation or any such
director, officer, controlling person or underwriter may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary prospectus or final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and will reimburse the Corporation or any such director,
officer, controlling person or underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 10(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld) and provided further that no Holder shall have any
liability under this Section 10(b) in excess of the net proceeds actually
received by such Holder in the relevant public offering.
(c) Promptly after receipt by an indemnified party under this Section 10 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 10, notify the indemnifying party in writing of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to notify an indemnifying party
promptly, of the commencement of any such action, if prejudicial to his ability
to defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 10, but the omission so to notify the
indemnifying party will not relieve him of any liability that he may have to any
indemnified party otherwise than under this Section 10.
11. Registrations on Form S-3.
-------------------------
(a) If (i) the Corporation shall receive a written request (specifying that
it is being made pursuant to this Section 11) from the Holder or Holders of at
least twenty-five percent (25%) of the then outstanding Registrable Securities
that the Corporation file a registration statement on Form S-3 (or any successor
form to Form S-3 regardless of its designation) for a public offering of shares
of the Registrable Securities the reasonably anticipated aggregate price to the
public of which would exceed Two Million Dollars ($2,000,000), and (ii) the
Corporation is a registrant entitled to use Form S-3 to register such shares,
then the Corporation shall use its
6
<PAGE>
best efforts to cause such shares to be registered on Form S-3 (or any successor
form to Form S-3).
(b) All expenses (excluding underwriters' discounts and commissions)
incurred in connection with the first two registrations requested pursuant to
Section 11(a), including, without limitation, all registration, qualification,
printing, and accounting fees, and fees and disbursements of one special counsel
to the selling Holder or Holders and counsel to the Corporation, shall be borne
by the Corporation. All such expenses for registrations pursuant to Section
11(a) after the first two such registrations shall be borne by the Corporation,
except that the selling Holders shall pay all fees of their legal counsel, if
any, in connection therewith.
(c) Holders' rights to registration under this Section 11 are in addition
to, and not in lieu of, their rights to registration under Sections 2 and 3 of
this Agreement.
12. Reports Under Securities Exchange Act of 1934. With a view to making
---------------------------------------------
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Corporation to the public without registration, the
Corporation agrees to use its best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to ninety (90) days
after the effective date of the first registration statement covering an
underwritten public offering filed by the Corporation;
(b) file with the SEC in a timely manner all reports and other documents
required of the Corporation under the Act and the Securities Exchange Act of
1934, as amended (the "1934 Act"); and
(c) furnish to any Holder forthwith upon request a written statement by the
Corporation that it has complied with the reporting requirements of Rule 144 (at
any time after ninety (90) days after the effective date of said first
registration statement filed by the Corporation), and of the Act and the 1934
Act (at any time after it has become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Corporation, and such
other reports and documents so filed by the Corporation as may be reasonably
requested in availing any such holder to take advantage of any rule or
regulation of the SEC permitting the selling of any such securities without
registration.
13. Limitations in Connection with Future Grants of Registration Rights.
-------------------------------------------------------------------
Without the prior written consent of the Holder or Holders of a majority of the
then outstanding Registrable Securities issued or issuable upon conversion of
the Preferred Stock, the Corporation shall not grant rights to cause the
Corporation to register any of its securities to any person or entity other than
the Additional Investors as contemplated hereunder.
14. Transfer of Registration Rights. The registration rights of any
-------------------------------
Investor (and of any permitted transferee of any Investor or its permitted
transferees) under this Agreement with respect to any shares of Registrable
Securities may be transferred to any Affiliate of such Investor or such
permitted transferee, or to any transferee who acquires (otherwise than in a
registered public offering) at least five percent (5%) of the Registrable
Securities held or acquired as of the date hereof by such Investor, provided,
however, that the Corporation is given
<PAGE>
written notice by the Holder at the time of such transfer stating the name and
address of the transferee and identifying the securities with respect to which
the rights under this Agreement are being assigned. For such purpose, an
"Affiliate" of any Investor (or any such transferee) means any partner of such
Investor (or transferee) if it is a partnership, or any person or entity that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Investor or transferee.
15. Mergers, Etc. The Corporation shall not, directly or indirectly,
------------
enter into any merger, consolidation or reorganization in which the Corporation
shall not be the surviving corporation unless the proposed surviving corporation
shall, prior to such merger, consolidation or reorganization, agree in writing
to assume the obligations of the Corporation under this Agreement, and for that
purpose references hereunder to "Registrable Securities" shall be deemed to be
references to the securities which the Holders would be entitled to receive in
exchange for Registrable Securities under any such merger, consolidation or
reorganization; provided, however, that the provisions of this Agreement shall
not apply in the event of any merger, consolidation or reorganization in which
the Corporation is not the surviving corporation if the Holders of Registrable
Securities are entitled to receive in exchange therefor (i) cash, or (ii)
securities of the acquiring corporation which may be immediately sold to the
public without registration under the Act.
16. Stand-Off Agreement. Each Holder, if requested by the Corporation and
-------------------
the managing underwriter of an offering by the Corporation of Common Stock or
other securities of the Corporation pursuant to a registration statement under
the Act, shall agree not to sell publicly or otherwise transfer or dispose of
any Registrable Securities or other securities of the Corporation held by such
Holder for a specified period of time (not to exceed 180 days) following the
effective date of such registration statement; provided, that:
--------
(a) such agreement shall only apply to the first registration statement
covering Common Stock to be sold on the Corporation's behalf to the public in an
underwritten offering; and
(b) all holders of five percent (5%) or more of the shares of Common Stock
then outstanding (including shares of Common Stock issuable upon the conversion
of Preferred Stock, or other convertible securities, or upon the exercise of
options, warrants or rights) and all officers and directors of the Corporation
enter into similar agreements.
17. Accession. Any Additional Investors as defined in the Purchase
---------
Agreement shall automatically become an Investor hereunder by delivering to the
Corporation a written instrument in the form of Exhibit A hereto, by which such
---------
Additional Investor agrees to be bound by the obligations imposed under this
Agreement, whereupon such Additional Investor shall automatically become a party
to this Agreement and shall thereupon be deemed an "Investor" for all purposes
of this Agreement.
18. Notices. All notices, requests, consents and other communications
-------
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by first class mail postage
prepaid (other than to non-U.S. parties) or by fax or DHL, Federal Express or
other internationally recognized courier service, addressed to such party at the
<PAGE>
address set forth below or such other address as may hereafter be designated in
writing by the addressee to the addressor listing all parties:
(i) if to the Corporation, to:
Sequenom, Inc.
11555 Sorrento Valley Road
Suite C
San Diego, CA 92121
Attention: President
Fax: (619) 350-0344
with a copy to:
David R. Pierson, Esq.
Foley, Hoag & Eliot LLP
One Post office Square
Boston, Massachusetts 02109
Fax: (617) 832-7000
(ii) if to the Series B Investors or the Investors (or their respective
transferees), to their respective last known address or their
respective address, if any, appearing in the books of the Corporation.
19. Miscellaneous.
-------------
(a) This Agreement states the entire agreement of the parties concerning
the subject matter hereof, and supersedes all prior agreements, written or oral,
between or among them concerning such subject matter.
(b) This Agreement may be amended, and compliance with any provision of
this Agreement may be omitted or waived, only by the written agreement of the
Corporation and the Holders of at least eighty-five percent (85%) in voting
power of the then outstanding Registrable Securities issued or issuable upon
conversion of the Preferred Stock to be bound thereby.
(c) This Agreement supersedes and replaces the Prior Registration Rights
Agreement, which upon execution hereof shall be of no further force or effect.
(c) This Agreement shall be governed by, and construed and enforced in
accordance with, the substantive laws of The Commonwealth of Massachusetts,
without regard to its principles of conflicts of laws.
(d) This Agreement may be executed in any number of counterparts, each such
counterpart shall be deemed to be an original instrument, and all such
counterparts together shall constitute but one agreement. Any such counterpart
may contain one or more signature pages.
* * *
9
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as a contract under seal as of the date first written above.
SEQUENOM, INC.
By: _________________________________
Its President
SERIES B INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management Limited
Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: _________________________________
Name:
Title:
<PAGE>
TVM INTERTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: /s/ illegible
------------------------------------
Its:
TVM ZWEITE BETEILIGUNG-US LIMITED
PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: /s/ illegible
------------------------------------
Its:
<PAGE>
TVM EUROTECH LIMITED
PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: __________________________________
Its:
TVM TECHNO VENTURE
INVESTORS NO. 1 LIMITED
PARTNERSHIP
By: __________________________________
General Partner
KBL FOUNDER VENTURES SCA
By: __________________________________
Its:
ALPINVEST INTERNATIONAL B.V.
By: __________________________________
Its:
<PAGE>
BOSTON UNIVERSITY NOMINEE
PARTNERSHIP
By: __________________________________
General Partner
______________________________________
Gerald E. Coughlan
______________________________________
Charles P. Floe
______________________________________
Hellmut Kirchner
______________________________________
Herwig Brunner
______________________________________
Franz A. Wirtz
______________________________________
Hannemarie Wirtz
______________________________________
Hubert Koster
______________________________________
Ernst-Gunter Afting
<PAGE>
SVE STAR VENTURES
ENTERPRISES NO. III GbR
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _________________________________
Managing Partner
SVE STAR VENTURES
ENTERPRISES NO. IIIa GbR
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _________________________________
Managing Partner
SVE STAR VENTURES
MANAGEMENTGESELLSCHAFT MBH
Nr. 3 & CO. BETEILIGUNGS KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _________________________________
Managing Partner
<PAGE>
SEQUENOM, INC.
Registration Rights Agreement
Investor Signature Page
-----------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Investor" as defined in the Registration Rights Agreement
dated as of May ___, 1997, by and among Sequenom, Inc. and the parties named
therein, (ii) that it is a party to the Registration Rights Agreement for all
purposes and (iii) that it is bound by all terms and conditions of the
Registration Rights Agreement.
EXECUTED this ___ day of May, 1997.
____________________________________
(print name)
By: ________________________________
Title: _____________________________
Address:____________________________
____________________________________
____________________________________
____________________________________
<PAGE>
SVE STAR VENTURES
ENTERPRISES NO. III GbR
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _________________________________
Managing Partner
SVE STAR VENTURES
ENTERPRISES NO. IIIa GbR
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _________________________________
Managing Partner
SVE STAR VENTURES
MANAGEMENTGESELLSCHAFT MBH
Nr. 3 & CO. BETEILIGUNGS KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _________________________________
Managing Partner
<PAGE>
EXHIBIT 4.16B
-------------
Form of Voting Agreement
------------------------
<PAGE>
VOTING AGREEMENT
Agreement made as of May ___, 1997 by and among Sequenom, Inc., a Delaware
corporation (the "Corporation"); Hubert Koster, Nola E. Masterson and Robert E.
Patterson (the "Founders"); TVM Techno Venture Enterprises No. II Limited
Partnership, TVM Intertech Limited Partnership, TVM Zweite Beteiligung-U.S.
Limited Partnership, TVM Eurotech Limited Partnership, TVM Techno Venture
Investors No. 1 Limited Partnership and KBL Founder Ventures SCA (the "Original
Investors"); the holders (the "Series B Investors") of shares of the
Corporation's Series B Convertible Preferred Stock, $.001 par value per share
(the "Series B Preferred Stock"); and the purchasers of shares of the
Corporation's Series C Convertible Preferred Stock, $.001 par value per share
("Series C Preferred Stock"), pursuant to the Series C Convertible Preferred
Stock Purchase Agreement dated as of the date hereof (the "Purchase Agreement"),
including any Additional Investors as defined in the Purchase Agreement (all
such purchasers of Series C Preferred Stock under the Purchase Agreement being
referred to as the "Investors," and all such Founders, Original Investors,
Series B Investors and Investors being referred to as the "Stockholders").
AGREEMENT
---------
In consideration of the mutual covenants herein contained, the parties
hereto agree as follows:
1. Board of Directors. The Stockholders agree to vote all shares of the
------------------
Corporation's Common Stock, $.001 par value per share ("Common Stock"), Series A
Convertible Preferred Stock, $.001 par value per share ("Series A Preferred
Stock"), Series B Preferred Stock, Series C Preferred Stock and any other class
of voting security of the Corporation (the "Shares") now or hereafter owned or
controlled by them, and otherwise to use their respective best efforts as
stockholders of the Corporation, to set the number of directors of the
Corporation at seven and to elect as directors, on the date of this Agreement
and in any subsequent election of directors of the Corporation:
(a) the Chief Executive Officer of the Corporation (the "CEO Director"),
who shall initially be Fareed Kureshy;
(b) one person designated by the Founders, who shall initially be Hubert
Koster;
(c) one person designated by the Original Investors, who shall initially
be Helmut Schuhsler;
(d) two persons designated by the Series B Investors, who shall initially
be Thomas Bologna and William Golden; and
(e) two persons who are not employees of the Corporation (the "Independent
Directors"), who have experience in the Corporation's industry and who
are reasonably acceptable to a majority of the other directors, and
who shall initially be Nola E. Masterson and Ernst-Gunter Afting.
<PAGE>
Any person or entity or group of persons or entities entitled to make a
director designation hereunder (a "Designating Party") shall furnish written
notice to the Stockholders at least 10 days prior to any election of directors
of its director-designee or director-designees. In the absence of such notice,
the director-designee or director-designees of such Designating Party then
serving and previously designated shall be reelected if still eligible to serve
as provided herein. In the event that any Designating Party that is a group of
Stockholders cannot agree upon a director-designee, the identity of the
director-designee of such Designating Party shall be determined by a plurality
in voting power of the outstanding capital stock of the Corporation held by the
Stockholders constituting such Designating Party.
This Agreement is not intended, and shall not be construed, to confer upon
any person designated hereunder for election to the Board of Directors any right
to serve or to continue to serve in such capacity. Any Designating Party may,
at any time, determine to remove its then-current director-designee and
designate another person for election to the Board of Directors in place of the
person then serving as the director-designee of such Designating Party. In the
event any such determination is made, the Stockholders shall promptly vote to
remove the director-designee of such Designating Party then serving, and to
elect as a director the replacement director-designee of such Designating Party.
If at any time the person serving as Chief Executive Officer of the
Corporation shall resign, be removed or otherwise cease to serve as such
officer, the Stockholders shall promptly vote (i) if the former Chief Executive
Officer has not resigned as a director, to remove him as a director, and (ii) to
elect the new Chief Executive Officer of the Corporation as the CEO Director.
At any time a majority of the directors other than the Independent
Directors may determine to remove any Independent Director from the Board of
Directors and designate another person for election to the Board of Directors in
place of the person then serving as such Independent Director. In the event any
such determination is made, the Stockholders shall promptly vote to remove the
applicable Independent Director and to elect as a director the replacement
Independent Director designee.
Any vacancy on the Board of Directors created by the resignation, removal,
incapacity, or death of any person designated under this Section 1 shall be
filled by another person designated by the original Designating Party. The
Stockholders shall vote their respective Shares in accordance with such new
designation, and any such vacancy shall not be filled in the absence of a new
designation by the original Designating Party.
This Section 1 shall terminate and be of no further force and effect upon
the closing of a firm commitment underwritten public offering of Common Stock of
the Corporation pursuant to an effective registration statement under the
Securities Act of 1933, as amended, in which the aggregate gross proceeds to the
Corporation from such offering are not less than $20,000,000 and the offering
price per share is not less than $9.45, appropriately adjusted to take account
of any stock split, stock dividend, combination of shares or similar event.
In the event that any Designating Party (or its or their respective
partners, stockholders and affiliates) owns, in the aggregate, fewer than
200,000 shares of the Corporation's Common
2
<PAGE>
Stock, subject to adjustment for stock splits, stock dividends, combinations of
shares and similar events, such Designating Party's right to make designations
under this Section 1 shall terminate, and the obligation of the other parties
under this Section 1 to vote for any members of the Board of Directors
designated by such Designating Party shall terminate, but all other obligations
of all parties hereunder shall continue unless otherwise terminated. For
purposes of this paragraph, in determining the number of shares of Common Stock
owned by a Designating Party, ownership by such Designating Party of shares of
Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock
shall be deemed to be ownership by it of that number of shares of Common Stock
into which such shares of Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock are convertible.
2. Director Indemnification. In the event that any director contemplated
------------------------
by this Agreement shall be made or threatened to be made a party to any action,
suit or proceeding with respect to which he may be entitled to indemnification
by the Corporation pursuant to its Certificate of Incorporation, By-Laws or
otherwise, he shall be entitled to be represented in such action, suit or
proceeding by counsel of his choice and the expenses of such representation
shall be reimbursed by the Corporation to the extent provided in or authorized
by said Certificate of Incorporation or other provision and permitted by
applicable law.
The Corporation and the Stockholders agree not to take any action to amend
any provision of the Certificate of Incorporation or By-Laws of the Corporation
relating to indemnification of directors, as presently in effect, without the
prior written consent of a majority in voting power of the Series B Investors.
3. Accession. Any Additional Investors as defined in the Purchase
---------
Agreement shall automatically become an Investor hereunder by delivering to the
Corporation a written instrument in the form of Exhibit A hereto, by which such
---------
Additional Investor agrees to be bound by the obligations imposed under this
Agreement, whereupon such Additional Investor shall automatically become a party
to this Agreement and shall thereupon be deemed an "Investor" and a
"Stockholder" for all purposes of this Agreement.
4. Notices. All notices, requests, consents and other communications
-------
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by first class mail postage
prepaid (other than to non-U.S. parties), by fax, or by DHL, Federal Express or
any other internationally recognized express courier service, addressed to such
party at the address set forth below or such other address as may hereafter be
designated in writing by the addressee to the addressor listing all parties:
i) if to the Corporation, to:
Sequenom, Inc.
11555 Sorrento Valley Road
Suite C
San Diego, CA 92121
Attention: President
Fax: (619) 350-0344
3
<PAGE>
with a copy to:
David R. Pierson, Esq.
Foley, Hoag & Eliot LLP
One Post office Square
Boston, Massachusetts 02109
Fax: (617) 832-7000
(ii) if to the Stockholders, to their respective last known address or
their respective address, if any, appearing in the books of the Corporation.
5. Assignment; Binding Effect. No Designating Party may assign its or
--------------------------
their rights hereunder. Subject to termination or partial termination as
provided in Section 1, this Agreement shall be binding on the parties hereto and
their respective legal representatives, successors and permitted assigns and on
the transferees of any Shares now owned or hereafter acquired by them.
6. Entire Agreement; Amendment and Waiver. This Agreement contains the
--------------------------------------
sole and entire understanding of the parties with respect to its subject matter
and supersedes all prior negotiations, commitments, agreements and
understandings heretofore had among any of them with respect thereto. Without
limiting the generality of the foregoing, this Agreement supersedes and replaces
the Voting Agreement among the Corporation, the Founders, the Original Investors
and the Series B Investors dated as of December 22, 1995, which shall no longer
have any force or effect. This Agreement may not be changed or terminated or
any performance or condition waived, in whole or in part, except by the written
agreement of the Corporation and Stockholders or transferees of their rights
hereunder holding two-thirds in voting power of the Shares held by the Founders,
two-thirds in voting power of the Shares held by the Original Investors, eighty-
five percent (85%) in voting power of the Shares held by the Series B Investors,
and two-thirds in voting power of the Shares held by the Investors. A waiver on
one occasion shall not constitute a waiver on any further occasion.
7. Counterpart. This Agreement may be executed in more than one
-----------
counterpart, each of which shall be deemed to be an original and which,
together, shall constitute one and the same instrument. Any such counterpart
may contain one or more signature pages.
8. Applicable Law. This Agreement shall be governed by, and construed
--------------
and enforced in accordance with, the substantive laws of The Commonwealth of
Massachusetts, without regard to its principles of conflicts of laws.
9. Legend. Each certificate for Shares shall bear a legend stating in
------
substance as follows, and each of the Stockholders shall cause its certificates
to be so legended promptly after the execution and delivery of this Agreement:
The shares of stock represented by this certificate are subject to the
terms and provisions of a Voting Agreement among the Corporation and
certain stockholders of the Corporation. The Corporation will furnish a
copy of the Voting Agreement to the holder hereof upon written request and
without charge.
* * *
4
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as a
contract under seal as of the date first written above.
SEQUENOM, INC.
By:
---------------------------------
its President
FOUNDERS:
------------------------------------
Hubert Koster
------------------------------------
Nola E. Masterson
------------------------------------
Robert E. Patterson
ORIGINAL INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By:
---------------------------------
Name:
Title:
<PAGE>
TVM INTERTECH LIMITED
PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By:
-------------------------------
Its:
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By:
-------------------------------
Its:
<PAGE>
TVM EUROTECH LIMITED
PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: -------------------------------
Its:
TVM TECHNO VENTURE
INVESTORS NO. 1 LIMITED
PARTNERSHIP
By:
-------------------------------
General Partner
<PAGE>
SERIES B INVESTORS:
TVM TECHNO VENTURE ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: /s/ illegible
------------------------------
Its:
TVM INTERTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
By: TVM Management Corporation
its General Partner
By: /s/ illegible
------------------------------
Its:
<PAGE>
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By:
-------------------------------
Its:
TVM EUROTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By:
-------------------------------
Its:
TVM TECHNO VENTURE
INVESTORS NO. 1 LIMITED PARTNERSHIP
By:
-------------------------------
General Partner
<PAGE>
KBL FOUNDER VENTURES SCA
By:
------------------------------------------
Its:
ALPINVEST INTERNATIONAL B. V.
By:
------------------------------------------
Its:
BOSTON UNIVERSITY NOMINEE PARTNERSHIP
By:
------------------------------------------
General Partner
---------------------------------------------
Gerald E. Coughlan
---------------------------------------------
Charles P. Floe
---------------------------------------------
Hellmut Kirchner
---------------------------------------------
Herwig Brunner
---------------------------------------------
Franz A. Wirtz
--------------------------------------------
Hannemarie Wirtz
<PAGE>
------------------------------------
Hubert Koster
------------------------------------
Ernst-Gunter Afting
SVE STAR VENTURES ENTERPRISES NO. III GbR,
A GERMAN CIVIL LAW PARTNERSHIP (with
limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By:_________________________________
Managing Partner
SVE STAR VENTURES ENTERPRISES NO. IIIa
GbR, A GERMAN CIVIL LAW PARTNERSHIP (with
limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By:_________________________________
Managing Partner
SVE STAR VENTURES MANAGEMENTGESELLSCHAFT
MBH Nr. 3 & Co. BETEILIGUNGS KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By:_________________________________
Managing Partner
<PAGE>
KRL FOUNDER VENTURES SCA
By:
------------------------------------------
Its:
ALPINVEST INTERNATIONAL B. V.
By:
------------------------------------------
Its:
BOSTON UNIVERSITY NOMINEE PARTNERSHIP
By:
------------------------------------------
General Partner
---------------------------------------------
Gerald E. Coughlan
---------------------------------------------
Charles P. Floe
---------------------------------------------
Hellmut Kirchner
---------------------------------------------
Herwig Brunner
---------------------------------------------
Franz A. Wirtz
--------------------------------------------
Hannemarie Wirtz
<PAGE>
Exhibit A
---------
SEQUENOM, INC.
Voting Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Additional Investor" as defined in the Series C Convertible
Preferred Stock Purchase Agreement dated as of May ___, 1997, and an "Investor"
and a "Stockholder" as defined in the Voting Agreement dated as of May ___,
1997, each by and among Sequenom, Inc. and the parties named therein, (ii) that
it is a party to the Voting Agreement for all purposes and (iii) that it is
bound by all terms and conditions of the Voting Agreement.
EXECUTED this __ day of ____________, 1997.
------------------------------------
(print name)
By:
---------------------------------
Title:
------------------------------
Address:
----------------------------
<PAGE>
EXHIBIT 4.16C
-------------
Form of Stock Restriction Agreement
-----------------------------------
<PAGE>
STOCK RESTRICTION AGREEMENT
This Stock Restriction Agreement made as of May ___, 1997 by and among
Sequenom, Inc., a Delaware corporation (the "Corporation"); Hubert Koster
("Koster"), Nola E. Masterson ("Masterson") and Robert E. Patterson
("Patterson," and together with Koster and Masterson, the "Founders"); the
holders (the "Series B Investors") of shares of the Corporation's Series B
Convertible Preferred Stock, $.001 par value per share (the "Series B Preferred
Stock"); and the purchasers of shares of the Corporation's Series C Convertible
Preferred Stock, par value $.001 per share ("Series C Preferred Stock"),
pursuant to the Series C Convertible Preferred Stock Purchase Agreement dated as
of the date hereof (the "Purchase Agreement"), including any Additional
Investors as defined in the Purchase Agreement (such purchasers being
hereinafter referred to as the "Series C Investors", and, together with the
Series B Investors, the "Investors").
WITNESSETH THAT
WHEREAS, the Series C Investors wish to purchase from the Corporation
certain shares of Series C Preferred Stock and certain warrants to purchase
shares of Series C Preferred Stock;
WHEREAS, the Series C Investors' purchase of such Series C Preferred Stock
and warrants would materially benefit the Founders and the Series B Investors as
holders of certain shares of the Corporation's capital stock and rights to
acquire such capital stock;
WHEREAS, it is a condition to the obligations of the Series C Investors
under the Purchase Agreement that this Agreement be executed by the Corporation,
the Founders and the Series B Investors, and the Corporation, the Founders and
the Series B Investors are willing to execute this Agreement and to be bound by
the provisions hereof;
NOW, THEREFORE, in consideration of the foregoing, the agreements set forth
below, and the parties' desire to provide for continuity of ownership of the
Corporation to further the interests of the Corporation and its present and
future stockholders, the parties hereby agree with each other as follows:
1. Certain Defined Terms. As used in this Agreement, the following terms
---------------------
shall have the following respective meanings:
(a) "Common Stock" means the Corporation's Common Stock, $.001 par value
per share.
(b) "Convertible Securities" means any evidences of indebtedness, shares of
capital stock or other securities directly or indirectly convertible into or
exchangeable for Common Stock.
(c) "Options" means any rights, options, or warrants to subscribe for,
purchase or otherwise acquire Common Stock or Convertible Securities.
(d) "Series A Preferred Stock" means the Corporation's Series A Convertible
Preferred Stock, $.001 par value per share.
<PAGE>
(e) "Shares" shall mean and include all shares of Stock now owned or
hereafter acquired by any Founder or any Investor.
(f) "Stock" shall mean and include all shares of Common Stock, all
Convertible Securities, all Options, and all other securities of the Corporation
which may be issued in exchange for or in respect of shares of Common Stock,
Convertible Securities or Options (whether by way of stock split, stock
dividend, combination of shares, reclassification, recapitalization,
reorganization, or any other means).
2. Prohibited Transfers. None of the Founders shall sell or otherwise
--------------------
transfer, by gift or otherwise, all or any part of his Shares except in
compliance with the terms of this Agreement.
3. Offer of Sale; Notice of Proposed Sale or Transfer. If any Founder
--------------------------------------------------
desires to sell or otherwise transfer any of his Shares, or of any interest
therein, whether voluntarily or by operation of law, in any transaction other
than pursuant to clauses (iii) or (iv) of Section 7(a) of this Agreement, such
Founder (the "Selling Founder") shall first deliver written notice of his desire
to do so (the "Notice") to the Corporation and each of the Investors. The Notice
must specify: (i) the name and address of the party to which the Selling Founder
proposes to sell or otherwise transfer the Shares or an interest in the Shares
(the "Proposed Transferee"), (ii) the number of Shares the Selling Founder
proposes to sell or otherwise transfer (the "Offered Shares"), (iii) the
consideration per Share to be delivered to the Selling Founder for the proposed
sale or transfer, and (iv) all other material terms and conditions of the
proposed transaction, which must be bona fide.
4. Corporation's Option to Purchase.
--------------------------------
(a) Except as set forth in Section 7(a), the Corporation shall have the
first option to purchase all or any part of the Offered Shares for the
consideration per Share and on the terms and conditions specified in the Notice.
The Corporation must exercise such option, no later than fifteen (15) business
days after such Notice is deemed to have been delivered to it, by written notice
to the Selling Founder.
(b) In the event the Corporation does not exercise its option within such
fifteen-business-day period with respect to all of the Offered Shares, the Chief
Financial Officer of the Corporation shall, by the last day of such period, give
written notice of that fact to the Investors (the "Investor Notice"). The
Investor Notice shall specify the number of Offered Shares the Corporation has
elected not to purchase (the "Remaining Shares").
(c) In the event the Corporation duly exercises its option to purchase all
or a portion of the Offered Shares, the closing of such purchase shall take
place at the offices of the Corporation on the later of (i) the date five
business days after the expiration of such fifteen-business-day period or (ii)
the date that the Investors consummate their purchase of Offered Shares under
Section 5(c) hereof.
(d) To the extent that the consideration proposed to be paid by the
Proposed Transferee for the Offered Shares consists of property other than cash
or a promissory note, the consideration required to be paid by the Corporation
and/or the Investors exercising their options
2
<PAGE>
under Sections 4 and 5 hereof, respectively, may consist of cash equal to the
value of such property, as determined in good faith by agreement of the Selling
Founder and the Corporation and/or the Investors acquiring such Offered Shares.
5. Investors' Option to Purchase and Right to Participate in Sales.
---------------------------------------------------------------
(a) Except as set forth in Section 7(a), each Investor shall have an
option, exercisable for a period of fifteen (15) business days from the date of
delivery of the Investor Notice, to purchase, on a pro rata basis, its
Proportionate Percentage (as defined below) of the Remaining Shares, for the
consideration per Share and on the terms and conditions set forth in the Notice.
Such option shall be exercised by delivery of written notice to the Chief
Financial Officer of the Corporation. Alternatively, each Investor may, within
the same fifteen-business-day period, notify the Chief Financial Officer of the
Corporation of its desire to participate in the sale of Shares and to sell, on
the terms as set forth in the Notice including at the same price per Share on a
common equivalent basis, up to an equivalent proportion of the Series B
Preferred Stock and Series C Preferred Stock owned by such Investor as the
proposed sale of the Remaining Shares represents with respect to the Shares then
owned by the Selling Founder.
(b) In the event options to purchase have been exercised by the
Investors with respect to some but not all of the Remaining Shares, the Chief
Financial Officer of the Corporation shall promptly give written notice of that
fact to those Investors who have exercised their options within such period (the
"Second Investor Notice"). The Second Investor Notice shall specify the number
of Remaining Shares the Investors have not elected to purchase. The Investors
who have exercised their options within the fifteen-business-day period
specified in Section 5(a) shall have an additional option, for a period of ten
(10) business days after delivery of the Second Investor Notice, to purchase all
or any part of the balance of such Remaining Shares on the terms and conditions
set forth in the Notice, which option shall be exercised by the delivery of
written notice to the Chief Financial Officer of the Corporation. In the event
that there are two or more such Investors that choose to exercise the last-
mentioned option for a total number of Remaining Shares in excess of the number
available, the Remaining Shares available for each such Investor's option shall
be allocated to such Investors pro rata based on their respective Proportionate
Percentages (as defined below).
(c) Promptly after the expiration of the last period for exercise of
an Investor's purchase option, the Chief Financial Officer of the Corporation
shall give written notice to the Selling Founder and the purchasing Investors,
specifying the number of Remaining Shares to be purchased by each purchasing
Investor. The closing of the purchase of the Remaining Shares shall take place
at the offices of the Corporation no later than five (5) business days after
delivery of such notice to the Selling Founder and the purchasing Investors.
(d) As used in this Section 5, the term "Proportionate Percentage"
shall mean with respect to each Investor a fraction, the numerator of which
shall be the amount of Series B Preferred Stock and Series C Preferred Stock
owned by such Investor, and the denominator of which shall be the total amount
of Series B Preferred Stock and Series C Preferred Stock owned by all Investors,
in each case on a common equivalent basis.
3
<PAGE>
6. Co-Sale.
-------
(a) If the Corporation and the Investors do not exercise their options
to purchase all of the Offered Shares within the periods described in this
Agreement (the "Option Period"), then each Investor which has, pursuant to
Section 5(a), expressed a desire to sell shares of Series B Preferred Stock and
Series C Preferred Stock in the transaction (a "Participating Investor") shall
be entitled to do so pursuant to this Section. The Chief Financial Officer of
the Corporation shall promptly, on expiration of the Option Period, notify the
Selling Founder of the aggregate amount of Series B Preferred Stock and Series C
Preferred Stock the Participating Investors wish to sell. The Selling Founder
shall use his best efforts to interest the Proposed Transferee in purchasing, in
addition to the Remaining Shares not subscribed for by the Investors, the Series
B Preferred Stock and Series C Preferred Stock the Participating Investors wish
to sell. If the Proposed Transferee does not wish to purchase all of the Stock
so made available by the Selling Founder and the Participating Investors, then
each Participating Investor and the Selling Founder shall be entitled to sell,
on the terms and conditions set forth in the Notice and on the same price per
share on a common equivalent basis, a portion of the Stock being sold to the
Proposed Transferee, in the same proportion as such Selling Founder or
Participating Investor's ownership of Stock on a common equivalent basis bears
to the aggregate amount of Stock owned by the Selling Founder and the
Participating Investors on a common equivalent basis. The transaction
contemplated by the Notice shall be consummated not later than 60 days after the
expiration of the Option Period.
(b) If the Participating Investors do not elect to sell the full
amount of Series B Preferred Stock and Series C Preferred Stock which they are
entitled to sell pursuant to Section 6(a), the Selling Founder shall be entitled
to sell to the Proposed Transferee, according to the terms set forth in the
Notice, that number of his Shares which equals the difference between the amount
of Stock desired to be purchased by the Proposed Transferee and the number of
shares of Series B Preferred Stock and Series C Preferred Stock the
Participating Investors wish to sell, in each case on a common equivalent basis.
(c) If the Selling Founder wishes to sell or otherwise transfer any of
his Shares at a price per Share which differs from that set forth in the Notice,
upon terms different from those previously offered to the Corporation and the
Investors, or more than 60 days after the expiration of the Option Period, then,
as a condition precedent to such transaction, such Shares must first be offered
to the Corporation and the Investors on the same terms and conditions as given
the Proposed Transferee, and the Investors must first be offered the opportunity
to participate in such transaction, in accordance with the procedures and time
periods set forth above.
7. Permitted Transfers.
-------------------
(a) Subject to the provisions of Section 7(b) and Section 8, the
Corporation's and the Investors' right of first refusal and the Investors' right
of co-sale described in Sections 4 through 6 shall not apply to: (i) any
transfer of Shares by a Founder by gift or bequest or through inheritance to, or
for the benefit of, any member or members of such Founder's immediate family;
(ii) any transfer of Shares by an Founder to a trust (A) in respect of which
such Founder serves as trustee, provided that the trust instrument governing
such trust shall provide that such
4
<PAGE>
Founder, as trustee, shall retain sole and exclusive control over the voting and
disposition of such Shares until the termination of this Agreement or (B) for
the benefit solely of any member or members of such Founder's immediate family;
(iii) any sale or transfer of Shares to the Corporation; (iv) any underwritten
public offering of Common Stock pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "Securities Act"); and (v)
with respect to sales or other transfers of up to an aggregate of the following
number of Shares (as adjusted to reflect any stock split, stock dividend,
combination of shares or other similar transaction), but subject in any case to
the restrictions set forth in Section 8: (A) in the case of each of Koster and
Masterson, 130,000 Shares; and (B) in the case of Patterson, 50,000 Shares;
(b) In the event of any sale or transfer described in clauses (i) or
(ii) of Section 7(a), the transferee of the Shares shall hold the Shares so
acquired subject to all the restrictions imposed by this Agreement and shall be
deemed a Founder for all purposes hereof, and as a condition to such transfer,
any such transferee shall, at the request of the Corporation or any Investor,
execute and deliver a written instrument agreeing to be bound by the provisions
of this Agreement.
8. Consent of the Corporation to Transfer. As a condition to selling or
--------------------------------------
otherwise transferring any Shares proposed to be sold or transferred by the
Selling Founder and any Participating Investor to any Proposed Transferee, other
than a sale or transfer described in clause (iii) or (iv) of Section 7(a), the
Selling Founder shall have obtained the written consent to such transfer by the
Board of Directors of the Corporation by majority vote at a meeting or by
unanimous consent in lieu of a meeting. Such consent shall not be unreasonably
withheld, and shall be based on the Board of Directors' determination, after
such inquiry as it deems appropriate, but within thirty days of the date of the
Selling Founder's notice to the Corporation under Section 3, that the Proposed
Transferee is not a competitor of the Corporation and is not otherwise an
inappropriate investor in the Corporation. In the event the Selling Founder
disagrees with such determination, and the Board of Directors and the Selling
Founder are unable to resolve the disagreement, an independent third party
selected and agreed upon by the Board of Directors and the Selling Founder shall
arbitrate and finally resolve the disagreement.
9. Lock-up. Each Founder agrees that upon the request of the Corporation
-------
or the underwriters managing an underwritten offering of the Corporation's
securities, such Founder will not sell, make any short sale or loan of, grant
any option for the purchase of, or otherwise dispose of any Shares held by him
without the prior written consent of the Corporation or such underwriters, as
the case may be, for a period of up to 180 days from effective date of the
applicable registration statement.
10. Sale or Transfer in Violation of this Agreement. If any sale or other
-----------------------------------------------
transfer of Shares is made or attempted in violation of any provision of this
Agreement, or if any Shares are not offered to the Corporation or the Investors
as required hereby, the Corporation and the Investors, as the case may be, shall
have the right to purchase such Shares from the owner thereof or his transferee
at any time before or after the transfer, as herein provided. In addition to any
other legal or equitable remedies which it or they may have, the Corporation and
the Investors may enforce their respective rights hereunder by actions for
specific performance (to the extent permitted by law). The Corporation shall not
be required (i) to transfer on its books
5
<PAGE>
any Shares or other Stock which has been sold or transferred in violation of any
provision of this Agreement or (ii) to treat as the owner of such Shares or
Stock, or to pay dividends to, any transferee to whom any such Shares or Stock
have been so sold or transferred. If a Founder becomes obligated to sell any
Shares to the Corporation under this Agreement and fails to deliver such Shares
in accordance with the terms of this Agreement, the Corporation may, at its
option, in addition to all other remedies it may have, send to such Founder the
purchase price for such Shares as is herein specified and cancel on its books
the certificate or certificates representing the Shares to be sold. Thereafter,
all of the Founder's rights in and to such Shares shall terminate.
11. Disposition of Shares. Any Shares that the Corporation elects to
---------------------
purchase hereunder may be disposed of by it in such manner as it deems
appropriate with or without restrictions on the transfer thereof, and the
Corporation may require their transfer to a nominee or designee as part of any
purchase of the Shares from the Founders.
12. Restrictive Legend. All certificates representing Shares held by the
------------------
Founders which are subject to this Agreement shall have affixed thereto a legend
in substantially the following form, in addition to any other legends that may
be required by the Corporation in connection with compliance with federal or
state securities laws or otherwise:
"The shares of stock represented by this certificate are subject to
restrictions on transfer and/or an option to purchase set forth in a
Stock Restriction Agreement between the Corporation and the registered
owner of the shares represented by this certificate (or his
predecessor in interest). The Corporation will furnish a copy of such
agreement to the holder of this certificate upon written request
without charge."
The Founders shall cause such legend to be affixed to any of such certificates
not so legended.
13. Term. This Agreement shall terminate upon the closing of a fm
----
commitment underwritten public offering of Common Stock pursuant to an effective
registration statement under the Securities Act in which (i) the public offering
price per share is not less than $9.45 (appropriately adjusted to take account
of any stock split, stock dividend, combination of shares or similar event) and
(ii) the aggregate gross proceeds to the Corporation are not less than
$20,000,000.
14. Specific Enforcement. Each Founder expressly agrees that a violation
--------------------
of this Agreement by such Founder could not be adequately compensated by money
damages alone and that the Investors and the Corporation will be irreparably
damaged if this Agreement is not specifically enforced. Upon a breach or
threatened breach of the terms, covenants and/or conditions of this Agreement by
any Founder, the Investors and the Corporation shall, in addition to all other
remedies, each be entitled to a temporary or permanent injunction, and/or a
decree for specific performance, in accordance with the provisions hereof.
15. Other Agreements. The restrictions on the Founders' right to dispose
----------------
of their Shares pursuant to this Agreement are in addition to and to be
construed consistently with the Founders' rights and obligations (including
restrictions on the Founders' right to dispose of
6
<PAGE>
shares of the Corporation's capital stock) contained in any other agreement
relating to restrictions on the transferability of such Shares that the Founders
execute before, on, or after the date hereof; provided, that this Agreement
shall supersede and replace the Stock Restriction Agreement dated as of December
22, 1995 among the Corporation, the Founders and the Series B Investors, which
shall no longer be of any force or effect.
16. Waiver, Modification and Termination. No provision of this Agreement
------------------------------------
shall be deemed to have been waived by the Corporation or any Investor in the
absence of a written agreement executed by such party with respect to such
waiver. This Agreement may be modified or terminated only with the written
consent of the Founders, the Corporation, and the holders of a majority in
voting power of the Shares then held by the Investors.
17. Accession. Any Additional Investors as defined in the Purchase
---------
Agreement shall automatically become an Investor hereunder by delivering to the
Corporation a written instrument in the form of Exhibit A hereto, by which such
---------
Additional Investor agrees to be bound by the obligations imposed under this
Agreement, whereupon such Additional Investor shall automatically become a party
to this Agreement and shall thereupon be deemed an "Investor" for all purposes
of this Agreement.
18. Binding Effect; Assignment. This Agreement shall be binding upon the
--------------------------
parties hereto and their heirs, legal representatives, successors and assigns.
The rights and obligations of the Founders hereunder may not be assigned or
delegated without the written consent of the Corporation.
19. Notices. All notices, requests, consents, deliveries and other
-------
communications hereunder shall be in writing and shall be delivered in person or
duly sent by first class mail postage prepaid (other than in the case of non-
U.S. parties) or by fax or DHL, Federal Express or other internationally
recognized express courier service, to the Corporation at its principal place of
business, and to the Investors and the Founders at their respective last known
address or at their respective address, if any, appearing on the books of the
Corporation.
20. Severability. If any provision of this Agreement shall be held to be
------------
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
21. Governing Law. This Agreement shall be governed by, and construed and
-------------
enforced in accordance with, the substantive law of The Commonwealth of
Massachusetts, without regard to its principles of conflicts of laws.
22. Captions. Captions are for convenience only and are not deemed to be
--------
part of this Agreement.
23. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together she constitute a single instrument. Each such counterpart may contain
one or more signature pages.
7
<PAGE>
any Shares or other Stock which has been sold or transferred in violation of any
provision of this Agreement or (ii) to treat as the owner of such Shares or
Stock, or to pay dividends to, any transferee to whom any such Shares or Stock
have been so sold or transferred. If a Founder becomes obligated to sell any
Shares to the Corporation under this Agreement and fails to deliver such Shares
in accordance with the terms of this Agreement, the Corporation may, at its
option, in addition to all other remedies it may have, send to such Founder the
purchase price for such Shares as is herein specified and cancel on its books
the certificate or certificates representing the Shares to be sold. Thereafter,
all of the Founder's rights in and to such Shares shall terminate.
11. Disposition of Shares. Any Shares that the Corporation elects to
---------------------
purchase hereunder may be disposed of by it in such manner as it deems
appropriate with or without restrictions on the transfer thereof, and the
Corporation may require their transfer to a nominee or designee as part of any
purchase of the Shares from the Founders.
12. Restrictive Legend. All certificates representing Shares held by the
------------------
Founders which are subject to this Agreement shall have affixed thereto a legend
in substantially the following form, in addition to any other legends that may
be required by the Corporation in connection with compliance with federal or
state securities laws or otherwise:
"The shares of stock represented by this certificate are subject to
restrictions on transfer and/or an option to purchase set forth in a
Stock Restriction Agreement between the Corporation and the registered
owner of the shares represented by this certificate (or his
predecessor in interest). The Corporation will furnish a copy of such
agreement to the holder of this certificate upon written request
without charge."
The Founders shall cause such legend to be affixed to any of such certificates
not so legended.
13. Term. This Agreement shall terminate upon the closing of a fm
----
commitment underwritten public offering of Common Stock pursuant to an effective
registration statement under the Securities Act in which (i) the public offering
price per share is not less than $9.45 (appropriately adjusted to take account
of any stock split, stock dividend, combination of shares or similar event) and
(ii) the aggregate gross proceeds to the Corporation are not less than
$20,000,000.
14. Specific Enforcement. Each Founder expressly agrees that a violation
--------------------
of this Agreement by such Founder could not be adequately compensated by money
damages alone and that the Investors and the Corporation will be irreparably
damaged if this Agreement is not specifically enforced. Upon a breach or
threatened breach of the terms, covenants and/or conditions of this Agreement by
any Founder, the Investors and the Corporation shall, in addition to all other
remedies, each be entitled to a temporary or permanent injunction, and/or a
decree for specific performance, in accordance with the provisions hereof.
15. Other Agreements. The restrictions on the Founders' right to dispose
----------------
of their Shares pursuant to this Agreement are in addition to and to be
construed consistently with the Founders' rights and obligations (including
restrictions on the Founders' right to dispose of
6
<PAGE>
shares of the Corporation's capital stock) contained in any other agreement
relating to restrictions on the transferability of such Shares that the Founders
execute before, on, or after the date hereof; provided, that this Agreement
shall supersede and replace the Stock Restriction Agreement dated as of December
22, 1995 among the Corporation, the Founders and the Series B Investors, which
shall no longer be of any force or effect.
16. Waiver, Modification and Termination. No provision of this Agreement
------------------------------------
shall be deemed to have been waived by the Corporation or any Investor in the
absence of a written agreement executed by such party with respect to such
waiver. This Agreement may be modified or terminated only with the written
consent of the Founders, the Corporation, and the holders of a majority in
voting power of the Shares then held by the Investors.
17. Accession. Any Additional Investors as defined in the Purchase
---------
Agreement shall automatically become an Investor hereunder by delivering to the
Corporation a written instrument in the form of Exhibit A hereto, by which such
---------
Additional Investor agrees to be bound by the obligations imposed under this
Agreement, whereupon such Additional Investor shall automatically become a party
to this Agreement and shall thereupon be deemed an "Investor" for all purposes
of this Agreement.
18. Binding Effect; Assignment. This Agreement shall be binding upon the
--------------------------
parties hereto and their heirs, legal representatives, successors and assigns.
The rights and obligations of the Founders hereunder may not be assigned or
delegated without the written consent of the Corporation.
19. Notices. All notices, requests, consents, deliveries and other
-------
communications hereunder shall be in writing and shall be delivered in person or
duly sent by first class mail postage prepaid (other than in the case of non-
U.S. parties) or by fax or DHL, Federal Express or other internationally
recognized express courier service, to the Corporation at its principal place of
business, and to the Investors and the Founders at their respective last known
address or at their respective address, if any, appearing on the books of the
Corporation.
20. Severability. If any provision of this Agreement shall be held to be
------------
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
21. Governing Law. This Agreement shall be governed by, and construed and
-------------
enforced in accordance with, the substantive law of The Commonwealth of
Massachusetts, without regard to its principles of conflicts of laws.
22. Captions. Captions are for convenience only and are not deemed to be
--------
part of this Agreement.
23. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together she constitute a single instrument. Each such counterpart may contain
one or more signature pages.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Stock Restriction
Agreement as a contract under seal as of the day and year first above written.
SEQUENOM, INC.
By: _____________________________
Its President
FOUNDERS:
_________________________________
Hubert Koster
_________________________________
Nola E. Masterson
_________________________________
Robert E. Patterson
SERIES B INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: _____________________________
Name:
Title:
<PAGE>
TVM INTERTECH LIMITED
PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: _________________________________
Its:
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: _________________________________
Its:
<PAGE>
TVM EUROTECH LIMITED
PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management Corporation
its General Partner
By: _________________________________
Its:
TVM TECHNO VENTURE
INVESTORS NO. 1 LIMITED
PARTNERSHIP
By: _________________________________
General Partner
KBL FOUNDER VENTURES SCA
By:
_________________________________
Its:
ALPINVEST INTERNATIONAL B.V.
By: _________________________________
Its:
<PAGE>
BOSTON UNIVERSITY NOMINEE
PARTNERSHIP
BY:_____________________________________
General Partner
_____________________________________
Gerald E. Coughlan
_____________________________________
Charles P. Floe
_____________________________________
Hellmut Kirchner
_____________________________________
Herwig Brunner
_____________________________________
Franz A. Wirtz
_____________________________________
Hannemarie Wirtz
_____________________________________
Hubert Koster
_____________________________________
Ernst-Gunter Afting
<PAGE>
SVE STAR VENTURES ENTERPRISES NO. III
GbR, A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _________________________________
Managing Partner
SVE STAR VENTURES ENTERPRISES NO. IIIa
GbR, A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _________________________________
Managing Partner
SVE STAR VENTURES MANAGEMENTGESELLSCHAFT
MBH Nr. 3 & CO. BETEILIGUNGS KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _________________________________
Managing Partner
<PAGE>
SEQUENOM, INC.
Stock Restriction Agreement
Series C Investor Signature Page
--------------------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is a "Series C Investor" as defined in the Stock Restriction
Agreement dated as of May __, 1997, by and among Sequenom, Inc. and the parties
named therein, (ii) that it is a party to the Stock Restriction Agreement for
all purposes and (iii) that it is bound by all terms and conditions of the Stock
Restriction Agreement.
EXECUTED this ___ day of May, 1997.
_____________________________________
(print name)
By: _________________________________
Title:_______________________________
Address:_____________________________
_____________________________________
_____________________________________
_____________________________________
<PAGE>
Exhibit-A
---------
SEQUENOM, INC.
Stock Restriction Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Additional Investor" as defined in the Series C Convertible
Preferred Stock Purchase Agreement dated as of May __, 1997 and an "Investor" as
defined in the Stock Restriction Agreement dated as of May __, 1997 each by and
among Sequenom, Inc. and the parties named therein, (ii) that it is a party to
the Stock Restriction Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Stock Restriction Agreement.
EXECUTED this ___ day of ______________, 1997.
-----------------------------------------------
(print name)
By:
--------------------------------------------
Title:
-----------------------------------------
Address:
---------------------------------------
<PAGE>
EXHIBIT 4.19
------------
Related Transactions
--------------------
None.
<PAGE>
EXHIBIT 4.20
------------
Governmental Consents
---------------------
None.
<PAGE>
EXHIBIT 4.23
------------
Commitments from German Government
----------------------------------
Sequenom, Inc. (the "Inc.") and Sequenom Instruments GmbH (the "GmbH")
Description of agreements with Technnologie-Beteiligungs-Gesellischaft m.b.H.
der Deutschen Ausgleichsbank ("TBG")
1. The May 1995 "BJTU" Agreement
-----------------------------
The TBG has provided DM 1 million silent partnership financing to the GmbH,
which matches DM 1 million of capital invested in the GmbH by the Inc. The
terms of the silent partnership arrangement are as follows:
Interest rate of 6% on the principal amount of the silent partnership loan.
Interest payable beginning June 30, 1997.
Additional compensation as follows:
9% of any annual profits, beginning with fiscal year 1997, if the profits exceed
DM 100,000, up to a maximum compensation amount of 6% of the silent partnership
loan
Principal payment due on December 31, 2005
This agreement has no "downside protection," which is contained in the 1995
agreement.
2. The December 1995 "BJTU." Agreement
-----------------------------------
The TBG has committed to provide up to DM 3 million silent partnership financing
to the GmbH, which will match up to DM 3 million of capital invested in the GmbH
by the Inc. The TBG has matched the entire DM 3 million of capital which has
been invested by the Inc.
The terms of the silent partnership arrangement are as follows:
Interest rate of 6% on the principal amount of the silent partnership loan.
Interest payable beginning June 30, 1997.
<PAGE>
Commitments from German Government, continued
Additional compensation as follows:
9% of any annual profits, beginning with fiscal year 1997, if the profits exceed
DM 100,000, up to a maximum compensation amount of 6% of the silent partnership
loan
Principal payment due on December 31, 2005
This agreement also contains a "50% downside protection" for the investors in
the Inc. as follows: Under certain circumstances, if the Inc. exercises its "put
option" to the TBG of its equity interest in the GmbH, the TBG will pay to the
Inc. 50% of the amount of the silent partnership.
Description of the grant programs for which Sequenom Instruments GmbH has
received approvals:
1. Grant from the "Biotechnology 2000" grant scheme from the Ministry of
Research and Technology ("BMBF"):
The BMBF has approved a grant (which is a non-repayable contribution) in
the amount of DM 2.2 million based on the application for the financing of a
total research and development project of DM 4.4 million. The grant coverage is
therefore 50% of total estimated project cost. The company will call the money
quarterly in arrears based on actual cost attributable to the project. The
project started on September 1, 1995 and has a duration of three years.
2. Grant from Freie und Hansestadt Hamburg (City of Hamburg):
The City of Hamburg has approved a grant of DM 800,000 based on a list of
equipment for Sequenom's laboratory to be purchased after September 1, 1995.
Total expected cash outflows for the equipment purchases is DM 1.6 million.
Grant coverage is also 50% of estimated cost.
Both grants do not have to be repaid.
<PAGE>
EXHIBIT 6.5
-----------
Form of Opinion of Counsel to Corporation
-----------------------------------------
<PAGE>
FOLEY, HOAG & ELIOT LLP
ONE POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109-2170
TELEPHONE: (617) 832-1000
FACSIMILE (617) 832-7000
TELEX 940593
http://www.fhe.com
IN WASHINGTON. D.C.
1615 L STREET, N.W.
SUITE 860
WASHINGTON D.C. 20036
TELEPHONE: (202) 776-0600
May 8, 1997
To the Persons listed in the Schedule of
Investors to the Series C Convertible
Preferred Stock Purchase Agreement
dated as of May 8, 1997
Ladies/Gentlemen:
We are counsel to Sequenom, Inc., a Delaware corporation (the
"Corporation"). This opinion is rendered to you pursuant to Section 6.5 of the
Series C Convertible Preferred Stock Purchase Agreement (including the exhibits
thereto, the "Agreement') dated as of May 8, 1997, among the Corporation and
each of you relating to the issuance and sale by the Corporation to you of up to
an aggregate of 1,904,770 shares (the "Shares") of its Series C Convertible
Preferred Stock, par value $.001 per share ("Series C Preferred"), and warrants
to purchase up to an aggregate of 190,477 shares of Series C Preferred (the
"Warrants") (the "Transaction"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Agreement.
In connection with our rendering this opinion, we have reviewed (i) the
Certificate of Incorporation and By-Laws of the Corporation, each as amended to
date; (ii) a certificate issued by the Secretary of State of the State of
Delaware on May 2, 1997, with respect to the due incorporation, legal existence
and good standing of the Corporation in the State of Delaware (the "Legal
Existence Certificate"); (iii) counterparts of the Agreement and the related
Registration Rights Agreement dated May 8, 1997 (the "Registration Rights
Agreement'); and (iv) originals or copies, certified or otherwise, identified to
our satisfaction, of such other documents, certificates, instruments and
corporate records that we considered necessary for the purposes of this opinion.
In rendering the opinion expressed herein, we have also examined and have
relied completely as to matters of fact upon the representations and warranties
made by the Corporation and each of you in the Agreement, the Registration
Rights Agreement and the other agreements, instruments and documents delivered
in connection with the Initial Closing on the date hereof; and we have assumed
the completeness and accuracy of all factual matters described in such
representations and warranties.
<PAGE>
To the Persons listed in the Schedule of
Investors to the Series C Convertible
Preferred Stock Purchase Agreement
dated as of May 8, 1997
We have not, except as specifically noted above, made any independent
review or investigation of facts relating to the Corporation, including but
without limiting the generality of the foregoing, any investigation as to the
existence of any actions, suits or proceedings pending or threatened against the
Corporation or notes, indentures, mortgages, leases, contracts, instruments,
documents, agreements, judgments, injunctions, orders, writs or decrees to which
the Corporation is a party, which are binding upon the Corporation or which
might result in the imposition of any lien or other encumbrance on any asset of
the Corporation.
We have assumed the authenticity and completeness of all documents
furnished to us as originals, the genuineness of all signatures, the legal
capacity of natural persons, and the conformity to the originals of all
documents furnished to us as copies.
In rendering the opinions expressed in paragraph 1 below with respect to
the due incorporation, legal existence and good standing of the Corporation in
Delaware, we have relied solely on the Legal Existence Certificate.
You have not asked us to pass upon your power and authority to enter into
the Agreement or the Registration Rights Agreement. Accordingly, for the
purposes of this opinion, we have assumed that you have all requisite power and
authority to enter into the Agreement and the Registration Rights Agreement and
to effect the transactions contemplated thereby, and that each of the Agreement
and the Registration Rights Agreement constitutes the valid and legally binding
obligation of all parties thereto other than the Corporation.
We have made such examination of Massachusetts and federal Law and of the
General Corporation Law of Delaware as we deem necessary for the purposes of
this opinion. We do not purport to pass herein on the laws of any state or
jurisdiction other than the United States of America and the Commonwealth of
Massachusetts, and as to its General Corporation Law only, the State of
Delaware.
The opinions herein expressed are qualified to the extent that (i) the
validity or enforceability of any provisions of any agreement or instrument or
of any rights granted thereunder may be subject to or affected by any
bankruptcy, reorganization, insolvency, moratorium or similar law from time to
time in effect and relating to or affecting the rights or remedies of creditors
generally, (ii) the remedy of specific performance or any other equitable remedy
may be unavailable in any jurisdiction or may be withheld as a matter of
judicial discretion; and (iii) a court may apply equitable principles in
construing or enforcing the provisions of any agreement or instrument.
The phrase "of which we have knowledge" means the actual knowledge of the
lawyer signing this opinion letter and the other lawyers in our office who have
had active involvement in negotiating the Transaction and preparing the
Agreement and the Registration Rights Agreement.
Based upon and subject to the foregoing, we are of the opinion that:
2
<PAGE>
To the Persons listed in the Schedule of
Investors to the Series C Convertible
Preferred Stock Purchase Agreement
dated as of May 8, 1997
1. The Corporation is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has
the requisite corporate power to carry on its business as it is
currently being conducted.
2. The execution and delivery of the Agreement and the Registration
Rights Agreement and the performance by the Corporation of its
obligations thereunder have been duly authorized by all necessary
corporate action on the part of the Corporation and do not violate or
cause any default under any provision of (i) the Corporation's
Certificate of Incorporation or By-Laws, or (ii) except where any such
violation or default would not have a material adverse effect on the
Corporation, any note, indenture, mortgage, lease, contract or other
instrument, document or agreement to which the Corporation is a party
and of which we have knowledge or any writ, injunction, order,
judgment or decree of any court, administrative agency or other
governmental body to which the Company is a party and of which we have
knowledge. Each of the Agreement and the Registration Rights
Agreement constitutes a valid and legally binding obligation of the
Corporation, enforceable against the Corporation in accordance with
its terms; provided, however, that we express no opinion as to the
enforceability of the indemnification provisions contained in Section
10 of the Registration Rights Agreement.
3. The sale of Shares and the Warrants to each of you is not required to
be registered under the Securities Act of 1933 or the Massachusetts
Uniform Securities Act.
4. Upon receipt by the Corporation of the purchase price therefor, the
Shares will be validly issued, fully-paid and non-assessable.
5. No authorization, consent, approval or other order of, declaration to,
or filing with, any United States or Massachusetts governmental agency
or body is required to be made or obtained by the Corporation for or
in connection with the valid and lawful authorization, execution and
delivery by the Corporation of the Agreement and the Registration
Rights Agreement, for or in connection with the valid and lawful
authorization, issuance, sale and delivery of the Shares and the
Warrants or for or in connection with the valid and lawful
authorization, reservation, issuance, sale and delivery of the
Reserved Shares to be issued upon the conversion of the Shares, except
such exemptive filings, if any, as are required to be made under
applicable securities laws.
Very truly yours,
FOLEY, HOAG & ELIOT LLP
By: /s/ [ILLEGIBLE]^^
----------------------------------------
A Partner
3
<PAGE>
EXHIBIT 10.4
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
THIS AGREEMENT made as of the 21st day of December, 1998, by and among
Sequenom, Inc., a Delaware corporation (the "Corporation"); the several
investors named on the Schedule of Investors attached hereto (individually, an
"Initial Investor", and collectively, the "Initial Investors"); such additional
investors as may be identified on such addenda to the Schedule of Investors as
may be agreed upon by the Corporation and such additional investors in
accordance with the terms of this Agreement (individually, an "Additional
Investor", and collectively, the "Additional Investors")(the Initial Investors
and the Additional Investors being hereinafter sometimes referred to
individually as an "Investor" and collectively as the "Investors"); and, solely
for purposes of Section 8.1 hereof, Hubert Koster, Nola E. Masterson, and Robert
E. Patterson (individually a "Founder" and collectively the "Founders") and each
holder of the Corporation's Series B Convertible Preferred Stock (the "Series B
Investors") and Series C Convertible Preferred Stock (the "Series C Investors").
WHEREAS, the Initial Investors wish to purchase from the Corporation, and
the Corporation wishes to sell to the Investors, up to an aggregate of 6,153,850
shares of the Corporation's Series D Convertible Preferred Stock, par value
$.001 per share (the "Series D Preferred");
WHEREAS, the Corporation wishes to sell to the Additional Investors up to
an aggregate number of shares of Series D Preferred equal to the difference
between 6,153,850 and the number of shares of Series D Preferred sold at the
Initial Closing (as hereinafter defined); and
WHEREAS, pursuant to that certain Stock Purchase Agreement dated as of May
8, 1997 and amended as of January 12, 1998 (the "Series C Purchase Agreement")
the Corporation granted certain rights of first refusal to the Series C
Investors, the Series B Investors and the Founders, and the Corporation, such
Series C Investors, Series B Investors and the Founders now desire to amend and
restate such rights of first refusal in the Series C Purchase Agreement with the
rights of first refusal set forth in Section 8.1 hereof.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereby agree as follows:
SECTION 1. Amendment of Certificate of Incorporation. Immediately prior to
---------- -----------------------------------------
the execution and delivery of this Agreement, the Corporation filed with the
Secretary of State of Delaware an Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation"), a copy of which is attached
hereto as Exhibit 1, for the purpose of increasing and amending the authorized
---------
capital stock of the Corporation and setting forth the designations and the
powers, preferences and rights, and the qualifications, limitations and
restrictions thereof, granted to or imposed upon the capital stock of the
Corporation or the holders thereof.
SECTION 2. Purchase and Sale of the Series D Preferred.
---------- -------------------------------------------
2.1 Initial Shares. Subject to the terms and conditions of this Agreement,
--------------
at the Initial Closing (as defined in Section 3.1), the Corporation agrees to
issue and sell to each Initial
<PAGE>
Investor the number of shares of Series D Preferred set forth opposite the name
of such Initial Investor on the Schedule of Investors, at a purchase price equal
---------------------
to $6.50 per share of Series D Preferred and an aggregate purchase price as set
forth on the Schedule of Investors, and each Initial Investor, acting severally
---------------------
and not jointly, hereby agrees to purchase from the Corporation such number of
shares of Series D Preferred at such purchase price. The shares of Series D
Preferred sold at the Initial Closing are hereafter referred to as the "Initial
Shares."
2.2 Additional Shares. Subject to the terms and conditions of this
-----------------
Agreement, from time to time after the Initial Closing, but on or before
December 31, 1998, the Corporation agrees to issue and sell to one or more
Additional Investors who enter into this Agreement by executing one or more
counterparts hereof up to an aggregate number of shares of Series D Preferred
equal to 6,153,850 minus the number of Initial Shares (the "Additional Shares").
By executing such a counterpart, each such Additional Investor shall agree to
purchase that number of Additional Shares as may be set forth opposite its name
on such addenda to the Schedule of Investors which may be agreed upon between
---------------------
the Corporation and each such Additional Investor, at the purchase price of
$6.50 per share and at the aggregate purchase price set forth opposite such
Additional Investor's name on such addenda. Each such addendum shall be executed
by the Corporation and each such Additional Investor, a copy of each such
addendum shall be delivered to each Investor, and each such addendum shall be
deemed a part of this Agreement ab initio. Initial Investors may become
---------
Additional Investors.
The Initial Shares and the Additional Shares are referred to collectively
hereinafter as the "Shares".
SECTION 3. Closings.
---------- --------
3.1 Initial Closing. The closing of the sale and purchase of the Initial
---------------
Shares (the "Initial Closing") shall take place simultaneously with the
execution of this Agreement at the offices of Brobeck, Phleger & Harrison LLP,
550 West C Street, Suite 1300, San Diego, California 92101, on December 21, 1998
(the "Initial Closing Date"), or at such other location, date and time as may be
agreed upon between the Initial Investors and the Corporation. At the Initial
Closing, the Corporation shall issue and deliver to each Initial Investor a
certificate or certificates registered in the name of such Initial Investor,
representing the Initial Shares being purchased by it at the Initial Closing,
against payment by such Initial Investor to the Corporation of the purchase
price therefor in the form of (a) a check payable to the order of the
Corporation, (b) a wire transfer to the account of the Corporation, (c)
cancellation of indebtedness of the Corporation to such Investor or an affiliate
of such Investor, (d) conversion of convertible promissory notes issued by the
Corporation to such Investor or an affiliate of such Investor, or (e) any
combination thereof.
3.2 Additional Closings. The closings of the sale and purchase of the
-------------------
Additional Shares under this Agreement (the "Additional Closings") shall take
place at such time, date and place as are mutually agreeable to the Corporation
and any Additional Investor, but such Additional Closings, if any, shall take
place on or before December 31, 1998. At the Additional Closings, the
Corporation shall issue and deliver to each Additional Investor a certificate or
certificates registered in the name of such Additional Investor, representing
the Additional Shares being purchased by it at the Additional Closing, against
payment by such Additional
2
<PAGE>
Investor to the Corporation of the purchase price therefor in the form of (a) a
check payable to the order of the Corporation, (b) a wire transfer to the
account of the Corporation, (c) cancellation of indebtedness of the Corporation
to such Additional Investor or an affiliate of such Additional Investor, (d)
conversion of convertible promissory notes issued by the Corporation to such
Additional Investor or an affiliate of such Additional Investor, or (e) any
combination thereof.
SECTION 4. Representations and Warranties of the Corporation. The
---------- -------------------------------------------------
Corporation hereby represents and warrants to the Investors as of the date of
this Agreement as follows:
4.1 Organization. The Corporation is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own and lease its properties, to
carry on its business as presently conducted and as proposed to be conducted and
to carry out the transactions contemplated hereby. Except as set forth in
Exhibit 4.1, the Corporation is duly qualified as a foreign corporation and is
- -----------
in good standing in all such other jurisdictions (which jurisdictions are listed
in Exhibit 4.1) in which the conduct of its business or its ownership or leasing
-----------
of property requires such qualification and in which the failure so to qualify
or so to be in good standing would have a materially adverse effect on the
Corporation's operations or financial condition. Exhibit 4.1 contains a true,
-----------
complete and accurate copy of the By-Laws, as amended to date, of the
Corporation (the "By-Laws").
4.2 Capitalization. The entire authorized capital stock of the Corporation
--------------
consists of:
(a) 34,960,347 shares of Common Stock, par value $.001 per share (the
"Common Stock");
(b) 1,650,000 shares of Series A Convertible Preferred Stock, par
value $.001 per share (the "Series A Preferred");
(c) 2,976,663 shares of Series B Convertible Preferred Stock, par
value $.001 per share (the "Series B Preferred");
(d) 4,679,834 shares of Series C Convertible Preferred Stock, par
value $.001 per share (the "Series C Preferred"); and
(e) 6,153,850 shares of Series D Preferred Stock.
The number of shares of Common Stock, Series A Preferred, Series B
Preferred and Series C Preferred that are issued and outstanding or held as
treasury shares as of the date hereof is as set forth in Exhibit 4.2. All
-----------
issued and outstanding shares of Common Stock, Series A Preferred, Series B
Preferred and Series C Preferred are validly issued, fully paid and
nonassessable. The number of shares of Common Stock reserved for issuance upon
the exercise of options granted and to be granted, and upon conversion of the
Series A Preferred, the Series B Preferred, the Series C Preferred and the
Series D Preferred, is as set forth in Exhibit 4.2. Prior to the Initial
-----------
Closing, no shares of Series D Preferred were issued or outstanding.
3
<PAGE>
Exhibit 4.2 contains a list of all holders of capital stock of the
-----------
Corporation and options, warrants or rights to purchase such capital stock, in
each case including the number of shares of capital stock held by, or subject to
purchase pursuant to the exercise of any option, warrant or right held by, each
such holder. Except as set forth in Exhibit 4.2, there are no outstanding
-----------
shares of capital stock of the Corporation or warrants, options, agreements,
convertible securities or other commitments pursuant to which the Corporation is
or may become obligated to issue any shares of its capital stock or other
securities of the Corporation. Except as set forth in Exhibit 4.2, the number
-----------
of shares of capital stock, if any, reserved for issuance in connection with the
securities described in the immediately preceding sentence is not subject to
adjustment by reason of the issuance of the Shares or the Reserved Shares (as
defined in Section 4.16). Except as set forth in Section 8.1 or in Exhibit 4.2,
-----------
there are no preemptive or similar rights to purchase or otherwise acquire
shares of capital stock of the Corporation pursuant to any provision of law, the
Certificate of Incorporation or the By-Laws or any agreement to which the
Corporation is a party, or otherwise, and except as set forth in the Voting
Agreement, the Registration Rights Agreement and the Stock Restriction Agreement
described in Section 4.16 of this Agreement, there is no agreement, restriction
or encumbrance with respect to the sale or voting of any shares of the
Corporation's capital stock (whether outstanding or issuable upon conversion or
exercise of outstanding securities) imposed by or through the Certificate of
Incorporation, By-Laws or any agreement to which the Corporation is a party.
4.3 Equity Investments. Except as set forth on Exhibit 4.3, the
------------------ -----------
Corporation does not currently have any subsidiaries nor currently own any
capital stock or other proprietary interest, directly or indirectly, in any
corporation, association, trust, partnership, joint venture or other entity.
4.4 Financial Statements. Attached as Exhibit 4.4 are the audited
-------------------- -----------
financial statements of the Corporation for the years ended December 31, 1997
and 1996, and for the period from February 14, 1994 (inception) to December 31,
1997, along with the unaudited balance sheet of the Corporation as of September
30, 1998 (the "Balance Sheet") and the related unaudited statement of income for
the nine months ended September 30, 1998 (September 30, 1998 is hereinafter
sometimes referred to as the "Balance Sheet Date"). All such financial
statements are in accordance with the books and records of the Corporation and
present fairly the financial position and results of operations of the
Corporation as of the dates and for the periods indicated in accordance with
generally accepted accounting principles consistently applied, except that the
unaudited financial statements may not contain all footnotes required by
generally accepted accounting principles.
4.5 Absence of Undisclosed Liabilities. Except as set forth in Exhibit 4.5
---------------------------------- -----------
or as reflected in the Balance Sheet, at the Balance Sheet Date (a) the
Corporation had no material liabilities of any nature (matured or unmatured,
fixed or contingent) of a type required by generally accepted accounting
principles to be disclosed on a balance sheet of the Corporation which were not
so disclosed; (b) all reserves established by the Corporation and set forth in
the Balance Sheet were adequate; and (c) there were no loss contingencies (as
such term is used in Statement of Financial Accounting Standards No. 5 issued by
the Financial Accounting Standards Board in March 1975) which were not
adequately disclosed in the Balance Sheet as required by such Statement No. 5.
4
<PAGE>
4.6 Absence of Changes. Except as set forth in Exhibit 4.6, since the
------------------ -----------
Balance Sheet Date there has not been (a) any material adverse change in the
financial condition, results of operations, assets, liabilities, business or
prospects of the Corporation, (b) any material asset or property of the
Corporation made subject to a lien of any kind, (c) any waiver of any valuable
right of the Corporation, or the cancellation of any debt or claim held by the
Corporation, (d) any payment of dividends on, or other distribution with respect
to, or any direct or indirect redemption or acquisition of, any shares of the
capital stock of the Corporation, or any agreement or commitment therefor, (e)
any mortgage, pledge, sale, assignment or transfer of any tangible or intangible
assets of the Corporation, except in the ordinary course of business, (f) any
loan by the Corporation to, or any loan to the Corporation from, any officer,
director, employee or stockholder of the Corporation, or any agreement or
commitment therefor, (g) any damage, destruction or loss (whether or not covered
by insurance) materially and adversely affecting the assets, property or
business of the Corporation, or (h) any change in the accounting methods or
practices followed by the Corporation.
4.7 Encumbrances. Except as set forth in Exhibit 4.7, the Corporation has
------------ -----------
good title to all of its property and assets, real, personal or mixed, tangible
or intangible, free and clear of all liens, security interests, charges and
other encumbrances of any kind.
4.8 Intellectual Property Rights. Except in each case as set forth in
----------------------------
Exhibit 4.8:
- -----------
(a) the Corporation owns or has the right to use all Intellectual
Property Rights (as hereinafter defined) necessary or required for the conduct
of its business as presently conducted or as proposed to be conducted;
(b) to the Corporation's knowledge, no royalties or other amounts are
payable by the Corporation to other persons by reason of the ownership or use of
said Intellectual Property Rights; and
(c) to the Corporation's knowledge, no product marketed or sold or
proposed to be marketed or sold by the Corporation violates or will violate any
license or infringes any Intellectual Property Rights of another, nor has the
Corporation received any notice that any of such Intellectual Property Rights or
the operation or proposed operation of the Corporation's business conflicts or
will conflict with the rights of others.
As used herein, the term "Intellectual Property Rights" means all patents,
trademarks, service marks, trade names, copyrights, inventions, trade secrets,
proprietary processes and formulae, applications for patents, trademarks,
service marks and copyrights, and other industrial and intellectual property
rights. A list of the Corporation's patents is set forth in Exhibit 4.8.
-----------
Dr. Hubert Koster has entered into agreements with the Company relating to
protection of proprietary information and invention assignment.
4.9 Litigation. There is no action, suit, claim, proceeding or
----------
investigation, at law, in equity or otherwise, or by or before any governmental
instrumentality or other agency, now pending, or, to the Corporation's
knowledge, threatened against the Corporation.
5
<PAGE>
4.10 No Defaults. The Corporation is not in violation or breach of, or in
-----------
default under, any provision of (a) the Certificate of Incorporation or the By-
Laws or (b) except where any such violation, breach or default would not have a
material adverse effect on the Corporation, any note, indenture, mortgage,
lease, contract, purchase order or other instrument, document or agreement to
which the Corporation is a party or by which it or any of its property is bound
or affected or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or other governmental body, except as set forth in
Exhibit 4.14. To the Corporation's knowledge, there exists no condition, event
- ------------
or act which after notice, lapse of time, or both, would constitute a violation
or breach of, or a default under, any of the foregoing.
4.11 Employment of Officers, Employees and Consultants. To the
-------------------------------------------------
Corporation's knowledge, no third party may assert any valid claim against the
Corporation, any Investor, or any Designated Person (as hereinafter defined)
with respect to (a) the continued employment by or association with the
Corporation of any of the present officers or key employees of, or consultants
to, the Corporation (collectively, the "Designated Persons"), or (b) the use or
disclosure by the Corporation or any Designated Person of any information which
the Corporation or any Designated Person would be prohibited from using or
disclosing under any prior agreements or arrangements or under any laws,
including, without limitation, laws applicable to unfair competition, trade
secrets or proprietary information.
4.12 Taxes. The Corporation has filed all Federal, state, local and
-----
foreign tax returns which are required to be filed by it and all such returns
are true and correct. The Corporation has paid all taxes pursuant to such
returns or pursuant to any assessments received by it or which it is obligated
to withhold from amounts owing to any employee, creditor or third party, except,
in each case, for those which are not yet due and payable pursuant to such
returns.
4.13 Agreements. Except as set forth in Exhibit 4.13, the Corporation is
---------- ------------
not a party to any written or oral (a) contract with any labor union; (b)
contract for the future purchase of fixed assets or for the future purchase of
materials, supplies or equipment in excess of normal operating requirements; (c)
contract for the employment of any officer, individual employee or other person
or any contract with any person on a consulting basis; (d) bonus, pension,
profit-sharing, retirement, stock purchase, stock option, hospitalization,
medical insurance or similar plan, contract or understanding in effect with
respect to employees or any of them or the employees of others; (e) agreement or
indenture relating to the borrowing of money or to the mortgaging, pledging or
otherwise placing a lien on any assets of the Corporation; (f) guaranty of any
obligation for borrowed money or otherwise; (g) lease or agreement under which
the Corporation is lessee of or holds or operates any property, real or
personal, owned by any other party; (h) lease or agreement under which the
Corporation is lessor of or permits any third party to hold or operate any
property, real or personal, owned or controlled by the Corporation; (i) license
or lease agreement with respect to any Intellectual Property Rights; (j)
agreement or other commitment for capital expenditures in excess of $25,000; or
(k) contract, agreement or commitment under which the Corporation is obligated
to pay any broker's fees, finder's fees or any such similar fees, to any third
party. The Corporation has furnished to the Investors true and correct copies of
all such agreements and other documents requested by the Investors or their
authorized representatives.
6
<PAGE>
4.14 Compliance. Except as set forth in Exhibit 4.14, the Corporation has
---------- ------------
complied in all material respects with all Federal, state, local or foreign laws
applicable to its business. Except as set forth in Exhibit 4.14, the Corporation
------------
has all Federal, state, local and foreign governmental licenses, registrations
and permits material to or necessary for the conduct of its business, and,
except as set forth in Exhibit 4.14, such licenses, registrations and permits
------------
are in full force and effect and there have been no violations in any material
respect of any such licenses, registrations or permits. No proceeding is pending
or, to the Corporation's knowledge, threatened, to revoke or limit any thereof.
4.15 Insurance. Exhibit 4.15 sets forth each insurance policy (specifying
---------
the insurer, the amount of coverage, the type of insurance, the policy number,
the expiration date, the annual premium and any pending claims thereunder)
maintained by the Corporation on its properties, assets, business or personnel.
The insurance maintained by the Corporation on its properties, assets, business
and personnel is in amounts deemed adequate by the Corporation, is in accordance
with the standards of the industry in which the Corporation operates, and is
under policies currently in effect and issued by insurers of recognized
responsibility.
4.16 Authorization of this Agreement. The execution, delivery and
-------------------------------
performance by the Corporation of this Agreement, the Amended and Restated
Registration Rights Agreement of even date herewith by and among the
Corporation, the Investors and certain additional parties identified therein,
which agreement is in the form of Exhibit 4.16A (the "Registration Rights
-------------
Agreement"), the Amended and Restated Voting Agreement of even date herewith by
and among the Corporation, the Investors and certain additional parties
identified therein, which agreement is in the form of Exhibit 4.16B (the "Voting
-------------
Agreement"), and the Amended and Restated Stock Restriction Agreement of even
date herewith by and among the Corporation, the Investors and certain additional
parties identified therein, which agreement is in the form of Exhibit 4.16C (the
-------------
"Stock Restriction Agreement"; this Agreement, the Registration Rights
Agreement, the Voting Agreement and the Stock Restriction Agreement are
hereinafter referred to collectively as the "Transaction Documents") have been
duly authorized by all requisite corporate action. The Transaction Documents
have been duly executed and delivered on behalf of the Corporation and
constitute the valid and binding obligations of the Corporation, enforceable in
accordance with their respective terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (iii) to the extent that the
indemnification provisions contained in the Registration Rights Agreement may be
limited by applicable laws. The execution, delivery and performance of the
Transaction Documents, the issuance, sale and delivery of the Shares and the
shares of Common Stock issuable upon conversion of the Shares (collectively, the
"Reserved Shares"), and compliance with the provisions hereof and thereof by the
Corporation, do not and will not, with or without the passage of time or the
giving of notice or both, (a) violate any provision of law, statute, rule or
regulation or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or other governmental body or (b) conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Corporation
under, the Certificate of Incorporation or By-Laws or any note,
7
<PAGE>
indenture, mortgage, lease, contract, purchase order or other instrument,
document or agreement to which the Corporation is a party or by which it or any
of its property is bound or affected except to the extent that any such
violation, conflict, breach, default, lien, security interest, charge or
encumbrance would not have a material adverse effect on the Corporation.
4.17 Authorization of Shares. The issuance, sale and delivery hereunder by
-----------------------
the Corporation of the Shares have been duly authorized by all requisite
corporate action, and when so issued, sold and delivered, the Shares will be
fully paid and nonassessable and the Shares will be validly issued and
outstanding and not subject to preemptive or any other similar rights of the
stockholders of the Corporation or others.
4.18 Authorization of Reserved Shares. The issuance, sale and delivery by
--------------------------------
the Corporation of the Reserved Shares have been duly authorized by all
requisite corporate action of the Corporation, and the Reserved Shares have been
duly reserved for issuance upon conversion of the Shares, and when so issued,
sold and delivered upon conversion of the Shares, the Reserved Shares will be
validly issued and outstanding, fully paid and nonassessable, and not subject to
preemptive or any other similar rights of the stockholders of the Corporation or
others.
4.19 Related Transactions. Except as set forth in Exhibit 4.19, no
--------------------
director, officer or employee of the Corporation nor any "associate" (as defined
in the rules and regulations promulgated under the Securities Exchange Act of
1934 (the "Exchange Act")) of any such person is indebted to the Corporation,
nor is the Corporation indebted (or committed to make loans or extend or
guarantee credit) to any such person, nor is any such person a party to any
transaction (other than as an employee or consultant) with the Corporation
providing for the furnishing of services by, or rental of real or personal
property from, or otherwise requiring cash payments to, any such person.
4.20 No Governmental Consent or Approval Required. Except as set forth in
--------------------------------------------
Exhibit 4.20, no authorization, consent, approval or other order of, declaration
- ------------
to, or filing with, any governmental agency or body is required to be made or
obtained by the Corporation for or in connection with the valid and lawful
authorization, execution and delivery by the Corporation of the Transaction
Documents, for or in connection with the valid and lawful authorization,
issuance, sale and delivery of the Shares or for or in connection with the valid
and lawful authorization, reservation, issuance, sale and delivery of the
Reserved Shares, except such exemptive filings as are required to be made under
applicable securities laws and have been and shall be made on a timely basis.
4.21 Registration Rights. Except as contemplated by the Registration
-------------------
Rights Agreement, no person has any right to cause the Corporation to effect the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of any securities of the Corporation.
4.22 Exemptions from Securities Laws. Subject to the accuracy of the
-------------------------------
representations and warranties of the Investors set forth in Section 5 hereof,
the provisions of Section 5 of the Securities Act are inapplicable to the
offering, issuance, sale and delivery of the Shares and the Reserved Shares, and
no consent, approval, qualification or registration or filing under any state
securities laws is required in connection therewith, except such exemptive
filings as are required to be made under applicable securities laws and have
been and shall be made on a timely basis.
8
<PAGE>
4.23 Commitments from German Government. Exhibit 4.23 accurately describes
---------------------------------- ------------
certain commitments from certain German governmental authorities made with
respect to the Corporation and its subsidiary Sequenom Instruments GmbH.
SECTION 5. Representations and Warranties of the Investors. Each Investor,
---------- -----------------------------------------------
severally and not jointly, represents and warrants to the Corporation as of the
date of this Agreement as follows:
5.1 Organization. If other than an individual, such Investor is an entity
------------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with all requisite power and authority to own
and lease its properties, to carry on its business, and to carry out the
transactions contemplated hereby.
5.2 Purchase for Investment. Such Investor is acquiring the Shares, and,
-----------------------
in the event such Investor should acquire Reserved Shares upon conversion of the
Shares, such Investor will be acquiring such Reserved Shares, for its own
account, for investment and not for, with a view to, or in connection with, any
distribution or public offering thereof within the meaning of the Securities
Act.
5.3 Unregistered Securities; Legend. Such Investor understands that the
-------------------------------
Shares have not been, and the Reserved Shares will not be, registered under the
Securities Act or any state securities law, by reason of their issuance in a
transaction exempt from the registration requirements of the Securities Act and
such laws, and that they must be held indefinitely unless they are subsequently
registered under the Securities Act and such laws or a subsequent disposition
thereof is exempt from registration. Such Investor further understands that such
exemption depends upon, among other things, the bona fide nature of such
Investor's investment intent expressed herein. Such Investor acknowledges that
the certificates for the Shares and the Reserved Shares shall bear a legend to
such effect, and appropriate transfer instructions may be issued.
5.4 Status of the Investors. Such Investor has not been formed for the
-----------------------
specific purpose of acquiring Shares or Reserved Shares pursuant to this
Agreement. Such Investor understands the term "accredited investor," as used in
Regulation D promulgated under the Securities Act and represents and warrants to
the Corporation that such Investor is an "accredited investor" for purposes of
acquiring Shares and Reserved Shares.
5.5 Knowledge and Experience; Economic Risk. Such Investor has sufficient
---------------------------------------
knowledge and experience in business and financial matters and with respect to
investment in securities of privately held companies so as to enable it to
analyze and evaluate the merits and risks of the investment contemplated hereby
and is capable of protecting its interest in connection with this transaction.
Such Investor is able to bear the economic risk of such investment, including a
complete loss of the investment.
5.6 Access to Information. Such Investor acknowledges that such Investor
---------------------
and its representatives have had the opportunity to ask questions and receive
answers from officers and representatives of the Corporation concerning the
transactions contemplated by this Agreement, and to obtain any additional
information which the Corporation possesses or can acquire that is
9
<PAGE>
necessary to verify the accuracy of the information regarding the Corporation
herein set forth or otherwise desired in connection with its purchase of the
Shares purchasable by it.
5.7 Authorization. The execution, delivery and performance by such
-------------
Investor of this Agreement have been duly authorized by all requisite action of
such Investor and its partners or equity holders. This Agreement has been duly
executed and delivered on behalf of such Investor and constitutes the valid and
binding obligation of such Investor, enforceable in accordance with its terms
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies. The execution, delivery and performance of the Transaction Documents,
the purchase of the Shares and compliance with the provisions hereof and thereof
by such Investor, do not and will not, with or without the passage of time or
the giving of notice or both, (a) violate any provision of law, statute, rule or
regulation or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or other governmental body or (b) conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default (or give rise to any right of termination, cancellation or
acceleration) under, such Investor's charter, by-laws, partnership agreement or
other organizational document, or any material note, indenture, mortgage, lease,
agreement, contract, purchase order or other instrument, document or agreement
to which such Investor is a party or by which it or any of its property is bound
or affected except to the extent that any such violation, conflict, breach or
default would not have a material adverse effect on such Investor.
5.8 No Governmental Consent or Approval Required. No authorization,
--------------------------------------------
consent, approval or other order of, or declaration to, or filing with, any
governmental agency or body is required to be made or obtained by such Investor
for or in connection with the valid authorization, execution and delivery by
such Investor of the Transaction Documents or for the valid purchase by such
Investor of the Shares hereunder or for or in connection with the issuance to
such Investor of any Reserved Shares.
5.9 Rule 144. Such Investor understands that the exemption from
--------
registration afforded by Rule 144 (the provisions of which are known to such
Investor) promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act depends upon the satisfaction of various
conditions, that such exemption is not currently available and that, if
applicable, Rule 144 affords the basis for sales only in limited amounts.
SECTION 6. Conditions Precedent to Closing by the Investor. The obligation
--------- -----------------------------------------------
of each Investor to purchase and pay for the Shares being purchased by such
Investor is subject to satisfaction (or waiver by the Investor) of the following
conditions precedent at the Initial Closing:
6.1 Corporate Proceedings. All corporate and other proceedings to be
---------------------
taken and all waivers and consents to be obtained in connection with the
transactions contemplated by this Agreement shall have been taken or obtained
and all documents incident to such transactions shall be satisfactory in form
and substance to the Investors and their counsel, who shall have received all
such originals or certified or other copies of such documents as they may
reasonably request.
10
<PAGE>
6.2 Representations and Warranties Correct. The representations and
--------------------------------------
warranties made by the Corporation in Section 4 hereof shall be true and correct
when made, and shall be true and correct in all material respects at the time of
the Initial Closing with the same force and effect as if they had been made at
and as of the time of the Initial Closing.
6.3 Compliance with Covenants. The Corporation shall have duly complied
-------------------------
with and performed all covenants and agreements of the Corporation herein which
are required to be complied with and performed at or before the Initial Closing.
6.4 Certificate of Compliance. The Corporation shall have provided at the
-------------------------
Initial Closing a certificate, dated the date of the Initial Closing, in form
and substance reasonably satisfactory to such Investor, confirming compliance
with the conditions set forth in Sections 6.2 and 6.3.
6.5 Opinion of Counsel. At the Initial Closing, each of the Investors
------------------
purchasing Shares shall have received from Brobeck, Phleger & Harrison LLP,
counsel for the Corporation, an opinion addressed to such Investors, dated the
date of such Closing, to the effect set forth in Exhibit 6.5.
-----------
6.6 Related Agreements and Documents. At or before the Initial Closing,
--------------------------------
the parties thereto shall have executed and delivered the Registration Rights
Agreement, the Voting Agreement and the Stock Restriction Agreement, and the
Corporation shall have delivered to the Investors such other documents as they
shall reasonably request.
6.7 Blue Sky Matters. All consents, approvals, qualifications,
----------------
registrations and filings required to be obtained or effected under any
applicable state securities or "blue sky" laws in connection with the issuance,
sale and delivery of the Shares prior to the sale of the Shares shall have been
obtained or effected and copies of the same delivered to each of the Investors.
6.8 Subscription by Other Investors. Initial Shares in an amount which
-------------------------------
would result in at least $20,000,000 in aggregate proceeds to the Company shall
have been subscribed for at the Initial Closing.
SECTION 7. Financial Reports. Subject to the limitations set forth in
---------- -----------------
Section 7.6, the Corporation agrees to furnish each of the Investors and any
transferee to which any Investor transfers at least 100,000 Shares (a "Series D
Transferee") with the following:
7.1 Quarterly Reports. Within 45 days after the end of each fiscal
-----------------
quarter, an unaudited financial report of the Corporation, which report shall be
prepared in accordance with generally accepted accounting principles
consistently applied (except that the financial report may (i) be subject to
normal year-end audit adjustments neither individually nor in the aggregate
material and (ii) not contain all notes thereto which may be required in
accordance with generally accepted accounting principles) and shall be certified
by either the Chief Executive Officer or the Chief Financial officer of the
Corporation to have been so prepared, and which shall include the following:
11
<PAGE>
(a) an income statement for such quarter, together with a cumulative
income statement from the first day of the then-current fiscal year to the last
day of such quarter;
(b) a balance sheet as of the last day of such quarter;
(c) a statement of cash flows for such quarter;
(d) a comparison between the actual figures for such quarter, the
comparable figures (with respect to the foregoing clauses (a) and (b) only) for
the prior year (if any) and the comparable figures included in the Budget (as
hereinafter defined) for such quarter, with an explanation of any material
differences between them.
The financial report for each fiscal quarter shall be accompanied by a
report by the Chief Executive Officer of the Corporation explaining business
developments and problems occurring during the quarter.
7.2 Annual Reports. Within 120 days after the end of each fiscal year of
--------------
the Corporation, audited financial statements of the Corporation, which shall
include an income statement for such fiscal year and a balance sheet as of the
last day thereof, and statements of stockholders' equity and cash flows for such
fiscal year, each prepared in accordance with generally accepted accounting
principles consistently applied, certified by independent certified public
accountants of recognized national standing satisfactory to the Investors,
together with such accountants' annual management letter.
7.3 Consolidated Financial Statements. If for any period the Corporation
---------------------------------
shall have any subsidiary whose accounts are consolidated with those of the
Corporation, then in respect of such period the financial statements delivered
pursuant to the foregoing Sections 7.1 and 7.2 shall be the consolidated and
consolidating financial statements of the Corporation and all such consolidated
subsidiaries.
7.4 Other Reports and Information. Promptly upon becoming available:
-----------------------------
(a) copies of all financial statements, reports, notices, press
releases, proxy statements and other documents sent by the Corporation to its
stockholders or released to the public and copies of all regular and periodic
reports, if any, filed by the Corporation with the Commission or any securities
exchange; and
(b) any other financial or other information available to management
of the Corporation as any of the Investors shall have reasonably requested on a
timely basis.
7.5 Budgets and Operating Plans. At least 30 days prior to the beginning
---------------------------
of each fiscal year of the Corporation, a monthly operating plan of the
Corporation, with monthly break-downs, for such fiscal year (the "Budget"). The
Budget shall be accepted as the Budget for such fiscal year when it has been
approved by the Board of Directors of the Corporation. The Budget shall be
reviewed by the Corporation periodically and all changes therein and all
material deviations therefrom which are proposed to be made by the Corporation
shall be resubmitted to its Board of Directors in advance and shall be accepted
when approved by, and the Corporation
12
<PAGE>
shall not make any such changes or material deviations to or from the Budget
without such prior approval of, its Board of Directors. The Budget shall include
an income statement, balance sheet and cash flow information.
7.6 Limitations on Rights of Investors under Section 7. The Corporation
--------------------------------------------------
shall provide the information required by Sections 7.1 through 7.5 to each
Investor and any Series D Transferee so long as such Investor or Series D
Transferee shall own at least 100,000 shares of the Common Stock (including in
such number shares of Common Stock issuable upon Conversion of Series D
Preferred) appropriately adjusted to take account of any stock split, stock
dividend, combination of shares or the like. The foregoing provisions of this
Section 7 to the contrary notwithstanding, the Investors shall not have any
rights and the Corporation shall not have any obligations under the foregoing
provisions of this Section 7 at such time that the Common Stock is registered
under Section 12 of the Exchange Act.
SECTION 8. Additional Agreements of the Corporation.
--------- ----------------------------------------
8.1 Right of First Refusal.
----------------------
(a) Subject to the limitations set forth in paragraph (i) of this
Section 8.1 and in Section 8.9, the Corporation hereby grants to each Investor,
each Series C Investor, each Series B Investor, each Founder, and any of their
respective permitted assignees described in paragraph (j) of this Section 8.1
(each a "Right Holder") the right of first refusal to purchase, pro rata, all
(or any part) of any New Securities (as defined in this Section 8.1(b)) that the
Corporation may, from time to time, propose to sell or issue. Each such Right
Holder's pro rata share, for purposes of this right of first refusal, is the
ratio of (i) the number of shares of Common Stock then held of record by, or
issuable on conversion of Series D Preferred, Series C Preferred, Series B
Preferred or Series A Preferred (collectively, "Preferred Stock") then held of
record by, such Right Holder to (ii) the sum of the total number of shares of
the Common Stock issued and outstanding plus the total number of shares of
Common Stock issuable upon conversion of the Preferred Stock, in each case at
such time (the "Basic Amount").
(b) "New Securities" shall mean any equity securities of the
Corporation, whether now authorized or not, and rights, options, or warrants to
purchase said equity securities, and securities of any type whatsoever that are,
or may become, convertible into said equity securities; provided, however, that
"New Securities" does not include (i) securities offered to the public pursuant
to a registration statement filed under the Securities Act, the gross proceeds
to the Corporation from the sale of which would equal or exceed $20,000,000;
(ii) securities issued pursuant to the acquisition of another corporation by the
Corporation by merger, purchase of substantially all of the assets, or other
reorganization whereby the Corporation acquires not less than a majority of the
voting power of such corporation; (iii) up to 2,700,000 shares (appropriately
adjusted to take account of any stock split, stock dividend, combination of
shares or the like) of Common Stock (or related options) issued to employees,
officers or other persons performing services for the Corporation pursuant to
any stock offering, plan or arrangement approved by the Board of Directors of
the Corporation, which number may be adjusted upward by the affirmative vote of
a majority of the whole Board of Directors; (iv) securities issued in connection
with any stock split, stock dividend or recapitalization by the Corporation; (v)
shares of Common Stock issued upon conversion of the Shares; (vi) securities
issuable upon exercise or
13
<PAGE>
conversion of any rights, options, warrants or convertible securities
outstanding on the date of this Agreement; (vii) securities issued to any
financial institution in connection with a loan transaction approved by the
Board of Directors of the Corporation; (viii) securities issued to vendors or
customers or to other persons in similar commercial situations with the
Corporation, provided such issuance is approved by the Board of Directors of the
Corporation; (ix) securities issued in connection with obtaining lease
financing, whether issued to a lessor, guarantor or other person involved in the
financing, provided such issuance is approved by the Board of Directors of the
Corporation; (x) the Additional Shares; (xi) securities issued to Technologie-
Beteiligungs-Gesellschaft mbH der Deutschen Ausgleighsbank ("TBG") upon
conversion of any repayment premiums payable to TBG by the Corporation's German
subsidiary pursuant to silent partnership arrangements in the aggregate amount
of DM 6 million; or (xii) any right, option or warrant to acquire any security
convertible into securities excluded from the definition of New Securities
pursuant to clauses (i) through (x) above.
(c) The Corporation shall not issue, sell or exchange, agree to
issue, sell or exchange, or reserve or set aside for issuance, sale or exchange
any New Securities unless the Corporation shall deliver to each Right Holder a
written notice of any proposed or intended issuance, sale or exchange of New
Securities (the "Offer"), which Offer shall (i) identify and describe the New
Securities, (ii) describe the price and other terms upon which they are to be
issued, sold or exchanged, and the number or amount of the New Securities to be
issued, sold or exchanged, (iii) identify the persons or entities to which or
with which the New Securities are to be offered, issued, sold or exchanged and
(iv) offer to issue and sell to or exchange with such Right Holder (a) such
Right Holder's Basic Amount, and (b) any additional portion of the New
Securities as such Right Holder shall indicate it will purchase or acquire
should the other Right Holders subscribe for less than their Basic Amounts (the
"Undersubscription Amount"). Each Right Holder shall have the right, for a
period of 30 days following delivery of the Offer, to purchase or acquire, at a
price and upon the other terms specified in the Offer, the number or amount of
New Securities described above. The Offer by its terms shall remain open and
irrevocable for such 30-day period.
(d) To accept an Offer, in whole or in part, a Right Holder must
deliver a written notice to the Corporation prior to the end of the 30-day
period of the Offer, setting forth the portion of the Right Holder's Basic
Amount that such Right Holder elects to purchase and, if such Right Holder shall
elect to purchase all of its Basic Amount, the Undersubscription Amount (if any)
that such Right Holder elects to purchase (the "Notice of Acceptance"). If the
Basic Amounts subscribed for by all Right Holders are less than the total New
Securities, then each Right Holder who has set forth an Undersubscription Amount
in its Notice of Acceptance shall be entitled to purchase, in addition to the
Basic Amount subscribed for, the Undersubscription Amount it has subscribed for;
provided, however, that should the Undersubscription Amounts subscribed for
exceed the difference between the New Securities and the Basic Amounts
subscribed for (the "Available Undersubscription Amount"), each Right Holder who
has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the
Undersubscription Amount subscribed for by such Right Holder bears to the total
Undersubscription Amounts subscribed for by all Right Holders, subject to
rounding by the Board of Directors to the extent it reasonably deems necessary.
14
<PAGE>
(e) In the event that Notices of Acceptance are not given by the
Right Holders in respect of all the New Securities, the Corporation shall have
90 days from the expiration of the period set forth in paragraph (c) above to
issue, sell or exchange all or any part of such New Securities as to which a
Notice of Acceptance has not been given by the Right Holders (the "Refused
Securities"), but only to the offerees or purchasers and only upon terms and
conditions (including, without limitation, unit prices and interest rates) which
are described in the Offer.
(f) In the event the Corporation shall propose to sell less than all
the Refused Securities (any such sale to be in the manner and on the terms
specified in paragraph (e) above), then each Right Holder may, at its sole
option and in its sole discretion, reduce the number or amount of the New
Securities specified in its Notice of Acceptance to an amount that shall be not
less than the number or amount of the New Securities that the Right Holder
elected to purchase pursuant to paragraph (d) above multiplied by a fraction,
(i) the numerator of which shall be the number or amount of New Securities the
Corporation actually proposes to issue, sell or exchange (including New
Securities to be issued or sold to Right Holders pursuant to paragraph (d) above
prior to such reduction) and (ii) the denominator of which shall be the amount
of all New Securities. In the event that any Right Holder so elects to reduce
the number or amount of New Securities specified in its Notice of Acceptance,
the Corporation may not issue, sell or exchange more than the reduced number or
amount of the New Securities unless and until such securities have again been
offered to the Right Holders in accordance with paragraph (c) above.
(g) Upon the closing of the issuance, sale or exchange of all or less
than all the Refused Securities, the Right Holders shall acquire from the
Corporation, and the Corporation shall issue to the Right Holders, the number or
amount of New Securities specified in the Notices of Acceptance, as reduced
pursuant to paragraph (f) above if the Right Holders have so elected, upon the
terms and conditions specified in the Offer. The purchase by the Right Holders
of any New Securities is subject in all cases to the preparation, execution and
delivery by the Corporation and the Right Holders of a purchase agreement
relating to such New Securities reasonably satisfactory in form and substance to
the Right Holders and their respective counsel.
(h) Any New Securities not acquired by the Right Holders or other
persons in accordance with paragraph (e) above may not be issued, sold or
exchanged until they are again offered to the Right Holders under the procedures
specified in this Agreement.
(i) This right of first refusal shall run to each Investor, each
Series C Investor, each Series B Investor, each Founder and any of their
respective permitted assignees under paragraph (j) of this Section 8.1 only for
so long as they hold the following number of shares of Common Stock (including
in such number shares of Common Stock issuable upon conversion of Preferred
Stock):
(i) in the case of the Founders and the Series B Investors who
were parties to the Stock Purchase Agreement dated May 26, 1994, and their
respective permitted assignees, 50,000 shares; and
15
<PAGE>
(ii) in the case of all other Series B Investors, the Series C
Investors and the Investors, and their respective permitted assignees, 200,000
shares (including shares held by their respective Affiliates (as hereinafter
defined)).
(j) This right of first refusal may be assigned, in whole or in part,
(i) to any Affiliate (as hereinafter defined) of any Right Holder or (ii) to any
assignee who acquires not less than 50,000 shares of Common Stock in the case of
an assignment from assignor described in clause (i) of paragraph (i) of this
Section 8.1, or 200,000 shares of Common Stock in the case of an assignment from
an assignor described in clause (ii) of paragraph (i) of this Section 8.1 (in
each case, including in such number shares of Common Stock issuable upon
conversion of Preferred Stock and appropriately adjusted to take account of any
stock split, stock dividend, combination of shares, or the like). As used in
this Section, an Affiliate of a Right Holder shall mean any general or limited
partner of the Right Holder that is a partnership or any person or entity that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Right Holder. In addition,
for purposes of this Section, in the case of any Right Holder that is a limited
partnership for which TVM Techno Venture Management Limited Partnership, TVM
Techno Venture Management III GmbH or any of their respective Affiliates serves
as a general partner, the term Affiliate of any such Right Holder shall include
KBL Founder Ventures SCA, KB Lux Venture Capital Fund - European Biotechnology
and their respective Affiliates and Alpinvest International B.V. and its
Affiliates.
(k) This Section 8.1 shall amend and restate Section 8.1 of the
Series C Purchase Agreement, which Section 8.1 shall no longer have any force or
effect.
8.2 Keeping of Records and Books of Account. The Corporation shall keep,
---------------------------------------
and cause each subsidiary to keep, adequate records and books of account, in
which complete entries will be made in accordance with generally accepted
accounting principles consistently applied, reflecting all financial
transactions of the Corporation and such subsidiary, and in which, for each
fiscal year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection with its
business shall be made.
8.3 Insurance. The Corporation will do or cause to be done all things
---------
necessary to preserve and maintain in full force and effect fire and casualty
insurance policies, with extended coverage, on its properties, assets, business
and personnel, in amounts deemed adequate by the Corporation, and in accordance
with the standards of the industry in which the Corporation operates, sufficient
in amount to allow it to replace any of its properties which might be damaged or
destroyed.
8.4 Key Man Life Insurance. The Corporation shall use its best efforts to
----------------------
maintain in force a policy of life insurance, naming the Corporation as
beneficiary, on the life of Dr. Hubert Koster, in the amount of US$1,000,000.
8.5 Maintenance of Corporate Existence, etc. The Corporation will do or
---------------------------------------
cause to be done all reasonable things necessary to preserve and keep in full
force and effect its existence and all of its rights (charter and statutory),
subject in all cases to the exercise by the Board of Directors of the
Corporation of their fiduciary obligations. The Corporation shall comply in all
respects with the provisions of its Certificate of Incorporation and By-laws.
16
<PAGE>
8.6 Maintenance of Facilities. The Corporation will cause all facilities
-------------------------
owned or leased in the conduct of its business to be maintained and kept in good
condition and repair and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Corporation may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Corporation from
discontinuing the lease or maintenance of any such facilities if such
discontinuance is, in the good faith judgment of the Board of Directors of the
Corporation, desirable in the conduct of its business.
8.7 Payment of Taxes. The Corporation will pay or discharge or cause to
----------------
be paid or discharged, before the same shall become delinquent, (1) all material
taxes, assessments and governmental charges levied or imposed upon the
Corporation or upon the income, profits or property of the Corporation; and (2)
all material liabilities of the Corporation; provided, however, that the
Corporation shall not be required to pay or discharge or cause to be paid or
discharged any such tax assessment, liability, or charge, whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings if adequate reserves therefor have been established in accordance
with generally accepted accounting principles.
8.8 Compliance with Applicable Laws. The Corporation shall conduct its
-------------------------------
business in compliance in all material respects with all laws and valid
requirements of governmental authorities relating to the conduct of its business
or to its properties or assets.
8.9 Limitation On Rights of Investors. The rights of Right Holders,
---------------------------------
including the Investors under Section 8.1, and the obligations of the
Corporation to Right Holders, including the Investors under Section 8.1, shall
terminate and be of no effect upon and following the closing of a firm
commitment underwritten public offering of the Corporation's Common Stock
pursuant to an effective registration statement under the Securities Act in
which (i) the offering price per share is not less than $10.00 (prior to
underwriter's discounts and commissions), appropriately adjusted to take account
of any stock split, stock dividend, combination of shares, or the like, and (ii)
the aggregate gross proceeds to the Corporation from such offering are not less
than $20 million.
8.10 Proprietary Information and Invention Assignment Agreements. As soon
-----------------------------------------------------------
as practicable after the Initial Closing, the Corporation will use reasonable
efforts to cause each senior technical employee who has not already signed an
agreement with the Corporation relating to the protection of proprietary
information and the assignment of inventions to sign such an agreement in a form
acceptable to the Board of Directors of the Corporation.
SECTION 9. Expenses.
---------- --------
9.1 Expenses. The Corporation shall pay the reasonable fees and
--------
disbursements of one or more special counsel to the Investors in connection with
the transactions contemplated by this Agreement, up to a maximum aggregate
amount of $10,000. Otherwise, the Corporation and the Investors shall each bear
their own expenses, including the fees and disbursements of their respective
counsel, incurred in connection with the purchase and sale of the Shares.
17
<PAGE>
9.2 Brokers. No party to this Agreement has employed any broker or finder
-------
in connection with the transactions contemplated hereby. No person or entity
will have, as a result of the transactions contemplated by this Agreement, any
right, interest or valid claim against or upon any such party of any commission,
fee or other compensation as a finder or broker because of any act or omission
by such party or any agent of such party. Each party to this Agreement agrees to
indemnify and hold the others harmless from payment of any brokerage fee,
finders fee, or commission claimed by any third party who claims to have been
involved because of association with such party.
SECTION 10. Exchanges; Lost, Stolen or Mutilated Certificates. Upon
----------- -------------------------------------------------
surrender by any Investor to the Corporation of a certificate or certificates
representing shares of Series D Preferred purchased or acquired by such Investor
hereunder, or representing Reserved Shares received upon conversion of any such
shares of Series D Preferred, the Corporation at its expense shall issue in
exchange therefor, and deliver to such Investor, a new certificate or
certificates representing such shares, in such denomination or denominations as
may be requested by such Investor. Upon receipt of evidence satisfactory to the
Corporation of the loss, theft, destruction or mutilation of any certificate
representing any shares of Series D Preferred purchased or acquired by the
Investor hereunder, or representing Reserved Shares received upon conversion of
any such shares of Series D Preferred and in case of any such loss, theft or
destruction, upon delivery of any indemnity agreement satisfactory to the
Corporation, or in case of any such mutilation, upon surrender and cancellation
of such certificate, the Corporation at its expense shall issue and deliver to
such Investor a new certificate for such shares of Series D Preferred or
Reserved Shares, of like tenor, in lieu of such lost, stolen or mutilated
certificate.
SECTION 11. Survival of Representations, Warranties, Covenants and
----------- ------------------------------------------------------
Agreements. The covenants, representations and warranties of the parties
- ----------
contained herein shall survive the execution and delivery of this Agreement, the
Initial Closing and all Additional Closings. Each of the parties may rely on
such covenants, representations and warranties irrespective of any investigation
made, or notice or knowledge held by, it or any other person. All statements
contained in any certificate or other instrument delivered by any party pursuant
to this Agreement or in connection with the transactions contemplated by this
Agreement shall constitute representations and warranties by such party under
this Agreement.
SECTION 12. Remedies. In case any one or more of the covenants or
----------- --------
agreements set forth in this Agreement shall have been breached by the
Corporation, the Investors may proceed to protect and enforce their rights
either by suit in equity or by action at law, including, but not limited to, an
action for damages as a result of any such breach or an action for specific
performance of any such covenant or agreement contained in this Agreement.
SECTION 13. Successors and Assigns. This Agreement shall be binding upon,
----------- ----------------------
and inure to the benefit of, each of the parties hereto and, except as otherwise
expressly provided herein, each other person who shall become a registered
holder named in any certificate evidencing shares of Common Stock or Series D
Preferred transferred to such holder by any of the Investors or their permitted
transferees, and (except as aforesaid) their respective legal representatives,
successors and assigns.
18
<PAGE>
SECTION 14. Entire Agreement; Effect on Prior Documents. This Agreement
----------- -------------------------------------------
and the other documents referred to herein or delivered pursuant hereto contain
the entire agreement among the parties with respect to the financing
transactions contemplated hereby and supersede all prior negotiations,
commitments, agreements and understandings among them with respect thereto.
SECTION 15. Notices. All notices, requests, consents and other
----------- -------
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or duly sent by first
class mail postage prepaid (other than to non-U.S. parties) or fax or DHL,
Federal Express or other internationally recognized express courier service,
addressed to such party at the address set forth below or such other address as
may hereafter be designated in writing by the addressee to the addressor listing
all parties:
(i) if to the Corporation, to:
Sequenom, Inc.
11555 Sorrento Valley Road, Suite C
San Diego, California 92121
Attention: President
Fax: (619) 350-0344
with a copy to:
John A. Denniston, Esq.
Brobeck, Phleger & Harrison LLP
550 West C Street, Suite 1300
San Diego, California 92101
Fax: (619) 234-3848
(ii) if to the Investors, to their respective addresses set
forth on the Schedule of Investors.
---------------------
SECTION 16. Amendments; Waivers. This Agreement, other than Sections 8.1
----------- -------------------
and 8.9 and the second sentence of this Section 16, may be amended, and
compliance with the provisions of this Agreement, other than Sections 8.1 and
8.9 and the second sentence of this Section 16, may be omitted or waived, by the
written agreement of the Corporation and Investors or assignees of their rights
hereunder holding at least two-thirds in voting power of the Series D Preferred
(and Common Stock issued upon conversion thereof) held by the Investors and such
assignees. Sections 8.1 and 8.9 hereof and the second sentence of this Section
16 may be amended, and compliance with the provisions of Sections 8.1 and 8.9
hereof and the second sentence of this Section 16 may be omitted or waived, by
the written agreement of the holders of at least two-thirds in voting power of
the Series A Preferred, Series B Preferred, Series C Preferred and Series D
Preferred (or Common Stock issued upon conversion thereof) held by Right
Holders.
SECTION 17. Counterparts. This Agreement may be executed in any number of
----------- ------------
counterparts, each such counterpart shall be deemed to be an original
instrument, and all such
19
<PAGE>
counterparts together shall constitute but one agreement. Any such counterpart
may contain one or more signature pages.
SECTION 18. Headings. The headings of the various sections of this
----------- --------
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.
SECTION 19. Nouns and Pronouns. Whenever the context may require, any
----------- ------------------
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice-versa.
SECTION 20. Governing Law. This Agreement shall be governed by, and
----------- -------------
construed and enforced in accordance with, the substantive laws of the State of
California, without regard to its principles of conflicts of laws.
SECTION 21. Severability. Any provision of this Agreement that is
----------- ------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 22. Information Confidential. Each Investor acknowledges that the
----------- ------------------------
information received by it pursuant hereto (including without limitation under
Section 7 hereof) is confidential and for its use only and such Investor will
not reproduce, disclose or disseminate such information to any other person
(other than its employees or agents having a need to know the contents of such
information), except in connection with the exercise of rights under this
Agreement, unless the Corporation has made such information available to the
public generally or such Investor is required to disclose such information by
law or by any court or other governmental body; provided, however, that an
Investor may make general statements concerning the nature and progress of the
Corporation's business and may include summary financial information concerning
the Corporation in such Investor's reports to its partners or shareholders. The
obligation of confidentiality set forth in this Section shall not apply to
information (i) generally known on a non-confidential basis (without fault of an
Investor) to companies in the Corporation's line of business; (ii) lawfully
obtained by an Investor without restriction on disclosure; (iii) known to an
Investor prior to receipt from the Corporation without restriction on
disclosure; or (iv) independently developed by an Investor without use of
information provided by the Corporation.
* * *
20
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Series D Convertible
Preferred Stock Purchase Agreement as of the day and year first written above.
SEQUENOM, INC.
By: /s/ Hubert Koster
----------------------------------
Its: President
FOUNDERS:
/s/ Hubert Koster
----------------------------------------
Hubert Koster
/s/ Nola E. Masterson
----------------------------------------
Nola E. Masterson
/s/ Robert E. Patterson
----------------------------------------
Robert E. Patterson
SERIES B INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By: /s/ illegible
----------------------------------
Its: Treasurer
----------------------------------
<PAGE>
TVM INTERTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By: /s/ illegible
----------------------------------
Its: Treasurer
----------------------------------
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By: /s/ illegible
----------------------------------
Its: Treasurer
----------------------------------
TVM EUROTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By: /s/ illegible
----------------------------------
Its: Treasurer
----------------------------------
[SIGNATURE PAGE TO SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
TVM TECHNO VENTURE INVESTORS NO. I
LIMITED PARTNERSHIP
By: /s/ illegible
----------------------------------
General Partner
KBL Founder Ventures SCA
By: /s/ illegible /s/ illegible
--------------- ----------------
Its: Director Director
--------------- ----------------
ALPINVEST INTERNATIONAL B.V.
By: /s/ illegible /s/ illegible
--------------- ----------------
Its: authorized signatories
----------------------------------
Boston Univeristy Nominee Partnership
By: ----------------------------------
General Partner
----------------------------------
Gerald Coughlan
----------------------------------
Charles P. Floe
/s/ illegible
----------------------------------
Hellmut Kirchner
----------------------------------
Herwig Brunner
[SIGNATURE PAGE TO SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
----------------------------------
Franz A. Wirtz
----------------------------------
Hannemarie Wirtz
/s/ Hubert Koster
----------------------------------
Hubert Koster
/s/ Ernst-Gunter Afting
----------------------------------
Ernst-Gunter Afting
SVE Star Ventures
ENTERPRISES NO. III GbR,
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: /s/ illebigle
----------------------------
Managing Partner
SVE Star Ventures
ENTERPRISES NO. IIIa GbR,
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation
of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: /s/ illebigle
----------------------------
Managing Partner
[SIGNATURE PAGE TO SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SVE STAR VENTURES
MANAGEMENTGESELLSCHAFT MBH
Nr. 3 & CO. BETEILIGUNGS KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: /s/ illegible
----------------------------
Managing Partner
SERIES C INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By: /s/ illegible
----------------------------
Its: Treasurer
----------------------------
TVM INTERTECH
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By: /s/ illegible
----------------------------------
Its: Treasurer
----------------------------------
[SIGNATURE PAGE TO SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By: /s/ illegible
----------------------------------
Its: Treasurer
----------------------------------
TVM EUROTECH
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By: /s/ illegible
----------------------------------
Its: Treasurer
----------------------------------
TVM TECHNO VENTURE INVESTORS NO. I
LIMITED PARTNERSHIP
By: /s/ illegible
----------------------------------
Its: Treasurer
----------------------------------
KBL FOUNDER VENTURES SCA
By: /s/ illegible
----------------------------------
Its: Director
----------------------------------
[SIGNATURE PAGE TO SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
ALPINVEST INTERNATIONAL B.V.
By: /s/ illegible /s/ illegible
------------- -------------
Its: authorized signatories
----------------------------------
/s/ Hellmut Kirchner
-----------------------------------------
Hellmut Kirchner
/s/ Hellmut Kirchner
----------------------------------------
Hellmut Kirchner as Trustee
----------------------------------------
Franz A. Wirtz
----------------------------------------
Hannemarie Wirtz
GLS LP Investment III Limited
By: /s/ L. S. McNairn
----------------------------------
Its: L. S. McNairn
----------------------------------
Director
Kleinwort Benson Limited
By: /s/ illegible
----------------------------------
Its: Director
----------------------------------
LOMBARD ODIER & CIE
By: /s/ Michaela Troyanov /s/ A. Plattet
------------------------ --------------
Its: Assistant Vice President Vice President
------------------------ --------------
[SIGNATURE PAGE TO SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
MERIFIN CAPITAL N.V.
By:
----------------------------------
Its:
----------------------------------
S.R. ONE, LIMITED
By: /s/ [illegible]^^
----------------------------------
Its: VICE PRESIDENT
----------------------------------
SVM Star Ventures Managementgesellschaft
mbH Nr. 3 & Co. Beteiligungs KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
Its: Managing Partner
By: /s/ [illegible]^^
----------------------------------
Its:
----------------------------------
SVE STAR VENTURES ENTERPRISES
NO. IIIA, a German Civil Law Partnership (with
limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
Its: Managing Partner
By: /s/ [illegible]^^
----------------------------------
Its:
----------------------------------
[SIGNATURE PAGE TO SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SVE STAR VENTURES ENTERPRISES
NO. III, a German Civil Law Partnership (with
limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
Its: Managing Partner
By: /s/ [illegible]^^
-----------------------------------------
Its:
-----------------------------------------
TBG-TECHNOLOGIE-
BETEILIGNGSGESELLSCHAFT MBH
DER DEUTSCHEN AUSGLEICHSBANK
By: /s/ [illegible]^^
-----------------------------------------
Its: General Manager Authorized Representative
-----------------------------------------
[SIGNATURE PAGE TO SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
RESIDENTIE PARTICIPATES IV CV
----------------------------------------
(print name)
461,538 By: M. ULEYWEGT
- ---------------- ------------------------------------
Shares Purchased
Title: Managing Director
--------------------------------
Address: illegible
$3,000,000 -------------------------------
- --------------------
Total Purchase Price ----------------------------------------
----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
DB UK FINANCE PLC
----------------------------------------
(print name)
652,686 By: /s/ [ILLEGIBLE]^^
- ---------------- ------------------------------------
Shares Purchased
Title: DIRECTOR
--------------------------------
By: /s/ [ILLEGIBLE]^^
----------------------------------
Title: DIRECTOR
--------------------------------
Address: 6 BISHOPS GATE
--------------------------------
US $4,242,459.00 LONDON, EC2N 40A
- -------------------- ----------------------------------------
Total Purchase Price UK
----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
Kleinwort Benson Limited
-----------------------------------------
(print name)
By: /s/ [ILLEGIBLE]^^
- ----------------------- ------------------------------------
Shares Purchased
Title: Director
---------------------------------
Address: c/o Dresdner Bank
--------------------------------
$3,000,000 75 Wall Street
- ----------------------- -----------------------------------------
Total Purchase Price 24th Floor, New York, NY 10005
-----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
H. KIRCHNER
----------------------------------------
(print name)
84,000 By: /s/ H. Kirchner
- ------------------------- ------------------------------------
Shares Purchased
Title: Managing Director
--------------------------------
Address: MartelsGraben 2
-------------------------------
USD 546,000 D-82327 Tutzing
- ------------------------- --------------------------------------
Total Purchase Price
--------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
S. R. ONE, LIMITED
----------------------------------------
(print name)
172,000 By: [ILLEGIBLE]^^
- ------------------------- ------------------------------------
Shares Purchased
Title: VICE PRESIDENT
--------------------------------
Address: FOUR TOWER BRIDGE - SUITE 25C
-------------------------------
$1,118,000.00 200 BARR HARBOR DRIVE
- -------------------- ----------------------------------------
Total Purchase Price WEST CONSHOHOCKEN PA 19428
----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
J. H. MACKENRODT
----------------------------------------
(print name)
By: /s/ J. H. Mackenrodt
- ------------------------- -----------------------------------
Shares Purchased
Title:
---------------------------------
Address: 31 GABRIEL VON SEIDLSTR
-------------------------------
100,000 [ILLEGIBLE]^^
- ------------------------- ----------------------------------------
Total Purchase Price ----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
Erik Hornnaess
----------------------------------------
(print name)
20,000 By: /s/ Erik Hornnaess
- ------------------------- ----------------------------------------
Shares Purchased
Title: Retired
--------------------------------
Address: Parkstrasse 75
-------------------------------
US $130,000 65191 Wiesbaden
- ------------------------- ----------------------------------------
Total Purchase Price Germany
----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
HASPA Beteiligungsgesellschaft fuer den
mittelstand MbH
Joerg Wohlers Dr. Juergen Wagenmann
------------------------------------------------
(print name)
461,538 By: /s/ Joerg Wohlers /s/ Dr. Juergen Wagenmann
- ------------------------- --------------------------------------------
Shares Purchased 03 Dec 98 03 Dec 98
Title: Managing Director / Managing Director
----------------------------------------
Address: 20454 Hamburg
------------------------------------
USD 2,999,997.00 Germany
- ------------------------- ---------------------------------------------
Total Purchase Price _____________________________________________
We refer to the Memorandum dated November 16, 1998
and the documents in the drafting dated November 11, 1998
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
Prof. Dr. med. Dr. rer. Nat.
Ernst-Gunter Afting
----------------------------------------
(print name)
By: /s/ Ernst- Gunter Afting
- ------------------------- -----------------------------------
Shares Purchased
Title:
---------------------------------
Address:
--------------------------------
- ------------------------- ----------------------------------------
Total Purchase Price
----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
GLS LP INVESTMENT III LIMITED
----------------------------------------
(print name)
38,461 By: /s/ L. S. McNairn
- ------------------------- ----------------------------------------
Shares Purchased L. S. McNairn
Title: Director
--------------------------------
Address: Barfield House
-------------------------------
$269,966.50 St. Julian's Avenue
- ------------------------- ----------------------------------------
Total Purchase Price St. Peter Port Guernsey, GY1 3QL
----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
Alpinvest International B.V.
----------------------------------------
(print name)
461,538 By: /s/ illegible /s/ illegible
- ------------------------- -------------- -------------
Shares Purchased
Title: Authorized Signatories
--------------------------------
Address: Gooimeer 3, P.O. Box 5073
-------------------------------
US 2,999,997.00 1410 AB Naarden
- ------------------------- ----------------------------------------
Total Purchase Price The Netherlands
----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
KREDIETBANK S.A. LUXEMBOURGEOISE AS NOMINEE
FOR K.B. LUX VENTURE CAPITAL FUND (in
establishment process)
136,616 By: /s/ [ILLEGIBLE]^^ /s/ [ILLEGIBLE]^^
- ------------------------- --------------------------------------
Shares Purchased Its: Manager General Manager
------------------------------------
Address: 43 Boulevard Royal
---------------------------------
$888,004 L-2955 Luxembourg
- ------------------------- ------------------------------------------
Total Purchase Price
------------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
KBL FOUNDER VENTURES SCA
136,615 By: /s/ [ILLEGIBLE]^^ /s/ [ILLEGIBLE]^^
- ------------------------- --------------------------------------
Shares Purchased Its: Director Director
------------------------------------
Address: 43, Boulevard Royal
-------------------------------
$887,998 L - 2955 Luxembourg
- ------------------------- ----------------------------------------
Total Purchase Price
----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
TVM MEDICAL VENTURES
By: /s/ illegible /s/ illegible
- ------------------------- ------------- -------------
Shares Purchased Its: Managing Partner CFO
--------------------------------
Address:
$ 3,500,000 -------------------------------
- ------------------------- ----------------------------------------
Total Purchase Price ----------------------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
122,462 By:
- --------------------------- ---------------------------
Shares Purchased
Title:
------------------------
Address:
$796,003 ----------------------
- --------------------------- -------------------------------
Total Purchase Price -------------------------------
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership,
its General Partner
By: TVM Management, LLC
its General Partner
By: /s/ illegible
-------------------------------
Title: Treasurer
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
TVM TECHNO VENTURE
INVESTORS NO. 1
LIMITED PARTNERSHIP
4,615 By: /s/ illegible
- -------------------------- ----------------------------
Shares Purchased
Title: General Partner
--------------------
Address:
$29,997.50 ---------------------
- -------------------------- -----------------------------
Total Purchase Price -----------------------------
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
TVM INTERTECH
LIMITED PARTNERSHIP
24,492 By:
- ----------------------------- -----------------------------
Shares Purchased
Title:
-------------------------
Address:
$ 159,198 -----------------------
- ----------------------------- --------------------------------
Total Purchase Price --------------------------------
TVM INTERTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership,
its General Partner
By: TVM Management, LLC
its General Partner
By: /s/ illegible
---------------------------
Title: Treasurer
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Initial Investor Signature Page
-------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
EXECUTED this 21st day of December, 1998.
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
36,738 By:
- ----------------------------- -----------------------------
Shares Purchased
Title:
--------------------------
Address:
$238,797 ------------------------
- ----------------------------- ---------------------------------
Total Purchase Price
TVM TECHNO VENTURE ENTERPRISES
NO. II LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership,
its General Partner
By: TVM Management, LLC
its General Partner
By: /s/ illegible
----------------------------
Title: Treasurer
[INITIAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series D Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 23 day of February, 1999.
-- --------
/s/ Koh Soo Boon
----------------------------------------------------
(print name)
Vertex Technology Fund Ltd
By: Koh Soo Boon
----------------------------------------------
Title: Senior Vice President/Deputy General Manager
--------------------------------------------
Address: c/o 77 Science Park Drive, #02-15
-------------------------------------------
Cintech III, Singapore Science Park
----------------------------------------------------
Singapore 118256
----------------------------------------------------
ADDITIONAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series D Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 13 day of Jan, 1999.
-- ---
ALAFI CAPITAL Co.
------------------------------
(print name)
By: /s/ [illegible]^^
------------------------
Title: General Partner
------------------------
Address: P.O. Box 7338
----------------------
BERKELEY, CA. 94707
-----------------------------
-----------------------------
ADDITIONAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series D Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 13 day of Jan, 1999.
-- ---
ALAFI CAPITAL Co.
------------------------------
(print name)
By: /s/ [illegible]
------------------------
Title: General Partner
------------------------
Address: P.O. Box 7338
----------------------
BERKELEY, CA. 94707
-----------------------------
-----------------------------
ADDITIONAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series D Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this ___ day of ___ 1999.
Florean W.J. Homm
--------------------------------------------------
(print name)
By: /s/ Florean Homm
--------------------------------------------
Title: CIO at Value Management Research AG
--------------------------------------------
Address: _________________________________________
__________________________________________________
__________________________________________________
ADDITIONAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series D Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 22nd day of Feb., 1999.
-- ---
HARRY A. COLLINS
-------------------------------------
(print name)
By: /s/ [illegible]^^
------------------------------
Title: CHAIRMAN OF BOARD
------------------------------
Address: 11750 SORRENTO VALLEY RD
----------------------------
SAN DIEGO, CA 92121
-----------------------------
-----------------------------
ADDITIONAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series D Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 19th day of Feb, 1999.
---- ---
E. Tyler Miller
----------------------------------------
(print name)
By: /s/ E. Tyler Miller
----------------------------------
Title: Vice Chairman
----------------------------------
Address: 11750 Sorrento Valley Road
--------------------------------
San Diego, CA 92121
----------------------------------------
ADDITIONAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series D Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 28 day of February, 1999.
-- ---------
DB UK FINANCE PLC
------------------------------------------
(print name)
By: /s/ [ILLEGIBLE]^^
------------------------------------
Title: DIRECTOR
------------------------------------
Address: 6 Bishopsgate
----------------------------------
London EC2N 4DA
------------------------------------------
------------------------------------------
ADDITIONAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series D Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 24 day of Feb, 1999.
-- ----
MANFRED FERBER
-----------------------------------
(print name)
By: /s/ M. Ferber
-----------------------------
Title:_____________________________
Address:___________________________
___________________________________
___________________________________
ADDITIONAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series D Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this ____ day of __________, 1999.
KIRCHNER
----------------------------------------
(print name)
By: /s/ H. Kirchner
----------------------------------
Title:__________________________________
Address: MARTELSGRABEN 2
--------------------------------
82327 TUTZING
----------------------------------------
----------------------------------------
ADDITIONAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE>
SEQUENOM, INC.
Series D Convertible Preferred Stock Purchase Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned investor
hereby agrees (i) that it is an "Additional Investor" as defined in the Series D
Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998,
among Sequenom, Inc. (the "Corporation") and certain investors named on the
Schedule of Investors thereto (the "Purchase Agreement"), (ii) that it is a
- ---------------------
party to the Purchase Agreement for all purposes and (iii) that it is bound by
all terms and conditions of the Purchase Agreement.
Attached hereto is an addendum to the Schedule of Investors to the Purchase
---------------------
Agreement, setting forth the name of the undersigned and the number of shares of
the Corporation's Series D Convertible Preferred Stock purchased by it pursuant
to the Purchase Agreement.
EXECUTED this 29 day of March, 1999.
-- -----
NOMURA INTERNATIONAL PLC
-------------------------------------
(print name)
By: /s/ [SIGNATURE ILLEGIBLE]^^
-------------------------------
Title: MANAGING DIRECTOR
-------------------------------
Address: 1 ST MARTINS LE GRAND
-----------------------------
LONDON
-----------------------------
ECIA 4ND
-----------------------------
ADDITIONAL INVESTOR SIGNATURE PAGE TO
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE>
SCHEDULE OF INVESTORS
Number of Shares
of Series D Aggregate
Initial Investor Preferred Stock Purchase Price
- ---------------- --------------- --------------
TVM Medical Ventures 538,461 $ 3,499,996.50
c/o TVM
TVM Techno Venture Enterprises 36,738* $ 238,797.00*
No. II Limited Partnership
c/o TVM Techno Venture
Management ("TVM")
101 Arch Street, Suite 1950
Boston, MA 02210
TVM Intertech Limited Partnership 24,492* $ 159,198.00*
c/o TVM
TVM Zweite Beteiligung-US 122,462* $ 796,003.00*
Limited Partnership
c/o TVM
TVM Eurotech Limited Partnership * *
c/o TVM
TVM Techno Venture Investors No. 1 4,615* $ 29,997.50*
Limited Partnership
c/o TVM
Kreietbank S.A. Luxembourgeoise 136,616 $ 888,004.00
as Nominee for
KB Lux Venture Capital Fund
43, Boulevard Royal
L-2955 Luxembourg
KBL Founder Ventures SCA 136,615* $ 887,997.50*
43, Boulevard Royal
L-2955 Luxembourg
Alpinvest International B.V. 461,538 $ 2,999,997.00
Gooimeer 3
NL- 1410 AB Naarden
The Netherlands
<PAGE>
Number of Shares
of Series D Aggregate
Initial Investor Preferred Stock Purchase Price
- ---------------- --------------- --------------
Hellmut Kirchner 84,000 $ 546,000.00
Martelsgraben 2
82327 Tutzing
Germany
Prof. Ernst-Gunter Afting 15,018 $ 97,617.00
Mediconsult
Meisenweg 21
D- 82152 Krailling, Germany
S.R. One, Limited 172,000 $ 1,118,000.00
Bay Colony Executive Park, Suite 315
565 E. Swedesford Road
Wayne, PA 19087
DB UK Finance plc 652,686 $ 4,242,459.00
6 Bishopsgate
London EC2N 4DA
England
Haspa Bank 461,538 $ 2,999,997.00
Ecke Adolphsplaz
Gr. Burslah 20457
Hamburg, Germany
GLS LP Investments III Limited 38,461 $ 249,996.50
Barfield House, St. Julian's Avenue
St. Peter Port Guersney
Channel Islands
United Kingdom GY13QL
Kleinwort Benson Limited 461,538 $ 2,999,997.00
75 Wall Street, 24th Floor
New York, NY 10005
Dr. Jochen Mackenrodt 15,384 $ 99,996.00
Gabriel-von-Seidi-Str. 31
82031 Grunwald
Germany
Mr. Erik Hornnaess 20,000 $ 130,000.00
Parkstr. 75 D
65191 Wiesbaden
Germany
Residentie Participaties IV CV 461,538 $ 2,999,997.00
Joh. Vermeerplein 91
1071 DV Amsterdam
Netherlands
TOTAL 3,843,700 $24,984,050.00
========= ==============
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1998
Number of Shares of Aggregate
Investor Series D Preferred Stock Purchase Price
- -------- ------------------------ --------------
Alafi Capital Company 307,692 $1,999,998.00
ALAFI CAPITAL CO.
- -------------------------------
Print Name of Investor
By: /s/ [SIGNATURE ILLEGIBLE]^^
----------------------------
Its: General Partner
----------------------------
Date: Jan 13/99
----------------------------
Accepted and agreed to this
28th day of February, 1999
- ---- ---------
SEQUENOM, INC.
By: /s/ [SIGNATURE ILLEGIBLE]^^
----------------------------
Its: CFO
----------------------------
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1998
Number of Shares of Aggregate
Investor Series D Preferred Stock Purchase Price
- -------- ------------------------ --------------
Trustees of Boston University 38,461 $249,996.50
MATTHEW J. BURNS
ASSISTANT TREASURER
BOSTON UNIVERSITY
- -----------------------------------
Print Name of Investor
Trustees of Boston University
By: /s/ Matthew J. Burns
--------------------------------
Its: Assistant Treasurer
--------------------------------
Date: 1/19/99
--------------------------------
Accepted and agreed to this
28th day of February, 1999
- ---- ---------
SEQUENOM, INC.
By: /s/ illegible
---------------------------------
Its: CFO
--------------------------------
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1998
Number of Shares of Aggregate
Investor Series D Preferred Stock Purchase Price
- -------- ------------------------ --------------
Harry A. Collins 7,692 $49,998.00
HARRY A. COLLINS
- ----------------------------
Print Name of Investor
By: /s/ Harry A. Collins
-------------------------
Its:
-------------------------
Date: 2/22/99
-------------------------
Accepted and agreed to this
28th day of February, 1999
- ---- ---------
SEQUENOM, INC.
By: /s/ illegible
--------------------------
Its: CFO
-------------------------
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1998
Number of Shares of Aggregate
Investor Series D Preferred Stock Purchase Price
- -------- ------------------------ --------------
E. Tyler Miller 7,692 $49,998.00
E. Tyler Miller
- -----------------------------
Print Name of Investor
By: /s/ [ILLEGIBLE]^^
--------------------------
Its: Vice Chairman
--------------------------
Date: 2/19/99
--------------------------
Accepted and agreed to this
28th day of February, 1999
- ---- ---------
SEQUENOM, INC.
By: /s/ illegible
--------------------------
Its: CFO
--------------------------
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1998
Number of Shares of Aggregate
Investor Series D Preferred Stock Purchase Price
- -------- ------------------------ --------------
Value Management 230,766 $1,499,979.00
& Research AG
Value Management & Research AG
- ------------------------------
Print Name of Investor
By: /s/ [ILLEGIBLE]^^
--------------------------
Its:
--------------------------
Date:
--------------------------
Accepted and agreed to this
28th day of February, 1999
- ---- ---------
SEQUENOM, INC.
By: /s/ illegible
--------------------------
Its: CFO
--------------------------
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1998
Number of Shares of Aggregate
Investor Series D Preferred Stock Purchase Price
- -------- ------------------------ --------------
Vertex Technology 308,000 $2,002,000
Fund Ltd
/s/ illegible
- ------------------------------
Print Name of Investor
Vertex Technology Fund Ltd
By: Koh Soo Boon
---------------------------
Its: SVP / DGM
---------------------------
Date: 22 February 1999
---------------------------
Accepted and agreed to this
28th day of February, 1999
- ---- ---------
SEQUENOM, INC.
By: /s/ illegible
---------------------------
Its: CFO
---------------------------
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1998
Number of Shares of Aggregate
Investor Series D Preferred Stock Purchase Price
- -------- ------------------------ --------------
DB UK Finance PLC 52300 $339950
DB UK FINANCE PLC
- -----------------------------------
Print Name of Investor
By: /s/ [ILLEGIBLE]^^ /s/ [ILLEGIBLE]^^
------------------------------ ------------------------------
Its: DIRECTOR DIRECTOR
------------------------------ ------------------------------
Date: 28 February 1999
-----------------------------
Accepted and agreed to this
30th day of March, 1999
- ---- ------
SEQUENOM, INC.
By: /s/ [ILLEGIBLE]^^
--------------------------------
Its: CFO
--------------------------------
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1998
Number of Shares of Aggregate
Investor Series D Preferred Stock Purchase Price
- -------- ------------------------ --------------
38,000 $247,000
Manfred Ferber
- ---------------------------
Print Name of Investor
By: /s/ Manfred Ferber
-----------------------
Its:
-----------------------
Date:
-----------------------
Accepted and agreed to this
30th day of March, 1999
- ---- ------
SEQUENOM, INC.
By: /s/ illegible
-------------------------
Its: CFO
-----------------------
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1998
Number of Shares of Aggregate
Investor Series D Preferred Stock Purchase Price
- -------- ------------------------ --------------
KIRCHNER 109,230 709,995 USD
KIRCHNER
- ------------------------------
Print Name of Investor
By: /s/[SIGNATURE ILLEGIBLE]^^
---------------------------
Its:
--------------------------
Date: 28/2/99
--------------------------
Accepted and agreed to this
30th day of March, 1999
- ---- ------
SEQUENOM, INC.
By: /s/ illegible
---------------------------
Its: CFO
--------------------------
<PAGE>
ADDENDUM TO THE
SCHEDULE OF INVESTORS
TO THE
SERIES D CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1998
Number of Shares of Aggregate
Investor Series D Preferred Stock Purchase Price
- -------- ------------------------ --------------
NOMURA 769,230 $4,999,995.00
INTERNATIONAL
PLC
NOMURA INTERNATIONAL PLC
- -------------------------------
Print Name of Investor
By: /s/ [ILLEGIBLE]^^
----------------------------
Its: Managing Director
---------------------------
Date: 29 March 1999
--------------------------
Accepted and agreed to this
___ day of ______________, 1999
SEQUENOM, INC.
By:
----------------------------
Its:
----------------------------
<PAGE>
EXHIBIT 4.1
Foreign Qualification; Bylaws
-----------------------------
The Corporation is qualified to do business in Massachusetts and
California.
A copy of the Bylaws are attached hereto.
<PAGE>
BYLAWS
OF
SEQUENOM, INC.
<PAGE>
BYLAWS
OF
SEQUENOM, INC.
Section 1. CERTIFICATE OF INCORPORATION AND BYLAWS
--------- ---------------------------------------
1.1 These Bylaws are subject to the certificate of incorporation of the
corporation. In these bylaws, references to the certificate of incorporation
and bylaws mean the provisions of the certificate of incorporation and the
bylaws as are from time to time in effect.
Section 2. OFFICES
--------- -------
2.1 Registered Office. The registered office shall be in the City of
-----------------
Wilmington, County of New Castle, State of Delaware.
2.2 Other Offices. The corporation may also have offices at such other
-------------
places both within and without the State of Delaware as the board of directors
may from time to time determine or the business of the corporation may require.
Section 3. STOCKHOLDERS
--------- ------------
3.1 Location of Meetings. All meetings of the stockholders shall be held
--------------------
at such place either within or without the State of Delaware as shall be
designated from time to time by the board of directors. Any adjourned session
of any meeting shall be held at the place designated in the vote of adjournment.
3.2 Annual Meeting. The annual meeting of stockholders shall be held at
--------------
10:00 a.m. on the second Wednesday in May in each year, unless that day be a
legal holiday at the place where the meeting is to be held, in which case the
meeting shall be held at the same hour on the next succeeding day not a legal
holiday, or at such other date and time as shall be designated from time to time
by the board of directors, at which they shall elect a board of directors and
transact such other business as may be required by law or these bylaws or as may
properly come before the meeting.
3.3 Special Meeting in Place of Annual Meeting. If the election for
------------------------------------------
directors shall not be held on the day designated by these bylaws, the directors
shall cause the election to be held as soon thereafter as convenient, and to
that end, if the annual meeting is omitted on the day herein provided therefor
or if the election of directors shall not be held thereat, a special meeting of
the stockholders may be held in place of such omitted meeting or election, and
any business transacted or election held at such special meeting shall have the
same effect as if transacted or held at the annual meeting, and in such case all
references in these bylaws to the annual meeting of the stockholders, or to the
annual election of directors, shall be deemed to refer to or include such
special meeting. Any such special meeting shall be called and the purposes
thereof shall be specified in the call, as provided in Section 3.4.
3.4 Notice of Annual Meeting. Written notice of the annual meeting
------------------------
stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting. Such notice may
<PAGE>
specify the business to be transacted and actions to be taken at such meeting.
No action shall be taken at such meeting unless such notice is given, or unless
waiver of such notice is given by the holders of outstanding stock having not
less than the minimum number of votes necessary to take such action at a meeting
at which all shares entitled to vote thereon were voted. Prompt notice of all
action taken in connection with such waiver of notice shall be given to all
stockholders not present or represented at such meeting.
3.5 Other Special Meetings. Special meetings of the stockholders, for any
----------------------
purpose or purposes, unless otherwise prescribed by law or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of the holders of at least ten percent
of all capital stock of the corporation issued and outstanding and entitled to
vote at such meeting. Such request shall state the purpose or purposes of the
proposed meeting and business to be transacted at any special meeting of the
stockholders.
3.6 Notice of Special Meeting. Written notice of a special meeting
-------------------------
stating the place, date and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be given not less than ten nor more than
sixty days before the date of the meeting, to each stockholder entitled to vote
at such meeting. No action shall be taken at such meeting unless such notice is
given, or unless waiver of such notice is given by the holders of outstanding
stock having not less than the minimum number of votes necessary to take such
action at a meeting at which all shares entitled to vote thereon were voted.
Prompt notice of all action taken in connection with such waiver of notice shall
be given to all stockholders not present or represented at such meeting.
3.7 Stockholder List. The officer who has charge of the stock ledger of
----------------
the corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
3.8 Quorum of Stockholders. The holders of a majority of the stock issued
----------------------
and outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise required by law, or by the
certificate of incorporation or by these bylaws. Except as otherwise provided
by law, no stockholder present at a meeting may withhold his shares from the
quorum count by declaring his shares absent from the meeting.
3.9 Adjournment. Any meeting of stockholders may be adjourned from time
-----------
to time to any other time and to any other place at which a meeting of
stockholders may be held under these bylaws, which time and place shall be
announced at the meeting, by a majority of votes cast upon the question, whether
or not a quorum is present. At such adjourned meeting at which a quorum shall
be present or represented any business may be transacted which might have been
2
<PAGE>
transacted at the original meeting. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
3.10 Proxy Representation. Every stockholder may authorize another person
--------------------
or persons to act for him by proxy in all matters in which a stockholder is
entitled to participate, whether by waiving notice of any meeting, objecting to
or voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy must be signed by the stockholder or by his
attorney-in-fact. No proxy shall be voted or acted upon after three years from
its date unless such proxy provides for a longer period. Except as provided by
law, a revocable proxy shall be deemed revoked if the stockholder is present at
the meeting for which the proxy was given. A duly executed proxy shall be
irrevocable if it states that it is irrevocable and, if, and only as long as, it
is coupled with an interest sufficient in law to support an irrevocable power.
A proxy may be made irrevocable regardless of whether the interest with which it
is coupled is an interest in the stock itself or an interest in the corporation
generally. The authorization of a proxy may but need not be limited to
specified action, provided, however, that if a proxy limits its authorization to
a meeting or meetings of stockholders, unless otherwise specifically provided
such proxy shall entitle the holder thereof to vote at any adjourned session
but shall not be valid after the final adjournment thereof.
3.11 Inspectors. The directors or the person presiding at the meeting
----------
may, but need not, appoint one or more inspectors of election and any substitute
inspectors to act at the meeting or any adjournment thereof. Each inspector,
before entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum and the validity and effect of proxies, and shall receive votes, ballots
or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the person
presiding at the meeting, the inspectors shall make a report in writing of any
challenge, question or matter determined by them and execute a certificate of
any fact found by them.
3.12 Action by Vote. When a quorum is present at any meeting, whether the
--------------
same be an original or an adjourned session, a plurality of the votes properly
cast for election to any office shall elect to such office and a majority of the
votes properly cast upon any question other than an election to an office shall
decide the question, except when a larger vote is required by law, by the
certificate of incorporation or by these bylaws. No ballot shall be required
for any election unless requested by a stockholder present or represented at the
meeting and entitled to vote in the election.
3.13 Action Without Meetings. Unless otherwise provided in the
-----------------------
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize
3
<PAGE>
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
Section 4. DIRECTORS
--------- ---------
4.1 Number. The number of directors which shall constitute the whole
------
board shall not be less than three nor more than seven, except that whenever
there shall be only one stockholder or prior to issuance of any stock, the
number of directors which shall constitute the whole board shall be not less
than one. Within the foregoing limits, the stockholders at the annual meeting
shall determine the number of directors, and within such limits, the number of
directors may be increased or decreased at any time or from time to time by the
stockholders or by the directors by vote of a majority of directors then in
office, except that any such decrease by vote of the directors shall only be
made to eliminate vacancies existing by reason of the death, resignation or
removal of one or more directors. The directors shall be elected at the annual
meeting of the stockholders, except as provided in Section 4.4 of these bylaws.
Directors need not be stockholders.
4.2 Tenure. Except as otherwise provided by law, by the certificate of
------
incorporation or by these bylaws, each director shall hold office until the next
annual meeting and until his successor is elected and qualified, or until he
sooner dies, resigns, is removed or becomes disqualified.
4.3 Powers. The business of the corporation shall be managed by or under
------
the direction of the board of directors which shall have and may exercise all
the powers of the corporation and do all such lawful acts and things as are not
by law, the certificate of incorporation or these bylaws directed or required to
be exercised or done by the stockholders.
4.4 Vacancies. Vacancies and any newly created directorships resulting
---------
from any increase in the number of directors may be filled by vote of the
stockholders at a meeting called for the purpose, or by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. When one or more directors shall resign from the board, effective at a
future date, a majority of the directors then in office, including those who
have resigned, shall have power to fill such vacancy or vacancies, the vote or
action by writing thereon to take effect when such resignation or resignations
shall become effective. The directors shall have and may exercise all their
powers notwithstanding the existence of one or more vacancies in their number,
subject to any requirements of law or of the certificate of incorporation or of
these bylaws as to the number of directors required for a quorum or for any vote
or other actions.
4.5 Committees. The board of directors may, by vote of a majority of the
----------
whole board, (a) designate, change the membership of or terminate the existence
of any committee or committees, each committee to consist of one or more of the
directors; (b) designate one or more directors as alternate members of any such
committee who may replace any absent or disqualified member at any meeting of
the committee; and (c) determine the extent to which each such committee shall
have and may exercise the powers and authority of the board of directors in the
management of the business and affairs of the corporation, including the power
to authorize the seal of the corporation to be affixed to all papers which
require it and the power and authority to declare dividends or to authorize the
issuance of stock; excepting, however, such
4
<PAGE>
powers which by law, by the certificate of incorporation or by these bylaws they
are prohibited from so delegating. In the absence or disqualification of any
member of such committee and his alternate, if any, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the board of
directors to act at the meeting in the place of any such absent or disqualified
member. Except as the board of directors may otherwise determine, any committee
may make rules for the conduct of its business, but unless otherwise provided by
the board or such rules, its business shall be conducted as nearly as may be in
the same manner as is provided by these bylaws for the conduct of business by
the board of directors. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors upon request.
4.6 Regular Meeting. Regular meetings of the board of directors may be
---------------
held without call or notice at such place within or without the State of
Delaware and at such times as the board may from time to time determine,
provided that notice of the first regular meeting following any such
determination shall be given to absent directors. A regular meeting of the
directors may be held without call or notice immediately after and at the same
place as the annual meeting of the stockholders.
4.7 Special Meetings. Special meetings of the board of directors may be
----------------
held at any time and at any place within or without the State of Delaware
designated in the notice of the meeting, when called by the president, or by
one-third or more in number of the directors, reasonable notice thereof being
given to each director by the secretary or by the president or by any one of the
directors calling the meeting.
4.8 Notice. It shall be reasonable and sufficient notice to a director to
------
send notice by mail at least forty-eight hours or by telegram at least twenty-
four hours before the meeting, addressed to him at his usual or last known
business or residence address or to give notice to him in person or by telephone
at least twenty-four hours before the meeting. Notice of a meeting need not be
given to any director if a written waiver of notice, executed by him before or
after the meeting, is filed with the records of the meeting, or to any director
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him. Neither notice of a meeting nor a waiver of a notice
need specify the purposes of the meeting.
4.9 Quorum. Except as may be otherwise provided by law, by the
------
certificate of incorporation or by these bylaws, at any meeting of the
directors a majority of the directors then in office shall constitute a quorum;
a quorum shall not in any case be less than one-third of the total number of
directors constituting the whole board. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
4.10 Action by Vote. Except as may be otherwise provided by law, by the
--------------
certificate of incorporation or by these bylaws, when a quorum is present at any
meeting the vote of a majority of the directors present shall be the act of the
board of directors.
4.11 Action Without a Meeting. Unless otherwise restricted by the
------------------------
certificate of incorporation or these bylaws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting if all the members of the board or of such
committee, as the case may be, consent thereto in writing, and
5
<PAGE>
such writing or writings are filed with the records of the meetings of the board
or of such committee. Such consent shall be treated for all purposes as the act
of the board or of such committee, as the case may be.
4.12 Participation in Meetings by Conference Telephone. Unless otherwise
-------------------------------------------------
restricted by the certificate of incorporation or these bylaws, members of the
board of directors or of any committee thereof may participate in a meeting of
such board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Such participation shall constitute presence in
person at such meeting.
4.13 Compensation. Unless otherwise restricted by the certificate of
------------
incorporation or these bylaws, the board of directors shall have the authority
to fix from time to time the compensation of directors. The directors may be
paid their expenses, if any, of attendance at each meeting of the board of
directors and the performance of their responsibilities as directors and may be
paid a fixed sum for attendance at each meeting of the board of directors and/or
a stated salary as director. No such payment shall preclude any director from
serving the corporation or its parent or subsidiary corporations in any other
capacity and receiving compensation therefor. The board of directors may also
allow compensation for members of special or standing committees for service on
such committees.
4.14 Interested Directors and Officers.
---------------------------------
(a) No contract or transaction between the corporation and one or more of
its directors or officers, or between the corporation and any other corporation,
partnership, association, or other organization in which one or more of the
corporation's directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board or committee thereof which authorizes the contract or transaction, or
solely because his or their votes are counted for such purpose, if:
(1) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the board of directors
or the committee, and the board or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or
(2) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the corporation as of
the time it is authorized, approved or ratified, by the board of directors, a
committee thereof, or the stockholders.
(b) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.
6
<PAGE>
4.15 Resignation or Removal of Directors. Unless otherwise restricted by
-----------------------------------
the certificate of incorporation or by law, any director or the entire board of
directors may be removed, with or without cause, by the holders of a majority of
the stock issued and outstanding and entitled to vote at an election of
directors. Any director may resign at any time by delivering his resignation in
writing to the president or the secretary or to a meeting of the board of
directors. Such resignation shall be effective upon receipt unless specified to
be effective at some other time; and without in either case the necessity of its
being accepted unless the resignation shall so state. No director resigning and
(except where a right to receive compensation shall be expressly provided in a
duly authorized written agreement with the corporation) no director removed
shall have any right to receive compensation as such director for any period
following his resignation or removal, or any right to damages on account of such
removal, whether his compensation be by the month or by the year or otherwise;
unless in the case of a resignation, the directors, or in the case of removal,
the body acting on the removal, shall in their or its discretion provide for
compensation.
Section 5. NOTICES
--------- -------
5.1 Form of Notice. Whenever, under the provisions of law, or of the
--------------
certificate of incorporation or of these bylaws, notice is required to be given
to any director or stockholder, such notice may be given by mail, addressed to
such director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Unless written notice by mail is required by law, written notice may also be
given by telegram, cable, telecopy, commercial delivery service, telex or
similar means, addressed to such director or stockholder at his address as it
appears on the records of the corporation, in which case such notice shall be
deemed to be given when delivered into the control of the persons charged with
effecting such transmission, the transmission charge to be paid by the
corporation or the person sending such notice and not by the addressee. Oral
notice or other in-hand delivery (in person or by telephone) shall be deemed
given at the time it is actually given.
5.2 Waiver of Notice. Whenever notice is required to be given under the
----------------
provisions of law, the certificate of incorporation or these bylaws, a written
waiver thereof, signed by the person entitled to notice, whether before or after
the time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any meeting of the stockholders, directors or members of a
committee of the directors need be specified in any written waiver of notice.
Section 6. OFFICERS AND AGENTS
--------- -------------------
6.1 Enumeration; Qualification. The officers of the corporation shall be
--------------------------
a president, a treasurer, a secretary and such other officers, if any, as the
board of directors from time to time may in its discretion elect or appoint
including without limitation one or more vice presidents. Any officer may be,
but none need be, a director or stockholder. Any two or more offices may be
held by the same person. Any officer may be required by the board of directors
to secure the
7
<PAGE>
faithful performance of his duties to the corporation by giving bond in such
amount and with sureties or otherwise as the board of directors may determine.
6.2 Powers. Subject to law, to the certificate of incorporation and to
------
the other provisions of these bylaws, each officer shall have, in addition to
the duties and powers herein set forth, such duties and powers as are commonly
incident to his office and such additional duties and powers as the board of
directors may from time to time designate.
6.3 Election. The board of directors at its first meeting after each
--------
annual meeting of stockholders shall choose a president, a secretary and a
treasurer. Other officers may be appointed by the board of directors at such
meeting, at any other meeting or by written consent. At any time or from time
to time, the directors may delegate to any officer their power to elect or
appoint any other officer or any agents.
6.4 Tenure. Each officer shall hold office until the first meeting of the
------
board of directors following the next annual meeting of the stockholders and
until his successor is elected and qualified unless a shorter period shall have
been specified in terms of his election or appointment, or in each case until he
sooner dies, resigns, is removed or becomes disqualified. Each agent of the
corporation shall retain his authority at the pleasure of the directors, or the
officer by whom he was appointed or by the officer who then holds agent
appointive power.
6.5 President and Vice Presidents. The president shall be the chief
-----------------------------
executive officer and shall have direct and active charge of all business
operations of the corporation and shall have general supervision of the entire
business of the corporation, subject to the control of the board of directors.
He shall preside at all meetings of the stockholders and of the board of
directors at which he is present, except as otherwise voted by the board of
directors.
The president or treasurer shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.
Any vice presidents shall have such duties and powers as shall be
designated from time to time by the board of directors or by the president.
6.6 Treasurer and Assistant Treasurers. The treasurer shall be the chief
----------------------------------
financial officer of the corporation and shall be in charge of its funds and
valuable papers, and shall have such other duties and powers as may be assigned
to him from time to time by the board of directors or by the president.
Any assistant treasurers shall have such duties and powers as shall be
designated from time to time by the board of directors, the president or the
treasurer.
6.7 Secretary and Assistant Secretaries. The secretary shall record all
-----------------------------------
proceedings of the stockholders, of the board of directors and of committees of
the board of directors in a book or series of books to be kept therefor and
shall file therein all writings of, or related to, action by stockholder or
director consent. In the absence of the secretary from any meeting, an
assistant secretary, or if there is none or he is absent, a temporary secretary
chosen at the meeting, shall
8
<PAGE>
record the proceedings thereof. Unless a transfer agent has been appointed, the
secretary shall keep or cause to be kept the stock and transfer records of the
corporation, which shall contain the names and record addresses of all
stockholders and the number of shares registered in the name of each
stockholder. The secretary shall have such other duties and powers as may from
time to time be designated by the board of directors or the president.
Any assistant secretaries shall have such duties and powers as shall be
designated from time to time by the board of directors, the president or the
secretary.
6.8 Resignation and Removal. Any officer may resign at any time by
-----------------------
delivering his resignation in writing to the president or the secretary or to a
meeting of the board of directors. Such resignation shall be effective upon
receipt unless specified to be effective at some other time, and without in any
case the necessity of its being accepted unless the resignation shall so state.
The board of directors may at any time remove any officer either with or without
cause. The board of directors may at any time terminate or modify the authority
of any agent. No officer resigning and (except where a right to receive
compensation shall be expressly provided in a duly authorized written agreement
with the corporation) no officer removed shall have any right to any
compensation as such officer for any period following his resignation or
removal, or any right to damages on account of such removal, whether his
compensation be by the month or by the year or otherwise; unless in the case of
a resignation, the directors, or in the case of removal, the body acting on the
removal, shall in their or its discretion provide for compensation.
6.9 Vacancies. If the office of the president or the treasurer or the
---------
secretary becomes vacant, the directors may elect a successor by vote of a
majority of the directors then in office. If the office of any other officer
becomes vacant, any person or body empowered to elect or appoint that office may
choose a successor. Each such successor shall hold office for the unexpired
term of his predecessor, and in the case of the president, the treasurer and the
secretary until his successor is chosen and qualified, or in each case until he
sooner dies, resigns, is removed or becomes disqualified.
Section 7. CAPITAL STOCK
--------- -------------
7.1 Stock Certificates. Each stockholder shall be entitled to a
------------------
certificate stating the number and the class and the designation of the series,
if any, of the shares held by him, in such form as shall, in conformity to law,
the certificate of incorporation and the bylaws, be prescribed from time to time
by the board of directors. Such certificate shall be signed by the president or
a vice-president and (i) the treasurer or an assistant treasurer or (ii) the
secretary or an assistant secretary. Any of or all the signatures on the
certificate may be a facsimile. In case an officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed on such certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent, or registrar at the time of its
issue.
7.2 Lost Certificates. The board of directors may direct a new
-----------------
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its
9
<PAGE>
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
Section 8. TRANSFER OF SHARES OF STOCK
--------- ---------------------------
8.1 Transfer on Books. Subject to any restrictions with respect to the
-----------------
transfer of shares of stock, shares of stock may be transferred on the books of
the corporation by the surrender to the corporation or its transfer agent of the
certificate therefor properly endorsed or accompanied by a written assignment
and power of attorney properly executed, with necessary transfer stamps affixed,
and with such proof of the authenticity of signature as the board of directors
or the transfer agent of the corporation may reasonably require. Except as may
be otherwise required by law, by the certificate of incorporation or by these
bylaws, the corporation shall be entitled to treat the record holder of stock as
shown on its books as the owner of such stock for all purposes, including the
payment of dividends and the right to receive notice and to vote or to give any
consent with respect thereto and to be held liable for such calls and
assessments, if any, as may lawfully be made thereon, regardless of any
transfer, pledge or other disposition of such stock until the shares have been
properly transferred on the books of the corporation.
It shall be the duty of each stockholder to notify the corporation of his
post office address.
Section 9. GENERAL PROVISIONS
--------- ------------------
9.1 Record Date. In order that the corporation may determine the
-----------
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty days nor less than ten days before the date
of such meeting, nor more than sixty days prior to any other action to which
such record date relates. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the board of directors may fix a new
record date for the adjourned meeting. If no record date is fixed,
(a) The record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held;
(b) The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the board of directors is necessary, shall be the day on which the first
written consent is expressed; and
10
<PAGE>
(c) The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the board of directors
adopts the resolution relating to such purpose.
9.2 Dividends. Dividends upon the capital stock of the corporation may be
---------
declared by the board of directors at any regular or special meeting or by
written consent, pursuant to law. Dividends may be paid in cash, in property,
or in shares of the capital stock, subject to the provisions of the certificate
of incorporation.
9.3 Payment of Dividends. Before payment of any dividend, there may be
--------------------
set aside out of any funds of the corporation available for dividends such sum
or sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to the interest of
the corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
9.4 Checks. All checks or demands for money and notes of the corporation
------
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
9.5 Fiscal Year. The fiscal year of the corporation shall begin on the
-----------
first of January in each year and shall end on the last day of December next
following, unless otherwise determined by the board of directors.
9.6 Seal. The board of directors may, by resolution, adopt a corporate
----
seal. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the word "Delaware." The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise. The seal may be altered from time to time by the board
of directors.
Section 10. INDEMNIFICATION
---------- ---------------
10.1 It being the intent of the corporation to provide maximum protection
available under the law to its officers and directors, the corporation shall
indemnify its officers and directors to the full extent the corporation is
permitted or required to do so by the General Corporation Law of Delaware. In
furtherance of and not in limitation of the foregoing, the corporation shall
advance expenses, including attorneys' fees, incurred by an officer or director
of the corporation in defending any civil, criminal, administrative or
investigative action, suit or proceeding in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay such advances if it shall be ultimately
determined that he is not entitled to be indemnified by the corporation. The
corporation shall have the power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation, or who is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status
11
<PAGE>
as such, whether or not the corporation has the power to indemnify such person
under the General Corporation Law of Delaware.
Section 11. AMENDMENTS
---------- ----------
11.1 These bylaws may be altered, amended or repealed or new bylaws may be
adopted by the stockholders or by the board of directors when such power is
conferred upon the board of directors by the certificate of incorporation, at
any regular meeting of the stockholders or of the board of directors or at any
special meeting of the stockholders or of the board of directors. If the power
to adopt, amend or repeal bylaws is conferred upon the board of directors by the
certificate of incorporation, it shall not divest or limit the power of the
stockholders to adopt, amend or repeal bylaws.
12
<PAGE>
EXHIBIT 4.2
Capitalization
--------------
Attached hereto is a stockholder list dated December 21, 1998.
Attached hereto is a list of outstanding stock options and warrants dated
December 21, 1998.
The Corporation has reserved the number of shares of its capital stock set
forth below:
Common Stock:
- -------------
Exercise of Options: 2,700,000
Conversion of
Series A Preferred: 1,650,000
Series B Preferred: 2,976,663
Series C Preferred: 4,679,834*
Series D Preferred: 6,153,850
Exercise of TBG Silent Partnership Exchange Option: 725,624
----------
Total: 18,885,971
==========
Series A Preferred:
- -------------------
Exercise of Comdisco Warrant: 70,000
Series C Preferred:
- -------------------
Exercise of Warrants: 106,503
* The total number of reserved Series C Preferred Stock shares listed includes
the conversion of TBG's DM 3 million equity investment into Series C Preferred
Shares of Sequenom, Inc. immediately prior to the Initial Closing.
<PAGE>
SEQUENOM, INC.
STOCKHOLDER LIST
DECEMBER 21, 1998
<TABLE>
<CAPTION>
AUTHORIZED:
PAR VALUE AUTHORIZED ISSUED
--------- ---------- ---------
<S> <C> <C> <C>
Common: $ .001 34,960,347 337,350
Series A Convertible Preferred: $ .001 1,650,000 1,580,000
Series B Convertible Preferred: $ .001 2,976,663 2,976,663
Series C Convertible Preferred: $ .001 4,679,834 4,573,331
Series D Convertible Preferred: $ .001 6,153,850 0
COMMON STOCK
------------
STOCKHOLDER SHARES CERT. NO. ISSUE DATE
- ----------- ------ --------- ----------
Hubert Koster 1 C-10 03-08-95
Hallerstrasse 74
20146 Hamburg, Germany
Nola E. Masterson 90,000 C-11 10-16-95
Science Futures International
768 West California Way
Woodside, CA 94062
Russell D. Hays 26,250 C-12 10-31-95
136 Lark Court
Alamo, CA 94507
Randall R. Lunn 10,000 C-13 12-01-95
650 Town Center Drive
Suite 1350
Costa Mesa, CA 92626
Helmut Schuhsler 10,000 C-14 12-01-95
c/o TVM Techno Venture Management
Denninger Str. 15
81679 Munich, Germany
Patricia Dane 2,000 C-15 12-01-95
c/o TVM Techno Venture Management
101 Arch Street
Suite 1950
Boston, MA 02110
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
------------
STOCKHOLDER SHARES CERT. NO. ISSUE DATE
- ----------- ------ --------- ----------
<S> <C> <C> <C>
Amy B. Crawford 2,000 C-16 12-01-95
c/o TVM Techno Venture Management
101 Arch Street
Suite 1950
Boston, MA 02110
Monica Schlawinsky 2,000 C-17 12-01-95
c/o TVM Techno Venture Management
101 Arch Street
Suite 1950
Boston, MA 02110
John J. Di Bello 6,000 C-18 12-01-95
c/o TVM Techno Venture Management
101 Arch Street
Suite 1950
Boston, MA 02110
Fareed Kureshy 144,000 C-19 06-19-97
2132 Pinar Place
Del Mar, CA 92014
Maryanne J. O'Donnell 13,500 C-20 05-26-98
65 East India Row #38F
Boston, MA 02110
Scott Higgins 5,000 C-21 06-24-98
33 Castleview Avenue
Paisley, PA 28EE
Scotland
Dong-Jing Fu 17,250 C-22 10-01-98
1130 Mohawk Hills Drive, #H
Carmel, IN 46032
Charles Canter 6,349
526 E. Stanford Court
Del Mar, CA 92014
Gudula Ruhe 3,000
Auf Der Holzwiese 3
Ober Moerlen 61239
Germany
TOTAL: 337,350
</TABLE>
<PAGE>
SERIES A CONVERTIBLE PREFERRED STOCK
------------------------------------
<TABLE>
<CAPTION>
SHAREHOLDER SHARES CERT. NO. ISSUE DATE
- ----------- ------ --------- ----------
<S> <C> <C> <C>
Hubert Koster 1,120,000 1 03-08-95
Hallerstrasse 74
20146 Hamburg, Germany
Nola Masterson 40,000 2 03-08-95
Science Futures International
768 West California Way
Woodside, CA 94062
Robert E. Patterson 20,000 3 03-08-95
Graham & James LLP
600 Hansen Way
Palo Alto, CA 94304-1043
TVM Techno Venture Investors No.1 8,000 10 08-18-95
Limited Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Techno Venture Investors No.11 63,680 12 08-18-95
Limited Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Intertech Limited Partnership 42,454 13 08-18-95
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Zweite Beteiligung - U.S. 98,000 6 03-08-95
Limited Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
29,360 11 08-18-95
TVM Eurotech Limited Partnership 65,200 7 03-08-95
101 Arch Street
Suite 1950
Boston, MA 02110
19,706 9 08-18-95
KBL Founder Ventures SCA 73,600 8 03-08-95
43, Boulevard Royal
L-2955 Luxembourg
TOTAL: 1,580,000
</TABLE>
<PAGE>
SERIES B CONVERTIBLE PREFERRED STOCK
------------------------------------
<TABLE>
<CAPTION>
STOCKHOLDER SHARES CERT. NO. ISSUE DATE
- ----------- ------ --------- ----------
<S> <C> <C> <C>
TVM Techno Venture Enterprises No. 11 Limited Partnership 212,267 B-1 12-22-95
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Intertech Limited Partnership 141,513 B-2 12-22-95
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Zweite Beteiligung-U.S. 432,953 B-3 12-22-95
Limited Partnership
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Eurotech Limited Partnership 288,633 B-4 12-22-95
101 Arch Street
Suite 1950
Boston, MA 02110
TVM Techno Venture Investors No. 1 Limited Partnership 12,634 B-5 12-22-95
101 Arch Street 6,666 B-13 2-69-96
Suite 1950
Boston, MA 02110
KBL Founder Ventures SCA 245,333 B-6 12-22-95
43 Boulevard Royal
L-2955 Luxembourg
Alpinvest International B.V. 666,667 B-7 12-22-95
Gooimeer 3
NL- 1410 AB Naarden
The Netherlands
Boston University 333,333 B-8 12-22-95
Nominee Partnership
108 Bay State Road
Boston, MA 02215
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STOCKHOLDER SHARES CERT. NO. ISSUE DATE
- ----------- ------ --------- ----------
<S> <C> <C> <C>
Gerald E. Coughlan 13,333 B-9 2-29-96
Lehman Brothers
One Broadgate
London EC2M 7HA
England
Charles P. Floe 6,666 B-10 2-29-96
Lehman Brothers
One Broadgate
London EC2M 7HA
England
Hellmut Kirchner 66,666 B-11 2-29-96
Martelsgraben 2
82327 Tutzing
Germany
Herwig Brunner 20,000 B-12 2-29-96
An der Betteleiche 6
70569 Stutrgart
Germany
Franz A. Wirtz 33,333 B-14 2-29-96
Atzenach 37
D-52223 Stolberg
Germany
Hannemarie Wirtz 33,333 B-15 2-29-96
Atzenach 37
D-52223 Stolberg
Germany
Hubert Koster 100,000 B-16 2-29-96
Hallerstasse 74
20146 Hamburg, Germany
Ernst-Gunter Afting 30,000 B-17 3-29-96
Maisenweg 21
82152 Krailing
Germany
SVE Star Ventures 218,768 B-18 3-29-96
Enterprises No. III GbR,
A German Civil Law Partnership
Possartstrasse 9
D-81679 Munich
Germany
SVE Star Ventures 18,294 B-19 3-29-96
Enterprises No. IIIa
Gbr, A German
Civil Law Partnership
Possartstrasse 9
D-81679 Munich
Germany
SVE Star Ventures 96,271 B-20 3-29-96
Managementgesellschaft
mbH Nr. 3 & Co.
Beteiligungs KG
Possartstrasse 9
D-81679 Munich
Germany
TOTAL: 2,976,663
</TABLE>
<PAGE>
SERIES C CONVERTIBLE PREFERRED STOCK
------------------------------------
<TABLE>
<CAPTION>
STOCKHOLDER SHARES CERT. NO. ISSUE DATE
- ----------- ------ --------- ----------
<S> <C> <C> <C>
TVM Techno Venture Enterprises No. II 76,064 C-1 05-08-97
Limited Partnership
c/o TVM Techno Venture Management ("TVM")
101 Arch Street, Suite 1950
Boston, MA 02110
TVM Intertech Limited Partnership 50,709 C-2 05-08-97
c/o TVM Techno Venture Management ("TVM")
101 Arch Street, Suite 1950
Boston, MA 02110
TVM Zweite Beteiligung-U.S. 152,127 C-3 05-08-97
Limited Partnership
c/o TVM Techno Venture Management ("TVM")
101 Arch Street, Suite 1950
Boston, MA 02110
TVM Eurotech Limited Partnership 101,418 C-4 05-08-97
c/o TVM Techno Venture Management ("TVM")
101 Arch Street, Suite 1950
Boston, MA 02110
TVM Techno Venture Investors No. 1 8,253 C-5 05-08-97
Limited Partnership
c/o TVM Techno Venture Management ("TVM")
101 Arch Street, Suite 1950
Boston, MA 02110
KBL Founder Ventures SCA 87,619 C-6 05-08-97
43 Boulevard Royal
L-2955 Luxembourg
Alpinvest International B.V. 317,460 C-7 05-08-97
Gooimeer 3
NL- 1410 AB Naarden
The Netherlands
Hellmut Kirchner 15,873 C-8 05-08-97
Martelsgraben 2
82327 Tutzing
Germany
Hellmut Kirchner, as Trustee 222,222 C-9 05-08-97
Martelsgraben 2
82327 Tutzing
Germany
Franz A. Wirtz 16,667 C-10 05-08-97
Atzenach 37
D-52223 Stolberg
Germany
Hannemarie Wirtz 16,667 C-11 05-08-97
Atzenach 37
D-52223 Stolberg
Germany
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STOCKHOLDER SHARES CERT. NO. ISSUE DATE
- ----------- ------ --------- ----------
<S> <C> <C> <C>
SVE Star Ventures Enterprises No. III, 156,286 C-12 01-12-98
a German Civil Law Partnership
Possartstrasse 9
D-81679 Munich
Germany
SVE Star Ventures Enterprises No. IIIA, 13,047 C-13 01-12-98
a German Civil Law Partnership
Possartstrasse 9
D-81679 Munich
Germany
SVM Star Ventures Managementgesellschaft 68,762 C-14 01-12-98
mbH Nr. 3 & Co.
Beteiligungs KG
Possartstrasse 9
D-81679 Munich
Germany
S.R. One, Limited 507,936 C-15 01-12-98
565 E. Swedesford Road, Suite 315
Wayne, PA 19087
GLS LP Investment III Limited 793,650 C-16 01-12-98
Barfield House
St. Julian's Avenue
St. Peter Port Guernsey
G413QL
Lombard, Odier & Cie 952,381 C-17 01-12-98
Rue de la Corraterie
CH-1204 Geneva
Switzerland
Kleinwort Benson Limited 317,460 C-18 01-12-98
c/o Dresdner Kleinwort Benson
75 Wall Street
New York, NY 10005
Attn: C. Wright and J.S. Walker
Merifin Capital N.V. 158,730 C-19 01-12-98
Avenue Lloyd George 6
Boite 8
B-1000 Brussels, Belgium
Attn: Coen N. Teulings
Technologie-Betiligungs-Gesellschaft 540,000 C-__ [CLOSING]
Deutschen Ausgleichsbank
Postanschrift 53170 Bonn
TOTAL: 4,573,331
</TABLE>
<PAGE>
EXHIBIT 4.2 (CONTINUED)
Sequenom, Inc.
Analysis of stock options and warrants outstanding
as of December 21, 1998
<TABLE>
<CAPTION>
Exercise
Shares Price
Issued prior to 1996 ----------- ------------
- ------------------------------------------------------------
<S> <C> <C>
Hubert Koster (founder) 80,000 $0.05
Robert Patterson (founder) 30,000 $0.05
Bob Cotter (technical advisory board) 42,000 $0.05
Charles Cantor (technical advisory board) 66,000 $0.05
Kai Tang (employee) 10,000 $0.05
Issued in 1996
- ------------------------------------------------------------
Kai Tang (employee-1/96) 1,000 $0.25
Dr. Andreas Braun (employee-1/96) 15,000 $0.25
Dan Little (employee-1/96) 10,000 $0.25
Fiona Craven (employee-1/96) 2,000 $0.25
Lorieta Leppin (employee-1/96) 2,000 $0.25
Brigitte Damhofer-Demar (employee-1/96) 3,000 $0.25
Professor Ernst-Gunter Afting (bd member-1/96) 20,000 $0.25
Kai Tang (employee-1/96) 1,000 $0.25
Toni Schuh (employee-9/96) 109,000 $0.25
Kai Tang ((employee-1/96) 5,000 $0.25
John J. DiBello (TVM-9/96) 6,000 $0.25
Tom Bologna (ex-bd member-12/96) 18,000 $0.25
Tom Bologna (ex-bd member-12/96) 27,000 $0.25
Issued in 1997
- ------------------------------------------------------------
Tom Bologna (ex-bd member-6/97) 3,000 $0.25
Steve Zaniboni (employee-6/97) 70,000 $0.25
Dr. Andreas Braun (employee-6/97) 20,000 $0.25
Dan Little (employee-6/97) 22,000 $0.25
Dr. Andreas Braun (employee-9/97) 35,000 $0.25
Dan Little (employee-9/97) 10,000 $0.25
Debra Robertson (employee-9/97) 10,000 $0.25
Ken Nunes (employee-9/97) 6,000 $0.25
April Pasko (employee-9/97) 5,000 $0.25
Cecile Pham (employee-9/97) 3,000 $0.25
Dominique Julien (employee-9/97) 2,000 $0.25
Nola Masterson (founder-12/97) 20,000 $0.25
Hubert Koster (founder-12/97) 300,000 $0.25
Professor Ernst-Gunter Afting (bd member-12/97) 20,000 $0.25
Helmut Shuhsler (TVM-12/97) 40,000 $0.25
Toni Schuh (employee-12/97) 41,000 $0.25
Dirk Reuter (employee-12/97) 15,000 $0.25
Thomas Becker (employee-12/97) 10,000 $0.25
Julia Clemens (employee-12/97) 3,000 $0.25
Heike Luken (employee-12/97) 5,000 $0.25
Gabi Dziewes (employee-12/97) 3,000 $0.25
Bonnie Dudley (employee-12/97) 3,000 $0.25
Yoshi Takehana (employee-12/97) 3,000 $0.25
Jhobe Steadman (employee-12/97) 10,000 $0.25
Michael Waltrip (employee-12/97) 6,000 $0.25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exercise
Issued in 1998 Shares Price
- -------------- -------- --------
<S> <C> <C>
Charles Cantor (technical advisor-4/98) 5,000 $0.50
Steve Zaniboni (employee-4/98) 20,000 $0.50
Dr. Andreas Braun (employee-4/98) 50,000 $0.50
Kai Tang (employee-4/98) 10,000 $0.50
Brigitte Damhofer-Demar (employee-4/98) 10,000 $0.50
Lorieta Leppin (employee-4/98) 10,000 $0.50
David Lough (employee-4/98) 10,000 $0.50
Rolf Reist (employee-4/98) 10,000 $0.50
Diana Tabbaa (employee-4/98) 3,000 $0.50
Cristy Johnston (employee-4/98) 1,500 $0.50
Raquel Vega (employee-4/98) 3,000 $0.50
Felicitas Koster (employee-4/98) 1,000 $0.50
Deserie Ingrande (employee-4/98) 3,000 $0.50
Steve Stilwell (employee-4/98) 40,000 $0.50
Andreas Ruppert (employee-4/98) 20,000 $0.50
Susanne Heins (employee-4/98) 5,000 $0.50
Edwin Munk (employee-4/98) 5,000 $0.50
Charles Cantor (technical advisor-6/98) 180,000 $0.50
Steve Zaniboni (employee-6/98) 20,000 $0.50
Mihn Ba Do (employee-6/98) 10,000 $0.50
Eunice Flores (employee-6/98) 2,000 $0.50
Christian Jurinke (employee-6/98) 5,000 $0.50
James Lugo (employee-6/98) 20,000 $0.50
Richard MacDonald (employee-6/98) 30,000 $0.50
Jon Osborn (employee-6/98) 3,000 $0.50
Mona Shahgholi (employee-6/98) 5,000 $0.50
C. N. Sridhar (employee-6/98) 30,000 $0.50
Dirk Van Den Boom (employee-6/98) 5,000 $0.50
Camile White (employee-6/98) 5,000 $0.50
Hubert Koster 75,000 $0.50
Ulf Landegan (technical advisor 9/98) 12,000 $0.50
John Lucas (bd member-9/98) 20,000 $0.50
Cecile Pham (employee-9/98) 1,500 $0.50
Dirk Rueter (employee-9/98) 2,500 $0.50
Thomas Becker (employee-9/98) 2,500 $0.50
Julia Clemens (employee-9/98) 1,000 $0.50
Heike Luken (employee-9/98) 1,000 $0.50
Gabi Dziewas (employee-9/98) 1,000 $0.50
Rolf Reist (employee-9/98) 5,500 $0.50
Andreas Ruppert (employee-9/98) 500 $0.50
Susanne Heins (employee-9/98) 500 $0.50
Edwin Munk (employee-9/98) 500 $0.50
Christian Jurinke (employee-9/98) 500 $0.50
Dirk Van Den Boom (employee-9/98) 500 $0.50
Beth Anderson (employee-9/98) 10,000 $0.50
James Allen Connell (employee-9/98) 500 $0.50
Kimberly Ellstrom (employee-9/98) 20,000 $0.50
Aaron Hanson (employee-9/98) 3,000 $0.50
Stefan Kammerer (employee-9/98) 10,000 $0.50
Robyn Wallace (employee-9/98) 3,000 $0.50
Cecile Walsh (employee-9/98) 500 $0.50
Ping Yip (employee-9/98) 10,000 $0.50
Alexandra Sowada (employee-9/98) 10,500 $0.50
Anja Engel (employee-12/98) 500 $0.50
Karsten Schmidt (employee-12/98) 20,000 $0.50
Bahr Dieter (employee-12/98) 7,500 $0.50
Hubert Koster (employee-12/98) 180,000 $0.50
Toni Schuh (employee-12/98) 100,000 $0.50
Stephen Zaniboni (employee-12/98) 100,000 $0.50
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exercise
Issued in 1998 Shares Price
- -------------- -------- --------
<S> <C> <C>
Liyan He (employee-12/98) 5,000 $0.50
Sheila Aubin (employee-12/98) 3,000 $0.50
D-Chelle Sharpe (employee-12/98) 500 $0.50
James Leushner (employee-12/98) 5,000 $0.50
David Vasquez (employee-12/98) 500 $0.50
Paul Oeth (employee-12/98) 1,000 $0.50
Liz Langston (employee-12/98) 500 $0.50
Leonid Barenblit (employee-12/98) 1,000 $0.50
Dana Hosseini (employee-12/98) 10,000 $0.50
Niels Strom (employee-12/98) 3,000 $0.50
Helmut Schusler (bd member-12/98) 20,000 $0.50
John Lucas (bd member-12/98) 20,000 $0.50
Ernst-Gunter Afting (bd member) 20,000 $0.50
Peter Reinisch (bd member-12/98) 10,000 $0.50
Franz Hillenkamp (technical advisor - 12/98) 20,000 $0.50
---------
=========
Options Outstanding 2,353,000
---------
Comdisco Series A warrants 70,000
Series C Preferred warrants 106,503
</TABLE>
<PAGE>
EXHIBIT 4.3
Equity Investments
------------------
The Corporation has one subsidiary, Sequenom GmbH, approximately all of the
outstanding equity interest in which is owned by the Corporation.
<PAGE>
Consolidated Financial Statements
Sequenom, Inc.
(a development stage company)
For the years ended December 31, 1997 and 1996 and
for the period from February 14, 1994 (inception) to
December 31, 1997
with Report of Independent Auditors
<PAGE>
Sequenom, Inc.
(a development stage company)
Consolidated Financial Statements
For the years ended December 31, 1997 and 1996 and for the
period from February 14, 1994 (inception) to December 31, 1997
CONTENTS
Report of Independent Auditors............................................. 1
Consolidated Financial Statements..........................................
Consolidated Balance Sheets................................................ 2
Consolidated Statements of Operations...................................... 3
Consolidated Statements of Stockholders' Equity (Deficit).................. 4
Consolidated Statements of Cash Flows...................................... 5
Notes to Consolidated Financial Statements................................. 6
<PAGE>
Report of Independent Auditors
The Board of Directors
Sequenom, Inc.
We have audited the accompanying consolidated balance sheet of Sequenom, Inc. (a
development stage company) as of December 31, 1997 and the related consolidated
statements of operations, stockholders' equity (deficit), and cash flows for the
year ended December 31, 1997 and the period from February 14, 1994 (inception)
through December 31, 1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit. The
financial statements as of December 31, 1996, and for the period February 14,
1994 (inception) through December 31, 1996, were audited by other auditors whose
report dated May 15, 1997 expressed an unqualified opinion on those statements.
The financial statements for the period February 14, 1994 (inception) through
December 31, 1996 include total revenues and net loss of $917,994 and
$(6,283,696), respectively. Our opinion on the statements of operations,
stockholders' equity, and cash flows for the period February 14, 1994
(inception) through December 31, 1997, insofar as it relates to amounts for
prior periods through December 31, 1996, is based solely on the report of other
auditors.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the report of other
auditors provide a reasonable basis for our opinion.
In our opinion, based on our audit and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Sequenom, Inc. ( a development
stage company) at December 31, 1997, and the result of its operations and its
cash flows for the year then ended and the period from February 14, 1994
(inception) through December 31, 1997, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
March 13, 1998
1
<PAGE>
Sequenom, Inc.
(a development stage company)
Consolidated Balance Sheets
<TABLE>
<CAPTION>
DECEMBER 31,
1997 1996
---------------------------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 832,782 $ 1,326,137
Grant receivable 181,350 241,947
Refundable value added tax 57,474 32,922
Other current assets and prepaid expenses 50,968 140,809
---------------------------
Total current assets 1,122,574 1,741,815
Property, equipment and leasehold improvements, net 1,002,197 921,034
Organizational costs, net 9,996 18,000
Other assets 137,806 32,834
Total assets $ 2,272,573 $ 2,713,683
===========================
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable and accrued expenses $ 1,121971 $ 796,662
Unearned revenue - current portion 126,000 125,500
---------------------------
Total current liabilities 1,247,971 922,162
Unearned revenue - long term portion -- 125,500
Accrued long-term interest payable 424,000 274,500
Long-term debt 3,348,000 2,597,600
Commitments
Stockholders' equity (deficit):
Series A Convertible Preferred Stock, $0.001 par value
1,650,000 shares authorized; 1,580,000 shares issued and outstanding 1,580 1,580
(liquidation preference $790,000)
Series B Convertible Preferred Stock, $0.0001 par value, 2,976,663 shares 2,977 2,977
authorized, issued and outstanding (liquidation preference $4,464,995)
Series C Convertible Preferred Stock, $0.001 par value, 3,365,061 shares 1,065 --
authorized; 1,065,079 shares issued and outstanding in 1997 (liquidation
preference $3354,999)
Common Stock, $0.001 par value; 9,218,000 shares authorized; 292,251 and 292 148
148,251 shares issue and outstanding in 1997 and 1996, respectively
Additional paid-in capital 8,569,705 5,229,576
Deferred compensation -- (25,000)
Cumulative translation adjustment (225,452) (131,664)
Deficit accumulated in the development stage (11,097,565) (6,283,696)
---------------------------
Total stockholders' equity (deficit) (2,747,396) (1,206,079)
---------------------------
Total liabilities and stockholders' equity (deficit) $ 2,272,573 $ 2,713,683
===========================
See accompanying notes.
</TABLE>
<PAGE>
Sequenom, Inc.
(a development stage company)
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the period
from February 14,1994
(inception) to
Years ended December 31, December 31,
----------------------------------
1997 1996 1997
----------- ----------- ---------------------
<S> <C> <C> <C>
Income:
Research and development grants $ 526,573 $ 892,903 $ 1,419,476
Other income 88,740 25,091 113,831
----------- ----------- ------------
615,313 917,994 1,533,307
Operating expenses:
Research and development 3,620,298 3,161,296 8,977,847
General and administrative 1,860,629 1,032,005 3,542,619
----------- ----------- ------------
5,480,927 4,193,301 12,520,466
----------- ----------- ------------
Net loss from operations (4,865,614) (3,275,307) (10,987,159)
Interest income 56,986 72,918 134,964
Interest expense (308,191) (274,793) (611,505)
Foreign currency transaction gain 302,950 63,185 366,135
----------- ----------- ------------
Net loss $(4,813,869) $(3,413,997) $(11,097,565)
=========== =========== ============
</TABLE>
See accompanying notes.
3
<PAGE>
SEQUENOM, INC.
(A DEVELOPMENT STAGE COMPANY)
Consolidated Statements of Stockholders' Equity (Deficit)
Period from February 14, 1994 (inception) through December 31, 1997
<TABLE>
<CAPTION>
SERIES A CONVERTIBLE SERIES B CONVERTIBLE SERIES C CONVERTIBLE
PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK COMMON STOCK
---------------------------------------------------------------------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of Common Stock - $ - - $ - - $ - - $ -
Issuance of Series A 442,000 442 - - - - - -
Convertible Preferred Stock,
net of issuance costs of
$35,484
Issuance of Series A 38,000 38 - - - - - -
Convertible Preferred Stock
for services
Issuance of Series A 1,100,000 1,100 - - - - - -
Convertible Preferred Stock
for holdings
Translation adjustment - - - - - - - -
Net loss - - - - - - - -
--------------------------------------------------------------------------------------
Balance at December 31, 1994 1,500,000 1,500 - - - - - -
Issuance of Series B
Convertible Preferred Stock,
net of issuance costs of
$32,940 - - 2,333,333 2,333 - - - -
Issuance of Common Stock - - - - - - 26,250 26
Exercise of Stock Options - - - - - - 122,000 122
Translation adjustment - - - - - - - -
Net loss - - - - - - - -
--------------------------------------------------------------------------------------
Balance at December 31, 1995 1,500,000 1,500 2,333,333 2,333 - - 148,251 148
Issuance of Series B
Convertible Preferred Stock,
net of issuance costs of
$10,648 - - 643,330 644 - - - -
Issuance of warrants - - - - - - - -
Deferred compensation related - - - - - - - -
to issuance of options to
consultants
Translation adjustment - - - - - - - -
Net loss - - - - - - - -
--------------------------------------------------------------------------------------
Balance at December 31, 1996 1,500,000 1,500 2,976,663 2,977 - - 144,251 148
Exercise of stock options - - - - - - 144,000 144
Issuance of Series C
Convertible Preferred Stock,
net of issuance costs of
$49,661 - - - - 1,065,079 1,065 - -
Amortization of deferred - - - - - - - -
compensation
Translation adjustment - - - - - - - -
Net loss - - - - - - - -
--------------------------------------------------------------------------------------
Balance at December 31, 1997 1,500,000 $1,500 2,976,663 $2,977 1,065,079 $1,065 292,251 $292
</TABLE>
<TABLE>
<CAPTION>
DEFICIT
ACCOMMODATED TOTAL
ADDITIONAL CUMULATIVE DURING THE STOCKHOLDERS'
PAID-IN DEFERRED TRANSLATION DEVELOPMENT EQUITY
CAPITAL COMPENSATION ADJUSTMENT STAGE (DEFICIT)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Issuance of Common Stock $ - $ - $ - $ - $ -
Issuance of Series A
Convertible Preferred Stock,
net of issuance costs of
$35,484 185,074 - - - 185,516
Issuance of Series A
Convertible Preferred Stock
for services 18,962 - - - 19,000
Issuance of Series A
Convertible Preferred Stock
for holdings 548,908 - - - 550,000
Translation adjustment - - (1,703) - (1,703)
Net loss - - - (1,149,498) (1,149,498)
--------------------------------------------------------------------------------------------
Balance at December 31, 1994 752,937 - (1,703) (1,149,498) (396,684)
Issuance of Series B
Convertible Preferred Stock,
net of issuance costs of
$32,940 3,464,727 - - - 3,467,060
Issuance of Common Stock 1,287 - - - 1,313
Exercise of Stock Options 5,978 - - - 6,100
Translation adjustment - - (3,222) - (3,222)
Net loss - - - (1,720,201) (1,720,201)
--------------------------------------------------------------------------------------------
Balance at December 31, 1995 4,224,929 - (4,925) (2,869,699) 1,354,366
Issuance of Series B
Convertible Preferred Stock,
net of issuance costs of
$10,648 953,647 - - - 954,291
Issuance of warrants 10,000 - - - 18,000
Deferred compensation related
to issuance of options to
consultants 33,000 (25,000) - - 8,000
Translation adjustment - - (126,739) - (126,739)
Net loss - - - (3,413,997) (3,413,997)
--------------------------------------------------------------------------------------------
Balance at December 31, 1996 5,229,576 (25,000) (131,664) (6,283,696) (illegible)
Exercise of stock options 36,896 - - - illegible
Issuance of Series C
Convertible Preferred Stock,
net of issuance costs of
$49,661 3,304,273 - - - 3,305,330
Amortization of deferred
compensation - 25,000 - - 25,000
Translation adjustment - - (93,788) - (93,788)
Net loss - - - (4,813,869) (4,813,869)
--------------------------------------------------------------------------------------------
Balance at December 31, 1997 $8,569,705 $ - $(225,452) $(11,097,565) $(2,747,398)
</TABLE>
<PAGE>
Sequenom, Inc.
(a development stage company)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For the period from
Years ended December 31, February 14, 1994
-------------------------------------- to December 31,
1997 1996 1997
-------------------------------------------------------------
<S> <C> <C> <C>
Operating activities
Net Loss $(4,813,869) $(3,413,997) $(11,097,565)
Adjustments to reconcile net loss to net cash used in
operating activities:
Warrants issued in conjunctions with leasing - 18,000 18,000
Options issued to consultants 25,000 8,000 33,000
Stock issued for technology and services - - 569,000
Depreciation and amortization 351,173 314,195 813,333
Foreign currency transaction gain (302,950) - (302,950)
Net change in other assets and liabilities 348,592 418,737 1,222,242
----------------------------------------------------------
Net cash used in operating activities (4,392,054) (2,655,065) (8,744,940)
Investing activities
Purchase of property and equipment (490,891) (429,896) (1,852,085)
Organization costs - - (40,000)
----------------------------------------------------------
Net cash used in investing activities (490,891) (429,896) (1,892,085)
Financing activities
Proceeds from issuance of Series A Convertible - -- 185,516
Preferred Stock, net of issuance costs of $35,484
Proceeds from issuance of Series B Convertible - 954,291 2,841,351
Preferred Stock, net of issuance cots of $10,648 in
1996
Proceeds from issuance of Series C Convertible 3,305,337 - 3,305,337
Preferred Stock, net of issuance costs of $49,662
Proceeds from long-term debt 1,165,000 1,706,592 3,762,600
Proceeds from issuance of convertible term notes to - - 1,580,000
stockholders
Proceeds from issuance of Common Stock 36,000 0 43,414
Net cash provided by financing activities 4,506,337 2,660,883 11,718,218
----------------------------------------------------------
Net increase (decrease) in cash (376,608) (424,078) 1,081,193
Effect of exchange rate change on cash (116,747) (126,739) (248,411)
Cash and cash equivalents at beginning of period 1,326,137 1,876,954 -
Cash and cash equivalents at end of period $ 832,782 $ 1,326,137 $ 832,782
----------------------------------------------------------
Supplemental schedule of noncash investing and
financing activities:
Conversion of convertible term notes to Series B $ - $ - $ 1,580,000
Convertible Preferred Stock
-------------------------------------------------------------
Supplemental disclosures of cash flow information:
Interest paid $ 158,691 $ - $ 158,691
-------------------------------------------------------------
See accompanying notes.
</TABLE>
5
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements
December 31, 1997
1. NATURE OF THE BUSINESS
Sequenom, Inc. (the "Company") was incorporated on February 14, 1994 in the
State of Delaware. The Company is focused on developing high definition DNA
analysis tools for industrial biomedical and life science applications.
Since inception, the Company has devoted its efforts to establishing its
business, raising capital and recruiting personnel. Accordingly, through the
date of these financial statements, the Company is considered to be a
development stage enterprise.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation
The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, Sequenom GmbH. All significant
intercompany transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash equivalents consists of highly liquid investments with original maturities
when purchased of less than three months.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to concentrations of
credit risk consist of demand deposits.
6
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property, Equipment and Leasehold Improvements
Property and equipment are stated at cost and depreciated using the straight-
line method over the estimated useful lives of the assets. Leasehold
improvements are amortized using the straight-line method over the life of the
improvement or the remaining term of the lease, whichever is shorter.
Organization Costs
Organization costs of $40,000, consisting of legal fees related to the formation
of the Company, are being amortized on the straight-line basis over a five-year
period.
Asset Impairment
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed of, effective January 1, 1996. SFAS No. 121 requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount. SFAS
No. 121 also addresses the accounting for long-lived assets that are expected to
be disposed of. The adoption had no impact on the Company's financial
statements.
Revenue Recognition
Grant revenue is recorded as the research expenses relating to the grants as
incurred.
Research and Development Costs
Research and development costs are expensed as incurred.
Income Taxes
The Company accounts for income taxes according to SFAS No. 109, Accounting for
Income Taxes. Under the asset and liability method specified by SFAS No. 109, a
deferred tax asset or liability is determined based on the difference between
the financial statement and tax basis of assets and liabilities as measured by
the enacted tax rates which will be in effect when these differences reverse.
7
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The Company provides a valuation allowance against net deferred tax assets if,
based upon the available evidence, it is more likely than not that some or all
of the deferred tax assets will not be realized.
Stock-Based Compensation
Effective January 1, 1997, the Company adopted the footnote disclosure
provisions of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No.
123 permits entities to adopt a fair value-based method of accounting for stock-
based compensation arrangements, under which compensation cost is determined
using the fair value of the stock option at the grant date and the number of
options vested, and is recognized over the periods in which the related services
are rendered. However, it also allows an entity to continue measuring
compensation cost for stock-based compensation using the intrinsic value method
of accounting prescribed by Accounting Principles Board Opinion No. 25 ("APB
25"), Accounting for Stock Issued to Employees. The Company has elected to
continue to apply the provisions of APB 25 and provide pro forma footnote
disclosures required by SFAS No. 123.
Comprehensive Income and Segment Information
In June 1996, the Financial Accounting Standards Board issued SFAS No. 130,
Reporting Comprehensive Income and SFAS No. 131, Disclosure about Segments of an
Enterprise and Related Information. SFAS No. 130 requires that all components
of comprehensive income be reported in the period in which they are recognized
and is effective for fiscal 1998. SFAS No. 131 establishes standards for
disclosures of an entity's reportable operating segments, and is also effective
in fiscal 1998. The Company is in process of evaluating the disclosure
requirements of the new standards, the adoption of which is not expected to have
a material impact on the consolidated financial statements.
Reclassifications
Certain amounts in the prior year financial statements have been reclassified to
conform with current year presentation.
8
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
3. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
The following is a summary of property, equipment and leasehold improvements and
related accumulated depreciation and amortization, as of December 31, 1997 and
1996:
1997 1996
-------------------------
Laboratory equipment $1,248,735 $1,035,924
Leasehold improvements 119,061 123,236
Office furniture and equipment 238,418 202,034
-------------------------
1,606,214 1,361,194
Less accumulated depreciation and amortization 604,017 440,160
$1,002,197 $ 921,034
=========================
Total depreciation and amortization expense for the years ended December 31,
1997 and 1996 amounted to $351,173 and $314,195, respectively.
4. LONG-TERM DEBT
In 1995, the Company and its wholly-owned subsidiary, Sequenom GmbH, entered
into agreements with a German bank for two loans, one for DM 1 million
(approximately $697,800) and the other for DM 3 million (approximately
$2,093,400). In 1997, the Company and subsidiary entered into another agreement
with the same German bank for an additional loan of DM 2 million (approximately
$1,116,000). The loans are unsecured, and must be preceded by an equity
contribution of the same amount by the Company to the subsidiary. As of
December 31, 997, the Company had made such equity contributions and the
subsidiary had borrowed the entire DM 6 million under the agreements.
Interest is payable semi-annually on the loans. The 1995 loans began accruing a
nominal interest of 6% on March 31, 1997, while payments commenced in June 1997.
The effective nominal interest rate over the life of the 1995 loans is 4.8%.
The 1997 loan bears interest at 7% with payments commencing in 1998. The
subsidiary is also required to pay additional interest equal to 9% of the
subsidiary's annual profits, to the extent that such profits exceed DM 100,000
per year. The combined annual interest rate (nominal interest and additional
interest) may not exceed 7% per year through December 31, 2000. Commencing
January 1, 2001 and January 1, 2003, any amounts still outstanding will accrue
additional interest at 6% and 7% per annum for the 1995 loans and 1997 loan,
respectively. Principal is due in full on December 31, 2005 and December 31,
2007 or earlier upon certain events, as defined in the 1995 and 1997 loan
agreements, respectively.
9
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
4. LONG TERM DEBT (CONTINUED)
In addition, at the end of the loan term (earlier of repayment or December 31,
2005 and December 31, 2007 for the 1995 loans and 1997 loan, respectively), the
subsidiary is obligated to pay a terminal interest equal to 25%, 30% and 35% of
the amounts loaned under the DM I million, DM 3 million and DM 2 million
agreements, respectively, estimated to be $1,0.41,606 u of December 31, 1997.
The bank may elect to forego such payments in certain situations. The Company
anticipates that the full amount borrowed under these loans will be repaid in
the year 2000.
Under certain conditions, the Company may exercise a "put option" to sell its
shares of capital stock in the subsidiary to the German bank for an amount equal
to 50% of the Company's equity contribution to the subsidiary pursuant to the DM
3 million loan. Through December 31, 1997, the Company had made capital
contributions to the subsidiary under the DM 3 million loan agreement of DM 3
million (approximately $1,674,000); therefore, the potential amount recoverable
under this "put option" was approximately DM 1.5 million (approximately
$837,000) at December 31, 1997. If the Company exercises such put option, then
the Series B Preferred Stockholders have a right to elect redemption of their
Series B Preferred Stock in the amount of $1.50 per share. At the present time
the Company has no intention of exercising the "put option."
5. STOCKHOLDERS' EQUITY
Pursuant to the Company's Certificate of Incorporation, as amended, the Company
has authorized the issuance of 17,209,744 shares of capital stock par value
$0.001 per share, consisting of 9,218,000 shares of Common Stock ("Common
Stock"), 1,650,000 shares of Series A Convertible Preferred Stock ("Series A
Preferred Stock"), 2,976,663 shares of Series B Convertible Preferred stock
("Series B Preferred Stock"), and 3,365,081 shares of Series C Convertible
Preferred Stock ("Series C Preferred Stock").
All shares of stock have voting rights. Holders of Common Stock have one vote
per share, while holders of Series A, Series B, and Series C Preferred Stock are
entitled to the number of votes per share equal to the number of shares of
Common stock into which each Preferred share could be converted.
PREFERRED STOCK
Each share of Preferred Stock is convertible into one share of Common Stock at
any time at the option of the holder. The rate at which the Preferred Stock
convert to Common Stock is subject to adjustment in certain circumstances. All
outstanding shares of Series C Preferred Stock shall
10
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
5. STOCKHOLDERS' EQUITY (CONTINUED)
automatically convert to Common Stock upon the closing of a firm commitment
underwritten public offering with a price per share of not less than $9.45 and
with gross proceeds to the Company of not less than $20 million. All
outstanding shares of Series B and Series A Preferred Stock shall automatically
convert to Common Stock upon the closing of a firm commitment underwritten
public offering with a price per share of not less than $4.50 and $2.50,
respectively, and with gross proceeds to the Company of not less than $10
million.
The holders of the Series B Preferred Stock shall be entitled to receive, from
funds legally available therefore, a noncumulative dividend at the rate of $0.05
per share per annum, payable when and as declared by the Board of Directors. No
dividends shall be declared or paid to the holders of Series A Preferred Stock
or Common Stock unless the holders of Series B and Series C Preferred Stock have
been paid in full all of the dividends to which they are entitled, nor shall any
dividends be declared or paid to the holders of Series A Preferred Stock or
Common stock at a rate greater than the rate paid to the holders of Series B and
Series C Preferred Stock. If dividends are paid on Series A or B Preferred
Stock, the holders of the Series C Preferred Stock are entitled to receive a
dividend at the same rate per share.
The Series B and Series C Preferred Stock have preference as to the assets of
the Company upon liquidation over the Series A Preferred Stock and the Common
Stock; the Series A Preferred Stock has preference over the Common Stock. In
liquidation, the holders of Series B Preferred Stock and Series A Preferred
Stock are entitled to the greater of (a) the amount per share as would have been
payable had all shares of Series B Preferred Stock or Series A Preferred Stock
been converted to Common Stock immediately prior to such event of liquidation,
plus all declared but unpaid dividends or (b) for the Series C preferred stock,
$3.15 per share plus declared but unpaid dividends, for the Series B Preferred
Stock, $1.50 per share plus declared but unpaid dividends and, for the Series A
Preferred Stock, $0.50 per share plus declared but unpaid dividends.
The holders of Series B Preferred Stock have redemption rights under certain
limited conditions as discussed in Note 4.
In December 1995, the Company issued 2,333,333 shares of Series B Convertible
Preferred Stock to a group of investors for gross proceeds of $3,500,000. In
August 1995 the Company also issued 26,250 shares of Common Stock to one
investor for proceeds of $1,313.
In February 1996, the Company issued 643,330 shares of Series B Convertible
Stock to various investors for gross proceeds of $964,995.
11
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
5. STOCKHOLDERS' EQUITY (CONTINUED)
In May 1997, the Company issued 1,065,079 shares of Series C Convertible Stock
to various investors for gross proceeds of $3,355,000.
COMMON STOCK
In February 1994, the Company issued 420,000 shares of Common Stock at $0.05 per
share to three individuals (the "founders"), for gross proceeds of $21,000.
These shares were subsequently exchanged for 42,000 shares of Series A Preferred
stock. In March 1994, the Company issued 380,000 shares of Common Stock, at a
value of $0.05 per share, which were subsequently exchanged for 38,000 shares of
Series A Preferred Stock, to one of the founders for consulting services. The
Company recorded expense of $19,000 related to this issuance of shares.
In May 1994, the Company issued 400,000 shares of Common Stock at $0.50 per
share to a group of investors for gross proceeds of $200,000. Contemporaneously
with this issuance of shares, the Company issued 1,100,000 shares of Common
Stock at a value of $0.50 per share to one of the founders in exchange for the
assignment of the rights to all inventions (and related documentation) which had
been developed by the founder. Accordingly, $550,000 has been recorded as
research and development expense in the accompanying financial statements.
These shares were subsequently exchanged for 400,000 shares and 1,100,000 shares
of Series A Preferred Stock, respectively.
1994 STOCK PLAN
In February 1994, the Company adopted the 1994 Stock Plan (the "Plan"). The
Plan provides for the grant of options to purchase Common Stock and the issuance
of shares of Common Stock subject to Company repurchase rights to directors,
officers, employees and consultants to the Company. Options granted to
employees generally vest over four years at the rate of 25% per year with a
maximum term of 10 years. Options granted to consultant shave vesting periods
determined at the date of grant. The number of shares of Common Stock issuable
under the Plan was 1,700,000 in 1997 and 1,000,000 in 1996.
12
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
5. STOCKHOLDERS' EQUITY (CONTINUED)
The stock option activity is summarized as follows:
Number of Weighted
Shares Average
Exercise Price
---------------------------------
Balance at December 31, 1993
Granted 318,000 $0.50
Canceled -- --
Exercised -- --
---------
Balance at December 31, 1994 318,00 $0.50
Granted 370,000 $0.05
Canceled (318,000) $0.50
Exercised (122,000) $0.05
---------
Balance at December 31, 1995 248,000 $0.05
Granted 435,000 $0.25
Canceled -- --
Exercised -- --
---------
Balance at December 31, 1996 683,000 $0.18
Granted 731,000 $0.25
Canceled (50,000) $0.25
Exercised (144,000) $0.25
Balance at December 31, 1997 1,220,000 $0.21
=========
At December 31, 1997, 214,000 shares were available for future option grants and
1,434,000 shares of Common Stock were reserved for issuance of all options.
The following table summarizes information about options outstanding at December
31, 1997:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------- ----------------------
WEIGHTED
AVERAGE WEIGHTED
REMAINING AVERAGE
RANGE OF NUMBER CONTRACTUAL NUMBER EXERCISE
EXERCISE PRICE OUTSTANDING LIFE EXERCISABLE PRICE
- --------------------------------------------------- ----------- --------
$0.05 248,000 7.3 82,000 $0.05
$0.25 972,000 9.5 84,250 $0.25
- ------------- --------- --------
$0.05 - $0.25 1,220,000 9.1 166,250 $0.15
============= ========= ========
13
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
5. STOCKHOLDERS' EQUITY (CONTINUED)
Of the 731,000 options issued in 1997, 3,000 were exercisable in full on the
date of grant with the remaining exercisable ratably over a four-year period.
Of the 435,000 options issued in 1996, 67,000 were exercisable in full on the
date of grant, 36,000 were exercisable ratably over a six-month period and the
remaining 332,000 were exercisable over a five year period. Of the 370,000
options issued in 1995, 222,000 were exercisable in full on the date of grant,
30,000 were exercisable ratably over a five-year period and an additional
118,000 are subject to a vesting schedule as follows - 22,000 became immediately
exercisable and 96,000 are exercisable on the earlier of November 1, 2003, or
the achievement of certain milestones, as defined. None of these milestones had
been achieved as of December 31, 1997.
The Company accounts for the stock option plan under APB No. 25, under which no
compensation cost has been recognized. Had compensation cost for this plan been
determined consistent with SFAS No. 123, the Company's net loss would have been
changed to the following pro forma amounts:
1997 1996
------------------------------------
Adjusted pro forma net loss $(4,819,703) $(3,416,437)
Pro forma information regarding net loss has been determined as if the Company
has accounted for its employee stock options under the fair value method
prescribed in SFAS No. 123. The fair value of these options was estimated at
the date of grant using the minimal value pricing model with the following
weighted average assumptions for 1997 and 1996: risk-free interest rate of 6%;
dividend yield of 0%; and a weighted-average life of the option of four years.
The minimal value pricing model is similar to the Black-Scholes option valuation
model which was developed for use in estimating the fair value of traded options
which have no vesting restrictions and are fully transferable, except that it
excludes the factor for volatility. In addition, option valuation models
require the input of highly subjective assumptions. Because the Company's
employee stock options have characteristics significantly different from those
of traded options, and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management's opinion, the existing
models do not necessarily provide a reliable single measure of the fair value of
its employee stock options.
14
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
6. INCOME TAXES
Deferred income taxes reflect the net effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purpose
and the amounts used for income tax purposes. Significant components of the
Company's deferred tax assets are shown below. A valuation allowance of
$4,621,000 has been recognized as realization of such assets is uncertain.
December 31,
1997 1996
----------------------------
Deferred tax assets:
Net operating loss carryforwards $ 3,383,000 $ 1,408,000
Research and development credits 193,000 46,000
Capitalized research expenses 981,000 830,000
Other, net 64,000 --
----------------------------
Total deferred tax assets 4,621,000 2,284,000
Valuation allowance (4,621,000) (2,284,000)
----------------------------
Net deferred tax assets $ -- $ --
============================
At December 31, 1997, the Company has federal and state tax net operating loss
carryforwards of approximately $4,710,000 and $2,344,000, respectively. The
difference between the federal and state tax loss carryforwards is attributable
to the capitalization of research and development expenses for state tax
purposes. The federal and state tax loss carryforwards will begin to expire in
2008 and 1998, respectively, unless previously utilized. The Company also has
German net operating loss carryforwards of approximately $2,990,000 which may be
carried forward indefinitely. The Company also has federal and state research
and development tax credit carryforwards of approximately $154,000 and $59,000
respectively, which will being to expire in 2011 unless previously utilized.
Pursuant to Internal Revenue Code Sections 382 and 383, use of the Company's net
operating loss and credit carryforwards may be limited if a cumulative change in
ownership of more than 50% occurs within a three-year period.
7. Commitments
Leases
In October 1994, the Company entered into a master lease agreement whereby it
may lease up to $1 million of equipment over a period of three years. The
Company has made deposits of $52,100 ($14,300 by the Company and DM 54,300 by
the Company's subsidiary) in connection with this arrangement. Additionally,
under the terms of this
15
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
7. COMMITMENTS (CONTINUED)
agreement, in 1996 the Company issued warrants to purchase 70,000 shares of
Series A Preferred Stock at an exercise price of $0.50 per share. In connection
with those warrants, the Company recorded $18,000 of expense in 1996. The
initial delivery of equipment under this arrangement was made to the Company's
subsidiary in December 1994. The lease extends through June 1998. Total rent
expense under this lease was approximately $199,000 in 1997 and $180,000 in
1996.
The Company entered into a lease of office and research and development space in
1996 which commenced on April 1, 1997 and extends through March 2000. Prior to
that date, the Company had been subject to a short-term lease agreement for such
space commencing in October 1996, and incurred approximately $132,000 of rent in
1997 and $34,000 in 1996. The Company's subsidiary entered into a lease of
office and research and development space in 1995 extending until July 2000.
Total rent expense under this lease was approximately $118,000 in 1997 and
$68,000 in 1996.
Future commitments under operating leases at December 31, 1997 are approximately
as follows:
1998 $ 484,000
1999 $ 425,000
2000 $ 148,000
----------
$1,057,000
==========
Consulting Agreements
The Company has entered into agreements with consultants to provide scientific
and management services. One agreement is with a board member for strategic
consulting services. This agreement expired in June 1997, and provided for
payment of $1,500 per day and stock options for 72,000 shares of Common Stock.
The Company valued these options at $9,000. This expense was recognized over
the vesting period. Payments under this agreement amounted to approximately
$90,750 and $121,000 in 1997 and 1996, respectively.
The Company has also entered into consulting agreements with two individuals for
scientific advisory services. Each individual receives a fee of $20,00 per
year, and has been granted a certain number of nonqualified stock options, which
vest upon the later of the occurrence of one or more events or ten years. The
Company valued these options at $24,000. This expense was recognized over the
period of service under the contracts. These agreements exist on a quarter-to-
quarter basis and are cancelable by either the Company or the individual upon
thirty days written notice.
16
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
7. COMMITMENTS (CONTINUED)
Development Agreements
In August 1994, the Company entered into a development agreement with a
university for the design and construction of a prototype DNA sequencing mass
spectrometer. Payments amounted to approximately $203,200 and $270,000 for the
period ending June 1997 and June 1996, respectively. In September 1997, the
Company extended the agreement through June 30, 1999 and committed to a payment
approximately $200,000 for the two year period ending June 30, 1998.
In September 1994, the Company entered into a development agreement with another
university for the design of a system for preparation of DNA samples. Payments
under the agreement were approximately $112,000 in 1997 and $150,000 in 1996.
The Company is committed to a payment of approximately $220,000 for 1998.
8. GERMAN GOVERNMENT GRANTS
The Company's wholly owned subsidiary, Sequenom GmbH, has been the recipient of
two grants from German government authorities. The first grant, received in
1996 from the City/State of Hamburg, is for DM 800,000 (approximately $520,000).
This grant reimburses the subsidiary for the cost of certain equipment to be
used in a three-year research project. If the equipment is not used for the
grant's express purpose, the equipment must be relinquished to the City/State of
Hamburg. Through December 31, 1997, approximately DM 609,000 (approximately
$377,000) of such equipment had been purchased under the grant program.
Deferred revenue at December 31, 1997 relating to the grant totaled DM 224,000
($126,000).
The second grant, also received in 1996, is from the German Federal Ministry of
Research and Development and amounts to DM 2.2 million (approximately $1.4
million). This grant reimburses the Company for certain materials, personnel,
travel and development costs. Through December 31, 1997, approximately DM
1,844,000 (approximately $1,169,000) had been expended and recognized under this
grant program.
17
<PAGE>
Sequenom, Inc.
(development stage company)
Notes to Consolidated Financial Statements (continued)
9. YEAR 2000 ISSUE (UNAUDITED)
The Company recognizes the need to ensure that its operations will not be
adversely impacted by Year 2000 hardware and software issues. The Company
intends to confirm its compliance regarding Year 2000 issues for both internal
and external information systems by the end of 1998. This process will entail
communications with significant suppliers, financial institutions, insurance
companies and other parties that provide significant services to the Company.
Expenditures required to make the Company Year 2000 compliant will be expensed
as incurred and are not expected to be material to the Company's financial
position or results of operations.
10. SUBSEQUENT EVENTS
Series C Preferred Stock
In January 1998, the Company issued an additional 2,968,252 shares of Series C
Preferred Stock at $3.15 per share for gross proceeds of $9,349,998.
Long-Term Convertible Debt
In January 1998, the Company entered into an agreement with a German bank for
debt of DM 4 million (approximately $2,285,000) which is convertible into Common
Stock. Interest is equal to 6% of the subsidiary's annual profits. However,
the combined annual interest rate on all loans granted by the same German bank
(see Note 4) may not exceed 9% of the subsidiary's annual profits or the
combined annual interest rate on all loans with the German bank may not exceed
7%. The loan may be converted to Common Stock each June or December at the
option of the bank. The conversion ratio is calculated as the arithmetic mean
between $3.15 per share and a current valuation of the Common Stock at the time
of conversion, not to exceed $8.40 per share. The loan must be repaid by
December 31, 2007, if not previously converted.
Sequenom GmbH Financing
In February 1998, a German bank purchased 2,700 shares of approximately 5% of
Sequenom GmbH common stock for DM 3 million (approximately $1,714,000). These
shares can be converted to Sequenom, Inc.'s Series C Preferred Stock at the
option of the bank. The conversion price is $3.15 per share. Sequenom, Inc.
can call for conversion in the case of an initial public offering or the exit of
existing investors.
Equipment Lease Line
In February 1998, the Company entered into a $1,500,000 equipment lease
agreement. Under the agreement, the lessor will purchase equipment which the
Company will lease and make monthly payments for over a 42-month period with a
2.72% monthly interest rate.
18
<PAGE>
Sequenom, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
Sept 30, Dec 31, Sept 30, Dec 31,
1998 1997 1998 1997
(Unaudited) (Unaudited)
---------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Cash 7,099,830 832,782 Accounts payable & accrued expenses 723,308 1,121,972
Accounts receivable -- -- Unearned revenue - current portion -- 126,000
Other currents assets 614,507 289,792 Capital lease - current portion 238,488
---------- --------- ---------- -----------
Total Current Assets 7,714,337 1,122,574 Total Current Liabilities 1,006,796 1,247,972
Property, equipment and leasehold Capital lease - long-term portion 658,774
Improvements, net 2,560,253 1,002,197 Accrued interest 498,750 424,000
Organization costs, net -- 9,996 Long-term debt 5,975,000 3,348,000
---------- ----------
Other assets 38,984 137,806 Total Long-Term Liabilities 7,132,524 3,772,000
Total Liabilities 8,139,320 5,019,972
Common and preferred stock 9,449 5,914
Additional paid in capital 19,636,829 8,569,704
Accumulated deficit (17,255,005) (11,097,565)
Cumulative translation adjustment (217,019) (225,452)
---------- -----------
Total Equity 2,174,254 (2,747,399)
--------- ---------- Total Liabilities & ---------- -----------
10,313,574 2,272,573 Stockholders' Equity 10,313,574 2,272,573
========== ========== ========== ===========
</TABLE>
Interim
<PAGE>
Sequenom, Inc.
Consolidated Statement of Operations
<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
30-Sep-98 31-Dec-97
------------- -----------
(Unaudited)
<S> <C> <C>
Research & development grants 126,000 526,573
Other Income -- 88,740
---------- -----------
126,000 615,313
Operating expenses:
Research and development 2,717,931 3,620,298
General and administrative 3,453,182 1,860,629
---------- -----------
6,171,113 5,480,927
Net loss from operations (6,045,113) (4,865,614)
Interest income 322,409 56,986
Interest expense (229,947) (308,191)
Foreign currency transaction (loss) gain (204,789) 302,950
---------- -----------
Net loss (6,157,440) (4,813,869)
</TABLE>
Interim
<PAGE>
EXHIBIT 4.4
Audited Financial Statements
as of December 31, 1997 and 1996 and for the period from
February 14, 1994 (inception) to December 31, 1997
with Report of Independent Auditors; and
Unaudited Financial Statements
for the nine months ended September 30, 1998
--------------------------------------------
<PAGE>
EXHIBIT 4.5
Undisclosed liabilities
-----------------------
See Exhibit 4.14.
------------
<PAGE>
EXHIBIT 4.6
Changes Since September 30, 1998
--------------------------------
See Exhibit 4.14.
------------
<PAGE>
EXHIBIT 4.7
Encumbrances
------------
None, other than non-consensual liens arising in the ordinary course of
business by operation of law and assets capitalized under an equipment lease
line agreement. The Corporation is not aware of the existence of any such
liens.
<PAGE>
EXHIBIT 4.8
Patents and Patent Applications
-------------------------------
ILLEGIBLE
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 4.13
Material Agreements
-------------------
ITEM 4.13 (c)
1. Employment agreement dated September 6, 1996 between Sequenom, Inc. and
Fareed Kureshy.
2. Consulting Agreement dated September 6, 1996 between Sequenom, Inc. and
Dr. Hubert Koster; Executive Employment Agreement dated April 1, 1994 between
Sequenom, Inc. and Dr. Hubert Koster.
3. Scientific Advisory Board Agreement dated September 6, 1996 between
Sequenom, Inc. and Dr. Hubert Koster.
4. Consulting Agreement dated December 16, 1996 between Sequenom, Inc. and
Thomas A. Bologna.
5. Consulting Services Agreement dated April 1, 1994 between Sequenom,
Inc. and Charles Cantor.
6. Consulting Services Agreement dated April 1, 1994 between Sequenom,
Inc. and Robert Cotter.
7. Consulting Services Agreement dated October 4, 1996 between Sequenom,
Inc. and Prof. Dr. Franz Hillenkamp.
8. Consulting Services Agreement dated February 17, 1997 between Sequenom,
Inc. and Prof. Dr. Ulf B. Gobel.
9. Severance Agreement dated May 23, 1997 between Sequenom, Inc. and Fareed
Kureshy.
10. Amendment dated June 9, 1997 to the Consulting Agreement between
Sequenom, Inc. and Thomas Bologna.
11. Consulting Agreement dated January 30, 1997 between Sequenom, Inc. and
Prof. Dr. Peter Roepstorff.
12. Consulting Agreement dated August 24, 1997 between Sequenom, Inc. and
Dr. Kris Venkat.
13. Indemnification Agreement dated December 23, 1997 between Sequenom, Inc.
and Thomas A. Bologna concerning Mr. Bologna's service as a director.
14. Indemnification Agreement dated December 23, 1997 between Sequenom, Inc.
and William Golden concerning Mr. Golden's service as a director.
<PAGE>
15. Employment Agreement dated July 1, 1997 between Sequenom, Inc. and Dr.
Hubert Koster.
In addition, the Corporation is in the process of negotiating the following
agreements:
(a) Employment Agreement between Sequenom, Inc. and Dr. Charles Cantor.
(b) Employment Agreement between Sequenom, Inc. and Dr. Toni Schuh.
ITEM 4.13 (d)
1. The Corporation maintains the 1994 Stock Plan. The Plan provides for
the grant of options to purchase Common Stock and the issuance of shares of
Common Stock to employees, officers, directors and consultants to the
Corporation. The 1994 Stock Option Plan remains in effect pending adoption of
the 1998 Stock Option Plan.
2. The Corporation provides health and dental insurance to all of its
full-time employees through a policy with the Guardian Insurance Company.
ITEM 4.13 (e)
1. Grid Promissory Note dated March 21, 1997 for up to DM 5,000,000
between the Corporation and its wholly-owned subsidiary, Sequenom Instruments
GmbH.
2. "Kooperationsvertrag" (Cooperation Agreement) between Sequenom, Inc.
and Technologie Beteiligung Gesellschaft mbH der Deutschen Ausgleichsbank
("tbg") related to a silent partnership loan of DM 1 million to the company's
wholly-owned subsidiary Sequenom Instruments GmbH dated May 1995.
3. "Kooperationsvertrag" (Cooperation Agreement) between Sequenom, Inc.
and Technologie Beteiligung Gesellschaft mbH der Deutschen Ausgleichsbank
("tbg") related to a silent partnership loan of DM 3 million to the company's
wholly-owned subsidiary Sequenom Instruments GmbH dated December 1995.
4. "Kooperationsvertrag" (Cooperation Agreement) between Sequenom, Inc.
and Technologie Beteiligung Gesellschaft mbH der Deutschen Ausgleichsbank
("tbg") related to a silent partnership loan of DM 2 million to the company's
wholly-owned subsidiary Sequenom Instruments GmbH dated October 1997.
ITEM 4.13 (g)
1. Global Master Rental Agreement between Sequenom, Inc. and Comdisco, Inc.
2. Standard Industrial Gross Lease for office and development space in San
Diego between Sequenom, Inc. and Sorrento Business Complex.
3. Master Equipment Lease Agreement dated February 5, 1998 between
Sequenom, Inc. and Phoenix Leasing Incorporated.
<PAGE>
4. Amendment No. 1 dated September 16, 1998 to the Master Equipment Lease
Agreement dated February 5, 1998 between Sequenom, Inc. and Phoenix Leasing
Incorporated.
ITEM 4.13 (i)
1. Sponsored Research Agreement dated September 15, 1994 between Sequenom,
Inc. and the Trustees of Boston University.
2. Termination Letter dated February 5, 1997 with respect to the Sponsored
Research Agreement dated September 15, 1994 between Sequenom, Inc. and the
Trustees of Boston University.
3. Research Agreement dated October 1, 1994 between Sequenom, Inc. and the
Johns Hopkins University.
4. Amendment No. 1 dated October 23, 1995 to Research Agreement dated
October 1, 1994 between Sequenom, Inc. and the Johns Hopkins University.
5. Patent and Know-How License Agreement dated June 1, 1996 between
Sequenom, Inc. and the Trustees of Boston University.
6. Patent Sublicense Agreement dated November 19, 1996 between Sequenom,
Inc. and Protogene Laboratories, Inc.
7. Confidentiality/Material Transfer Agreement dated December 1, 1995
between Sequenom, Inc. and Becton, Dickinson and Company.
8. Sponsored Research Agreement dated July 1, 1996 between Sequenom, Inc.
and the Korea Advanced Institute of Science and Technology ("KAIST").
9. License Agreement between Sequenom, Inc. and the Johns Hopkins
University, as contemplated by item 3 above (negotiated but not yet executed by
the parties).
10. Letter extending the term of the Sponsored Research Agreement dated
July 9, 1997 between Sequenom, Inc. and KAIST.
11. Agreement dated October 8, 1997 between Sequenom, Inc. and Community
Technology Fund, Office of Technology Transfer of Community Technology Fund and
Center for Advanced Biotechnology of Boston University.
* * *
12. The Corporation's wholly-owned subsidiary, Sequenom Instruments GmbH,
has the following material agreements relating to loans and grants:
. Beteiligungsvertrag (Investment Contract) between Sequenom
Instruments GmbH and Technologie Beteiligung Gesellschaft mbH der Deutschen
Ausgleichsbank ("tbg") for a silent partnership loan of DM 1 million dated
May 1995.
<PAGE>
. Beteiligungsvertrag (Investment Contract) between Sequenom
Instruments GmbH and Technologie Beteiligung Gesellschaft mbH der Deutschen
Ausgleichsbank ("tbg") for a silent partnership loan of DM 3 million dated
December 1995.
. Zuwendung aus dem Bundeshaushalt (Federal Budget Grant) dated
August 17, 1995 for the co-operative project "High Speed DNA Sequencing and
DNA Diagnostics with the Help of Mass Spectrometry" from the
Bundesministerium flur Bildung, Wissenschaft, Forschung und Technologie (the
Ministry for Education, Science, Research and Technology) in the amount of
DM 2.2 million.
. Foderantrag (Grant Application) for the period October 1, 1995 to
December 31, 1998 for the co-operative project High Speed DNA Sequencing and
DNA Diagnostics with the Help of Mass Spectrometry with the Freie und
Hansestadt Hamburg Wirtschaftbehorde (the Trade Bureau of the City/State of
Hamburg) in the amount of DM 800,000.
<PAGE>
EXHIBIT 4.14
Compliance with State Securities Laws in connection with Stock Option Grants
----------------------------------------------------------------------------
The Corporation granted stock options to various individuals between the
dates of February, 1994 and September, 1998 under the Corporation's 1994 Stock
Plan (the "Plan"). The shares of the Corporation's Common Stock that are
subject to the grants were not qualified or exempted under applicable state
securities laws and therefore the options may have been granted in violation of
such laws. As a result, the Corporation may have potential liability to some or
all of the individuals to whom the options were granted. The Corporation is
currently analyzing this matter and cannot, at this time, ascertain the extent
of its potential liability, if any. Nevertheless, the Corporation does not
believe that such potential liability, if any, would exceed $200,000 in the
aggregate.
<PAGE>
EXHIBIT 4.l5
Insurance
---------
See Exhibit 4.13 and the following:
------------
1. St. Paul Fire and Marine Insurance Company
Policy Period: October 26, 1998 - October 25, 1999
Premium: $5,980
Policy Number: FK06603871
Commercial General Liability Limits:
<TABLE>
<S> <C>
Each Event: $2,000,000
Premises Damage: $1,000,000
Medical Expenses: $ 5,000
Personal Injury and Advertising Injury: $2,000,000
Aggregate Limit: $4,000,000
Loss of Earnings and Extra Expenses Coverage, Limit: $ 500,000
Specialized Medical & Computer Equipment: $1,000,000
Hired and non-owned Auto Liability: $2,000,000
Subject to $500 deductible:
Business Contents: $1,000,000
Valuable Papers $ 25,000
Account Receivable $ 25,000
Money and Securities (Inside & Outside) $ 12,000
</TABLE>
2. Zenith Insurance Company
Policy Period: October 1, 1998 - October 1, 1999
Premium: $6,143
Policy number: Z042591702
<TABLE>
<S> <C>
Workers Compensation Insurance
Employers Liability Insurance Limits:
Bodily Injury by Accident: $1,000,000 each accident
Bodily Injury by Disease: $1,000,000 each employee
Bodily Injury by Disease $1,000,000 policy limit
</TABLE>
<PAGE>
3. Woodruff - Sawyer & Co. - Insurer: 100% Lloyd's of London
Policy Period: October 7, 1998 - October 7, 1999
Premium: $16,536
Policy number: DOM3000604
Directors & Officers Liability
Limit(s): $2,000,000
4. The Corporation also maintains life insurance coverage on Dr. Hubert Koster
in the amount of $1,000,000 ($500,000 in whole life and $500,000 in term
life). The Corporation is beneficiary of both policies.
<PAGE>
EXHIBIT 4.16A
Form of Registration Rights Agreement
-------------------------------------
<PAGE>
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement (this "Agreement")
is entered into as of December 21, 1998 by and among Sequenom, Inc., a Delaware
corporation (the "Corporation"); the holders (the "Series B Investors") of
shares of the Corporation's Series B Convertible Preferred Stock, $.001 par
value per share (the Series B Preferred Stock"); the holders (the "Series C
Investors") of shares of the Corporation's Series C Convertible Preferred Stock,
$.001 par value per share (the "Series C Preferred Stock"); and the purchasers
of shares of the Corporation's Series D Convertible Preferred Stock, par value
$.001 per share (the "Series D Preferred Stock"), pursuant to the Series D
Convertible Preferred Stock Purchase Agreement dated as of the date hereof (the
"Purchase Agreement"), including any Additional Investors as defined in the
Purchase Agreement (such purchasers of Series D Preferred Stock being
hereinafter sometimes referred to individually as an "Investor" and collectively
as the "Investors").
WHEREAS, the Corporation, the Series B Investors and the Series C Investors
are the parties to a Registration Rights Agreement dated as of May 8, 1997, as
amended as of January 12, 1998 (the "Prior Registration Rights Agreement"),
pursuant to which the Corporation granted certain registration rights to the
Series B Investors, the Series C Investors and certain of their transferees;
WHEREAS, the Corporation now wishes to sell to the Investors certain shares
of its Series D Preferred Stock;
WHEREAS, the Series B Preferred Stock, the Series C Preferred Stock and the
Series D Preferred Stock are convertible into shares of the Corporation's Common
Stock; and
WHEREAS, as a condition to entering into the Purchase Agreement, the
Investors have required that the Corporation, the Series B Investors and the
Series C Investors execute this Agreement to provide the Investors rights to
register the shares of Common Stock issuable upon conversion of their Series D
Preferred Stock and certain other securities of the Corporation described below;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
-----------
the following meanings:
(a) The term "Act" means the Securities Act of 1933, as amended;
----------
(b) The term "Holder" means any Investor, any Series B Investor, any
--------
Series C Investor and any other person or entity holding Registrable Securities
to whom the registration rights granted in this Agreement have been transferred
pursuant to Section 14 hereof;
(c) The term "Preferred Stock" means the Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock;
<PAGE>
(d) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act and the declaration or ordering of effectiveness of such
registration statement; and
(e) The term "Registrable Securities" means (1) the Common Stock
issuable upon conversion of the Preferred Stock, (2) Common Stock purchased by
an Investor pursuant to Section 8.1 of the Purchase Agreement (or Common Stock
for or into which New Securities (as therein defined) purchased by the Investor
pursuant to such Section 8.1 may be exercised or converted) or pursuant to the
Stock Restriction Agreement dated as of the date hereof among the Corporation,
the Series B Investors, the Series C Investors, the Investors and certain
additional parties identified therein, and (3) any Common Stock of the
Corporation issued as a dividend or other distribution with respect to, or in
exchange or in replacement of, such Preferred Stock or Common Stock.
In addition, for purposes of all calculations and notices under this
Agreement, and all other provisions of this Agreement where the context permits,
the term "Registrable Securities" shall include securities issuable upon
conversion of the Preferred Stock, a holder of the Preferred Stock shall be
deemed the Holder of such securities and such securities shall be deemed
outstanding Registrable Securities hereunder. Notwithstanding the foregoing,
nothing in this Agreement shall require the Corporation actually to register any
shares of the Preferred Stock.
2. Request for Registration. If at any time after the earlier of (i) the
------------------------
first underwritten public offering of securities for the account of the
Corporation, and (ii) the date two (2) years from the date hereof, the
Corporation shall receive a written request (specifying that it is being made
pursuant to this Section 2) from the Holder or Holders at least fifty percent
(50%) of the then outstanding Registrable Securities that the Corporation file a
registration statement under the Act, or a similar document pursuant to any
other statute then in effect corresponding to the Act, covering the registration
of at least the lesser of (i) at least twenty-five percent (25%) of the then
outstanding Registrable Securities and (ii) Registrable Securities the expected
price to the public of which equals or exceeds $10,000,000, then the Corporation
shall promptly notify all other Holders of such request and shall use its best
efforts to cause all Registrable Securities that Holders have requested be
registered to be registered under the Act.
Notwithstanding the foregoing, (a) the Corporation shall not be obligated
to effect a registration pursuant to this Section 2 during the period starting
with the date sixty (60) days prior to the Corporation's estimated date of
filing of, and ending on a date six (6) months following the effective date of,
a registration statement pertaining to an underwritten public offering of
securities for the account of the Corporation, provided that the Corporation is
actively employing in good faith its best efforts to cause such registration
statement to become effective and that the Corporation's estimate of the date of
filing such registration statement is made in good faith; (b) the Corporation
shall not be obligated to effect a registration pursuant to this Section 2
within six (6) months after the effective date of a prior registration under
such Section; (c) if the Corporation shall furnish to the Holders a certificate
signed by the President of the Corporation stating that in the good faith
judgment of the Board of Directors it would be seriously detrimental to the
Corporation or its stockholders for a registration statement to be filed in the
near future, then the Corporation's obligation to use its best efforts to file a
registration
-2-
<PAGE>
statement shall be deferred for a period not to exceed three (3) months; and (d)
the Corporation may postpone a registration pursuant to this election for such
period of time as may be required to permit the use of regular audited year-end
financial statements with supplemental short period figures for a period not
exceeding six (6) months unless the Holders agree to bear the costs of any
special audit.
The Corporation shall not be obligated to effect more than two (2)
registrations pursuant to this Section 2. Any request for registration under
this Section 2 must be for a firm commitment underwritten public offering to be
managed by an underwriter or underwriters of recognized national standing
reasonably acceptable to the Corporation.
3. Corporation Registration. Subject to Section 8 of this Agreement, if
------------------------
at any time the Corporation proposes to register any of its Common Stock under
the Act in connection with the public offering of such securities for its own
account or for the accounts of other stockholders, solely for cash on a form
that would also permit the registration of the Registrable Securities, the
Corporation shall, each such time, promptly give each Holder written notice of
such determination. Upon the written request of any Holder given within thirty
(30) days after mailing of any such notice by the Corporation, the Corporation
shall, subject to the limitations set forth in Section 8(a), use its best
efforts to cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested be registered.
4. Obligations of the Corporation. Whenever required under Section 2, 3,
------------------------------
or 11 to use its best efforts to effect the registration of any Registrable
Securities, the Corporation shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Securities and Exchange Commission
("SEC") a registration statement with respect to such Registrable Securities and
use its best efforts to cause such registration statement to become and remain
effective; provided, however, that in connection with any proposed registration
intended to permit an offering of any securities from time to time (i.e., a so-
called "shelf registration"), the Corporation shall in no event be obligated to
cause any such registration to remain effective for more than one hundred eighty
(180) days.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement, provided
that the Corporation shall not be required in connection therewith or as a
-3-
<PAGE>
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, and further provided
that (anything in this Agreement to the contrary notwithstanding with respect to
the bearing of expenses) if any jurisdiction in which the securities shall be
qualified shall require that expenses incurred in connection with the
qualification of the securities in that jurisdiction be borne by selling
stockholders, then such expenses shall be payable by selling stockholders pro
rata, to the extent required by such jurisdiction.
(e) Provide a transfer agent for the Common Stock no later than the
effective date of the first registration of any Registrable Securities.
5. Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Corporation to take any action pursuant to this Agreement
that the Holders shall furnish to the Corporation such information regarding
them, the Registrable Securities held by them, and the intended method of
disposition of such securities as the Corporation shall reasonably request and
as shall be required in connection with the action to be taken by the
Corporation.
6. Expenses of Demand Registration. All expenses incurred in connection
-------------------------------
with registrations pursuant to Section 2 (excluding underwriters' discounts and
commissions), including, without limitation, all registration and qualification
fees, printers, and accounting fees, fees and disbursements of counsel for the
Corporation, and the reasonable fees and disbursements of one special counsel
for the selling Holders, shall be borne by the Corporation.
7. Corporation Registration Expenses. All expenses (excluding
---------------------------------
underwriters' discounts and commissions) incurred in connection with a
registration pursuant to Section 3, including, without limitation, any
additional registration and qualification fees and any additional fees and
disbursements of counsel to the Corporation that result from the inclusion of
securities held by the Holders in such registration and the reasonable fees and
disbursements of one special counsel for the selling stockholders, shall be
borne by the Corporation; provided, however, that if the registration is of
exclusively a secondary offering, the holders shall bear their proportionate
share of the expenses incurred in connection with any registration (provided all
stockholders registering shares thereunder bear their proportionate share of
expenses), except expenses which the Corporation would have incurred whether or
not the securities held by the Holders were included in such registration
(including, without limitation, the expense of preparing normal audited or
unaudited financial statements).
8. Underwriting Requirements.
-------------------------
(a) In connection with any offering involving an underwriting of
shares being issued by the Corporation, the Corporation shall not be required
under Section 3 to include any of the Holders' Registrable Securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Corporation and the underwriters selected by it, and then only in
such quantity as will not, in the reasonable opinion of the underwriters,
jeopardize the success of the offering by the Corporation. If the total amount
of securities that all Holders request to be included in an underwritten
offering exceeds the amount of securities that the underwriters reasonably
believe compatible with the success of the offering, the Corporation
-4-
<PAGE>
shall only be required to include in the offering so many of the securities of
the selling Holders as the underwriters reasonably believe will not jeopardize
the success of the offering (the securities so included to be apportioned pro
rata among the selling Holders according to the total amount of securities owned
by said selling Holders, or in such other proportions as shall mutually be
agreed to by such selling Holders), provided that in the case of an offering
involving shares being issued by the Corporation, no such reduction shall be
made with respect to any securities offered by the Corporation for its own
account, and provided further that no securities of any stockholder who is not a
Holder shall be included in such offering, other than securities of stockholders
who have initiated such registration pursuant to the exercise of contractual
rights to do so, unless all securities which the Holders have requested to be
included are included on a pro rata basis with the securities of any other
stockholders who have a contractual right to include their securities in such
offering.
(b) With respect to any underwriting of shares to be registered under
Section 2, or an underwriting of shares to be registered under Section 11, if
the Holders of a majority of the then outstanding Registrable Securities have
requested registration thereunder, such Holders shall have the right to
designate the managing underwriter or underwriters, subject to the consent of
the Corporation. In all other circumstances under such Sections and in
connection with registrations under Section 3, the Corporation shall have the
right to designate the managing underwriter or underwriters, subject to the
consent of the Holders of a majority of the Registrable Securities participating
in the underwriting. In any such case, such consent shall not be unreasonably
withheld or delayed.
9. Delay of Registration. No Holder shall have any right to take any
---------------------
action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
10. Indemnification. In the event any Registrable Securities are included
---------------
in a registration statement under this Agreement:
(a) To the extent permitted by law, the Corporation will indemnify and
hold harmless each Holder requesting or joining in a registration, any
underwriter (as defined in the Act) for it, and each person, if any, who
controls such Holder or underwriter within the meaning of the Act, against any
losses, claims, damages or liabilities, joint or several, to which they may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
on any untrue or alleged untrue statement of any material fact contained in such
registration statement, including, without limitation, any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading or arise out of any
violation by the Corporation of any rule or regulation promulgated under the Act
applicable to the Corporation and relating to action or inaction required of the
Corporation in connection with any such registration; and will reimburse each
such Holder, such underwriter, or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action, provided, however,
that the indemnity agreement contained in this Section 10(a) shall not apply
-5-
<PAGE>
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Corporation
(which consent shall not be unreasonably withheld or delayed) nor shall the
Corporation be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in connection with such registration statement, preliminary prospectus,
final prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each Holder requesting or joining
in a registration will indemnify and hold harmless the Corporation, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Corporation within the meaning of the Act, and
any underwriter for the Corporation (within the meaning of the Act) against any
losses, claims, damages or liabilities to which the Corporation or any such
director, officer, controlling person or underwriter may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary prospectus or final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and will reimburse the Corporation or any such director,
officer, controlling person or underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 10(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld) and provided further that no Holder shall have any
liability under this Section 10(b) in excess of the net proceeds actually
received by such Holder in the relevant public offering.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 10, notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties. The failure to notify an indemnifying
party promptly, of the commencement of any such action, if prejudicial to his
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 10, but the omission so to
notify the indemnifying party will not relieve him of any liability that he may
have to any indemnified party otherwise than under this Section 10.
-6-
<PAGE>
11. Registrations on Form S-3.
-------------------------
(a) If (i) the Corporation shall receive a written request (specifying
that it is being made pursuant to this Section 11) from the Holder or Holders of
at least twenty-five percent (25%) of the then outstanding Registrable
Securities that the Corporation file a registration statement on Form S-3 (or
any successor form to Form S-3 regardless of its designation) for a public
offering of shares of the Registrable Securities the reasonably anticipated
aggregate price to the public of which would exceed Two Million Dollars
($2,000,000), and (ii) the Corporation is a registrant entitled to use Form S-3
to register such shares, then the Corporation shall use its best efforts to
cause such shares to be registered on Form S-3 (or any successor form to Form S-
3).
(b) All expenses (excluding underwriters' discounts and commissions)
incurred in connection with the first two registrations requested pursuant to
Section 11(a), including, without limitation, all registration, qualification,
printing, and accounting fees, and fees and disbursements of one special counsel
to the selling Holder or Holders and counsel to the Corporation, shall be borne
by the Corporation. All such expenses for registrations pursuant to Section
11(a) after the first two such registrations shall be borne by the Corporation,
except that the selling Holders shall pay all fees of their legal counsel, if
any, in connection therewith.
(c) Holders' rights to registration under this Section 11 are in
addition to, and not in lieu of, their rights to registration under Sections 2
and 3 of this Agreement.
12. Reports Under Securities Exchange Act of 1934. With a view to making
---------------------------------------------
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Corporation to the public without registration, the
Corporation agrees to use its best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to ninety (90) days
after the effective date of the first registration statement covering an
underwritten public offering filed by the Corporation;
(b) file with the SEC in a timely manner all reports and other
documents required of the Corporation under the Act and the Securities Exchange
Act of 1934, as amended (the "1934 Act"); and
(c) furnish to any Holder forthwith upon request a written statement
by the Corporation that it has complied with the reporting requirements of Rule
144 (at any time after ninety (90) days after the effective date of said first
registration statement filed by the Corporation), and of the Act and the 1934
Act (at any time after it has become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Corporation, and such
other reports and documents so filed by the Corporation as may be reasonably
requested in availing any such holder to take advantage of any rule or
regulation of the SEC permitting the selling of any such securities without
registration.
-7-
<PAGE>
13. Limitations in Connection with Future Grants of Registration Rights.
-------------------------------------------------------------------
Without the prior written consent of the Holder or Holders of a majority of the
then outstanding Registrable Securities issued or issuable upon conversion of
the Preferred Stock, the Corporation shall not grant rights to cause the
Corporation to register any of its securities to any person or entity other than
the Additional Investors as contemplated hereunder.
14. Transfer of Registration Rights. The registration rights of any
-------------------------------
Series B Investor, Series C Investor or Investor (and of any permitted
transferee of any Series B Investor, Series C Investor or Investor or its
permitted transferees) under this Agreement with respect to any shares of
Registrable Securities may be transferred to any Affiliate of such Series B
Investor, Series C Investor or Investor or such permitted transferee, or to any
transferee who acquires (otherwise than in a registered public offering) at
least 20,000 shares of Registrable Securities held or acquired as of the date
hereof by such Series B Investor, Series C Investor or Investor; provided,
however, that the Corporation is given written notice by the Holder at the time
of such transfer stating the name and address of the transferee and identifying
the securities with respect to which the rights under this Agreement are being
assigned. For such purpose, an "Affiliate" of any Series B Investor, Series C
Investor or Investor (or any such transferee) means any general or limited
partner of such Series B Investor, Series C Investor or Investor (or transferee)
if it is a partnership, or any person or entity that, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Series B Investor, Series C Investor or Investor or
transferee. In addition, for purposes of this section, in the case of any
Series B Investor, Series C Investor or Investor that is a limited partnership
for which TVM Techno Venture Management Limited Partnership, TVM Techno Venture
Management III GmbH or any of their respective Affiliates serves as a general
partner, the term "Affiliate" of any such Series B Investor, Series C Investor
or Investor shall include KBL Founder Ventures SCA, KB Lux Venture Capital Fund
- - European Biotechnology and their respective Affiliates and Alpinvest
International B.V. and its Affiliates.
15. Mergers, Etc. The Corporation shall not, directly or indirectly,
-------------
enter into any merger, consolidation or reorganization in which the Corporation
shall not be the surviving corporation unless the proposed surviving corporation
shall, prior to such merger, consolidation or reorganization, agree in writing
to assume the obligations of the Corporation under this Agreement, and for that
purpose references hereunder to "Registrable Securities" shall be deemed to be
references to the securities which the Holders would be entitled to receive in
exchange for Registrable Securities under any such merger, consolidation or
reorganization; provided, however, that the provisions of this Agreement shall
not apply in the event of any merger, consolidation or reorganization in which
the Corporation is not the surviving corporation if the Holders of Registrable
Securities are entitled to receive in exchange therefor (i) cash, or (ii)
securities of the acquiring corporation which may be immediately sold to the
public without registration under the Act.
16. Stand-Off Agreement. Each Holder, if requested by the Corporation and
-------------------
the managing underwriter of an offering by the Corporation of Common Stock or
other securities of the Corporation pursuant to a registration statement under
the Act, shall agree not to sell publicly or otherwise transfer or dispose of
any Registrable Securities or other securities of the
-8-
<PAGE>
Corporation held by such Holder for a specified period of time (not to exceed
180 days) following the effective date of such registration statement; provided,
that:
(a) such agreement shall only apply to the first registration
statement covering Common Stock to be sold on the Corporation's behalf to the
public in an underwritten offering; and
(b) all holders of five percent (5%) or more of the shares of Common
Stock then outstanding (including shares of Common Stock issuable upon the
conversion of Preferred Stock, or other convertible securities, or upon the
exercise of options, warrants or rights) and all officers and directors of the
Corporation enter into similar agreements.
17. Accession. Any Additional Investors as defined in the Purchase
---------
Agreement shall automatically become an Investor hereunder by delivering to the
Corporation a written instrument in the form of Exhibit A hereto, by which such
Additional Investor agrees to be bound by the obligations imposed under this
Agreement, whereupon such Additional Investor shall automatically become a party
to this Agreement and shall thereupon be deemed an "Investor" for all purposes
of this Agreement.
18. Notices. All notices, requests, consents and other communications
-------
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by first class mail postage
prepaid (other than to non-U.S. parties) or by fax or DHL, Federal Express or
other internationally recognized courier service, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by the addressee to the addressor listing all parties:
(i) if to the Corporation, to:
Sequenom, Inc.
11555 Sorrento Valley Road, Suite C
San Diego, CA 92121
Attention: President
Fax: (619) 350-0344
with a copy to:
John A. Denniston, Esq.
Brobeck, Phleger & Harrison LLP
550 West C Street, Suite 1300
San Diego, California 92101
Fax: (619) 234-3848
(ii) if to the Series B Investors, the Series C Investors or the
Investors (or their respective transferees), to their respective
last known address or their respective address, if any, appearing
in the books of the Corporation.
-9-
<PAGE>
19. Miscellaneous.
-------------
(a) This Agreement states the entire agreement of the parties
concerning the subject matter hereof, and supersedes all prior agreements,
written or oral, between or among them concerning such subject matter.
(b) This Agreement may be amended, and compliance with any provision
of this Agreement may be omitted or waived, only by the written agreement of the
Corporation and the Holders of at least two-thirds in voting power of the then
outstanding Registrable Securities issued or issuable upon conversion of the
Preferred Stock to be bound thereby.
(c) This Agreement amends and restates the Prior Registration Rights
Agreement, which upon execution hereof shall be of no further force or effect.
(d) This Agreement shall be governed by, and construed and enforced in
accordance with, the substantive laws of the State of California, without regard
to its principles of conflicts of laws.
(e) This Agreement may be executed in any number of counterparts, each
such counterpart shall be deemed to be an original instrument, and all such
counterparts together shall constitute but one agreement. Any such counterpart
may contain one or more signature pages.
* * *
-10-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Registration Rights Agreement as of the date first written above.
SEQUENOM, INC.
By:
--------------------------------------
Its President
SERIES B INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
--------------------------------------
Its:
--------------------------------------
TVM INTERTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
--------------------------------------
Its:
--------------------------------------
<PAGE>
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
--------------------------------------
Its:
--------------------------------------
TVM EUROTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
--------------------------------------
Its:
--------------------------------------
TVM TECHNO VENTURE INVESTORS NO. I LIMITED
PARTNERSHIP
By:
--------------------------------------
General Partner
KBL Founder Ventures SCA
By:
--------------------------------------
Its:
--------------------------------------
[SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT]
<PAGE>
ALPINVEST INTERNATIONAL B.V.
By:
--------------------------------------
Its:
--------------------------------------
BOSTON UNIVERSITY NOMINEE
PARTNERSHIP
By: ____________________________________
General Partner
_________________________________________
Gerald E. Coughlan
_________________________________________
Charles P. Floe
_________________________________________
Hellmut Kirchner
_________________________________________
Herwig Brunner
_________________________________________
Franz A. Wirtz
_________________________________________
Hannemarie Wirtz
-----------------------------------------
Hubert Koster
-----------------------------------------
Ernst-Gunter Afting
[SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT]
<PAGE>
SVE STAR VENTURES
ENTERPRISES NO. III GbR,
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: __________________________________
Managing Partner
SVE STAR VENTURES
ENTERPRISES NO. IIIa GbR,
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: __________________________________
Managing Partner
SVE STAR VENTURES
MANAGEMENTGESELLSCIHAFT MBH
Nr. 3 & CO. BETEILIGUNGS KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: __________________________________
Managing Partner
[SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT]
<PAGE>
SERIES C INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
--------------------------------------
Its:
--------------------------------------
TVM INTERTECH
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
--------------------------------------
Its:
--------------------------------------
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
--------------------------------------
Its:
--------------------------------------
[SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT]
<PAGE>
TVM EUROTECH
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
--------------------------------------
Its:
--------------------------------------
TVM TECHNO VENTURE INVESTORS NO. I
LIMITED PARTNERSHIP
By:
--------------------------------------
General Partner
KBL FOUNDER VENTURES SCA
By: ____________________________________
Its: ____________________________________
ALPINVEST INTERNATIONAL B.V.
By:
--------------------------------------
Its:
--------------------------------------
_________________________________________
Hellmut Kirchner
_________________________________________
Hellmut Kirchner as Trustee
_________________________________________
Franz A. Wirtz
[SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT]
<PAGE>
_________________________________________
Hannemarie Wirtz
GLS LP INVESTMENT III LIMITED
By: ____________________________________
Its: ____________________________________
KLEINWORT BENSON LIMITED
By: ____________________________________
Its: ____________________________________
LOMBARD ODIER & CIE
By:
--------------------------------------
Its:
--------------------------------------
MERIFIN CAPITAL N.V.
By: ____________________________________
Its: ____________________________________
S.R. ONE, LIMITED
By: ____________________________________
Its: ____________________________________
SVM Star Ventures Managementgeselleschaft
mbH Nr. 3 & Co. Beteiligungs KG
By: SVM Star Ventures Managementgeselleschaft mbH Nr.
By: ____________________________________
Its: ____________________________________
[SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT]
<PAGE>
SVE STAR VENTURES ENTERPRISES
NO. IIIA, a German Civil Law
Partnership (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: ________________________________
Its: ________________________________
SVE STAR VENTURES ENTERPRISES
NO. III, a German Civil Law
Partnership (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: ________________________________
Its: ________________________________
TBG-TECHNOLOGIE-
BETEILIGUNGSGESELLSCHAFT MBH
DER DEUTSCHEN AUSGLEICHSBANK
By: ________________________________
Its: ________________________________
[SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT]
<PAGE>
SEQUENOM, INC.
Registration Rights Agreement
Investor Signature Page
-----------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Investor" as defined in the Registration Rights Agreement
dated as of December 21, 1998, by and among Sequenom, Inc. and the parties named
therein, (ii) that it is a party to the Registration Rights Agreement for all
purposes and (iii) that it is bound by all terms and conditions of the
Registration Rights Agreement.
EXECUTED this 21st day of December, 1998.
-----------------------------------------
(print name)
By:
--------------------------------------
Title:
-----------------------------------
[INVESTOR SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT]
<PAGE>
Exhibit A
---------
SEQUENOM, INC.
Registration Rights Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Additional Investor" as defined in the Series D Convertible
Preferred Stock Purchase Agreement dated as of December 21, 1998 and an
"Investor" as defined in the Registration Rights Agreement dated as of December
21, 1998, each by and among Sequenom, Inc. and the parties named therein, (ii)
that it is a party to the Registration Rights Agreement for all purposes and
(iii) that it is bound by all terms and conditions of the Registration Rights
Agreement.
EXECUTED this ____ day of ____________, 1999.
------------------------------------------
(print name)
By:
---------------------------------------
Title:
------------------------------------
Address:
----------------------------------
------------------------------------------
------------------------------------------
[ADDITIONAL INVESTOR SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT]
<PAGE>
EXHIBIT 4.16b
Form of Voting Agreement
------------------------
<PAGE>
AMENDED AND RESTATED VOTING AGREEMENT
This Amended and Restated Voting (this "Agreement") is entered into as of
December 21, 1998 by and among Sequenom, Inc., a Delaware corporation (the
"Corporation"); Hubert Koster, Nola E. Masterson and Robert E. Patterson (the
"Founders"); TVM Techno Venture Enterprises No. II Limited Partnership, TVM
Intertech Limited Partnership, TVM Zweite Beteiligung-U.S. Limited Partnership,
TVM Eurotech Limited Partnership, TVM Techno Venture Investors No. 1 Limited
Partnership and *** (the "Original Investors"); the holders (the "Series B
Investors") of shares of the Corporation's Series B Convertible Preferred Stock,
$.001 par value per share (the "Series B Preferred Stock"); the holders (the
"Series C Investors") of shares of the Corporation's Series C Convertible
Preferred Stock, $.001 par value per share (the "Series C Preferred Stock"); and
the purchasers of shares of the Corporation's Series D Convertible Preferred
Stock, $.001 par value per share ("Series D Preferred Stock"), pursuant to the
Series D Convertible Preferred Stock Purchase Agreement (the "Purchase
Agreement") dated as of the date hereof, including any Additional Investors as
defined in the Purchase Agreement (all such purchasers of Series D Preferred
Stock under the Purchase Agreement being referred to as the "Investors," and all
such Founders, Original Investors, Series B Investors, Series C Investors and
Investors being referred to as the "Stockholders").
AGREEMENT
---------
In consideration of the mutual covenants herein contained, the parties
hereto agree as follows:
1. Board of Directors. The Stockholders agree to vote all shares of the
------------------
Corporation's Common Stock, $.001 par value per share ("Common Stock"), Series A
Convertible Preferred Stock, $.001 par value per share ("Series A Preferred
Stock"), Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock and any other class of voting security of the Corporation (the "Shares")
now or hereafter owned or controlled by them, and otherwise to use their
respective best efforts as stockholders of the Corporation, to set the number of
directors of the Corporation at five and to elect as directors, on the date of
this Agreement and in any subsequent election of directors of the Corporation:
(a) one person designated by the Founders;
(b) one person designated by the Original Investors;
(c) one person designated by either (i) GLS LP Investment III Limited
("GLS") for so long as GLS holds at least 793,650 shares of Series C Preferred
Stock, or (ii) the holders of a majority of the Series C Preferred Stock if GLS
holds less than 793,650 shares of Series C Preferred Stock; and
(d) two persons who are not employees of the Corporation (the
"Independent Directors"), who have experience in the Corporation's industry and
who are reasonably acceptable to a majority of the other directors.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Any person or entity or group of persons or entities entitled to make a
director designation hereunder (a "Designating Party") shall furnish written
notice to the Corporation at least 30 days prior to any election of directors of
its director-designee or director-designees and the Corporation shall furnish
written notice thereof to the Stockholders at least 10 days prior to any such
election of directors. In the absence of such notice, the director-designee or
director-designees of such Designating Party then serving and previously
designated shall be reelected if still eligible to serve as provided herein. In
the event that any Designating Party that is a group of Stockholders cannot
agree upon a director-designee, the identity of the director-designee of such
Designating Party shall be determined by a plurality in voting power of the
outstanding capital stock of the Corporation held by the Stockholders
constituting such Designating Party.
This Agreement is not intended, and shall not be construed, to confer upon
any person designated hereunder for election to the Board of Directors any right
to serve or to continue to serve in such capacity. Any Designating Party may,
at any time, determine to remove its then-current director-designee and
designate another person for election to the Board of Directors in place of the
person then serving as the director-designee of such Designating Party. In the
event any such determination is made, the Stockholders shall promptly vote to
remove the director-designee of such Designating Party then serving, and to
elect as a director the replacement director-designee of such Designating Party.
At any time a majority of the directors other than the Independent
Directors may determine to remove any Independent Director from the Board of
Directors and designate another person for election to the Board of Directors in
place of the person then serving as such Independent Director. In the event any
such determination is made, the Stockholders shall promptly vote to remove the
applicable Independent Director and to elect as a director the replacement
Independent Director-designee.
Any vacancy on the Board of Directors created by the resignation, removal,
incapacity, or death of any person designated under this Section 1 shall be
filled by another person designated by the original Designating Party. The
Stockholders shall vote their respective Shares in accordance with such new
designation, and any such vacancy shall not be filled in the absence of a new
designation by the original Designating Party.
This Section 1 shall terminate and be of no further force and effect upon
the closing of a firm commitment underwritten public offering of Common Stock of
the Corporation pursuant to an effective registration statement under the
Securities Act of 1933, as amended, in which the aggregate gross proceeds to the
Corporation from such offering are not less than $20,000,000 and the offering
price per share is not less than $10.00, appropriately adjusted to take account
of any stock split, stock dividend, combination of shares or similar event.
In the event that any Designating Party (or its or their respective
partners, stockholders and affiliates) owns, in the aggregate, fewer than
200,000 shares of the Corporation's Common Stock, subject to adjustment for
stock splits, stock dividends, combinations of shares and similar events, such
Designating Party's right to make designations under this Section 1 shall
terminate, and the obligation of the other parties under this Section 1 to vote
for any members of the Board of Directors designated by such Designating Party
shall terminate, but all other obligations of all parties hereunder shall
continue unless otherwise terminated. For purposes of this paragraph, in
-2-
<PAGE>
determining the number of shares of Common Stock owned by a Designating Party,
ownership by such Designating Party of shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock
shall be deemed to be ownership by it of that number of shares of Common Stock
into which such shares of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock are convertible.
2. Director Indemnification. In the event that any director contemplated
------------------------
by this Agreement shall be made or threatened to be made a party to any action,
suit or proceeding with respect to which he may be entitled to indemnification
by the Corporation pursuant to its Certificate of Incorporation, By-Laws or
otherwise, he shall be entitled to be represented in such action, suit or
proceeding by counsel of his choice and the expenses of such representation
shall be reimbursed by the Corporation to the extent provided in or authorized
by said Certificate of Incorporation or other provision and permitted by
applicable law.
The Corporation and the Stockholders agree not to take any action to amend
any provision of the Certificate of Incorporation or By-Laws of the Corporation
relating to indemnification of directors, as presently in effect, without the
prior written consent of holders of at least two-thirds in voting power of the
Shares held by Founders, Original Investors, Series B Investors, Series C
Investors and the Investors, voting together as a single class.
3. Accession. Any Additional Investors as defined in the Purchase
---------
Agreement shall automatically become an Investor hereunder by delivering to the
Corporation a written instrument in the form of Exhibit A hereto, by which such
---------
Additional Investor agrees to be bound by the obligations imposed under this
Agreement, whereupon such Additional Investor shall automatically become a party
to this Agreement and shall thereupon be deemed an "Investor" and a
"Stockholder" for all purposes of this Agreement.
4. Notices. All notices, requests, consents and other communications
-------
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by first class mail postage
prepaid (other than to non-U.S. parties), by fax, or by DHL, Federal Express or
any other internationally recognized express courier service, addressed to such
party at the address set forth below or such other address as may hereafter be
designated in writing by the addressee to the addressor listing all parties:
(i) if to the Corporation, to:
Sequenom, Inc.
11555 Sorrento Valley Road, Suite C
San Diego, CA 92121
Attention: President
Fax: (619) 350-0344
-3-
<PAGE>
(ii) with a copy to:
John A. Denniston, Esq.
Brobeck, Phleger & Harrison LLP
550 West C Street, Suite 1300
San Diego, CA 92101
Fax: (619) 234-3848
(iii) if to the Stockholders, to their respective last known
address or their respective address, if any, appearing in
the books of the Corporation.
5. Assignment; Binding Effect. No Designating Party may assign its or
--------------------------
their rights hereunder. Subject to termination or partial termination as
provided in Section 1, this Agreement shall be binding on the parties hereto and
their respective legal representatives, successors and permitted assigns and on
the transferees of any Shares now owned or hereafter acquired by them.
6. Entire Agreement; Amendment and Waiver. This Agreement contains the
--------------------------------------
sole and entire understanding of the parties with respect to its subject matter
and supersedes all prior negotiations, commitments, agreements and
understandings heretofore had among any of them with respect thereto. Without
limiting the generality of the foregoing, this Agreement amends and restates the
Voting Agreement among the Corporation, the Founders, the Original Investors,
the Series B Investors and the Series C Investors dated as of May 8, 1997, as
amended as of January 12, 1998, which shall no longer have any force or effect.
This Agreement may not be changed or terminated or any performance or condition
waived, in whole or in part, except by the written agreement of the Corporation
and Stockholders or transferees of their rights hereunder holding at least two-
thirds in voting power of the Shares held by the Founders, two-thirds in voting
power of the Shares held by the Original Investors, two-thirds in voting power
of the Shares held by the Series B Investors, two-thirds in voting power of the
Shares held by the Series C Investors, and two-thirds in voting power of the
Shares held by the Investors. A waiver on one occasion shall not constitute a
waiver on any further occasion.
7. Counterparts. This Agreement may be executed in more than one
------------
counterpart, each of which shall be deemed to be an original and which,
together, shall constitute one and the same instrument. Any such counterpart
may contain one or more signature pages.
8. Applicable Law. This Agreement shall be governed by, and construed and
--------------
enforced in accordance with, the substantive laws of the State of California,
without regard to its principles of conflicts of laws.
9. Legend. Each certificate for Shares shall bear a legend stating in
------
substance as follows, and each of the Stockholders shall cause its certificates
to be so legended promptly after the execution and delivery of this Agreement:
The shares of stock represented by this certificate are subject to the
terms and provisions of a Voting Agreement among the Corporation and
certain stockholders of the Corporation. The Corporation will furnish a
copy of
-4-
<PAGE>
the Voting Agreement to the holder hereof upon written request and
without charge.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-5-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Voting Agreement as of the date first written above.
SEQUENOM, INC.
By:
-------------------------------------
Its President
FOUNDERS:
----------------------------------------
Hubert Koster
----------------------------------------
Nola E. Masterson
----------------------------------------
Robert E. Patterson
ORIGINAL INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
<PAGE>
TVM INTERTECH LIMITED
PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
TVM EUROTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
[SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
TVM TECHNO VENTURE INVESTORS NO. I LIMITED
PARTNERSHIP
By:
-------------------------------------
General Partner
KBL FOUNDER VENTURES SCA
By:
-------------------------------------
Its:
-------------------------------------
SERIES B INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
TVM INTERTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
[SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
TVM EUROTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
TVM TECHNO VENTURE INVESTORS NO. I LIMITED
PARTNERSHIP
By:
-------------------------------------
General Partner
KBL FOUNDER VENTURES SCA
By:
-------------------------------------
Its:
------------------------------------
[SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
ALPINVEST INTERNATIONAL B.V.
By:
_____________________________________
Its:
_____________________________________
BOSTON UNIVERSITY NOMINEE
PARTNERSHIP
By: __________________________________
General Partner
_______________________________________
Gerald E. Coughlan
_______________________________________
Charles P. Floe
_______________________________________
Hellmut Kirchner
_______________________________________
Herwig Brunner
_______________________________________
Franz A. Wirtz
_______________________________________
Hannemarie Wirtz
_______________________________________
Hubert Koster
_______________________________________
Ernst-Gunter Afting
[SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
SVE STAR VENTURES ENTERPRISES NO. III
GbR, A GERMAN CIVIL LAW PARTNERSHIP
(with limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: ________________________________
Managing Partner
SVE STAR VENTURES ENTERPRISES NO. IIIa,
GbR, A GERMAN CIVIL LAW PARTNERSHIP
(with limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: ________________________________
Managing Partner
SVE STAR VENTURES
MANAGEMENTGESELLSCHAFT MBH
Nr. 3 & CO. BETEILIGUNGS KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: ________________________________
Managing Partner
[SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
SERIES C INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
-------------------------------------
Its:
-------------------------------------
TVM INTERTECH
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
-------------------------------------
Its:
-------------------------------------
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
-------------------------------------
Its:
-------------------------------------
[SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
TVM EUROTECH
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
-------------------------------------
Its:
-------------------------------------
TVM TECHNO VENTURE INVESTORS NO. I LIMITED
PARTNERSHIP
By:
-------------------------------------
General Partner
KBL FOUNDER VENTURES SCA
By:
-------------------------------------
Its:
-------------------------------------
ALPINVEST INTERNATIONAL
By:
-------------------------------------
Its:
-------------------------------------
________________________________________
Hellmut Kirchner
________________________________________
Hellmut Kirchner as Trustee
[SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
_____________________________________________
Franz A. Wirtz
_____________________________________________
Hannemarie Wirtz
GLS LP INVESTMENT III LIMITED
By: ________________________________________
Its: ________________________________________
KLEINWORT BENSON LIMITED
By: ________________________________________
Its: ________________________________________
LOMBARD ODIER & CIE
By: ________________________________________
Its: ________________________________________
MERIFIN CAPITAL N.V.
By: ________________________________________
Its: ________________________________________
S.R. ONE, LIMITED
By: ________________________________________
Its: ________________________________________
[SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
SVM Star Ventures Managementgesellschaft
mbH Nr. 3 & Co. Beteiligungs KG
By: SVM Star Ventures Managementgesellschaft mbH Nr
By: ______________________________________
Managing Partner
SVE STAR VENTURES ENTERPRISES
NO. IIIA, a German Civil Law Partnership (with
limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: ______________________________________
Managing Partner
SVE STAR VENTURES ENTERPRISES
NO. III, a German Civil Law Partnership (with
limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: ______________________________________
Managing Partner
TBG-TECHNOLOGIE-
BETEILIGUNGSGESELLSCHAFT MBH
DER DEUTSCHEN AUSGLEICHSBANK
By: ______________________________________
Its: ______________________________________
[SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
SEQUENOM, INC.
Voting Agreement
Investor Signature Page
-----------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Investor" and a "Stockholder" as defined in the Voting
Agreement dated as of December 21, 1998, by and among Sequenom, Inc. and the
parties named therein, (ii) that it is a party to the Voting Agreement for all
purposes and (iii) that it is bound by all terms and conditions of the Voting
Agreement.
EXECUTED this 21st day of December, 1998.
------------------------------------------
(Print name)
By:
---------------------------------------
Title:
------------------------------------
Address:
----------------------------------
[INVESTOR SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
Exhibit A
---------
SEQUENOM, INC.
Voting Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Additional Investor" as defined in the Series D Convertible
Preferred Stock Purchase Agreement dated as of December 21, 1998, and an
"Investor" and a "Stockholder" as defined in the Voting Agreement dated as of
December 21, 1998, each by and among Sequenom, Inc. and the parties named
therein, (ii) that it is a party to the Voting Agreement for all purposes and
(iii) that it is bound by all terms and conditions of the Voting Agreement
EXECUTED this ____ day of _________________, 1999.
------------------------------------------
(Print name)
By:
---------------------------------------
Title:
------------------------------------
Address:
----------------------------------
[ADDITIONAL INVESTOR SIGNATURE PAGE TO AMENDED AND RESTATED VOTING AGREEMENT]
<PAGE>
EXHIBIT 4.16C
Form of Stock Restriction Agreement
-----------------------------------
<PAGE>
AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT
This Amended and Restated Stock Restriction Agreement (this "Agreement") is
entered into as of December 21, 1998 by and among Sequenom, Inc., a Delaware
corporation (the "Corporation"); Hubert Koster ("Koster"), Nola E. Masterson
("Masterson") and Robert E. Patterson ("Patterson," and together with Koster and
Masterson, the "Founders"); the holders (the "Series B Investors") of shares of
the Corporation's Series B Convertible Preferred Stock, $.001 par value per
share (the "Series B Preferred Stock"); the holders (the "Series C Investors")
of shares of the Corporation's Series C Convertible Preferred Stock, $.001 par
value per share (the "Series C Preferred Stock"); and the purchasers of shares
of the Corporation's Series D Convertible Preferred Stock, par value $.001 per
share ("Series D Preferred Stock"), pursuant to the Series D Convertible
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement"), including any Additional Investors as defined in the Purchase
Agreement (such purchasers being hereinafter referred to as the "Series D
Investors", and, together with the Series B Investors and the Series C
Investors, the "Investors").
W I T N E S S E T H T H A T
WHEREAS, the Series D Investors wish to purchase from the Corporation
certain shares of Series D Preferred Stock;
WHEREAS, the Series D Investors' purchase of such Series D Preferred Stock
would materially benefit the Founders, the Series B Investors and the Series C
Investors as holders of certain shares of the Corporation's capital stock and
rights to acquire such capital stock;
WHEREAS, it is a condition to the obligations of the Series D Investors
under the Purchase Agreement that this Agreement be executed by the Corporation,
the Founders, the Series B Investors and the Series C Investors, and the
Corporation, the Founders, the Series B Investors and the Series C Investors are
willing to execute this Agreement and to be bound by the provisions hereof;
NOW, THEREFORE, in consideration of the foregoing, the agreements set forth
below, and the parties' desire to provide for continuity of ownership of the
Corporation to further the interests of the Corporation and its present and
future stockholders, the parties hereby agree with each other as follows:
1. Certain Defined Terms. As used in this Agreement, the following terms
---------------------
shall have the following respective meanings:
(a) "Common Stock" means the Corporation's Common Stock, $.001 par
value per share.
(b) "Convertible Securities" means any evidences of indebtedness,
shares of capital stock or other securities directly or indirectly convertible
into or exchangeable for Common Stock.
<PAGE>
(c) "Options" means any rights, options, or warrants to subscribe for,
purchase or otherwise acquire Common Stock or Convertible Securities.
(d) "Series A Preferred Stock" means the Corporation's Series A
Convertible Preferred Stock, $.001 par value per share.
(e) "Shares" shall mean and include all shares of Stock now owned or
hereafter acquired by any Founder or any Investor.
(f) "Stock" shall mean and include all shares of Common Stock, all
Convertible Securities, all Options, and all other securities of the Corporation
which may be issued in exchange for or in respect of shares of Common Stock,
Convertible Securities or Options (whether by way of stock split, stock
dividend, combination of shares, reclassification, recapitalization,
reorganization, or any other means).
2. Prohibited Transfers. None of the Investors or Founders shall sell or
--------------------
otherwise transfer, by gift or otherwise, all or any part of his Shares except
in compliance with the terms of this Agreement.
3. Offer of Sale; Notice of Proposed Sale or Transfer. If any Founder
--------------------------------------------------
desires to sell or otherwise transfer any of his Shares, or of any interest
therein, whether voluntarily or by operation of law, in any transaction other
than pursuant to clauses (iii) or (iv) of Section 7(a) of this Agreement, such
Founder (the "Selling Founder") shall first deliver written notice of his desire
to do so (the "Selling Founder's Notice") to the Corporation and each of the
other Investors. If any Investor desires to sell or otherwise transfer an
aggregate of 50,000 or more Shares in one transaction or multiple transactions,
or of any interest therein, whether voluntarily or by operation of law, other
than in connection with any transaction described in Section 8(c) of this
Agreement, such Investor (the "Selling Investor") shall first deliver written
notice of his desire to do so (the "Selling Investor's Notice") to the
Corporation. The Selling Founder's Notice and the Selling Investor's Notice
must specify: (i) the name and address of the party to which the Selling
Investor or Selling Founder proposes to sell or otherwise transfer the Shares or
an interest in the Shares (the "Proposed Transferee"), (ii) the number of Shares
the Selling Investor or Selling Founder proposes to sell or otherwise transfer
(the "Offered Shares"), (iii) the consideration per Share to be delivered to the
Selling Investor or Selling Founder for the proposed sale or transfer, and (iv)
all other material terms and conditions of the proposed transaction, which must
be bona fide.
4. Corporation's Option to Purchase Shares of Selling Founder.
----------------------------------------------------------
(a) Except as set forth in Section 7(a), the Corporation shall have
the first option to purchase all or any part of the Offered Shares for the
consideration per Share and on the terms and conditions specified in the Selling
Founder's Notice. The Corporation must exercise such option, no later than
fifteen (15) business days after such Selling Founder's Notice is deemed to have
been delivered to it, by written notice to the Selling Founder.
(b) In the event the Corporation does not exercise its option within
such fifteen-business-day period with respect to all of the Offered Shares, the
Chief Financial Officer
-2-
<PAGE>
of the Corporation shall, by the last day of such period, give written notice of
that fact to the Investors (the "Investor Notice"). The Investor Notice shall
specify the number of Offered Shares the Corporation has elected not to purchase
(the "Remaining Shares").
(c) In the event the Corporation duly exercises its option to purchase
all or a portion of the Offered Shares, the closing of such purchase shall take
place at the offices of the Corporation on the later of (i) the date five
business days after the expiration of such fifteen-business-day period or (ii)
the date that the Investors consummate their purchase of Offered Shares under
Section 5(c) hereof.
(d) To the extent that the consideration proposed to be paid by the
Proposed Transferee for the Offered Shares consists of property other than cash
or a promissory note, the consideration required to be paid by the Corporation
and/or the Investors exercising their options under Sections 4 and 5 hereof,
respectively, may consist of cash equal to the value of such property, as
determined in good faith by agreement of the Selling Founder and the Corporation
and/or the Investors acquiring such Offered Shares.
5. Investors' Option to Purchase and Right to Participate in Sales by
------------------------------------------------------------------
Founders.
- --------
(a) Except as set forth in Section 7(a), each Investor shall have an
option, exercisable for a period of fifteen (15) business days from the date of
delivery of the Investor Notice, to purchase, on a pro rata basis, its
Proportionate Percentage (as defined below) of the Remaining Shares, for the
consideration per Share and on the terms and conditions set forth in the Selling
Founder's Notice. Such option shall be exercised by delivery of written notice
to the Chief Financial Officer of the Corporation. Alternatively, each Investor
may, within the same fifteen-business-day period, notify the Chief Financial
Officer of the Corporation of its desire to participate in the sale of Shares
and to sell, on the terms as set forth in the Selling Founder's Notice including
at the same price per Share on a common equivalent basis, up to an equivalent
proportion of the Series B Preferred Stock, Series C Preferred Stock and Series
D Preferred Stock owned by such Investor as the proposed sale of the Remaining
Shares represents with respect to the Shares then owned by the Selling Founder.
(b) In the event options to purchase have been exercised by the
Investors with respect to some but not all of the Remaining Shares, the Chief
Financial Officer of the Corporation shall promptly give written notice of that
fact to those Investors who have exercised their options within such period (the
"Second Investor Notice"). The Second Investor Notice shall specify the number
of Remaining Shares the Investors have not elected to purchase (the "Additional
Remaining Shares"). The Investors who have exercised their options within the
fifteen-business-day period specified in Section 5(a) shall have an additional
option, for a period of ten (10) business days after delivery of the Second
Investor Notice, to purchase all or any part of the Additional Remaining Shares
on the terms and conditions set forth in the Selling Founder's Notice, which
option shall be exercised by the delivery of written notice to the Chief
Financial Officer of the Corporation. In the event that there are two or more
such Investors that choose to exercise the last-mentioned option for a total
number of Additional Remaining Shares in excess of the number available, the
Additional Remaining Shares available for each such Investor's option shall be
allocated to such Investors pro rata based on that percentage calculated by
dividing (i) the number of Remaining Shares each such Investor elected to
purchase in
-3-
<PAGE>
response to the Investor Notice by (ii) the aggregate number of Remaining Shares
elected to be purchased (in response to the Investor Notice) by all such
Investors, and only those Investors, electing to purchase any portion of the
Additional Remaining Shares (in response to the Second Investor Notice),
provided, however, that if the number of Additional Remaining Shares so
calculated for any such Investor exceeds the number of the Additional Remaining
Shares such Investor has elected to purchase, then that Investor shall receive
the number of Additional Remaining Shares such Investor has elected to purchase,
and the excess Additional Remaining Shares shall be reallocated on an equitable
basis (as determined by the Board of Directors of the Corporation) among the
remaining Investors electing to purchase any of the Additional Remaining Shares.
(c) Promptly after the expiration of the last period for exercise of
an Investor's purchase option, the Chief Financial Officer of the Corporation
shall give written notice to the Selling Founder and the purchasing Investors,
specifying the number of Remaining Shares to be purchased by each purchasing
Investor. The closing of the purchase of the Remaining Shares shall take place
at the offices of the Corporation no later than five (5) business days after
delivery of such notice to the Selling Founder and the purchasing Investors.
(d) As used in this Section 5, the term "Proportionate Percentage"
shall mean with respect to each Investor a fraction, the numerator of which
shall be the amount of Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock owned by such Investor, and the denominator of which
shall be the total amount of Series B Preferred Stock, Series C Preferred Stock
and Series D Preferred Stock owned by all Investors, in each case on a common
equivalent basis.
6. Co-Sale.
-------
(a) If the Corporation and the Investors do not exercise their options
to purchase all of the Offered Shares within the periods described in this
Agreement (the "Option Period"), then each Investor which has, pursuant to
Section 5(a), expressed a desire to sell shares of Series B Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock in the transaction (a
"Participating Investor") shall be entitled to do so pursuant to this Section.
The Chief Financial Officer of the Corporation shall promptly, on expiration of
the Option Period, notify the Selling Founder of the aggregate amount of Series
B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock the
Participating Investors wish to sell. The Selling Founder shall use his best
efforts to interest the Proposed Transferee in purchasing, in addition to the
Remaining Shares not subscribed for by the Investors, the Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock the Participating
Investors wish to sell. If the Proposed Transferee does not wish to purchase
all of the Stock so made available by the Selling Founder and the Participating
Investors, then each Participating Investor and the Selling Founder shall be
entitled to sell, on the terms and conditions set forth in the Selling Founder's
Notice and on the same price per share on a common equivalent basis, a portion
of the Stock being sold to the Proposed Transferee, in the same proportion as
such Selling Founder or Participating Investor's ownership of Stock on a common
equivalent basis bears to the aggregate amount of Stock owned by the Selling
Founder and the Participating Investors on a common equivalent basis. The
transaction contemplated by the Selling Founder's Notice shall be consummated
not later than 60 days after the expiration of the Option Period.
-4-
<PAGE>
(b) If the Participating Investors do not elect to sell the full
amount of Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock which they are entitled to sell pursuant to Section 6(a), the
Selling Founder shall be entitled to sell to the Proposed Transferee, according
to the terms set forth in the Selling Founder's Notice, that number of his
Shares which equals the difference between the amount of Stock desired to be
purchased by the Proposed Transferee and the number of shares of Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock the
Participating Investors wish to sell, in each case on a common equivalent basis.
(c) If the Selling Founder wishes to sell or otherwise transfer any of
his Shares at a price per Share which differs from that set forth in the Selling
Founder's Notice, upon terms different from those previously offered to the
Corporation and the Investors, or more than 60 days after the expiration of the
Option Period, then, as a condition precedent to such transaction, such Shares
must first be offered to the Corporation and the Investors on the same terms and
conditions as given the Proposed Transferee, and the Investors must first be
offered the opportunity to participate in such transaction, in accordance with
the procedures and time periods set forth above.
7. Permitted Transfers.
-------------------
(a) Subject to the provisions of Section 7(b) and Section 8, the
Corporation's and the Investors' right of first refusal and the Investors' right
of co-sale described in Sections 4 through 6 shall not apply to: (i) any
transfer of Shares by a Founder by gift or bequest or through inheritance to, or
for the benefit of, any member or members of such Founder's immediate family;
(ii) any transfer of Shares by a Founder to a trust (A) in respect of which such
Founder serves as trustee, provided that the trust instrument governing such
trust shall provide that such Founder, as trustee, shall retain sole and
exclusive control over the voting and disposition of such Shares until the
termination of this Agreement or (B) for the benefit solely of any member or
members of such Founder's immediate family; (iii) any sale or transfer of Shares
to the Corporation; (iv) any underwritten public offering of Common Stock
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"); and (v) with respect to sales or other
transfers of up to an aggregate of the following number of Shares (as adjusted
to reflect any stock split, stock dividend, combination of shares or other
similar transaction), but subject in any case to the restrictions set forth in
Section 8: (A) in the case of each of Koster and Masterson, 130,000 Shares; and
(B) in the case of Patterson, 50,000 Shares;
(b) In the event of any sale or transfer described in clauses (i) or
(ii) of Section 7(a), the transferee of the Shares shall hold the Shares so
acquired subject to all the restrictions imposed by this Agreement and shall be
deemed a Founder for all purposes hereof, and as a condition to such transfer,
any such transferee shall, at the request of the Corporation or any Investor,
execute and deliver a written instrument agreeing to be bound by the provisions
of this Agreement.
-5-
<PAGE>
8. Consent of the Corporation to Transfer.
--------------------------------------
(a) As a condition to selling or otherwise transferring any Shares
proposed to be sold or transferred by a Selling Founder and any Participating
Investor to any Proposed Transferee, other than a sale or transfer described in
clause (iii) or (iv) of Section 7(a), the Selling Founder or Participating
Investor shall have obtained the written consent to such transfer by the Board
of Directors of the Corporation by majority vote at a meeting or by unanimous
consent in lieu of a meeting. Such consent shall not be unreasonably withheld,
and shall be based on the Board of Directors' determination, after such inquiry
as it deems appropriate, but within thirty days of the date of the Selling
Founder's Notice to the Corporation under Section 3, that the Proposed
Transferee is not a competitor of the Corporation and is not otherwise an
inappropriate investor in the Corporation. In the event the Selling Founder
disagrees with such determination, and the Board of Directors and the Selling
Founder are unable to resolve the disagreement, an independent third party
selected and agreed upon by the Board of Directors and the Selling Founder shall
arbitrate and finally resolve the disagreement.
(b) As a condition to selling or otherwise transferring 50,000 or more
Shares proposed to be sold or transferred by a Selling Investor to any Proposed
Transferee, the Selling Investor shall have obtained the consent, by majority
vote at a meeting or by unanimous written consent in lieu of a meeting, of the
Board of Directors of the Corporation. Such consent shall not be unreasonably
withheld, and shall be based on the Board of Directors' determination, after
such inquiry as it deems appropriate, but within ten (10) business days of the
date of the Selling Investor' s Notice to the Corporation under Section 3, that
the Proposed Transferee is not a competitor of the Corporation. In the event
the Selling Investor disagrees with such determination, and the Board of
Directors and the Selling Investor are unable to resolve the disagreement, an
independent third party selected and agreed upon by the Board of Directors and
the Selling Investor shall arbitrate and finally resolve the disagreement.
(c) Notwithstanding the foregoing, Section 8(b) shall not apply to any
Investor's sale or transfer of Shares to any Affiliate of such Investor. For
such purpose, an "Affiliate" of any Investor means any general or limited
partner of such Investor if it is a partnership, or any person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Investor. In addition, for such purpose,
in the case of any Investor that is a limited partnership for which TVM Techno
Venture Management Limited Partnership, TVM Techno Venture Management III GmbH
or any of their respective Affiliates serves as general partner, the term
"Affiliate" shall include KBL Founder Ventures SCA, KB Lux Venture Capital Fund-
- -European Biotechnology and their respective Affiliates and Alpinvest
International B.V. and its Affiliates.
9. Corporation's Option to Purchase Shares of Selling Investor.
-----------------------------------------------------------
(a) If the Board of Directors determines that the Proposed Transferee
of a Selling Investor is a competitor of the Corporation, the Corporation shall
have the option to purchase all, but not less than all, of the Offered Shares
for the consideration per Share and on the terms and conditions specified in the
Selling Investor's Notice. The Corporation must exercise such option, no later
than ten (10) business days after such Selling Investor's Notice is deemed to
have been delivered to it, by written notice to the Selling Investor.
-6-
<PAGE>
(b) In the event the Corporation does not exercise its option within
such ten-business-day period with respect to all of the Offered Shares, the
Selling Investor shall be entitled to sell to the Proposed Transferee, according
to the terms set forth in the Selling Investor's Notice, the Offered Shares.
(c) In the event the Corporation duly exercises its option to purchase
all of the Offered Shares, the closing of such purchase shall take place at the
offices of the Corporation no later than ten (10) business days after the notice
by the Corporation to exercise its option is deemed to have been delivered to
the Selling Investor.
(d) To the extent that the consideration proposed to be paid by the
Proposed Transferee for the Offered Shares consists of property other than cash
or a promissory note, the consideration required to be paid by the Corporation
exercising its option under this Section 9, may consist of cash equal to the
value of such property, as determined in good faith by agreement of the Selling
Investor and the Corporation.
10. Lock-up. Each Founder agrees that upon the request of the Corporation
-------
or the underwriters managing an underwritten offering of the Corporation's
securities, such Founder will not sell, make any short sale or loan of, grant
any option for the purchase of, or otherwise dispose of any Shares held by him
without the prior written consent of the Corporation or such underwriters, as
the case may be, for a period of up to 180 days from effective date of the
applicable registration statement.
11. Sale or Transfer in Violation of this Agreement. If any sale or other
-----------------------------------------------
transfer of Shares is made or attempted in violation of any provision of this
Agreement, or if any Shares are not offered to the Corporation or the Investors
as required hereby, the Corporation and the Investors, as the case may be, shall
have the right to purchase such Shares from the owner thereof or his transferee
at any time before or after the transfer, as herein provided. In addition to
any other legal or equitable remedies which it or they may have, the Corporation
and the Investors may enforce their respective rights hereunder by actions for
specific performance (to the extent permitted by law). The Corporation shall
not be required (i) to transfer on its books any Shares or other Stock which has
been sold or transferred in violation of any provision of this Agreement or (ii)
to treat as the owner of such Shares or Stock, or to pay dividends to, any
transferee to whom any such Shares or Stock have been so sold or transferred.
If a Founder becomes obligated to sell any Shares to the Corporation under this
Agreement and fails to deliver such Shares in accordance with the terms of this
Agreement, the Corporation may, at its option, in addition to all other remedies
it may have, send to such Founder the purchase price for such Shares as is
herein specified and cancel on its books the certificate or certificates
representing the Shares to be sold. Thereafter, all of the Founder's rights in
and to such Shares shall terminate.
12. Disposition of Shares. Any Shares that the Corporation elects to
---------------------
purchase hereunder may be disposed of by it in such manner as it deems
appropriate with or without restrictions on the transfer thereof, and the
Corporation may require their transfer to a nominee or designee as part of any
purchase of the Shares from the Founders.
13. Restrictive Legend. All certificates representing Shares held by the
------------------
Founders or Investors which are subject to this Agreement shall have affixed
thereto a legend in substantially
-7-
<PAGE>
the following form, in addition to any other legends that may be required by the
Corporation in connection with compliance with federal or state securities laws
or otherwise:
"The shares of stock represented by this certificate are subject to restrictions
on transfer and/or an option to purchase set forth in a Stock Restriction
Agreement between the Corporation and the registered owner of the shares
represented by this certificate (or his predecessor in interest). The
Corporation will furnish a copy of such agreement to the holder of this
certificate upon written request without charge."
The Founders and Investors shall cause such legend to be affixed to any of such
certificates not so legended.
14. Term. This Agreement shall terminate upon the closing of a firm
----
commitment underwritten public offering of Common Stock pursuant to an effective
registration statement under the Securities Act in which (i) the public offering
price per share is not less than $10.00 (appropriately adjusted to take account
of any stock split, stock dividend, combination of shares or similar event) and
(ii) the aggregate gross proceeds to the Corporation are not less than
$20,000,000.
15. Specific Enforcement. Each Investor and Founder expressly agrees that
--------------------
a violation of this Agreement by such Investor or Founder could not be
adequately compensated by money damages alone and that the Investors and the
Corporation will be irreparably damaged if this Agreement is not specifically
enforced. Upon a breach or threatened breach of the terms, covenants and/or
conditions of this Agreement by any Investor or Founder, the other Investors and
the Corporation shall, in addition to all other remedies, each be entitled to a
temporary or permanent injunction, and/or a decree for specific performance, in
accordance with the provisions hereof.
16. Other Agreements. The restrictions on the Founders' right to dispose
----------------
of their Shares pursuant to this Agreement are in addition to and to be
construed consistently with the Founders' rights and obligations (including
restrictions on the Founders' right to dispose of shares of the Corporation's
capital stock) contained in any other agreement relating to restrictions on the
transferability of such Shares that the Founders execute before, on, or after
the date hereof; provided, that this Agreement shall amend and restate the Stock
Restriction Agreement dated as of May 8, 1997, as amended as of January 12,
1998, among the Corporation, the Founders, the Series B Investors and the Series
C Investors, which shall no longer be of any force or effect.
17. Waiver, Modification and Termination. No provision of this Agreement
------------------------------------
shall be deemed to have been waived by the Corporation or any Investor in the
absence of a written agreement executed by such party with respect to such
waiver. This Agreement may be modified or terminated only with the written
consent of the Founders, the Corporation, and the holders of two-thirds in
voting power of the Shares then held by the Investors.
18. Accession. Any Additional Investors as defined in the Purchase
---------
Agreement shall automatically become an Investor hereunder by delivering to the
Corporation a written instrument in the form of Exhibit A hereto, by which such
---------
Additional Investor agrees to be bound by the obligations imposed under this
Agreement, whereupon such Additional Investor
-8-
<PAGE>
shall automatically become a party to this Agreement and shall thereupon be
deemed an "Investor" for all purposes of this Agreement.
19. Binding Effect; Assignment. This Agreement shall be binding upon the
--------------------------
parties hereto and their heirs, legal representatives, successors and assigns.
The rights and obligations of the Founders and Investors hereunder may not be
assigned or delegated without the written consent of the Corporation.
20. Notices. All notices, requests, consents, deliveries and other
-------
communications hereunder shall be in writing and shall be delivered in person or
duly sent by first class mail postage prepaid (other than in the case of non-
U.S. parties) or by fax or DHL, Federal Express or other internationally
recognized express courier service, to the Corporation at its principal place of
business, and to the Investors and the Founders at their respective last known
address or at their respective address, if any, appearing on the books of the
Corporation.
21. Severability. If any provision of this Agreement shall be held to be
------------
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
22. Governing Law. This Agreement shall be governed by, and construed and
-------------
enforced in accordance with, the substantive law of the State of California,
without regard to its principles of conflicts of laws.
23. Captions. Captions are for convenience only and are not deemed to be
--------
part of this Agreement.
24 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute a single instrument. Each such counterpart may
contain one or more signature pages.
* * *
-9-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Stock Restriction Agreement as of the day and year first above written.
SEQUENOM, INC.
By:
-------------------------------------
Its President
FOUNDERS:
----------------------------------------
Hubert Koster
----------------------------------------
Nola E. Masterson
----------------------------------------
Robert E. Patterson
SERIES B INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
<PAGE>
TVM INTERTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
TVM EUROTECH LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its General Partner
By: TVM Management LLC
its General Partner
By:
-------------------------------------
Its:
-------------------------------------
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT]
<PAGE>
TVM TECHNO VENTURE INVESTORS NO. I LIMITED
PARTNERSHIP
By:
-------------------------------------
General Partner
KBL FOUNDER VENTURES SCA
By: ___________________________________
Its: ___________________________________
ALPINVEST INTERNATIONAL B.V.
By:
-------------------------------------
Its:
-------------------------------------
BOSTON UNIVERSITY NOMINEE
PARTNERSHIP
By: ___________________________________
General Partner
________________________________________
Gerald E. Coughlan
________________________________________
Charles P. Floe
________________________________________
Hellmut Kirchner
________________________________________
Herwig Brunner
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT]
<PAGE>
________________________________________
Franz A. Wirtz
________________________________________
Hannemarie Wirtz
----------------------------------------
Hubert Koster
----------------------------------------
Ernst-Gunter Afting
SVE STAR VENTURES
ENTERPRISES NO. III, GbR,
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: ___________________________________
Managing Partner
SVE STAR VENTURES
ENTERPRISES NO. IIIa, GbR,
A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: ___________________________________
Managing Partner
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT]
<PAGE>
SVE STAR VENTURES
MANAGEMENTGESELLSCHAFT MBH
Nr.3 & CO. BETEILIGUNGS KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr.3
By:
-------------------------------------
Its:
------------------------------------
SERIES C INVESTORS:
TVM TECHNO VENTURE
ENTERPRISES NO. II
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
-------------------------------------
Its:
-------------------------------------
TVM INTERTECH
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
-------------------------------------
Its:
-------------------------------------
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT]
<PAGE>
TVM ZWEITE BETEILIGUNG-US
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
-------------------------------------
Its:
-------------------------------------
TVM EUROTECH
LIMITED PARTNERSHIP
By: TVM Techno Venture Management
Limited Partnership
its general partner
By: TVM Management LLC
its general partner
By:
-------------------------------------
Its:
-------------------------------------
TVM TECHNO VENTURE INVESTORS NO. I
LIMITED PARTNERSHIP
By:
-------------------------------------
General Partner
KBL FOUNDER VENTURES SCA
By:
-------------------------------------
Its:
-------------------------------------
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT]
<PAGE>
ALPINVEST INTERNATIONAL B.V.
By:
-------------------------------------
Its:
-------------------------------------
________________________________________
Hellmut Kirchner
________________________________________
Hellmut Kirchner as Trustee
________________________________________
Franz A. Wirtz
________________________________________
Hannemarie Wirtz
GLS LP INVESTMENT III LIMITED
By:
-------------------------------------
Its:
-------------------------------------
KLENINWORT BENSON LIMITED
By:
-------------------------------------
Its:
-------------------------------------
LOMBARD ODIER & CIE
By:
-------------------------------------
Its:
-------------------------------------
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT]
<PAGE>
MERIFIN CAPITAL N.V.
By: _____________________________
Its:_____________________________
S.R. ONE, LIMITED
By: _____________________________
Its:_____________________________
SVM Star Ventures Managementgesellschaft
mbH Nr. 3 & Co. Berteiligungs KG
By: SVM Star Ventures Managementgesellschaft mbH
By: _____________________________
Its:_____________________________
SVE STAR VENTURES ENTERPRISES
NO. IIIA, a German Civil Law Partnership (with
limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _____________________________
Its:_____________________________
SVE STAR VENTURES ENTERPRISES
NO. III, a German Civil Law Partnership (with
limitation of liability)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
By: _____________________________
Its:_____________________________
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT]
<PAGE>
TBG-TECHNOLOGIE-
BETEILIGUNGSGESELLSCHAFT MBH
DER DEUTSCHEN AUSGLEICHSBANK
By:
________________________________
Its:
________________________________
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT]
<PAGE>
SEQUENOM, INC.
Stock Restriction Agreement
Series D Investor Signature Page
--------------------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is a "Series D Investor" as defined in the Stock Restriction
Agreement dated as of December 21, 1998, by and among Sequenom, Inc. and the
parties named therein, (ii) that it is a party to the Stock Restriction
Agreement for all purposes and (iii) that it is bound by all terms and
conditions of the Stock Restriction Agreement.
EXECUTED this day of , 1998.
------------------------------------------
(print name)
By:
---------------------------------------
Title:
------------------------------------
By:
---------------------------------------
Title:
------------------------------------
Address:
----------------------------------
------------------------------------------
------------------------------------------
[INVESTOR SIGNATURE PAGE TO AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT]
<PAGE>
Exhibit A
---------
SEQUENOM, INC.
Stock Restriction Agreement
Additional Investor Signature Page
----------------------------------
By executing this page in the space provided, the undersigned hereby agrees
(i) that it is an "Additional Investor" as defined in the Series D Convertible
Preferred Stock Purchase Agreement dated as of December 21, 1998 and an
"Investor" as defined in the Stock Restriction Agreement dated as of December
21, 1998 each by and among Sequenom, Inc. and the parties named therein, (ii)
that it is a party to the Stock Restriction Agreement for all purposes and (iii)
that it is bound by all terms and conditions of the Stock Restriction Agreement.
EXECUTED this ____ day of ____________, 1999.
------------------------------------------
(print name)
By:
---------------------------------------
Title:
------------------------------------
Address:
----------------------------------
------------------------------------------
------------------------------------------
[ADDITIONAL INVESTOR SIGNATURE PAGE TO
AMENDED AND RESTATED STOCK RESTRICTION AGREEMENT]
<PAGE>
EXHIBIT 4.19
Related Transactions
--------------------
None.
<PAGE>
EXHIBIT 4.20
Governmental Consents
---------------------
None.
<PAGE>
EXHIBIT 4.23
Commitments from German Government
----------------------------------
Description of agreements between Sequenom Instruments GmbH ("Sequenom Germany")
and with Technnologie-Beteiligungs-Gesellschaft mbH der Deutschen Ausgleichsbank
("TBG")
1. The May 1995 "BJTU" Agreement
-----------------------------
TBG has provided DM 1 million silent partnership financing to Sequenom
Germany, which matches DM 1 million of capital invested in Sequenom Germany
by the Corporation. The terms of the silent partnership arrangement are as
follows:
Interest rate of 6% on the principal amount of the silent partnership loan.
Interest payable beginning June 30, 1997.
Additional compensation as follows:
. 9% of any annual profits, beginning with fiscal year 1997, if the
profits exceed DM 100,000, up to a maximum compensation amount of 6%
of the silent partnership loan.
. 25% of the amount loaned is due at the end of the investment period.
The profit shares described above, if any, are applied toward this
additional payment. The TBG may elect to forego such payments in certain
situations.
Principal payment due on December 31, 2005
This agreement has no "downside protection," which is contained in the 1995
agreement.
2. The December 1995 "BJTU" Agreement
----------------------------------
TBG has provided DM 3 million silent partnership financing to Sequenom
Germany, which matches DM 3 million of capital invested in Sequenom Germany
by the Corporation. The terms of the silent partnership arrangement are as
follows:
Interest rate of 6% on the principal amount of the silent partnership loan.
Interest payable beginning June 30, 1997.
Additional compensation as follows:
. 9% of any annual profits, beginning with fiscal year 1997, if the
profits exceed DM 100,000, up to a maximum compensation amount of 6% of
the silent partnership loan.
<PAGE>
. 30% of the amount loaned is due at the end of the investment period.
The profit shares described above, if any, are applied toward this
additional payment. The TBG may elect to forego such payments in certain
situations.
Principal payment due on December 31, 2005.
This agreement also contains a "50 % downside protection" for the investors
in the Inc. as follows: Under certain circumstances, if the Corporation
exercises its "put option" to TBG of its equity interest in Sequenom
Germany, TBG will pay to the Inc. 50% of the amount of the silent
partnership.
3. The October 1997 "BJTU" Agreement
---------------------------------
TBG has provided DM 2 million silent partnership financing to Sequenom
Germany, which matches DM 2 million of capital invested in Sequenom Germany
by the Corporation. The terms of the silent partnership arrangement are as
follows:
Interest rate of 7% on the principal amount of the silent partnership loan.
Interest payable beginning May 31, 1998.
Additional compensation as follows:
. 9% of any annual profits, beginning with fiscal year 1998, if the
profits exceed DM 100,000, up to a maximum compensation amount of 7% of
the silent partnership loan.
. 35% of the amount loaned is due at the end of the investment period.
The profit shares described above, if any, are applied toward this
additional payment. The TBG may elect to forego such payments in certain
situations.
Principal payment due on December 31, 2007.
4. The January 1998 "BJTU" Agreement
---------------------------------
TBG has provided DM 4 million silent partnership financing to Sequenom
Germany. The terms of the silent partnership arrangement are as follows:
Interest rate of 6% of Sequenom GmbH's annual profits.
The loan may be converted to Common Stock each June or December at the
option of the bank. The conversion ratio is calculated as the arithmetic
mean between $3.15 per share and the current valuation of the Common Stock
at the time of conversion, not to exceed $8.40 per share.
The loan must be repaid by December 31, 2007, if not previously converted.
<PAGE>
5. The February 1998 "BJTU" Agreement
----------------------------------
In February 1998, a German bank purchased 2,700 shares or approximately 5%
of Sequenom GmbH common stock for DM 3 million (approximately $1,714,000).
These shares can be converted to Sequenom, Inc.'s Series C Preferred Stock
at the option of the bank. The conversion price is $3.15 per share.
Sequenom, Inc. can call for conversion in the case of an initial public
offering or the exit of existing investors.
Description of the grant programs for which Sequenom Germany has received
approvals:
1. Grant from the "Biotechnology 2000" grant scheme from the Ministry of
Research and Technology ("BMBF"):
The BMBF has approved a grant (which is a non-repayable contribution) in
the amount of DM 2.2 million based on the application for the financing of
a total research and development project of DM 4.4 million. The grant
coverage is therefore 50% of total estimated project cost. The company
will call the money quarterly in arrears based on actual cost attributable
to the project. The project started on September 1, 1995 and has a
duration of three years.
2. Grant from Freie und Hansestadt Hamburg (City of Hamburg):
The City of Hamburg has approved a grant of DM 800,000 based on a list of
equipment for Sequenom's laboratory to be purchased after September 1,
1995. Total expected cash outflows for the equipment purchases is DM 1.6
million. Grant coverage is also 50% of estimated cost.
Both grants do not have to be repaid.
<PAGE>
[LOGO] EXHIBIT 10.21
SEQUENOM
BETA TEST AGREEMENT
This Agreement, dated March 1, 1999, is made by and between SEQUENOM, Inc., a
corporation with its principal place of business located at 11555 Sorrento
Valley Rd, San Diego, CA, USA, ("Company"), represented by SEQUENOM GmbH, and
GLE Medicon GmbH, with its principal place of business at LornsenstraBe 4-6,
22767 Hamburg, Federal Republic of Germany, ("Recipient").
WHEREAS, Company is willing to supply within the protection of a
confidential relationship, the DNA MassArray(TM) Basic System Plus and related
materials listed on Schedule A attached hereto ("Evaluation Item") to Recipient
solely for evaluating whether to enter in the currently proposed business
arrangement with Company ("Evaluation");
WHEREAS, Recipient desires to have access to the Evaluation Item and is
aware of the nature of the Evaluation Item, and is willing to enter in a
confidential relationship and to use and test the Evaluation Item and report to
Company on the performance of the Evaluation Item;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth, the parties hereby agree as follows:
1. Use of DNA MassArray(TM) Basic System and SpectroChip(TM) License.
-----------------------------------------------------------------
Subject to the terms of this Agreement Company grants to Recipient
*** nonsublicensable, nonexclusive license to use the Evaluation Item *** during
the trem of this Agreement. The Company shall at all times retain all title to
and ownership of the Evaluation Item and all ancillary products thereof.
Recipient agrees to use the Evaluation Item only in the ordinary course of
testing and comparing it's performance against comparable technologies in the
Recipient's facility, and Recipient will not reproduce or modify the Evaluation
Item or any portion thereof. Recipient shall not rent, sell, lease or otherwise
transfer the Evaluation Item or any part thereof or use it for the benefit of a
third party. Recipient shall not reverse assemble, reverse compile or reverse
engineer the Evaluation Item, or otherwise attempt to discover any Evaluation
Item underlying Proprietary Information (as that term is defined below).
2. Business Terms. All payments herein are for the use of Company's
--------------
Evaluation Item and the services required for the operation of the Evaluation
Item including training and support.
i. ***
*** for the Company's Evaluation Item for the first six months after the
INITIATION of the first test.
After the completion of the initial 6-month Beta-test period the Evaluation
Item cost will be ***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
ii. *** fee during the Beta-site period for all tests performed for
comparison of Evaluation Item with other DNA analysis methods and with
results of comparison tests reported to SEQUENOM.
iii. Annual Maintenance Fee that includes Evaluation Item support and Company
Bioinformatics Workstation updates ***
*** The incremental Maintenance Fee will be *** upon
delivery of all data necessary to complete each bi-monthly report as
specified under 4.
*** will be charged if the first
bi-monthly report should reveal uncompetitive performance in the accuracy
of the results compared to existing technologies after the first two months
and the Recipient wishes to terminate this Agreement as a consequence of
this. All Maintenance Fees paid during the initial 6-month Beta-test period
will be credited towards the Equipment.
iv. One Company senior scientist designated for on-site support during the
Beta-test period to facilitate the technology transfer and SYSTEM start-up.
Recipient shall provide the Company scientist full access to the Contracted
Item at the Recipient's facility during regular business hours.
v. Agreement is contingent on the use of authorized consumables provided from
Company.
3. Confidentiality; Ownership. Recipient acknowledges that, in the course
--------------------------
of using the Evaluation Item and performing its duties under this Agreement, it
may obtain information relating to the Evaluation Item and/or Company
("Proprietary Information"). Such Proprietary Information shall belong solely to
Company and includes, but, is not limited to, the existence of the Evaluation
Item, its features and mode of operation, this Agreement, trade secrets, know-
how, inventions (whether or not patentable), techniques, processes, programs,
ideas, algorithms, schematics, testing procedures, software design and
architecture, computer code, internal documentation, design and function
specifications, product requirements, problem reports, analysis and performance
information, software documents, and other technical, business, product,
marketing and financial information, plans and data. In regard to this
Proprietary Information:
(a) Recipient shall not during the term of this Agreement and for a period
of at least three (3) years after its termination, use (except as expressly
authorized by this Agreement) or disclose Proprietary Information without
the prior written consent of Company unless such Proprietary Information
becomes part of the public domain without breach of this Agreement by
Recipient, its officers, directors, employees or agents.
(b) During the period specified in (a) above, Recipient agrees to take all
reasonable measures to maintain the Proprietary Information and Evaluation
Item in confidence.
(c) During the period specified in (a) above, Recipient will disclose the
Evaluation Item and Proprietary Information only to those of its employees
and consultants as are necessary for the use expressly and unambiguously
licensed hereunder, and only after such employees and contractors have
agreed in writing to be bound by the provisions of this Agreement.
Recipient shall not, without the prior written consent of Company,
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 2
<PAGE>
disclose or otherwise make available the Evaluation Item or any ancillary
products to any third party.
(d) Recipient hereby assigns to Company any invention, idea or know-how
(whether or not patentable) that is conceived, learned or reduced to
practice in the course of performance under this Agreement and any patent
rights, trade secret rights, mask work rights, sui generis database rights
and all other intellectual and industrial property rights of any sort with
respect thereto. Recipient agrees to take any action reasonably requested
by Company to evidence, perfect, obtain, maintain, enforce or defend the
foregoing.
4. Reports.
-------
Company senior scientist, assisted by Recipient, shall provide written
reports bi-monthly commencing after installation of the Evaluation Item.
Reports shall disclose:
(1) which portions of the Evaluation Item have been used, (2) the nature of
that use, (3) the extent or amount of use, (4) all errors or difficulties
discovered, (5) suggestions on improving the Evaluation Item, (6) the
characteristic conditions and symptoms of the errors and difficulties, in
sufficient detail to allow the Company to recreate the errors and
difficulties itself, (7) a performance comparison with other available
systems and methods in use at the Recipients facility, including but not
limited to, accuracy, time of assay, repeat tests performed and instrument
down-time, and if possible (8) the amount of financial reimbursement per
reportable result versus comparable methods of DNA analysis.
5. WARRANTY DISCLAIMER.
-------------------
The parties acknowledge that the Evaluation Item is for use in a Beta test.
COMPANY DISCLAIMS ALL WARRANTIES RELATING TO THE EVALUATION ITEM, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES AGAINST INFRINGEMENT OF
THIRD-PARTY RIGHTS, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6. Limitation of Remedies and Damages.
----------------------------------
COMPANY SHALL NOT BE RESPONSIBLE OR LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF
THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY
(A) FOR LOSS OR INACCURACY OF DATA OR COST OF PROCUREMENT OF SUBSTITUTE GOODS,
SERVICES OR TECHNOLOGY, OR (B) FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES INCLUDING, BUT NOT LIMITED TO LOSS OF REVENUES AND LOSS OF PROFITS.
COMPANY SHALL NOT BE RESPONSIBLE FOR ANY MATTER BEYOND ITS REASONABLE CONTROL.
7. Nonassignability. Neither the rights nor the obligations arising under
----------------
this Agreement are assignable or transferable by Recipient, and any such
attempted assignment or transfer shall be void and without effect.
8. Execution of Agreement, Controlling Law, Attorneys' Fees and
------------------------------------------------------------
Severability. This Agreement shall become effective only upon its execution by
- ------------
both Company and Recipient and it
Page 3
<PAGE>
shall be governed by and construed in accordance with the laws of the Federal
Republic of Germany without regard to the conflicts of laws provisions therein.
In any action to enforce this Agreement the prevailing party will be entitled to
costs and attorneys' fees. In the event that any of the provisions of this
Agreement shall be held by a court or other tribunal of competent jurisdiction
to be unenforceable, such provisions shall be limited or eliminated to the
minimum extent necessary so that this Agreement shall otherwise remain in full
force and effect and enforceable.
9. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties pertaining to the subject matter hereof, and any and all
written or oral agreements previously existing between the parties are expressly
cancelled. Any modifications of this Agreement must be in writing and signed by
both parties.
10. Equitable Relief. Recipient acknowledges and agrees that due to the
----------------
unique nature of Company's Proprietary Information, there can be no adequate
remedy at law for any breach of its obligations hereunder, that any such breach
may allow Recipient or third parties to unfairly compete with Company resulting
in irreparable harm to Company, and therefore, that upon any such breach or
threat thereof, Company shall be entitled to injunctions and other appropriate
equitable relief in addition to whatever remedies it may have at law.
11. Termination. This Agreement may be terminated (1) by Company without
-----------
cause with twenty-one (21) days' written notice to the Recipient at the address
listed above, (2) by Recipient if the first bi-monthly report should reveal
uncompetitive performance in accuracy of the system compared to existing
technologies after the first two months and the Recipient wishes to terminate
this Agreement as a consequence of this, or (3) immediately upon notice of any
breach by Recipient of the provisions of this Agreement, and (4) in any case
will terminate six (6) months after the initiation of the first reportable test
at the Recipient's facility. Company and Recipient will enter into good faith
discussions sixty (60) days prior to the termination of the Beta Site Agreement
to negotiate a full DNA MassArray(TM) license Agreement. If no full license
Agreement has been established upon termination, the license granted hereunder
shall terminate and Recipient shall immediately return the Evaluation Item,
together with any and all documents, notes and other materials regarding the
Evaluation Item to Company, including, without limitation, all Proprietary
Information and all copies and extracts of the foregoing, but the terms of this
Agreement will otherwise remain in effect.
12. PUBLIC ANNOUNCEMENTS. Any announcements or similar publicity with
respect tthe execution of this Agreement shall be agreed upon between the
Parties in advance of such announcement, with such approval not unreasonable
withheld. Both Parties understand that this Agreement is likely to be of
interest to investors, analysts and others, and that the Parties therefore may
make such public announcements with respect thereto. The Parties agree that any
such announcement will not contain confidential business or technical
information and, if disclosure of confidential business or technical information
is required by law or regulation, will make reasonable efforts to minimize such
disclosure and obtain confidential treatment for any such information which is
disclosed to a governmental agency or group. Each Party agrees to
Page 4
<PAGE>
provide to the other Parties a copy of any public announcement as soon as
reasonably practicable under the circumstances prior to its scheduled release.
Except under extraordinary circumstances, each Party shall provide the other
with an advance copy of any press release at least five (5) business days prior
to the scheduled disclosure. Each Party shall have the right to expeditiously
review and recommend changes to any announcement regarding this Agreement or the
subject matter of this Agreement. Except as otherwise required by law, the Party
whose press release has been reviewed shall remove any information the reviewing
Party reasonably deems to be inappropriate for disclosure.
SEQUENOM, GmbH. GLE Medicon GmbH & Co
By /s/ - Dr. Warsten Schmidt By /s/ Oliver Gotz
------------------------- ---------------
Name (Print) Dr. Warsten Schmidt Name (Print): Dr. Oliver Gotz
------------------- ---------------
Title: Managing Director Title: Managing Director
----------------- -----------------
Confidential
Page 5
<PAGE>
Schedule A
DNA MassArray(TM) Basic System Plus Evaluation Items include:
. High-speed Bruker/SEQUENOM Array Mass Spectrometer
. GeSIM/SEQUENOM Monocharnel Nanoplotter
. SEQUENOM BioMASS Informatics Workstation
. Beckman Multimek(TM) Instrument with SEQUENOM magnetic lifters
vi. The SEQUENOM 96 D SpectroChip(TM) will be made available *** during the
Beta test period for all tests that are performed for comparison of DNA
MassArray(TM) performance with other DNA analysis methods with result
reported to SEQUENOM. For all samples being analyzed using DNA
MassArray(TM) for routine laboratory testing (without a performance report
to SEQUENOM) a price of *** . An "Element" represents one BiomassPROBE
reaction unit (Patent US 5,605,798) on Company's SpectroChip(TM) and
includes the reaction unit and reagents necessary to characterize a PCR
product for SNP analysis.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Confidential
Page 6
<PAGE>
SEQUENOM BETA TEST AGREEMENT [LOGO] 1/6
EXHIBIT 10.22
BETA TEST AGREEMENT
This Agreement, dated April ...., 1999, is made by and between SEQUENOM, Inc., a
corporation with its principal place of business located at 11555 Sorrento
Valley Rd, San Diego, CA, USA, ("Company"), represented by SEQUENOM GmbH, and
Priv.-Doz. Dr. med. Harald Funke, with his principal place of operations at
Universitat Munster, Albert Schweitzer-Stra(BETA)e 33, D-48149, Munster, Federal
Republic of Germany, ("Recipient").
WHEREAS, Company is willing to supply within the protection of a
confidential relationship, the DNA MassArray(TM) Basic System Plus and related
materials listed on Schedule A attached hereto ("Evaluation Item") to Recipient
solely for evaluating whether to enter in the currently proposed business
arrangement with Company ("Evaluation");
WHEREAS, Recipient desires to have access to the Evaluation Item and is
aware of the nature of the Evaluation Item, and is willing to enter in a
confidential relationship and to use and test the Evaluation Item and report to
Company on the performance of the Evaluation Item;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth, the parties hereby agree as follows:
1. Use of DNA MassArray(TM) Basic System and SpectroChip(TM) License.
-------------------------------------------------------------------
Subject to the terms of this Agreement Company grants to Recipient ***
nonsublicensable, nonexclusive license to use the Evaluation Item ***
during the term of this Agreement. The Company shall at all times retain all
title to and ownership of the Evaluation Item and all ancillary products
thereof. Recipient agrees to use the Evaluation Item only in the ordinary course
of testing and comparing it's performance against comparable technologies in the
Recipient's facility, and Recipient will not reproduce or modify the Evaluation
Item or any portion thereof. Recipient shall not rent, sell, lease or otherwise
transfer the Evaluation Item or any part thereof or use it for the benefit of a
third party. Recipient shall not reverse assemble, reverse compile or reverse
engineer the Evaluation Item, or otherwise attempt to discover any Evaluation
Item underlying Proprietary Information (as that term is defined below).
2. Business Terms. All payments herein are for the use of Company's
--------------
Evaluation Item and the services required for the operation of the Evaluation
Item including training and support.
i. *** for the Company's Evaluation Item for the
first six months after the initiation of the first test.
After the completion of the initial 6-month
Beta-test period the Evaluation Item cost will be ***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Confidential Page 1
<PAGE>
SEQUENOM BETA TEST AGREEMENT [LOGO] 2/6
ii. *** fee during the Beta-site period for all tests performed for
comparison of Evaluation Item with other DNA analysis methods and with
results of comparison tests reported to SEQUENOM. All samples being
analyzed using the Evaluation Item for routine laboratory testing, shall
have an Element fee of *** (the 'Element Fee'); An "Element represents one
Biomass PROBE reaction unit (Patent US 5,605,798) on Company's
SpectroChip(TM) and includes the reaction unit and reagents necessary to
characterize a PCR product for SNP analysis.
iii. Monthly Maintenance Fee of *** that includes Evaluation Item
support and the Company Bioinformatics Workstation updates *** six (6)
months commencing upon installation of the Evaluation Item.
iv. A *** Royalty will be assessed on all reimbursements for test
results obtained using the Evaluation Item on routine laboratory tests
outside of the evaluation activities.
v. One Company senior scientist designated for on-site support during the
Beta-test period to facilitate the technology transfer and SYSTEM start-up.
Recipient shall provide the Company scientist full access to the Contracted
Item at the Recipient's facility during regular business hours.
vi. Agreement is contingent on the use of authorized consumables provided from
Company.
3. Confidentiality; Ownership. Recipient acknowledges that, in the course
--------------------------
of using the Evaluation Item and performing its duties under this Agreement, it
may obtain information relating to the Evaluation Item and/or Company
("Proprietary Information"). Such Proprietary Information shall belong solely to
Company and includes, but, is not limited to, the existence of the Evaluation
Item, its features and mode of operation, this Agreement, trade secrets, know-
how, inventions (whether or not patentable), techniques, processes, programs,
ideas, algorithms, schematics, testing procedures, software design and
architecture, computer code, internal documentation, design and function
specifications, product requirements, problem reports, analysis and performance
information, software documents, and other technical, business, product,
marketing and financial information, plans and data. In regard to this
Proprietary Information:
(a) Recipient shall not during the term of this Agreement and for a period
of at least three (3) years after its termination, use (except as expressly
authorized by this Agreement) or disclose Proprietary Information without
the prior written consent of Company unless such Proprietary Information
becomes part of the public domain without breach of this Agreement by
Recipient, its officers, directors, employees or agents.
(b) During the period specified in (a) above, Recipient agrees to take all
reasonable measures to maintain the Proprietary Information and Evaluation
Item in confidence.
(c) During the period specified in (a) above, Recipient will disclose the
Evaluation Item and Proprietary Information only to those of its employees
and consultants as are necessary for the use expressly and unambiguously
licensed hereunder, and only after such employees and contractors have
agreed in writing to be bound by the provisions of this Agreement.
Recipient shall not, without the prior written consent of Company,
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Confidential Page 2
<PAGE>
SEQUENOM BETA TEST AGREEMENT [LOGO] 3/6
disclose or otherwise make available the Evaluation Item or any ancillary
products to any third party.
(d) Recipient hereby assigns to Company any invention, idea or know-how
(whether or not patentable) that is conceived, learned or reduced to
practice in the course of performance under this Agreement and any patent
rights, trade secret rights, mask work rights, sui generis database rights
and all other intellectual and industrial property rights of any sort with
respect thereto. Recipient agrees to take any action reasonably requested
by Company to evidence, perfect, obtain, maintain, enforce or defend the
foregoing.
4. Reports.
-------
Company senior scientist, assisted by Recipient, shall provide written
reports bi-monthly commencing after the date of this Agreement. Reports
shall disclose: (1) which portions of the Evaluation Item have been used,
(2) the nature of that use, (3) the extent or amount of use, (4) all errors
or difficulties discovered, (5) suggestions on improving the Evaluation
Item, (6) the characteristic conditions and symptoms of the errors and
difficulties, in sufficient detail to allow the Company to recreate the
errors and difficulties itself, (7) a performance comparison with other
available systems and methods in use at the Recipients facility, including
but not limited to, accuracy, time of assay, repeat tests performed and
instrument down-time, and if possible (8) the amount of financial
reimbursement per reportable result versus comparable methods of DNA
analysis.
5 WARRANTY DISCLAIMER.
-------------------
The parties acknowledge that the Evaluation Item is for use in a Beta test.
COMPANY DISCLAIMS ALL WARRANTIES RELATING TO THE EVALUATION ITEM, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES AGAINST INFRINGEMENT OF
THIRD-PARTY RIGHTS, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6. Limitation of Remedies and Damages.
----------------------------------
COMPANY SHALL NOT BE RESPONSIBLE OR LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF
THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY
(A) FOR LOSS OR INACCURACY OF DATA OR COST OF PROCUREMENT OF SUBSTITUTE GOODS,
SERVICES OR TECHNOLOGY, OR (B) FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES INCLUDING, BUT NOT LIMITED TO LOSS OF REVENUES AND LOSS OF PROFITS.
COMPANY SHALL NOT BE RESPONSIBLE FOR ANY MATTER BEYOND ITS REASONABLE CONTROL.
7. Nonassignability. Neither the rights nor the obligations arising under
----------------
this Agreement are assignable or transferable by Recipient, and any such
attempted assignment or transfer shall be void and without effect.
8. Execution of Agreement, Controlling Law, Attorneys' Fees and
------------------------------------------------------------
Severability. This Agreement shall become effective only upon its execution by
- -------------
both Company and Recipient and it shall be governed by and construed in
accordance with the laws of the Federal Republic of
Confidential Page 3
<PAGE>
SEQUENOM BETA TEST AGREEMENT [LOGO] 4/6
Germany without regard to the conflicts of laws provisions therein. In any
action to enforce this Agreement the prevailing party will be entitled to costs
and attorneys' fees. In the event that any of the provisions of this Agreement
shall be held by a court or other tribunal of competent jurisdiction to be
unenforceable, such provisions shall be limited or eliminated to the minimum
extent necessary so that this Agreement shall otherwise remain in full force and
effect and enforceable.
9. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties pertaining to the subject matter hereof, and any and all
written or oral agreements previously existing between the parties are expressly
cancelled. Any modifications of this Agreement must be in writing and signed by
both parties.
10. Equitable Relief. Recipient acknowledges and agrees that due to the
----------------
unique nature of Company's Proprietary Information, there can be no adequate
remedy at law for any breach of its obligations hereunder, that any such breach
may allow Recipient or third parties to unfairly compete with Company resulting
in irreparable harm to Company, and therefore, that upon any such breach or
threat thereof, Company shall be entitled to injunctions and other appropriate
equitable relief in addition to whatever remedies it may have at law.
11. Termination. This Agreement may be terminated by Company without cause
-----------
with fourteen (14) days' written notice to the Recipient at the address listed
above, or immediately upon notice of any breach by Recipient of the provisions
of this Agreement, and in any case will terminate six (6) months after the
initiation of the first reportable test at the Recipient's facility. Company and
Recipient will enter into good faith discussions sixty (60) days prior to the
termination of the Beta Site Agreement to negotiate a full DNA MassArrayTM
license Agreement. If no full license Agreement has been established upon
termination, the license granted hereunder shall terminate and Recipient shall
immediately return the Evaluation Item, together with any and all documents,
notes and other materials regarding the Evaluation Item to Company, including,
without limitation, all Proprietary Information and all copies and extracts of
the foregoing, but the terms of this Agreement will otherwise remain in effect.
12. PUBLIC ANNOUNCEMENTS. Any announcements or similar publicity with
respect to the execution of this Agreement shall be agreed upon between the
Parties in advance of such announcement, with such approval not unreasonable
withheld. Both Parties understand that this Agreement is likely to be of
interest to investors, analysts and others, and that the Parties therefore may
make such public announcements with respect thereto. The Parties agree that any
such announcement will not contain confidential business or technical
information and, if disclosure of confidential business or technical information
is required by law or regulation, will make reasonable efforts to minimize such
disclosure and obtain confidential treatment for any such information which is
disclosed to a governmental agency or group. Each Party agrees to provide to the
other Parties a copy of any public announcement as soon as reasonably
practicable under the circumstances prior to its scheduled release. Except under
extraordinary circumstances, each Party shall provide the other with an advance
copy of any press release at least five (5) business days prior to the scheduled
disclosure. Each Party shall have the right to expeditiously
Confidential Page 4
<PAGE>
SEQUENOM BETA TEST AGREEMENT [LOGO] 5/6
review and recommend changes to any announcement regarding this Agreement or the
subject matter of this Agreement. Except as otherwise required by law, the Party
whose press release has been reviewed shall remove any information the reviewing
Party reasonably deems to be inappropriate for disclosure.
13. PUBLICATION - Recipient shall have the right to publish the results of
the work conducted by University under this Agreement to the extent such results
do not contain Confidential Information of Company as per Article 3. and
provided Company has the opportunity to review and comment on any proposed
manuscripts describing said work thirty (30) days prior to their submission for
publication. Recipient agrees to consider Company's comments prior to
publication. However, if such submission would cause the loss of significant
foreign patent rights, Recipient will, at its option, either delete the enabling
portion of the proposed publication, or withhold publication for an additional
sixty (60) days until patent filings are completed.
SEQUENOM, GmbH Dr. med. Harald Funke, Universitat Munster
By: /s/ illegible By: /s/ Harold Funke
--------------------------------- ---------------------------------------
Name (Print): illegible Schmidt Name (Print): Harold Funke
----------------------- -----------------------------
Title: Director Business Development Title: Priv. - Doz.
------------------------------ ------------------------------------
By: /s/ R. Raist By: /s/ illegible
--------------------------------- ---------------------------------------
Name (Print): R. Raist Name (Print): Wilmer
----------------------- -----------------------------
Title: Commercial Director Title: Administrative Officer
------------------------------ ------------------------------------
Confidential Page 5
<PAGE>
SEQUENOM BETA TEST AGREEMENT [LOGO] 6/6
Schedule A
DNA MassArray(TM) Basic System Plus Evaluation Items include:
. High-speed Bruker/SEQUENOM Array Mass Spectrometer
. GeSIM/SEQUENOM Monochannel Nanoplotter
. SEQUENOM BioMASS Informatics Workstation
. Beckman MultimekTM Instrument with SEQUENOM magnetic lifters
The SEQUENOM 96 D SpectroChip(TM) - including the reaction unit and reagents
necessary to characterize a PCR Product for SNP analysis - will be made
available *** during the Beta test period for all tests that are
performed for comparison of DNA MassArray(TM) performance with other DNA
analysis methods with result reported to SEQUENOM. For all samples being
analyzed using DNA MassArray(TM) for routine laboratory testing (without a
performance report to SEQUENOM)a price of ***
***.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Confidential Page 6
<PAGE>
EXHIBIT 10.23
SEQUENOM BETA TEST AGREEMENT
This Agreement, dated July 15, 1999, is made by and between SEQUENOM, Inc., a
corporation with its principal place of business located at 11555 Sorrento
Valley Rd, San Diego, CA, 92121-1331, ("Company"), and Genzyme Corporation, a
corporation with its place of business at One Mountain Road, P.O. Box 9322,
Framingham, MA, 01701-9322 ("Recipient").
WHEREAS, Company is willing to supply within the protection of a
confidential relationship, the DNA MassArray(TM) system and related materials
listed on Schedule A attached hereto ("Evaluation Item") to Recipient by the
week of August 16, 1999 solely for evaluating whether to enter full commercial
business arrangement with the Company ("Evaluation");
WHEREAS, Recipient desires to have access to the Evaluation Item and is
aware of the nature of the Evaluation Item, and is willing to enter a
confidential relationship and to use and test the Evaluation Item and report to
Company on a confidential basis the performance of the Evaluation Item;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth, the parties hereby agree as follows:
1. Use of DNA MassArray(TM) and SpectroChip(TM) License. Subject to the
----------------------------------------------------
terms of this Agreement, Company grants to Recipient ***
nonsublicensable, nonexclusive license to use the Evaluation Item *** during
the term of this Agreement unless explicitly agreed to in writing by the
Company. The Company shall at all times retain all title to and ownership of the
Evaluation Item and all ancillary products thereof. Recipient agrees to use the
Evaluation Item only in the ordinary course of testing, and Recipient will not
reproduce or modify the Evaluation Item or any portion thereof. Recipient shall
not rent, sell, lease or otherwise transfer the Evaluation Item or any part
thereof or use it for the benefit of a third party. Recipient shall not reverse
assemble, reverse compile or reverse engineer the Evaluation Item, or otherwise
attempt to discover any Evaluation Item underlying Proprietary Information (as
that term is defined below).
2. Business Terms. All fees herein are for the use of Company's
--------------
Evaluation Item and the services required for the operation of the Evaluation
Item including training and support.
i. *** for the Company's Evaluation Item for the first six months after
the initiation of the first test. After the completion of the initial 6-month
Beta-test period, Recipient may purchase the Evaluation Item for *** .
ii. *** fee during the Beta-test period for all tests performed for the
objective evaluation of the Evaluation Item and/or the comparison of
Evaluation Item with other DNA analysis methods and with results of
evaluation and comparison tests (other than patient information) reported
to SEQUENOM on a confidential basis. All samples being
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Confidential Page 1
<PAGE>
Beta Test Agreement
analyzed using the Evaluation Item for testing other than for the purposes
as set forth in the preceding sentence shall have an Element fee of ***
(the "Element Fee"); An "Element" represents one BiomassPROBE reaction
unit (Patent US 5,605,798) on Company's SpectroChip(TM) and includes the
reaction unit and reagents necessary to characterize a PCR product for SNP
analysis.
iii. A Maintenance Fee that includes Evaluation Item Support and Company
Bioinformatics Workstation updates ("Maintenance") of *** ***
***. Evaluation Item Maintenance shall include installation, training,
ongoing maintenance and support for the term of the Evaluation provided by
the Company. The Maintenance Fee is strictly for this Evaluation Item
during the evaluation period. Pricing of a maintenance fee on any future
agreements would be dependent on the nature of that agreement.
3. Confidentiality; Ownership. Recipient acknowledges that, in the course
--------------------------
of using the Evaluation Item and performing its duties under this Agreement, it
may obtain information relating to the Evaluation Item and/or Company ("Company
Proprietary Information"). Such Company Proprietary Information shall belong
solely to Company and includes, but is not limited to, the existence of the
Evaluation Item, its features and mode of operation, this Agreement, trade
secrets, know-how, inventions (whether or not patentable), techniques,
processes, programs, ideas, algorithms, schematics, testing procedures, software
design and architecture, computer code, internal documentation, design and
function specifications, product requirements, problem reports, analysis and
performance information, software documents, and other technical, business,
product, marketing and financial information, plans and data.
Company acknowledges that, in the course of the Recipient using the
Evaluation Item and performing its duties under this Agreement, it may obtain
information relating to the Recipient's assays and/or the Recipient ("Recipient
Proprietary Information"). Such Recipient Proprietary Information shall belong
solely to Recipient and includes, but is not limited to the existence of such
assays, any know-how, techniques, processes, and other recipient specific
technical, business, product, marketing and financial information, plans, and
data. Further, Recipient shall own all discoveries, inventions, (whether or not
patentable), data and other results arising from the use of the Recipient's
*** with the Evaluation Item, but only to the extent that such discovery,
invention, data or results relates to the use and operation of Recipient's
*** and Recipient expressly reserves all intellectual property rights
therein with the exception of those enumerated in Paragraph 3 (d) below.
In regard to both Company and Recipient ("Parties") Proprietary
Information:
(a) Parties shall not, during the term of this Agreement, and for a
period of at least three (3) years after its termination, use (except
as expressly authorized by this Agreement) or disclose Proprietary
Information without the prior written consent of the other party
unless such Proprietary Information becomes part of the public
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Confidential Page 2
<PAGE>
Beta Test Agreement
domain without breach of this Agreement by either party, its officers,
directors, employees or agents.
(b) During the period specified in (a) above, both parties agree to
take all reasonable measures to maintain the Proprietary Information
and Evaluation Item in confidence.
(c) During the period specified in (a) above, both Parties will
disclose the Evaluation Item and Proprietary Information only to those
of its employees and consultants as are necessary for the use
expressly and unambiguously licensed hereunder, provided such
employees and contractors are subject to confidentiality obligations
consistent with those set forth herein. Recipient shall not, without
the prior written consent of Company, disclose or otherwise make
available the Evaluation Item or any ancillary products to any third
party.
(d) Recipient hereby assigns to Company any invention, improvement,
idea or know-how (whether or not patentable) that is conceived,
learned or reduced to practice in the course of performance under this
Agreement, but only to the extent that such invention, idea, or know-
how relates to the use and operation of the Evaluation Item and any
patent rights, trade secret rights, mask work rights, sui generis
database rights and all other intellectual and industrial property
rights of any sort with respect thereto. Recipient agrees to take any
action reasonably requested by Company to evidence, perfect, obtain,
or maintain the foregoing.
4. Reports. A Company senior scientist, assisted by Recipient, shall
-------
provide written reports monthly commencing after the date of the first test at
the Recipient's facility. Reports shall disclose: (1) which portions of the
Evaluation Item have been used, (2) the nature of that use, (3) the extent or
amount of use, (4) all errors or difficulties discovered, (5) suggestions on
improving the Evaluation Item, (6) the characteristic conditions and symptoms of
the errors and difficulties, in sufficient detail to allow the Company to
recreate the errors and difficulties itself, and (7) a performance comparison
with other available systems and methods in use at the Recipients facility,
including but not limited to, accuracy, time of assay, repeat tests performed
and instrument down-time.
5. WARRANTY DISCLAIMER. The parties acknowledge that the Evaluation Item
-------------------
is for use in a Beta test. COMPANY DISCLAIMS ALL WARRANTIES RELATING TO THE
EVALUATION ITEM, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTIES AGAINST INFRINGEMENT OF THIRD-PARTY RIGHTS, MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
6. Limitation of Remedies and Damages. COMPANY SHALL NOT BE RESPONSIBLE OR
----------------------------------
LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY (A) FOR LOSS OR INACCURACY OF DATA
OR COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY, OR (B) FOR
ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES INCLUDING, BUT
Confidential Page 3
<PAGE>
Beta Test Agreement
NOT LIMITED TO LOSS OF REVENUES AND LOSS OF PROFITS. COMPANY SHALL NOT BE
RESPONSIBLE FOR ANY MATTER BEYOND ITS REASONABLE CONTROL.
7. Nonassignability. Neither the rights nor the obligations arising under
----------------
this Agreement are assignable or transferable by Recipient, and any such
attempted assignment or transfer shall be void and without effect.
8. Execution of Agreement, Controlling Law. Attorneys' Fees and
------------------------------------------------------------
Severability. This Agreement shall become effective only upon its execution by
- ------------
both Company and Recipient and it shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts without regard to
the conflicts of laws provisions therein. In the event that any of the
provisions of this Agreement shall be held by a court or other tribunal of
competent jurisdiction to be unenforceable, such provisions shall be limited or
eliminated to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect and enforceable.
9. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties pertaining to the subject matter hereof, and any and all
written or oral agreements previously existing between the parties are expressly
canceled with the exception of any prior Confidentiality Agreement executed
between the two Parties. Any modifications of this Agreement must be in writing
and signed by both parties.
10. Equitable Relief. Recipient acknowledges and agrees that due to the
----------------
unique nature of Company's Proprietary Information, there may be no adequate
remedy at law for any breach of its obligations hereunder, that any such breach
may allow Recipient or third parties to unfairly compete with Company resulting
in irreparable harm to Company, and therefore, upon any such breach or threat
thereof, Company shall be entitled to seek injunctions and other appropriate
equitable relief in addition to whatever remedies it may have at law.
11. Termination. This Agreement maybe terminated by Company or Recipient
-----------
for any reason or no reason upon twenty-one (21) days' written notice to the
other party at its address listed above, or immediately upon notice of any
breach by either party of the provisions of this Agreement that has not been
cured within 10 days, and in any case will terminate six (6) months after the
initiation of the Evaluation at the Recipient's facility. Upon termination, all
payments owing Company up to the point of the date of termination shall be due
within thirty (30) days of the termination date and the license granted
hereunder shall terminate and Recipient shall immediately return the Evaluation
Item, together with any and all documents, notes and other materials regarding
the Evaluation Item to Company, including, without limitation, all Proprietary
Information and all copies and extracts of the foregoing, but the terms of this
Agreement, excluding Paragraph 2 will otherwise remain in effect.
Company and Recipient will enter into good faith discussions sixty (60)
days prior to the termination of the Beta Site Agreement to either extend the
current Agreement or negotiate a full DNA MassArray(TM) license Agreement.
Confidential Page 4
<PAGE>
Beta Test Agreement
12. Public Announcements. Any announcements or similar publicity with
--------------------
respect to the execution of this Agreement shall be agreed upon between the
Parties in advance of such announcement. Both Parties understand that this
Agreement is likely to be of significant interest to investors, analysts and
others, and that the Parties therefore may make such public announcements with
respect thereto. The Parties agree that any such announcement will not contain
confidential business or technical information and, if disclosure of
confidential business or technical information is required by law or regulation,
will make reasonable efforts to minimize such disclosure and obtain confidential
treatment for any such information which is disclosed to a governmental agency
or group. Each Party agrees to provide to the other Parties a copy of any public
announcement as soon as reasonably practicable under the circumstances prior to
its scheduled release. Except under extraordinary circumstances, each Party
shall provide the other with an advance copy of any press release at least five
(5) business days prior to the scheduled disclosure. Each Party shall have the
right to expeditiously review and recommend changes to any announcement
regarding this Agreement or the subject matter of this Agreement. Except as
otherwise required by law, the Party whose press release has been reviewed shall
remove any information the reviewing Party reasonably deems to be inappropriate
for disclosure.
13. Publication. Recipient shall have the right to publish the results of
-----------
the work conducted by Recipient under this Agreement to the extent such results
do not contain Confidential Information of Company as described in Paragraph 3
and provided Company has the opportunity to review and comment on any proposed
manuscripts describing said work thirty (30) days prior to their submission for
publication. Recipient agrees to make any changes as per the Company's comments
prior to publication. If such submission would cause the loss of significant
foreign patent rights, Recipient will, at its option, either delete the enabling
portion of the proposed publication, or withhold publication for an additional
ninety (90) days until U.S. patent filings are completed.
Sequenom, Inc. Genzyme Corporation
By /s/ Hubert Koster By /s/ Evan M. Lebson
---------------------------- ---------------------------------
__________________ _______________________
Name (Print) Hubert Koster Name (Print) Evan M. Lebson
------------------ -----------------------
Title: President and CEO Title Vice President - Treasurer
----------------------- -----------------------------
Confidential Page 5
<PAGE>
Beta Test Agreement
Schedule A
DNA MassArray(TM) Basic System Plus Evaluation Items include:
- - High-speed SpectroScan array mass spectrometer for
separation, detection and characterization of the analyte molecules from a
miniaturized array
- - SpectroJET dispenser for nanoliter sample transfer;
- - Automated Multipipettor;
- - BioMASS(TM) Workstation for data management and interpretation; and
- - Sequenom Magnetic Lifters.
The SEQUENOM 96 D SpectroChip(TM) will be made available *** during the
Beta test period for all tests that are performed for comparison of DNA
MassArray(TM) performance with other DNA analysis methods with result reported
to SEQUENOM on a confidential basis.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Confidential Page 6
<PAGE>
EXHIBIT 10.24
SPONSORED RESEARCH AGREEMENT
This AGREEMENT, effective as of October 1, 1999 (the "Effective Date") and
expiring as of September 30, 2000, is made by and between the TRUSTEES OF BOSTON
UNIVERSITY (hereinafter referred to as "UNIVERSITY") having a principal address
at 881 Commonwealth Avenue, Boston, Massachusetts 02215 and Sequenom, Inc.
(hereinafter referred to as "SPONSOR") a Delaware corporation having its
principal place of business at 11555 Sorrento Valley Road, San Diego, CA 92121.
WHEREAS, the research program contemplated by this Agreement is of mutual
interest and benefit to UNIVERSITY and SPONSOR and will further the
instructional and research objectives of the UNIVERSITY in a manner consistent
with its status as a non-profit, tax-exempt, educational institution,
NOW, THEREFORE, in consideration of the mutual covenants and promises herein
contained, UNIVERSITY and SPONSOR agree as follows:
I. RESEARCH PROGRAM
1.1 UNIVERSITY undertakes to conduct the research program ("Research Program")
as described in the attached Exhibit A titled "Research Program Scope of
Work," and will furnish the facilities and support necessary to carry out
such Research Program. The Research Program will be under the direction of
Dr. Charles Cantor, as Principal Investigator, and Dr. Hubert Koster, as
SPONSOR's Technical Representative. SPONSOR may change its Technical
Representative at any time upon written notice to UNIVERSITY.
1.2 SPONSOR understands that UNIVERSITY's primary mission is education and
advancement of knowledge and that the Research Program will be performed
in a manner best suited to carry out that mission. The manner of
performance of the Research Program shall respect this mission and shall
be determined jointly by the Principal Investigator and the Technical
Representative. SPONSOR acknowledges that UNIVERSITY does not guarantee
specific results.
1.3 UNIVERSITY shall promptly advise SPONSOR if for any reason the Principal
Investigator ceases to be available to work on the Research Program. If
UNIVERSITY and SPONSOR cannot agree on a qualified replacement scientist,
SPONSOR may terminate this Agreement on thirty (30) days written notice to
UNIVERSITY.
II. PERIOD OF PERFORMANCE
2.1 The Research Program shall be conducted during the twelve-month period
from October 1, 1999 through September 30, 2000; provided however, that
the parties may extend the term of the Research Program with the unanimous
agreement of UNIVERSITY, SPONSOR and the Principal Investigator.
1
<PAGE>
III. COMPENSATION
3.1 In consideration of UNIVERSITY's agreement to undertake the Research
Program described in Exhibit A, SPONSOR will pay UNIVERSITY a total of
$165,368 during the term of the Research Program, to be expended in
accordance with the Budget Detail set forth in Exhibit B. The program
funds will be paid to UNIVERSITY in quarterly installments as set forth in
the following schedule of amounts and due dates:
October 1, 1999 $41,342 January 1, 2000 $41,342
April 1, 2000 $41,342 July 1, 2000 $41,342
Payments will be made in the name of "Trustees of Boston University," and
will be sent to Boston University, Grant Accounting, 25 Buick Street,
Boston, Massachusetts 02215. UNIVERSITY shall provide SPONSOR with a final
financial accounting of all costs incurred and all funds received by
UNIVERSITY under this section 3.1 within ninety (90) days after the
termination of this Agreement. UNIVERSITY shall enclose a check payable to
SPONSOR in the amount of any unexpended balance of such funds.
3.2 SPONSOR shall have title to all equipment purchased and/or fabricated by
UNIVERSITY with funds provided by SPONSOR under this Agreement. Promptly
after termination of this Agreement, SPONSOR shall direct UNIVERSITY
regarding the delivery of such equipment. SPONSOR shall bear any expenses
associated with such delivery, provided that UNIVERSITY complies with the
written instructions of SPONSOR.
IV. RECORDS, CONSULTATION AND REPORTS
4.1 UNIVERSITY will use its best efforts to ensure that its employees prepare
and maintain records, including bound laboratory notebooks maintained in
accordance with standard scientific procedures, containing all appropriate
data reflecting the results of the Research Program. During the
performance of the Research Program, the Technical Representative shall
have reasonable access to consult informally with the Principal
Investigator regarding the research, both personally and by telephone.
UNIVERSITY agrees to furnish SPONSOR, upon request, with reasonable
amounts of any biological, chemical or physical materials determined to be
necessary during the course of the Research Program ("Program Materials").
The Principal Investigator shall deliver a written report to the Technical
Representative every four (4) months during the period of performance of
the Research Program. A final report setting forth the significant
research findings shall be prepared by the Principal Investigator and
submitted to the SPONSOR within ninety (90) days following the expiration
of the term of this Agreement or the effective date of early termination
as set forth in Article XI.
2
<PAGE>
V. PUBLICATION AND COPYRIGHTS
5.1 UNIVERSITY and its investigators will be free to publicly disclose
(through journals, lectures, or otherwise) the results of the Research
Program, provided that UNIVERSITY shall have provided a copy of the
proposed publication to SPONSOR at least sixty (60) days prior to the
intended submission of any written publication or any other public
disclosure to allow SPONSOR to determine whether any patentable invention,
trade secret or Confidential Information (Confidential Information as
defined in the Confidential Disclosure Agreement set forth in Exhibit C)
would be disclosed.
If the proposed disclosure contains a trade secret or Confidential
Information, UNIVERSITY shall remove or cause the author to remove such
trade secret or Confidential Information prior to its submission for
publication or other public disclosure. If the proposed disclosure would
disclose a patentable or potentially patentable invention, UNIVERSITY
shall, at the request of SPONSOR, delay or cause the author to delay
submission of the work for publication or other public disclosure for up
to an additional sixty (60) days to enable UNIVERSITY or SPONSOR to file a
patent application.
5.2 Title to any copyrights or copyrightable material produced or composed in
the performance of the Research Program shall remain with UNIVERSITY;
provided however, that UNIVERSITY shall grant to SPONSOR an irrevocable,
royalty-free, nontransferable, non-exclusive right to reproduce, translate
and use all such copyrightable material; except that such right with
respect to computer software and its programming documentation is
applicable only to computer software and its programming documentation, if
any, that is specified to be developed and delivered under the Research
Program Scope of Work, Exhibit A. UNIVERSITY shall not assign or license
its rights under such copyrights or copyrightable material without the
prior written consent of SPONSOR.
VI. CONFIDENTIAL AND PROPRIETARY INFORMATION/MATERIALS
6.1 SPONSOR may wish, from time to time, in connection with work contemplated
under this Agreement, to disclose Confidential Information (including
trade secrets) to UNIVERSITY personnel. To protect the confidentiality of
such information, SPONSOR will request the Principal Investigator and
other research personnel to sign confidentiality agreements with SPONSOR,
in a form the same as or similar to Exhibit C hereto.
6.2 In addition, from time to time, SPONSOR may provide UNIVERSITY personnel
Program Materials for use in the Research Program; such Program Materials
shall be proprietary to SPONSOR if they were developed prior to or outside
the performance of this Agreement. SPONSOR may request the Principal
Investigator and other research personnel to execute materials transfer
agreements
3
<PAGE>
with SPONSOR that set forth the proprietary nature of such Program
Materials and restrictions on their use and disclosure by UNIVERSITY.
VII. PUBLICITY
7.1 Neither party shall use the name of the other party or of any investigator
or research personnel in any advertising or promotional material without
the prior written approval of the other, except that SPONSOR shall have
the right to indentify UNIVERSITY and to disclose the terms of this
Agreement in any prospectus, offering memorandum, or other document or
filing required by applicable securities laws or other applicable law or
regulation. SPONSOR may, and UNIVERSITY shall, however, acknowledge
SPONSOR's support for the investigations being pursued under this
Agreement. In any such statements, the relationship of the parties shall
be accurately and appropriately described.
VIII. INVENTIONS AND PATENTS
8.1 (a) Sponsor Inventions. SPONSOR shall own all rights in any inventions
------------------
discovered or conceived solely by its employees or consultants and
reduced to practice in the course of the Research Program without
significant use of UNIVERSITY facilities or equipment ("Sponsor
Inventions").
(b) University Inventions. UNIVERSITY shall own all rights in any
---------------------
inventions discovered or conceived solely by its employees in the
course of the Research Program ("University Inventions").
(c) Joint Inventions. SPONSOR and UNIVERSITY shall jointly own rights in
----------------
any inventions discovered or conceived jointly by an employee or
consultant of SPONSOR and an employee of UNIVERSITY; further, SPONSOR
and UNIVERSITY shall jointly own rights in any inventions discovered
or conceived solely by SPONSOR's employees or consultants and reduced
to practice in the course of the Research Program with significant
use of UNIVERSITY facilities or equipment ("Joint Inventions").
For the purposes of this Section 8.1, the term "significant use" shall
have the meaning set forth in the Boston University Patent Policy, Charles
River Campus (as amended, 11/12/91), a copy of which is attached as
Exhibit D. The term "inventions" shall include all discoveries (whether or
not patentable) that are discovered, conceived, or reduced to practice in
the course of the Research Program funded by SPONSOR, including but not
limited to processes, methods, formulae, and techniques.
8.2 (a) UNIVERSITY shall make prompt written disclosure to SPONSOR of any
University Inventions or Joint Inventions conceived, realized,
developed,
4
<PAGE>
or reduced to practice during the course of the Research Program.
Such written disclosure shall be provided no later than thirty (30)
days from the date of such conception, realization, development, or
reduction to practice.
(b) Upon such written disclosure, SPONSOR shall have the right, at
SPONSOR's request and expense, to have UNIVERSITY file the necessary
papers for obtaining patent protection in any and all countries of
the world which SPONSOR, in its sole judgment, determines are of
sufficient interest to merit such filing.
(c) Patent applications relating to a University Invention shall be
filed, prosecuted and maintained by UNIVERSITY in its name, using
patent counsel reasonably acceptable to SPONSOR.
(d) Patent applications relating to a Joint Invention shall be filed,
prosecuted and maintained by SPONSOR using patent counsel reasonably
acceptable to UNIVERSITY.
(e) Patent applications relating to a Sponsor Invention shall be filed,
prosecuted and maintained by SPONSOR using patent counsel reasonably
acceptable to UNIVERSITY.
(f) Regarding patent applications under 8.2(c), 8.2(d) and 8.2(e), both
parties shall have the right to review and comment upon applications
and correspondence with the Patent Office and shall be provided with
drafts thereof sufficiently in advance to reasonably allow for such
review and comment.
(g) UNIVERSITY agrees that it will cause to be signed by concerned
UNIVERSITY personnel all documents of assignment or other documents
necessary to obtain patent protection as set forth above, and that
UNIVERSITY will do whatever SPONSOR reasonably requests to obtain and
maintain such patent rights, at the expense of SPONSOR.
(h) If SPONSOR elects not to have a patent application filed in any
country with respect to a particular University Invention or Joint
Invention, SPONSOR shall advise UNIVERSITY of such fact at least
ninety (90) days prior to any deadline for making such election.
UNIVERSITY may then, at its own expense, file and prosecute such
patent application, and such patent application and any patents
issuing therefrom shall not be included within the license option
granted to SPONSOR pursuant to section 8.3 of this Agreement, and
UNIVERSITY shall be free to license its rights in such patent to any
party.
8.3 (a) UNIVERSITY hereby grants SPONSOR a first option to acquire a royalty
bearing, exclusive, worldwide license, including the right to
sublicense, to
5
<PAGE>
make, have made, use, lease, sell, and offer for sale, products and
methods embodying or produced through the use of any University
Invention or Joint Invention. Said right must be exercised by written
notice to UNIVERSITY within ninety (90) days after receiving from
UNIVERSITY written disclosure of any University Inventions or Joint
Inventions as set forth in section 8.2(a).
(b) If SPONSOR elects to exercise any of its rights to acquire an
exclusive license under section 8.3(a) above, both parties agree that
the PATENT AND KNOW-HOW LICENSE AGREEMENT executed by the parties and
dated June 1, 1996 (attached hereto as Exhibit E) provides the
license terms for and will govern any exclusive license rights that
are elected and exercised pursuant to section 8.3(a). SPONSOR will
provide written notice to UNIVERSITY of its election of any rights
under this Agreement. For University Inventions or Joint Inventions
that SPONSOR does not elect to exercise its option rights to,
UNIVERSITY shall be free to license that particular invention to a
third party; provided however, that UNIVERSITY shall not grant any
rights in such invention on terms which, when taken in total, are
materially more favorable to the third party than those last offered
to SPONSOR by UNIVERSITY without first offering SPONSOR the
opportunity, for ninety (90) days from the date of any offer to a
third party, to meet the terms of such offer. If SPONSOR fails to
notify UNIVERSITY in writing within such ninety-day period that it
has accepted such terms, SPONSOR shall be deemed to have rejected the
offer, and UNIVERSITY may license its rights in such invention to
other parties. If SPONSOR notifies UNIVERSITY within such ninety-day
period that it accepts such offer, UNIVERSITY shall be deemed to have
entered into a binding license agreement with respect to such terms.
8.4 UNIVERSITY hereby grants SPONSOR a non-exclusive, world-wide, royalty-
free, perpetual license to use any results of the Research Program
(including without limitation all discoveries, data, Program Materials,
and University Inventions and Joint Inventions not exclusively licensed to
SPONSOR under section 8.3) for research purposes.
IX. LIABILITY
9.1 SPONSOR shall defend, indemnify and hold harmless UNIVERSITY, and its
trustees, officers, employees and agents and their respective successors,
heirs and assigns (the "Indemnitees"), against any and all liability,
damage, loss or expense (including reasonable attorneys' fees and expenses
of litigation) that may be incurred by or imposed upon Indemnitees, or any
of them, in connection with any claim, suit, demand, action or judgment
arising out of the design, production, manufacture, sale, use in commerce,
lease or promotion by SPONSOR or by an Affiliate or sublicensee of
SPONSOR, of any product, process or service relating
6
<PAGE>
to or developed pursuant to this Agreement as long as such liability,
damage, loss, or expense, is not attributable to the willful misconduct of
the Indemnitees.
9.2 UNIVERSITY makes no warranties, express or implied, including, without
limitation, the condition of the research or any inventions or products
whether tangible, conceived, discovered, or developed under this
Agreement, and makes no warranties, express or implied, regarding
merchantability, or fitness for a particular purpose of the research, any
inventions, and any products under this Agreement. UNIVERSITY shall not be
liable for any direct, consequential, or other damages suffered by
SPONSOR, or any licensee of SPONSOR, or any others resulting from the use
of the research or any invention or product.
X. INDEPENDENT CONTRACTOR
10.1 For the purpose of this Agreement and all services to be provided
hereunder, the parties shall be, and shall be deemed to be, independent
contractors and not agents or employees of the other party. Neither party
shall have authority to make any statements, representations or
commitments of any kind, or to take any action which shall be binding on
the other party, except as may be explicitly provided for herein or
authorized in writing.
XI. TERM AND TERMINATION
11.1 Performance may be terminated by UNIVERSITY immediately upon written
notice to SPONSOR if circumstances beyond its control preclude
continuation of the Research Program. SPONSOR may terminate this Agreement
for any reason upon ninety (90) days written notice to UNIVERSITY.
11.2 In the event that either party shall be in default of any of its
obligations under this Agreement and shall fail to remedy such default
within sixty (60) days after receipt of written notice thereof, the party
not in default shall have the option of terminating this Agreement by
giving written notice thereof.
11.3 Termination or cancellation of this Agreement shall not affect the rights
and obligations of the parties accrued prior to termination. Upon any
termination hereof, UNIVERSITY shall be entitled to be compensated for all
reasonable expenses and uncancellable commitments incurred as of the
effective date of termination, not to exceed the total contract amount
stated in section 3.1 above.
11.4 Articles V, VI, VII, VIII, and IX and Sections 3.1 (the obligation for a
final accounting and refund), 3.2, 4.1 (the obligation for a final
report), 11.3, and 11.4, shall survive such termination.
7
<PAGE>
XII. GENERAL
12.1 This Agreement may not be assigned by either party without the prior
written consent of the other party, except that SPONSOR may assign this
Agreement to an affiliate or to a successor in connection with the merger,
consolidation, transfer, or sale of all or substantially all of its assets
or that portion of its business pertaining to the subject matter of this
Agreement.
12.2 This Agreement constitutes the entire and only agreement between the
parties relating to the Research Program, and all prior negotiations,
representations, agreements and understandings are superseded hereby. No
agreements altering or supplementing the terms hereof may be made except
by means of a written document signed by the duly authorized
representatives of the parties.
12.3 Any notice required by this Agreement shall be sufficiently given (i) upon
the date of receipt if delivered by hand, recognized national overnight
courier, confirmed facsimile transmission, or registered or certified
mail, return receipt requested, postage prepaid, or (ii) on the third
business day after mailing by first class mail, postage prepaid, to the
following addresses or facsimile numbers (or at such other addresses or
facsimile numbers as may be designated by notice given from time to time
under the terms of this provision):
If to UNIVERSITY:
Boston University
Attention: Maureen Rodgers
Office of Sponsored Programs
25 Buick Street
Boston, MA 02215
Tel: (617) 353-4365
Fax: (617) 353-6660
If to SPONSOR:
Dr. Hubert Koster
Sequenom, Inc.
11555 Sorrento Valley Road
San Diego, CA 92121
Tel: (858) 350-0345
Fax: (858) 350-0344
12.4 This Agreement shall be construed and enforced in accordance with the laws
of the Commonwealth of Massachusetts.
8
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives:
TRUSTEES OF BOSTON UNIVERSITY
By:
------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
SEQUENOM, INC.
By:
------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
I have read this Agreement and agree to comply with its terms.
By:
-------------------------------------
Printed Name: Dr. Charles R. Cantor
Title: Principal Investigator
9
<PAGE>
EXHIBIT A
RESEARCH PROGRAM SCOPE OF WORK
The Charles R. Cantor research group at the Center for Advanced Biotechnology
(CAB) at Boston University ("UNIVERSITY") will investigate optimizations of mass
spectrometry (MS) based analysis of nucleic acids. The work will focus
primarily on development of methods for detection of mutations and/or single
nucleotide polymorphisms (SNPs) and de novo DNA sequencing; additional
investigations will be made to determine the feasibility of MS-based
quantitative measurement of genetic expression.
The work will be comprised of both laboratory and computational investigations,
with a special emphasis on techniques and assays that can be adapted for use in
the large-scale automated processes utilized by Sequenom ("SPONSOR").
The following activities will be accomplished under this work plan:
1) Provide SPONSOR with potential assays for large-scale MS-based
SNP/polymorphism detection. These assays will be simulated and compared with
experimentally derived data generated in proof of principle experiments at
CAB.
2) Provide SPONSOR with potential assays for MS-based diagnostic detection of
SNPs, polymorphisms, and de novo DNA sequencing. The assays will be
simulated and compared with experimentally derived data generated in proof
of principle experiments at CAB.
3) Provide SPONSOR with novel methods for capture of nucleic acid samples prior
to analysis by MS. Potential methods to be investigated include positional
sequencing by hybridization (PSBH) arrays, and ligation mediated SNP
detection arrays.
<PAGE>
EXHIBIT B
BOSTON UNIVERSITY
PRINCIPLE INVESTIGATOR: Charles R. Cantor, Ph.D.
------------------------
Sequenom Projections 1999-2000
------------------------------
BUDGET DETAIL
<TABLE>
<CAPTION>
Name Role Type % Effort Institutional Salary Fringe Total
Appt. Base Salary Requested Benefits
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Graber, J Research 12 86% 40,900 34,900 7,294 42,194
Assoc
- -----------------------------------------------------------------------------------------------------------
Siddiqi, F Research 12 32% 20,625 6,525 6,525
Assist
- -----------------------------------------------------------------------------------------------------------
Sabanayagam, C Research 12 8% 5,937 1,484 1,484
Assist
- -----------------------------------------------------------------------------------------------------------
Zhang, L Research 12 100% 18,750 18,750 18,750
Assist
- -----------------------------------------------------------------------------------------------------------
Undergraduates 5,000
- -----------------------------------------------------------------------------------------------------------
SUBTOTALS 66,659 7,294 73,953
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Equipment 0
- ----------------- -------------------
Travel 3,000
- ----------------- -------------------
Supplies 21,000
- ----------------- -------------------
Other
Expenses 3,500
- ----------------- -------------------
- ----------------- -------------------
Total Direct 101,453
- ----------------- -------------------
Indirect 63,915
53%
- ----------------- ===================
165,368
===================
</TABLE>
<PAGE>
EXHIBIT C
CONFIDENTIAL DISCLOSURE AGREEMENT
This Agreement, dated as of , is between and Sequenom, Inc.
------- ----------
In connection with the conduct of a research program pursuant to a
Sponsored Research Agreement effective as of October 1, 1999 among Sequenom,
Inc., Charles Cantor and Boston University (the "Sponsored Research Agreement"),
each party may furnish to the other party certain confidential information
relating to its business for the sole purpose of conducting this research
program. Accordingly, the parties hereby agree as follows:
1. For purposes of this Agreement, the term "Confidential Information"
means any technical or business information furnished by one party (the
"Disclosing Party") to the other party (the "Receiving Party") in connection
with the research program under the Sponsored Research Agreement and
specifically designated as confidential. Such Confidential Information may
include, without limitation, trade secrets, know-how, inventions, technical data
or specifications, testing methods, business or financial information, research
and development activities, product and marketing plans, and customer and
supplier information. Confidential Information that is disclosed in writing
shall be marked with a legend indicating its confidential status. Confidential
Information that is disclosed orally or visually shall be documented in a
written notice prepared by the Disclosing Party and delivered to the Receiving
Party within thirty (30) days of the date of disclosure; such notice shall
summarize the Confidential Information disclosed to the Receiving Party and
reference the time and place of disclosure.
2. With respect to all Confidential Information furnished by the
Disclosing party to the Receiving Party, the Receiving Party agrees that it
shall
a. maintain such Confidential Information in strict confidence;
b. not disclose or permit the disclosure of such Confidential
Information to any persons other than to persons who are obligated to maintain
the confidential nature of such Confidential Information and who need to know
such Confidential Information for the purposes set forth in the Sponsored
Research Agreement;
c. use such Confidential Information solely for the purpose set
forth in the Sponsored Research Agreement;
d. reproduce the Confidential Information only to the extent
necessary to effect the purposes set forth in the Sponsored Research Agreement,
with all such reproductions being considered Confidential Information.
<PAGE>
3. The obligations of the Receiving Party under Section 2 above shall not
apply to the extent that the Receiving Party can demonstrate that certain
Confidential Information:
a. was in the public domain prior to the time of its disclosure;
b. entered the public domain after the time of its disclosure
through means other than an unauthorized disclosure resulting from an act or
omission by the Receiving Party;
c. was independently developed or discovered by the Receiving Party
at any time, whether before or after the time of its disclosure under this
Agreement;
d. is or was disclosed to the Receiving Party at any time, whether
prior to or after the time of its disclosure under this Agreement, by a third
party having no fiduciary or contractual relationship with the Disclosing Party
and having no obligation of confidentiality with respect to such Confidential
Information; or
e. is required to be disclosed to comply with applicable laws,
governmental regulations or court orders, provided that the Disclosing Party
receives prior written notice of such disclosure and that the Receiving Party
takes all reasonable and lawful actions to obtain confidential treatment for
such disclosure and, if possible, to avoid such disclosure.
4. The Receiving party agrees that the Disclosing party (or any third
party entrusting its own Confidential Information to the Disclosing Party) is
and shall remain the exclusive owner of the Confidential Information disclosed
by the Disclosing Party and all patent, copyright, trademark, trade secret, and
other intellectual property rights in such Confidential Information or arising
therefrom.
5. Upon the termination by either party of the Sponsored Research
Agreement, the Receiving Party shall return to the Disclosing Party all
originals, copies, and summaries of documents, materials, and other tangible
manifestations of Confidential Information in the possession or control of the
Receiving party, except that the Receiving Party may retain one copy of such
information with its legal counsel solely for the purpose of documenting its
obligations under this Agreement.
Acknowledged and agreed:
SEQUENOM, INC.
By:
-------------------------------- --------------------------------------
Name: [NAME OF INVESTIGATOR]
Title:
<PAGE>
EXHIBIT D
PATENT POLICY
<PAGE>
Boston University Patent Policy
CHARLES RIVER CAMPUS
_____________________________________________________________________________
PREAMBLE
The patent policy outlined herein is the Policy of the Trustees of Boston
University (the "University"). The University recognizes that patentable
inventions may be made in the course of research sponsored by the University
and/or by others through the University. It is the policy of the University to
maximize the benefits to the individual who makes such patentable inventions, to
the University and to the general public, and thus to stimulate initiative in
the faculty, staff, and employees of the University. The University recognizes
that this may best be accomplished through patenting and licensing such
inventions in a manner consistent with the public interest, and for such purpose
the University hereby establishes the patent policy set forth herein. This
Policy supersedes all prior patent policies and amendments thereto applicable to
the Charles River Campus.
1. PATENT POLICY
A. In order to protect the public good and the University, and in order to
fulfill obligations to research sponsors, the University shall claim equity in
all discoveries and its right to acquire the title to and control of such
discoveries where the discoveries are made by faculty, staff, employees, or
students (including all types of trainees or postgraduate fellows) working on or
arising from programs supported in whole or in part by funds, space, personnel,
or facilities provided by the University.
B. When a discovery is made by an inventor outside of any program
conducted by the University, and the inventor can demonstrate that the
University did not provide or administer significant funds, space, personnel, or
facilities for work leading to the discovery, the discovery shall remain the
exclusive property of the inventor or his/her sponsor. The University shall not
ordinarily consider provision of office, classroom, or library facilities as
constituting significant use of University funds, space, personnel or
facilities. For purposes of this Policy, the term "Investor" shall include all
individuals who participated in and signed a disclosure statement respecting a
discovery or invention.
C. When necessary, the University Committee on Inventions and Discoveries
("Committee") shall decide whether an invention or discovery should be
classified under Paragraph A or Paragraph 3 of this Paragraph 1. Persons or
entities claiming a right to receive royalty interests under the provisions of
Paragraph 4 may appeal the decision of the Committee to the President of the
University. The President shall recommend final action to the Trustees, whose
decision shall be final.
2. ROYALTIES
Where the University is entitled to equity in a discovery, the Inventor shall
receive 30 percent of the net royalties accruing therefrom unless the University
recommends a lesser share, which shall not be less than 15 percent based upon
relevant circumstances relating to the discovery. In the
<PAGE>
event that the University determines that such lesser share is appropriate, the
University shall in its sole discretion designate the recipient or recipients of
the percentage share by which the Investor's share has been reduced. The
Community Technology Foundation (CTF) of Boston University, exclusive agent for
the administration of patents or discoveries made within the University, shall
receive 45 percent of the net royalties (see Paragraph 4). The remaining
royalties from, and equities in the Invention shall be distributed to the School
of the Investor, or in the absence of a School's being involved, the primary
unit or entity of the University with which the Investor works or is affiliated.
Net royalties are defined as gross royalties less amounts granted by the
University specifically for the invention or discovery process, and the cost of
securing, protecting, preserving, and maintaining patents, and of licensing and
marketing of the patent rights, or other costs or fees directly attributable to
the inventions being licensed.
3. DISCLOSURES
Because the securing of rights in discoveries and inventions depends on prompt
and efficient patent application and administration, all faculty, staff,
students, and employees of the University who make inventions or discoveries
shall immediately disclose said inventions or discoveries to the CTF Patent
Administrator and to the Investor's supervisor. This disclosure obligation
shall apply to all inventions and discoveries, without regard to whether they
fail under Paragraph A or 3 above.
4. PATENT ADMINISTRATION
CTF shall be the exclusive agent of the University for the administration of
inventions and discoveries made within the University and covered under
Paragraph 1.A. CTF shall present the disclosures to the Committee. Such report
shall state whether CTF has determined that an invention or discovery will be
developed by the University. The Committee shall consist of eleven voting
members, at least a majority of whom shall be faculty members from the Schools
and Colleges of the University. The members of the Committee and the Chairman
of the Committee shall be designated by the President of the University. CTF
shall render a written semiannual report to the Chairman of the Committee on the
disposition and status of all inventions and discoveries submitted. CTF shall
as promptly as practicable determine whether an invention or discovery shall be
pursued by the University. If the Committee determines that CTF has not filed a
patent application within one year after it has received a disclosure in respect
of which the University is entitled to claim an interest, the Committee, in
consultation with the Inventor, shall determine what other disposition, if any,
shall be made of the invention or discovery and of its development.
5. COVERAGE
The Policy shall cover only discoveries and inventions that are patentable as
the term is defined in the United States Code, as amended, or the laws of other
countries where applications are filed.
6. TRUSTEE REVIEW
<PAGE>
Any disputes that arise under this Policy that are not resolved by the Committee
shall be referred to the President of the University, who shall recommend final
action to the Trustees. The decision of the Trustees shall be final with
respect to all disputes.
7. EMPLOYMENT AGREEMENTS
Rights and obligations under this Policy shall survive any termination of
enrollment or employment at the University.
Nothing herein contained is intended to grant or dispose of any right,
title, and interest to any disclosure, idea, improvement, or invention, whether
patentable or not, which has been supported or funded by outside parties who
acquire rights to such disclosure, ideas, improvements, and invention.
7. CONSULTING AGREEMENTS
The rights of the University under this policy, and the interests of sponsors
under research grants or contracts, may not be abrogated or limited by
consulting agreements or other contracts entered into between University
students or employees and outside organizations or employers. University
students and employees should inform outside employers of their obligations and
commitments to the University under this policy. Such students and employees
should ascertain that patent clauses in their agreements are not in conflict
with their obligations to the University or this Policy statement. Each student
and employee should make his/her obligations to the University clear to those
with whom such agreements may be made, and should ensure that they are provided
with a current statement of University policy. Upon request, the University
will provide a standard clause which may be inserted in a student's or
employee's consulting agreement. This clause will put third parties on notice
as to the University's rights under this policy with respect to inventions and
discoveries. In cases of conflict of interest, the University reserves the
ultimate right to determine the final disposition of the rights and interests
involved.
Adopted, as amended, by the Trustees of Boston University, November 12, 1991.
PATENT AGREEMENT
I affirm that I have received and have read the Boston University Patent Policy
Charles River Campus.
For and in consideration of the provision by Boston University or support in the
form of funds, space, personnel, facilities instruction, supervision or other
assistance, I hereby accept the aforesaid Patent Policy as determinative of my
rights are (_________) in relation to any discoveries or patentable inventions.
________________________________________________________________________________
Signature Date
________________________________________________________________________________
Name
<PAGE>
EXHIBIT E
PLEASE SEE EXHIBIT 10.25
PREVIOUSLY FILED
<PAGE>
EXHIBIT 10.25
PATENT AND KNOW-HOW LICENSE AGREEMENT
THIS PATENT AND KNOW-HOW LICENSE AGREEMENT (the "Agreement") dated as of
the 1st day of June, 1996 (the "Effective Date"), is made by and between the
TRUSTEES OF BOSTON UNIVERSITY (hereinafter referred to as "UNIVERSITY"), a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts and having a principal office at 147 Bay State Road, Boston,
Massachusetts 02215, and Sequenom, Inc., a corporation organized under the laws
of Delaware, whose address is c/o Techno Venture Management, 101 Arch Street,
Suite 1950, Boston, Massachusetts 02110 (Sequenom, Inc. and any Affiliate of
Sequenom, Inc. hereinafter referred to as "LICENSEE").
WITNESSETH:
WHEREAS, UNIVERSITY and LICENSEE have entered into a certain Sponsored
Research Agreement, effective as of September 15, 1994 (the "Sponsored Research
Agreement"), pursuant to which UNIVERSITY granted to LICENSEE a first option to
acquire an exclusive, worldwide license to certain technology; and
WHEREAS, UNIVERSITY and LICENSEE wish to set forth the terms of such
exclusive, worldwide license;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereby agree as follows:
ARTICLE I. DEFINITIONS
----------------------
For purposes of the Agreement, the terms defined in this Article shall have
the respective meanings set forth below:
1.1 "Affiliate" shall mean, with respect to any Person, any other Person
---------
which directly or indirectly controls, is controlled by, or is under common
control with, such Person. A Person shall be regarded as in control of another
Person if it directly or indirectly possesses the power to direct or cause the
direction of the management and policies of the other Person by any means
whatsoever.
1.2 "Field" shall mean analysis, sequencing and detection of nucleic acids
-----
using mass spectrometry.
1.3 "First Commercial Sale" shall mean, with respect to any Product, the
---------------------
first sale for use or consumption by the general public of such Product.
1.4 "Net Income" shall mean all royalties actually received by LICENSEE
----------
from sublicensees with respect to Products and all sublicense fees (including
technology access fees, license issue fees, and license maintenance fees, but
excluding payments in connection with the issuance of debt or securities by
LICENSEE) actually received by LICENSEE relating solely to sublicenses of
University Patent Rights or University Know-How, in each case that do not
<PAGE>
involve Net Sales of Products by LICENSEE, less all costs, expenses and
disbursements incurred by LICENSEE in connection therewith, including, without
limitation, all legal and accounting fees associated with the preparation,
negotiation and implementation of any such sublicense agreements.
1.5 "Net Sales" shall mean the gross amount billed or invoiced on sales
---------
by LICENSEE of Products, less the following: (i) trade, quantity, or cash
discounts to the extent actually allowed and taken; (ii) amounts repaid or
credited by reason of rejection or return; and (iii) any taxes, imposts,
tariffs, custom duties or other governmental charges levied on the production,
sale, transportation, delivery, or use of a Product which are paid by or on
behalf of Company.
1.6 "Person" shall mean an individual, corporation, partnership, trust,
------
business trust, association, joint stock company, limited liability company,
limited liability partnership, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, governmental authority or any other
form of entity not specifically listed herein.
1.7 "Product" shall mean any product which if made, used or sold would
-------
infringe one or more Valid Patent Claims in an issued patent but for the license
granted by the Agreement, or which otherwise uses, incorporates or was
conceived, developed or reduced to practice using the UNIVERSITY Patent Rights
or UNIVERSITY Know-How.
1.8 "Territory"' shall mean all jurisdictions worldwide.
----------
1.9 "Third Party" shall mean any Person other than UNIVERSITY, LICENSEE
-----------
and their respective Affiliates.
1.10 UNIVERSITY Improvements" shall mean all inventions, discoveries,
-----------------------
processes, methods, compositions, formulae, procedures, protocols, software
developments and improvements, techniques, results of experimentation and
testing, information and data, which have been conceived by employees or others
acting on behalf of UNIVERSITY, either alone or jointly with others, as of the
Effective Date of the Agreement, or which are conceived by employees or others
acting on behalf of UNIVERSITY, either alone or jointly with others, during any
Research Program under the Sponsored Research Agreement, and which constitute
improvements to the UNIVERSITY Patent Rights or UNIVERSITY Know-How or are
conceived, developed or reduced to practice using the UNIVERSITY Patent Rights
or UNIVERSITY Know-How.
1.11 "UNIVERSITY Know-How" shall mean all inventions, discoveries,
-------------------
processes, methods, compositions, formulae, procedures, protocols, software
developments and improvements, techniques, results of experimentation and
testing, information and data, which are not generally known, (i) embodying or
produced through use of UNIVERSITY Patent Rights and associated know-how, or
(ii) embodying or produced through inventions conceived, discovered or reduced
to practice, whether alone or with others, by UNIVERSITY employees or with
UNIVERSITY facilities or equipment, in the course of any Research Program under
the Sponsored Research Agreement, or (iii) otherwise regarding the Field, in
which UNIVERSITY
-Page 2 of 23-
<PAGE>
has an ownership or other interest during the term of this Agreement; all to the
extent and only to the extent that UNIVERSITY has the right to grant licenses or
other rights thereunder.
1.12 "UNIVERSITY Patent Rights" shall mean (a) United States Patent No.
--------------------------
5,503,980, entitled "Positional Sequencing by Hybridization;" United States
Patent Application No. 07/972,012, entitled "Positional Sequencing by
Hybridization;" United States Patent Application No. 08/110,691 entitled
"Positional Sequencing by Hybridization;" United States Patent Application No.
08/420,009, entitled "Solid Phase Sequencing of Biopolymers By Mass
Spectrometry;" United States Patent Application No. 08/419,914, entitled "Solid
Phase Sequencing of Nucleic Acids;" United States Patent Application No.
08/614/151 entitled "Solid Phase Sequencing of Double-Stranded Nucleic Acids;"
and all patent applications, heretofore or hereafter filed or having legal force
in any country within the Territory, embodying or produced through inventions
conceived, discovered or reduced to practice, whether alone or with others, by
UNIVERSITY employees or with UNIVERSITY facilities or equipment, in the course
of any Research Program under the Sponsored Research Agreement, or otherwise
regarding analysis, sequencing and detection of nucleic acids using mass
spectrometry, which claim an invention in which UNIVERSITY has an ownership or
other interest during the term of this Agreement, (b) all patents that have
issued or in the future issue from the patent applications described in clause
(a) above, including utility, model and design patents and certificates of
invention, and (c) all divisions, continuations, continuations-in-part which are
directed to subject matter specifically described in the U.S. Patents and Patent
Applications listed above, reissues, renewals, extensions or additions to any
such patent applications and patents, and any UNIVERSITY Improvements thereto
upon which a patent application has been filed or a patent has issued. A list of
the UNIVERSITY Patent Rights as of the date of the Agreement is attached hereto
as Exhibit A.
1.13 "Valid Patent Claim" shall mean a claim of an issued and
------------------
unexpired patent included within the UNIVERSITY Patent Rights that has not been
held permanently revoked, unenforceable or invalid by a decision of a court or
other governmental agency of competent jurisdiction, which decision is
unappealable or has not been appealed within the time allowed for appeal, and
that has not been admitted to be invalid or unenforceable through reissue or
disclaimer or otherwise.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
------------------------------------------
Each party hereby represents and warrants to the other party as follows:
2.1 Existence and Power. Such party (a) is duly organized, validly
-------------------
existing and in good standing under the laws of the jurisdiction in which it is
incorporated and (b) has the 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.
2.2 Authorization and Enforcement of Obligations. Such party (a) has the
--------------------------------------------
power and authority and the legal right to enter into this Agreement and to
perform its obligations hereunder and (b) has taken all necessary action on its
part to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder. This Agreement has been duly
-Page 3 of 23-
<PAGE>
executed and delivered on behalf of such party and constitutes a legal, valid
and binding obligation of such party, enforceable against such party in
accordance with its terms.
2.3 No Consents. To the knowledge of such party and subject to the rights
-----------
of the United States government set forth in the Bayh-Dole Act, 35 U.S.C. (S)
200 et seq. (1980), all necessary consents, approvals and authorizations of all
governmental authorities and other Persons required to be obtained by such party
in connection with this Agreement have been obtained.
2.4 No Conflict. The execution and delivery of this Agreement and the
-----------
performance of such party's obligations hereunder (a) to the knowledge of such
party and subject to the rights of the United States government set forth in the
Bayh-Dole Act, 35 U.S.C. (S) 200 et seq. (1980), do not conflict with or violate
any requirement of applicable laws or regulations, and (b) do not conflict with,
or constitute a default under, any contractual obligation of it.
2.5 University Representations and Warranties. UNIVERSITY hereby
-----------------------------------------
represents and warrants to LICENSEE as follows:
(a) Validity and Enforceability of UNIVERSITY Patent Rights. To the
-------------------------------------------------------
knowledge of UNIVERSITY, every claim of the patents listed on Exhibit A attached
hereto is valid and enforceable, and every claim of the patent applications
listed on such Exhibit A, is valid and, if issued, shall be enforceable.
(b) Third Party Claims. No claim has been made by, and to the
------------------
knowledge of UNIVERSITY no claim is available to, any Third Party that any
activity permitted by the licenses granted to LICENSEE pursuant to this
Agreement constitutes an infringement of any right of any such Third Party
anywhere in the world, including, without limitation, any right under any
copyright, trademark, trade secret, patent, or other proprietary right of any
such Third Party.
(c) Patent Documents. UNIVERSITY has provided LICENSEE with copies of
----------------
all documents relevant to the validity or enforceability of the University
Patent Rights, including, without limitation, copies of all patent searches and
legal opinion letters relating to any patents included within the University
Patent Rights and copies of all documents relating to any infringement of the
University Patent Rights.
2.6 Warranty Disclaimer. EXCEPT AS SET FORTH IN THIS SECTION 2,
-------------------
UNIVERSITY MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
ANY IMPLIED WARRANTIES OF MERCHANTABILITY, OF NON-INFRINGEMENT, OF SCOPE OF
PATENT RIGHTS, OR OF FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO ANY
PATENT, TRADEMARK, SOFTWARE, NON-PUBLIC OR OTHER INFORMATION, OR TANGIBLE
RESEARCH PROPERTY, LICENSED OR OTHERWISE PROVIDED TO LICENSEE HEREUNDER AND
HEREBY DISCLAIMS THE SAME.
-Page 4 of 23-
<PAGE>
ARTICLE III. LICENSE GRANT
---------------------------
3.1 License Grant to LICENSEE. UNIVERSITY hereby grants to LICENSEE an
-------------------------
exclusive license, including the right to grant sublicenses, under the
UNIVERSITY Patent Rights and UNIVERSITY Know-How to develop, make, have made,
use, sell, license, market and otherwise exploit Products in the Territory.
Except as set forth in Section 3.2 of this Agreement, such license shall be
exclusive as to UNIVERSITY. Such license shall be limited to the Field with
respect to the inventions set forth on Exhibit C-I to the Sponsored Research
Agreement; otherwise, such license shall be valid with respect to any field.
3.2 Reservation of Certain Rights. Notwithstanding the foregoing, the
-----------------------------
license granted to LICENSEE by the Agreement is subject to the reservation of
(a) a non-exclusive license, without the right to sublicense, for UNIVERSITY and
its affiliated hospitals to use the inventions claimed by the UNIVERSITY Patent
Rights solely for noncommercial research purposes and (b) if and to the extent
applicable, the rights of the United States of America as set forth in Public
Laws 96-517 and 98-620 (codified at 35 U.S.C. 200 et. seq.).
-- ---
LICENSEE shall comply with the provisions of 35 U.S. C. 204, as amended from
time to time. The Parties shall comply with all applicable United States and
foreign laws and regulations, and nothing in this Agreement shall require or be
construed to require either Party to violate such provisions of law or subject
either Party to liability for adhering to such provisions of law.
3.3 Technical Assistance.
--------------------
(a) Upon execution of the Agreement, UNIVERSITY shall disclose and
make available to LICENSEE all information available to UNIVERSITY and not
previously disclosed to LICENSEE regarding the use of the UNIVERSITY Patent
Rights and UNIVERSITY Know-How.
(b) During the term of the Agreement, upon reasonable notice, during
normal business hours and after agreement on anticipated costs, UNIVERSITY (a)
shall provide such technical assistance regarding the UNIVERSITY Patent Rights
and UNIVERSITY Know-How as LICENSEE reasonably requests to conduct its
activities contemplated by the Agreement, (b) shall make available to LICENSEE
such technical personnel of UNIVERSITY as reasonably necessary to provide the
foregoing technical assistance, and (c) shall disclose and make available to
LICENSEE all information available to UNIVERSITY and not previously disclosed to
LICENSEE regarding the use of the UNIVERSITY Patent Rights and UNIVERSITY Know-
How. LICENSEE shall reimburse UNIVERSITY for research or consulting costs agreed
by the parties for any such technical assistance, together with such reasonable
out-of-pocket travel and other expenses incurred by UNIVERSITY in providing such
technical assistance as are approved in advance by LICENSEE. UNIVERSITY shall
provide LICENSEE with estimates of the anticipated costs of any requested
technical assistance prior to undertaking such technical assistance.
3.4 Exclusivity of Sublicenses. LICENSEE hereby agrees that every
--------------------------
sublicensing agreement to which it shall be a party and which shall relate to
the rights, privileges and license
-Page 5 of 23-
<PAGE>
granted hereunder shall contain a statement describing the conditions under
which LICENSEE'S exclusive rights, privileges and license hereunder may
terminate.
3.5 Copies of Sublicenses. LICENSEE shall furnish to UNIVERSITY a true
---------------------
and complete copy of each sublicense agreement and each amendment thereto,
promptly after the sublicense or amendment has been executed. Each such
sublicense agreement or amendment shall constitute Confidential Information of
LICENSEE.
3.6 Obligations of Sublicensees. LICENSEE agrees that any sublicenses
---------------------------
granted by it shall not be inconsistent with this Agreement and shall contain
provisions comparable to the provisions of this Agreement with respect to
confidentiality.
3.7 Limitation on Rights. The license granted hereunder shall not be
--------------------
construed to confer any rights upon LICENSEE by implication, estoppel or
otherwise as to any technology not specifically licensed hereunder.
ARTICLE IV. DUE DILIGENCE
--------------------------
4.1 LICENSEE agrees to use commercially reasonable efforts to effect
introduction of the use of the Products into the United States commercial market
as soon as practical, consistent with sound and reasonable business practices
and judgments.
4.2 LICENSEE acknowledges that UNIVERSITY shall be permitted to review any
business plan of LICENSEE that LICENSEE has provided to UNIVERSITY's Community
Technology Fund ("CTF") from time to time, and LICENSEE hereby authorizes CTF to
release any such business plan to UNIVERSITY. UNIVERSITY shall have the right to
render non-exclusive the license granted under Section 3 of this Agreement,
solely with respect to any particular "subject inventions," as defined in the
Bayh-Dole Act, 35 U.S.C. 201(e) (1980), within the UNIVERSITY Patent Rights, if
and only if: (i) at any time after four (4) years after the Effective Date,
within ninety (90) days after written notice from UNIVERSITY to LICENSEE of
UNIVERSITY's intent to render such license non-exclusive, LICENSEE has not put
the subject inventions into commercial use and is not keeping such subject
inventions reasonably available to the public; (ii) LICENSEE is not demonstrably
engaged in a significant research, development, manufacturing, marketing or
licensing program with respect to such subject inventions; and (iii) such
failure does not result from actions or inactions of any agency whose approval
is required for commercial sales. At any time after seven (7) years after the
Effective Date, UNIVERSITY shall have the right to terminate the license granted
under Section 3 of this Agreement, solely with respect to any such "subject
inventions," if and only if the conditions set forth in sub-paragraphs (ii) and
(iii) in the preceding sentence are met and, within ninety (90) days after
written notice from UNIVERSITY to LICENSEE of UNIVERSITY's intent to terminate
such license, LICENSEE has not put such subject inventions into commercial use
and is not keeping such subject inventions reasonably available to the public.
If UNIVERSITY elects to terminate such license with respect to particular
subject inventions, the UNIVERSITY shall refund to LICENSEE that portion of the
funds provided to UNIVERSITY by LICENSEE under the Sponsored Research Agreement
that related to the development of such subject
-Page 6 of 23-
<PAGE>
inventions. UNIVERSITY's rights under this Section 4.2 shall be UNIVERSITY's
sole remedy for failure by LICENSEE to put Products to commercial use or to make
Products available to the public. Without limiting the generality of the
foregoing, failure by LICENSEE to put Products to commercial use or to make
Products available to the public shall not constitute a ground for UNIVERSITY to
terminate this Agreement under Section 9.4 hereof.
ARTICLE V. PAYMENTS
-------------------
5.1 Royalties. ***
---------
(a) ***
(b) ***
(c) ***
5.2 Payments. All royalties pursuant to Section 5.1 shall accrue on the
--------
date on which LICENSEE actually receives payment with respect to Net Sales of
particular Products or with respect to particular Net Income. All royalties
pursuant to Section 5.1 shall be paid on a quarterly basis, within 60 days
following the end of the quarter in which they accrued. Each payment shall be
accompanied by a report setting forth the calculation of the amount due. All
monies to be paid to UNIVERSITY shall be made and computed in United States
Dollars, and LICENSEE shall use its best efforts to convert royalties in any
country to United States Dollars; provided, however, that if conversion to and
transfer of Dollars cannot be made by LICENSEE in any country for any reason,
LICENSEE may pay such sums in the currency of the country in which Net Sales are
made or Net Income is paid to LICENSEE, deposited in UNIVERSITY's name, in a
bank designated by UNIVERSITY in any such country. The rate of exchange of local
currencies to United States Dollars shall be the rate of exchange prevailing at
the Bank of Boston on the day such payment is made pursuant to the periods set
forth in this Section 5.2.
5.3 Reports. Within sixty (60) days after March 31, June 30, September 30
-------
and December 31 of each year in which this Agreement is in effect, LICENSEE
shall deliver to UNIVERSITY full, true and accurate reports of its activities
relating to this Agreement during the preceding three month period. These
reports shall include at least the following:
(a) amount of Net Sales for period;
(b) deductions applicable to a determination of Net Sales;
-Page 7 of 23-
*** Portions of this page have been omitted pursuant to confidential
treatment request and filed separately with the Commission.
<PAGE>
(c) amount of Net Income received from sublicensees;
(d) deductions applicable to a determination of Net Income;
(e) total royalties due; and
(f) activities of LICENSEE directed toward promoting the sale and use
of Products.
5.4 Records. LICENSEE shall keep (or cause to be kept) and maintain
-------
complete and accurate records of its sales of the Products in accordance with
generally accepted accounting principles. Such records shall be accessible to an
authorized representative selected and paid for by UNIVERSITY and acceptable to
LICENSEE, not more than once a year at any reasonable time during business hours
until three (3) years after the end of the royalty period to which such records
relate, for the purpose of verifying NET SALES and any royalty due thereon. Such
representative shall disclose to UNIVERSITY only information relating to the
accuracy of the records kept and the payments made, and shall be under a duty to
keep confidential any other information gleaned from such records. Any
adjustment in the amount of royalties due the UNIVERSITY on account of
overpayment or underpayment of royalties shall be made at the next date when
royalty payments are to be made to the UNIVERSITY under Section 5.2 herein. If
the verification on behalf of the UNIVERSITY results in an upward adjustment of
greater than ten percent (10%) of royalties due to the UNIVERSITY for the period
of time in question, LICENSEE shall pay the out-of-pocket expenses of the
UNIVERSITY relating to such verification.
5.5 Credits.
-------
(a) If LICENSEE must pay license fees or royalties to Third Parties
on a Product, LICENSEE may credit against any amounts due UNIVERSITY a total of
*** of such payments to Third Parties; provided, however, that any payment
otherwise due UNIVERSITY shall not be reduced by more than ***. In addition, and
notwithstanding, the last clause of the preceding sentence, in the event that
the license fees and royalties payable hereunder and to Third Parties on a
Product exceed *** of the Net Sales price of such Product in any jurisdiction or
*** of LICENSEE's Net Income with respect to sublicenses in such jurisdiction,
LICENSEE may reduce any amounts due UNIVERSITY hereunder pro rata with the
license fees and royalties due Third Parties on such Product, to the extent
necessary to reduce the total license fees and royalties for such Product to ***
of the Net Sales price of the Product or *** of LICENSEE'S Net Income in such
jurisdiction.
(b) LICENSEE may credit against any amounts due UNIVERSITY under this
Agreement a total of *** of expenses relating to patent filings, prosecution,
and maintenance for the licensed invention(s).
(c) The amounts credited pursuant to this Section 5.5 are in addition
to any credit or offset permitted pursuant to Section 6.2 hereof.
-Page 8 of 23-
*** Portions of this page have been omitted pursuant to confidential
treatment request and filed separately with the Commission.
<PAGE>
5.6 Late Payments. In the event that any payment due hereunder is not
-------------
made when due, the payment shall accrue interest beginning on due date as herein
specified, calculated at the annual rate of the prime interest rate quoted by
the Bank of Boston on the date said payment is due, the interest being
compounded on the last day of each calendar quarter, provided that in no event
shall said annual rate exceed the maximum legal interest rate in Massachusetts.
The payment of such interest shall not foreclose UNIVERSITY from exercising any
other rights it may have as a consequence of any overdue payment.
ARTICLE VI. INFRINGEMENT ACTIONS
--------------------------------
6.1 Enforcement of UNIVERSITY Patent Rights. UNIVERSITY shall notify
---------------------------------------
LICENSEE of any infringement in the Territory known to UNIVERSITY of the
UNIVERSITY Patent Rights and shall provide LICENSEE with the available evidence,
if any, of such infringement. LICENSEE, at its sole expense, shall have the
right to determine the appropriate course of action to enforce the UNIVERSITY
Patent Rights or otherwise abate the infringement thereof, to take (or refrain
from taking) appropriate action to enforce the UNIVERSITY Patent Rights, to
control any litigation or other enforcement action and to enter into, or permit,
the settlement of any such litigation or other enforcement action with respect
to the UNIVERSITY Patent Rights, and shall consider, in good faith, the
interests of UNIVERSITY in so doing. The parties may agree to permit UNIVERSITY
to control any such enforcement action. The party controlling any enforcement
action shall not settle the action or otherwise consent to judgment in such
action that adversely affects the rights or interests of the non-controlling
party or imposes additional obligations on the non-controlling party, without
the prior written consent of the non-controlling party. The party controlling
any enforcement action shall pay all expenses associated with such action;
provided, however, that LICENSEE may offset fifty percent (50%) of the expenses
incurred in any such action against any amounts due UNIVERSITY, provided that in
no event shall any payment otherwise due UNIVERSITY be reduced for such purpose
by more than fifty percent (50%). Any recovery obtained in such action shall be
distributed in the following order of precedence: (1) UNIVERSITY will be
reimbursed for any withheld payments, (2) LICENSEE will be reimbursed for its
expenses, (3) UNIVERSITY will be paid a reasonable approximation of its royalty
on lost sales of Products, and (4) LICENSEE will retain any remaining amounts
except with respect to punitive or other exemplary damages, which shall be
distributed seventy percent (70%) to LICENSEE and thirty percent (30%) to
UNIVERSITY.
6.2 Abandonment of Suit. Should either party commence a suit under these
-------------------
provisions and thereafter elect to abandon the same, it shall give timely notice
to the other party who, if it so desires, may continue prosecution of such suit;
provided, however, that the sharing of expenses and any recovery in such suit
shall be as agreed upon between the parties.
6.3 Allegations of Invalidity or Non-Infringement. In the event any claim
---------------------------------------------
or action alleging invalidity or non-infringement of any of the UNIVERSITY
Patent Rights is brought against LICENSEE and/or UNIVERSITY, LICENSEE shall have
the right to control the defense and settlement of the action, provided that
payment of the expenses and costs of such action, including attorneys' fees,
shall be borne and reimbursed as set forth in Section 6. 1.
-Page 9 of 23-
<PAGE>
6.4 Cooperation. In any infringement suit as either party may institute
-----------
to enforce the UNIVERSITY Patent Rights pursuant to this Agreement, the other
party hereto agrees, at the request and expense of the party initiating the
suit, to use its best efforts to cooperate, to have its employees testify when
requested and to make available relevant records, papers, information, samples,
specimens, and the like.
6.5 Consent to Settlement. No settlement or consent judgment or other
---------------------
voluntary and final disposition of any suit affecting the UNIVERSITY Patent
Rights may be entered into without the consent of both parties, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing, the party
controlling any suit referred to in this Article VI shall have the right to
settle any claims for infringement upon such terms and conditions that shall be
mutually agreed upon by UNIVERSITY and LICENSEE. During the term of this
Agreement, and upon the consent of UNIVERSITY, LICENSEE shall have the right to
sublicense any alleged infringer under the UNIVERSITY Patent Rights.
ARTICLE VII. CONFIDENTIALITY
----------------------------
7.1 Confidential Information. Each party shall exercise reasonable care
------------------------
to maintain in confidence all information of the other party (including samples)
disclosed by the other party and identified as, or acknowledged to be,
confidential (the "Confidential Information"), and shall not use, disclose or
grant the use of the Confidential Information except on a need-to-know basis to
those directors, officers, employees, agents, permitted sublicensees and
permitted assignees, to the extent such disclosure is reasonably necessary in
connection with such party's activities as authorized under this Agreement. Each
party shall notify the other promptly upon discovery of any unauthorized use or
disclosure of the other party's Confidential Information.
7.2 Permitted Disclosures. The nonuse and nondisclosure obligations
---------------------
contained in this Article shall not apply to the extent that (a) any receiving
party (the "Recipient") is required (i) to disclose information by law, order or
regulation of a governmental agency or a court of competent jurisdiction, or
(ii) to disclose information to any governmental agency for purposes of
obtaining approval to test or market a product or to apply for a patent on any
UNIVERSITY Improvement, provided that the Recipient shall provide written notice
thereof to the other party and sufficient opportunity to object, time
permitting, to any such disclosure or to request confidential treatment thereof;
or (b) the Recipient can demonstrate that (i) the information was public
knowledge at the time of such disclosure by the Recipient, or thereafter became
public knowledge, other than as a result of acts attributable to the Recipient
in violation hereof-, (ii) the information was rightfully known by the Recipient
(as shown by its written records) prior to the date of disclosure to the
Recipient by the other party hereunder; (iii) the information was disclosed to
the Recipient on an unrestricted basis by a Third Party not under a duty of
confidentiality to the other party; or (iv) the information was independently
developed by employees or agents of the Recipient without access to the
Confidential Information of the other party.
-Page 10 of 23-
<PAGE>
ARTICLE VIII. INVENTIONS AND PATENTS
------------------------------------
8.1 Ownership of Inventions. Ownership of UNIVERSITY Patent Rights and
-----------------------
UNIVERSITY Know-How developed by individuals providing technical assistance on
behalf of UNIVERSITY pursuant to this Agreement shall be governed as if such
UNIVERSITY Patent Rights and UNIVERSITY Know-How were developed pursuant to the
Sponsored Research Agreement.
8.2 Patent Rights Generally. Control over, and associated expenses for,
-----------------------
the filing, prosecution, and maintenance of patents and patent applications
relating to inventions licensed hereunder will be allocated according to Section
8.2 of the Sponsored Research Agreement. In the event that UNIVERSITY obtains
additional licensees under any invention licensed by LICENSEE, LICENSEE shall
pay only its pro rata share of patent-related expenses. LICENSEE shall have the
right to cease paying for the filing, prosecution, or maintenance of any patent
or patent application in any country upon thirty (30) days prior written notice
to UNIVERSITY. In such event, LICENSEE will have no further rights under this
Agreement with respect to such patent or patent application in such country, and
LICENSEE agrees to assign to UNIVERSITY any rights LICENSEE may have in such
patent or patent application in such country.
8.3 Reimbursement of Expenses. LICENSEE shall reimburse UNIVERSITY for
-------------------------
the reasonable expenses incurred by UNIVERSITY in relation to the filing,
prosecution, and maintenance of patents and patents applications licensed
hereunder; provided, however, that such expenses shall be equally divided among
LICENSEE and any other licensees of the UNIVERSITY Patent Rights or the
UNIVERSITY Know-How.
ARTICLE IX. TERM AND TERMINATION
--------------------------------
9.1 Term. This Agreement shall expire upon the expiration of the last to
----
expire patent included with the UNIVERSITY Patent Rights.
9.2 Termination by UNIVERSITY. UNIVERSITY's right to terminate the
-------------------------
license set forth in Section 3 of this Agreement shall be as set forth in
Section 4.2.
9.3 Termination by LICENSEE. LICENSEE may terminate the Agreement,
-----------------------
in its sole discretion, upon written notice to UNIVERSITY.
9.4 Termination for Cause. Except as otherwise provided in the
---------------------
Article below regarding force majeure, either party may terminate the Agreement
upon or after the breach of any material provision of the Agreement by the other
party, if the other party has not cured such breach within sixty (60) days after
written notice thereof by the non-breaching party.
9.5 Effect of Expiration or Termination. Expiration or termination
-----------------------------------
of the Agreement shall not relieve the parties of any obligation accruing prior
to such expiration or termination, and the provisions of Articles VI, VII, X and
XIII shall survive the expiration or termination of the Agreement. The effect of
termination by UNIVERSITY pursuant to Section 4.2 shall be as set forth therein.
Upon expiration of the Agreement under Section 9.1 above,
-Page 11 of 23-
<PAGE>
LICENSEE shall have a fully-paid, non-exclusive license to make, have made, use,
sell, license, market and otherwise exploit Products in the Territory.
ARTICLE X. INDEMNIFICATION; INSURANCE; AND LIABILITY
-----------------------------------------------------
10.1 Compliance with Government Regulations. The parties agree to
--------------------------------------
comply with all regulations and safety standards of government agencies such as
the FDA.
10.2 Indemnification. LICENSEE shall defend, indemnify and hold
---------------
harmless UNIVERSITY, and its trustees, officers, employees and agents and their
respective successors, heirs and assigns (the "Indemnitees"), against any and
all liability, damage, loss or expense (including reasonable attorneys' fees and
expenses of litigation) that may be incurred by or imposed upon the Indemnitees,
or any of them, in connection with any Third Party claim, suit, demand, action
or judgment arising out of the following:
(a) the design, production, manufacture, sale, use in commerce, lease
or promotion by LICENSEE or by an Affiliate or sublicensee of LICENSEE of any
product, process or service relating to or developed pursuant to this Agreement;
or
(b) any other activities of LICENSEE or a sublicensee to be carried
out pursuant to this Agreement.
LICENSEE'S indemnity under (a) shall apply to any liability, damage, loss or
expense whether or not it is attributable to the negligent activities of the
Indemnitees, and "Third-Party" claims under (a) shall be deemed to include
LICENSEE'S cross-claims and Third-Party complaints against Indemnitees arising
out of the matters described in (a) to the extent they are based on Third-Party
claims against LICENSEE arising out of such matters. LICENSEE'S indemnification
under (b) shall not apply to any liability, damage, loss or expense to the
extent that it is attributable to the negligence or willful misconduct of the
Indemnitees.
10.3 Indemnification Procedure. A party (the "Indemnitee") that intends to
-------------------------
claim indemnification under this article shall promptly notify LICENSEE of any
loss, liability, damage or expense, or any claim, demand, action or other
proceeding with respect to which the Indemnitee intends to claim such
indemnification, and the Indemnitee shall provide LICENSEE with the sole control
of the defense or settlement of any such claim, demand, action or other
proceeding. LICENSEE's indemnity obligations under this article shall not apply
to amounts paid in any settlement if effected without its consent. LICENSEE
shall not settle or consent to an adverse judgment in any such claim, demand,
action or other proceeding that directly affects the rights or interests of any
Indemnitee or imposes additional obligations on such Indemnitee, without the
prior express written consent of such Indemnitee, which consent shall not be
unreasonably withheld or delayed. The Indemnitee, its employees and agents,
shall cooperate fully with LICENSEE and its legal representatives in the
investigation of any action, claim or liability covered by this indemnification.
10.4 Liability Insurance. At such time as any product, process or service
-------------------
relating to, or developed pursuant to, this Agreement is being commercially
distributed or sold (other than for
-Page 12 of 23-
<PAGE>
the purpose of obtaining regulatory approvals) by LICENSEE or a sublicensee,
LICENSEE shall at its sole expense, procure and maintain policies of
comprehensive general liability insurance in amounts not less than $2,000,000
per incident and $2,000,000 in annual aggregate and naming the Indemnitees as
additional insureds. Such comprehensive general liability insurance shall
provide product liability coverage. LICENSEE shall provide UNIVERSITY with
written evidence of such insurance upon request of UNIVERSITY. In the event the
product liability coverage aforesaid is not occurrence liability, LICENSEE shall
maintain such comprehensive general liability insurance for a reasonable period
of not less than five (5) years after it has ceased commercial distribution or
use of any product, process or service relating to, or developed pursuant to,
this Agreement. If LICENSEE is unable to obtain the required amounts of
insurance at commercially reasonable rates, UNIVERSITY will cooperate with
LICENSEE to either obtain a waiver of this provision, assist in identifying a
carrier to provide such insurance, or identify a program for self-insurance or
other alternative measures. This Section 10.4 shall survive the expiration or
termination of this Agreement. Upon request, LICENSEE shall provide UNIVERSITY
with certificates of insurance evidencing its compliance with the insurance
requirements of this Section.
10.5 Additional Limitations of Liability. Notwithstanding the provisions
-----------------------------------
Section 2.3, the liability of UNIVERSITY of for any and all breaches of this
Agreement by a party other than UNIVERSITY, and for any and all failures of
Products in the aggregate, shall be limited to five percent (5%) of the
cumulative royalties paid by LICENSEE, and LICENSEE hereby waives and disclaims
the right to recover any damages in excess of such amount for any and all such
breaches and for any and all such failures irrespective of whether such damages
are direct, indirect, consequential, incidental, or any other types of damages
and irrespective of whether based upon loss of investment, loss of production,
lost profits, interest on investment, interruption of business, or any other
loss of any character whatsoever. LICENSEE further agrees that its sole and
exclusive remedy for any and all such breaches and any and all such failures
shall be to recover damages actually sustained up to, and not in excess of, such
amount. The foregoing notwithstanding, nothing in this Agreement shall limit
LICENSEE'S right to seek equitable relief in the event of University's breach of
Article VII or Article II of this Agreement.
10.6 Limited Liability. In no event shall either party be liable to
-----------------
the other or any third party for any special, consequential or incidental
damages arising out of or related to this Agreement or with respect to any
claim, demand, action or other proceeding relating to this Agreement however
caused, and on any theory of liability (including negligence), whether or not
the party has been advised of the possibility of such damages.
ARTICLE XI. FORCE MAJEURE
--------------------------
Neither party shall be held liable or responsible to the other party nor be
deemed to have defaulted under or breached the Agreement for failure or delay in
fulfilling or performing any term of this Agreement to the extent, and for so
long as, such failure or delay is caused by or results from causes beyond the
reasonable control of the affected party including but not limited to from,
earthquakes, floods, embargoes, wars, acts of war (whether war is declared or
not),
-Page 13 of 23-
<PAGE>
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or other party.
ARTICLE XII. DISPUTE RESOLUTION
--------------------------------
12.1 Forum. Any claim or controversy arising out of or relating to
-----
this Agreement may be resolved by a court of competent jurisdiction located in
Boston, Massachusetts.
12.2 Injunctive Relief. Each party acknowledges that a breach by the
-----------------
other party of any provision of this agreement relating to Confidential
Information would cause irreparable harm, that legal damages are not sufficient
to remedy any such breach, and that the sufficiency of legal damages shall not
constitute a ground for opposing any action for equitable relief with respect to
any breach or prospective breach of any such provision. LICENSEE shall be
entitled to seek equitable relief with respect to the prospective termination of
this Agreement by UNIVERSITY.
ARTICLE XIII. MISCELLANEOUS
----------------------------
13.1 Patent Policy. This Agreement shall be subject to the Boston
-------------
University Patent Policy, Charles River Campus, as in effect as of the Effective
Date, a copy of which is attached hereto as Exhibit B.
13.2 Notices. Any consent, notice or report required or permitted to
-------
be given or made under this Agreement by one party to the other party shall be
in writing, shall be delivered personally, by confirmed facsimile transmissions,
or by U.S. first class mail, courier or nationally recognized delivery service,
and shall be addressed to the other party at its address indicated below, or to
such other address as the addressee shall have last furnished in writing to the
addressor. Except as otherwise provided in the Agreement, such consent, notice
or report shall be effective upon receipt by the addressee.
If to UNIVERSITY:
Boston University
Office of Technology Transfer
Community Technology Fund
80 East Concord Street, Suite L307C
Boston, Massachusetts 02118
Attention: Director
Tel: (617) 638-4540
Fax: (617) 638-4515
-Page 14 of 23-
<PAGE>
with a copy to:
Boston University
Office of General Counsel
125 Bay State Road
Boston, Massachusetts 02215
Attention: Dennis Hart, Esq.
Tel: (617) 353-2326
Fax: (617) 353-5529
If to LICENSEE:
Sequenom, Inc.
c/o Techno Venture Management
101 Arch Street,
Suite 1950
Boston, Massachusetts 02110
Attention: Dr. Hubert Koster
Tel: (617) 345-9320
Fax: (617) 345-9377
with a copy to:
Foley, Hoag & Eliot
One Post Office Square
Boston, Massachusetts 02109
Attention: David R. Pierson, Esq.
Tel: (617) 832-1000
Fax: (617) 832-7000
13.3 Governing Law. This Agreement shall be governed by, and construed and
-------------
enforced in accordance with, the laws of The Commonwealth of Massachusetts,
without regard to the conflicts of law principles thereof, and shall not be
governed by the United Nations Convention on Contracts for the International
Sale of Goods.
13.4 U.S. Export Laws and Regulations. Each party hereby
--------------------------------
acknowledges that the rights and obligations of this Agreement are subject to
the laws and regulations of the United States relating to the export of products
and technical information. Without limitation, each party shall comply with all
such laws and regulations.
13.5 No Other Rights. This Agreement shall not be construed to grant
---------------
any license or other rights to either party in any patent rights, know-how or
other technology of the other, except as expressly provided in this Agreement.
-Page 15 of 23-
<PAGE>
13.6 Waivers and Amendments. No change, modification, extension,
----------------------
termination or waiver of this Agreement, or any of the provisions herein
contained, shall be valid unless made in writing and signed by duly authorized
representatives of the parties hereto.
13.7 Entire Agreement. This Agreement and the Sponsored Research
----------------
Agreement embody the entire understanding between the parties and supersede any
prior understanding and agreements between and among them respecting the subject
matter hereof. There are no representations, agreements, arrangements or
understandings, oral or written, between the parties hereto relating to the
subject matter of this Agreement which are not fully expressed herein.
13.8 Independent Contractors. UNIVERSITY and LICENSEE are
-----------------------
independent contractors and are not, and shall not represent themselves as,
principal and agent, partners or joint venturers. Neither party shall attempt
to act, or represent itself as having the power, to bind the other or create any
obligation on behalf of the other. Each party shall be solely responsible for
the employment, direction and control of its employees and their acts.
13.9 Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law. The parties agree that (i) the provisions of this Agreement
shall be severable in the event that any of the provisions hereof are for any
reason whatsoever invalid, void or otherwise unenforceable, (ii) such invalid,
void or otherwise unenforceable provisions shall be replaced by other provisions
which are as similar as possible in terms to such invalid, void or otherwise
unenforceable provisions but are valid and enforceable, and (iii) the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
13.10 Captions. The Captions herein have been inserted solely for
--------
convenience of reference and in no way define or limit the scope or substance of
any provision of this Agreement.
13.11 Certain Additional Definitions. As used in this Agreement,
------------------------------
"herein" and "hereof' shall refer to this Agreement as a whole, and "including"
shall mean "including but not limited to."
-Page 16 of 23-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as a document under seal by their duly authorized
officers, as of the date first above written.
SEQUENOM, INC. (LICENSEE) TRUSTEES OF BOSTON UNIVERSITY
(UNIVERSITY)
By: /s/ John J. DiBello By:____________________________
-------------------------
Name: John J. DiBello Name: John Bagalay
-----------------------
Title: Treasurer/CFO Title: Assistant Treasurer
----------------------
-Page 17 of 23-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as a document under seal by their duly authorized officers, as of
the date first above written.
SEQUENOM, INC. (LICENSEE) TRUSTEES OF BOSTON UNIVERSITY
(UNIVERSITY)
By:________________________ By: /s/ John Bagalay
---------------------------------
Name:______________________ Name: John Bagalay
Title:_____________________ Title: Assistant Treasurer
-Page 18 of 23-
<PAGE>
Exhibit A
UNIVERSITY Patent Rights
BU92-42
Positional Sequencing by Hybridization
Charles Cantor
07/972,012
Filed 11/6/92
Now abandoned
BU92-42
Positional Sequencing by Hybridization
Charles Cantor
08/322,526
Filed 10/17/94
Issued as US Patent 5,503,980 on 4/2/96
BU92-42
Positional Sequencing by Hybridization with Mass Spectrometry
Charles Cantor
08/462,704
Filed 6/5/95
BU92-42
Positional Sequencing by Hybridization
Charles Cantor and Marek Przetakiewiez
08/110,691
Filed 8/23/93
BU92-42
Positional Sequencing by Hybridization
Charles Cantor
08/470,832
Filed 6/5/95
-Page 19 of 23-
<PAGE>
PCT/US/93/10616EPO
PCT/US/93/10616JAPAN
Filed 11/5/93
Correspond to 08/110,691
BU92-42B/94-71
Solid Phase Sequencing of Nucleic Acids
Charles Cantor
08/420,009
Filed 4/11/95
BU92-42B
Solid Phase Sequencing of Nucleic Acids
Charles Cantor
08/470,835
Filed 6/6/95
BU92-42C
Solid Phase Biopolymer Sequencing with Mass Spectrometry
Charles Cantor and Hubert Koster
08/419,994
Filed 4/11/95
BU92-42C
Solid Phase Biopolymer Sequencing with Mass Spectrometry
Charles Cantor and Hubert Koster
08/470,716
Filed 4/11/95
BU92-42C
Solid Phase Sequencing of Double Stranded Nucleic Acids
Charles Cantor, Hubert Koster, Dong-Jing Fu and Cassandra Smith
08/614,151
Filed 3/26/96
-Page 20 of 23-
<PAGE>
Exhibit B
Patent Policy
-Page 21 of 23-
<PAGE>
Boston University Patent Policy [university logo]
CHARLES RIVER CAMPUS
- --------------------------------------------------------------------------------
PREAMBLE
The patent policy outlined herein is the Policy of the Trustees of Boston
University (the "University"). The University recognizes that patentable
inventions may be made in the course of research sponsored by the University
and/or by others through the University. It is the policy of the University to
- ---
maximize the benefits to the individual who makes such patentable inventions, to
the University and to the general public, and thus to stimulate initiative in
the faculty, staff, and employees of the University. The University recognizes
that this may best be accomplished through patenting and licensing such
inventions in a manner consistent with the public interest, and for such purpose
the University hereby establishes the patent policy set forth herein. This
Policy supersedes all prior patent policies and amendments thereto applicable to
the Charles River Campus.
1. PATENT POLICY
A. In order to protect the public good and the University, and in order
to fulfill obligations to research sponsors, the University shall claim equity
in all discoveries and its right to acquire the title to and control of such
discoveries where the discoveries are made by faculty, staff, employees, or
students (including all types of trainees or postgraduate fellows) working on or
arising from programs supported in whole or in part by funds, space, personnel,
or facilities provided by the University.
B. When a discovery is made by an inventor outside of any program
conducted by the University, and the inventor can demonstrate that the
University did not provide or administer significant funds, space, personnel, or
facilities for work leading to the discovery, the discovery shall remain the
exclusive property of the inventor or his/her sponsor. The University shall not
ordinarily consider provision of office, classroom, or library facilities as
constituting significant use of University funds, space, personnel, or
facilities. For purposes of this Policy, the term "Inventor" shall include all
individuals who participated in and signed a disclosure statement respecting a
discovery or invention.
C. When necessary, the University Committee on Inventions and Discoveries
("Committee") shall decide whether an invention or discovery should be
classified under Paragraph A or Paragraph B of this Paragraph 1. Persons or
entities claiming a right to receive royalty interests under the provisions of
Paragraph 4 may appeal the decision of the Committee to the President of the
University. The President shall recommend final action to the Trustees, whose
decision shall be final.
2. ROYALTIES
Where the University is entitled to equity in a discovery, the Inventor shall
receive 30 percent of the net royalties accruing therefrom unless the University
recommends a lesser share, which shall not be less than 15 percent, based upon
relevant circumstances relating to the discovery. In the event that the
University determines that such lesser share is appropriate, the University
shall in its sole discretion designate the recipient or recipients of the
percentage share by which the Inventor's share has been reduced. The Community
Technology Foundation (CTF) of Boston University, exclusive agent for the
administration of patents or discoveries made within the University, shall
receive 45 percent of the net royalties (see Paragraph 4). The remaining
royalties from, and equities in, the invention shall be distributed to the
School of the Inventor, or in the absence of a School's being involved, the
primary unit or entity of the University with which the inventor works or is
affiliated. Net royalties are defined as gross royalties less amounts granted
by the University specifically for the invention or discovery process, and the
costs of securing, protecting, preserving, and maintaining patents, and of
licensing and marketing of the patent rights, or other costs or fees directly
attributable to the inventions being licensed.
<PAGE>
3. DISCLOSURES
Because the securing of rights in discoveries and inventions depends on prompt
and efficient patent application and administration, all faculty, staff,
students, and employees of the University who make inventions or discoveries
shall immediately disclose said inventions or discoveries to the CTF Patent
Administrator and to the Inventor's supervisor. This disclosure obligation
shall apply to all inventions and discoveries, without regard to whether they
fall under Paragraph A or B above.
4. PATENT ADMINISTRATION
CTF shall be the exclusive agent of the University for the administration of
inventions and discoveries made within the University and covered under
Paragraph l.A. CTF shall present the disclosures to the Committee. Such report
shall state whether CTF has determined that an invention or discovery will be
developed by the University. The Committee shall consist of eleven voting
members, at least a majority of whom shall be faculty members from the Schools
and Colleges of the University. The members of the Committee and the Chairman
of the Committee shall be designated by the President of the University. CTF
shall render a written semiannual report to the Chairman of the Committee on the
disposition and status of all inventions and discoveries submitted. CTF shall as
promptly as practicable determine whether an invention or discovery shall be
pursued by the University. If the Committee determines that CTF has not filed a
patent application within one year after it has received a disclosure in respect
of which the University is entitled to claim an interest, the Committee, in
consultation with the Inventor, shall determine what other disposition, if any,
shall be made of the invention or discovery and of its development.
5. COVERAGE
The Policy shall cover only discoveries and inventions that are patentable as
the term is defined in the United States Code, as amended, or the laws of other
countries where applications are filed.
6. TRUSTEE REVIEW
Any disputes that arise under this Policy that are not resolved by the Committee
shall be referred to the President of the University, who shall recommend final
action to the Trustees. The decision of the Trustees shall be final with
respect to all disputes.
7. EMPLOYMENT AGREEMENTS
Rights and obligations under this Policy shall survive any termination of
enrollment or employment at the University.
Nothing herein contained is intended to grant or dispose of any right,
title, and interest to any disclosure, idea, improvement, or invention, whether
patentable or not, which has been supported or funded by outside parties who
acquire rights to such disclosure, ideas, improvements, and invention.
7. CONSULTING AGREEMENTS
The rights of the University under this policy, and the interests of sponsors
under research grants or contracts, may not be abrogated or limited by
consulting agreements or other contracts entered into between University
students or employees and outside organizations or employers. University
students and employees should inform outside employers of their obligations and
commitments to the University under this policy. Such students and employees
should ascertain that patent clauses in their agreements are not in conflict
with their obligations to the University or this Policy statement. Each student
and employee should make his/her obligations to the University clear to those
with whom such agreements may be made, and should ensure that they are provided
with a current statement of University policy. Upon request, the University
will provide a standard clause which may be inserted in a student's or
employee's consulting agreement. This clause will put third parties on notice
as to the University's rights under this policy with respect to inventions and
<PAGE>
discoveries. In cases of conflict of interest, the University reserves the
ultimate right to determine the final disposition of the rights and interests
involved.
Adopted, as amended, by the Trustees of Boston University, November 12, 1991.
PATENT AGREEMENT
I affirm that I have received and have read the Boston University Patent Policy
Charles River Campus.
For and in consideration of the provision by Boston University or support in the
form of funds, space, personnel, facilities instruction, supervision or other
assistance, I hereby accept the aforesaid Patent Policy as determinative of my
rights are (_________) in relation to any discoveries or patentable inventions.
________________________________________________________________________________
Signature Date
________________________________________________________________________________
Name
<PAGE>
EXHIBIT 10.26
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") dated as of the 3rd day of July,
1997 (the "Effective Date"), is made by and between The Johns Hopkins
University, a corporation organized under the laws of Maryland (hereinafter
referred to as ("UNIVERSITY"), and Sequenom, Inc., a corporation organized under
the laws of Delaware (Sequenom, Inc. and any Affiliate of Sequenom, Inc.
hereinafter referred to as "LICENSEE").
WITNESSETH
WHEREAS, UNIVERSITY and LICENSEE have entered into a certain Research
Agreement, effective as of October 1, 1994 (the "Sponsored Research Agreement"),
pursuant to which UNIVERSITY granted to LICENSEE the right to negotiate for an
Exclusive worldwide license to certain technology and a Non-Exclusive license to
certain other technology; and
WHEREAS, UNIVERSITY and LICENSEE wish to set forth the terms of such
licenses;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
-----------
For purposes of the Agreement, the terms defined in this article shall have
the respective meanings set forth below:
1.1 "Affiliate" shall mean, with respect to any Person, any other Person
---------
which directly or indirectly controls, is controlled by, or is under common
control with, such Person. A Person shall be regarded as in control of another
Person if it directly or indirectly possesses the power to direct or cause the
direction of the management and policies of the other Person by any means
whatsoever.
1.2 "Curved Filed Reflectron Patent Rights" shall mean the invention
-------------------------------------
claimed in U.S. Patent No. 5,464,985, entitled "Non-Linear Field Reflectron."
1.3 "Field" shall mean ***.
-----
1.4 "First Commercial Sale" shall mean, with respect to any Licensed
---------------------
Product, the first sale for use or consumption by the general public of such
Licensed Product.
1.5 "Improvements" shall mean all inventions, discoveries, processes,
------------
methods, compositions, formulae, procedures, protocols, software developments
and improvements, techniques, results of experimentation and testing,
information and data, which are conceived by employees or others acting on
behalf of the Mass Spectrometry Lab of the School of Medicine of UNIVERSITY,
either alone or jointly with others, and which constitute improvements to the
*** Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately with the commission.
1
<PAGE>
UNIVERSITY Patent Rights, the Curved Field Reflectron Patent Rights, the
Inventions, or the Licensed Technology all to the extent and only to the extent
conceived, developed or reduced to practice by employees or others acting on
behalf of the Mass Spectrometry Lab of the School of Medicine of UNIVERSITY,
either alone or jointly with others, arising out of research conducted pursuant
to the Sponsored Research Agreement.
1.6 "Inventions" shall mean all inventions arising out of research
----------
conducted pursuant to the Sponsored Research Agreement by the employees of the
Mass Spectrometry Lab of the School of Medicine of UNIVERSITY or by others whose
work is funded by the Sponsored Research Agreement.
1.7 "Licensed Product" shall mean products or components arising out of or
----------------
using Inventions or methods related to mass spectrometer instruments or other
products or components which if made, used or sold would infringe one or more
Valid Patent Claims but for the license granted by the Agreement, or which
otherwise uses, incorporates or was conceived, developed or reduced to practice
using the Licensed Technology.
1.8 "Licensed Service" shall mean a service that employs methods or
----------------
procedures covered by a Valid Patent Claim or that embodies or uses Licensed
Products.
1.9 "Licensed Technology" shall mean all UNIVERSITY Patent Rights, and all
-------------------
Inventions, together with all inventions, discoveries, processes, methods,
compositions, formulae, procedures, protocols, software developments and
improvements, techniques, results of experimentation and testing, information
and data, which are not generally known, embodying or produced through
inventions conceived, discovered or reduced to practice, whether alone or with
others, by employees of the Mass Spectrometry Lab of the School of Medicine of
UNIVERSITY or with facilities or equipment of such Mass Spectrometry Lab,
including any Improvements thereto; all to the extent and only to the extent
that UNIVERSITY has the right to grant licenses thereunder and all arising out
of research conducted pursuant to the Sponsored Research Agreement.
1.10 "Net Selling Price" shall mean the gross amount billed or invoiced on
-----------------
sales by LICENSEE of a mass spectrometer instrument or component thereof that is
a Licensed Product, or a Licensed Service, respectively, less the following: (i)
trade, quantity, or cash discounts and commissions to non-affiliated brokers or
agents to the extent actually allowed and taken; (ii) amounts repaid or credited
by reason of rejection or return; and (iii) any taxes, imposts, tariffs, custom
duties or other governmental charges levied on the production, sale,
transportation, delivery, or use of such product or service which are paid by or
on behalf of LICENSEE. The Net Selling Price for a Licensed Product that is a
mass spectrometer instrument or a component thereof shall be the Net Selling
Price of the entire mass spectrometer instrument, if the Licensed Product
contains at least a component that would infringe a Valid Patent Claim.
1.11 "Person" shall mean an individual, corporation, partnership, trust,
------
business trust, association, joint stock company, limited liability company,
limited liability partnership, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, governmental authority or any other
form of entity not specifically listed herein.
2
<PAGE>
1.12 "Territory" shall mean all jurisdictions worldwide.
---------
1.13 "Third Party" shall mean any Person other than UNIVERSITY, LICENSEE
-----------
and their respective Affiliates.
1.14 "UNIVERSITY Patent Rights" shall mean (a) all patent application,
------------------------
heretofore or hereafter filed or having legal force in any country within the
Territory, embodying or claiming Inventions conceived, discovered or reduced to
practice, whether alone or with others, by UNIVERSITY employees or with
UNIVERSITY facilities or equipment, in the course of any Research Program under
the Sponsored Research Agreement, (b) all patents that have issued or in the
future issue from the patent applications described in clause (a) above,
including utility, model and design patents and certificates of invention, and
(c) all divisions, continuations, continuations-in-part, reissues, renewals,
extensions or additions to any such patent applications and patents, and any
Improvements thereto upon which a patent application has been filed or a patent
has issued; provided, however, that UNIVERSITY Patent Rights shall not include
Curved Field Reflectron Patent Rights.
1.15 "Valid Patent Claim" shall mean a claim of an issued and unexpired
------------------
patent included within the UNIVERSITY Patent Rights or Curved Field Reflectron
Patent Rights that has not been held permanently revoked, unenforceable or
invalid by a decision of a court or other governmental agency of competent
jurisdiction, which decision is unappealable or has not been appealed within the
time allowed for appeal, and that has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
------------------------------
Each party hereby represents and warrants to the other party as follows:
2.1 Existence and Power. Such Party is duly organized, validly existing
-------------------
and in good standing under the laws of jurisdiction in which it is incorporated.
2.2 Authorization and Enforcement of Obligations. Such party (a) has the
--------------------------------------------
power and authority and the legal right to enter into this Agreement and to
perform its obligations hereunder and (b) has taken all necessary action on its
part to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder. This Agreement has been duly executed
and delivered on behalf of such party and constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its
terms.
2.3 No Consents. All necessary consents, approvals and authorizations of
-----------
all governmental authorities and other Persons required to be obtained by such
party in connection with this Agreement have been obtained.
3
<PAGE>
2.4 No Conflict. The execution and delivery of this Agreement and the
-----------
performance of such party's obligations hereunder (a) do not conflict with or
violate any requirement of applicable laws or regulations, and (b) do not
conflict with, or constitute a default under, any contractual obligation of it.
2.5 Third Party Claims. UNIVERSITY represents and warrants that, to the
------------------
best of its knowledge as of the signing of this Agreement, no claim has been
made by or is available to any Third Party that any activity permitted by the
licenses granted to LICENSEE pursuant to this Agreement constitutes an
infringement of any right of any such Third Party anywhere in the world,
including, without limitation, any right under any copyright, trademark, trade
secret, patent, or other proprietary right of such Third Party.
2.6 Warranty: Warranty Disclaimer. UNIVERSITY warrants that it has good
-----------------------------
and marketable title to its interest in the inventions claimed under UNIVERSITY
Patent Rights and Curved Field Reflectron Patent Rights with the exception of
certain retained rights of the United States government. UNIVERSITY does not
warrant the validity of any patents or that practice under such patents shall be
free of infringement. EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 2,
LICENSEE, AFFILIATED COMPANIES AND SUBLICENSEES AGREE THAT THE PATENT RIGHTS ARE
PROVIDED "AS IS", AND THAT UNIVERSITY MAKES NO REPRESENTATION OR WARRANTY WITH
RESPECT TO THE PERFORMANCE OF LICENSED PRODUCT(S) AND LICENSED SERVICES
INCLUDING THEIR SAFETY, EFFECTIVENESS, OR COMMERCIAL VIABILITY. UNIVERSITY
DISCLAIMS ALL WARRANTIES WITH REGARD TO PRODUCT(S) AND SERVICES LICENSED UNDER
THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESS OR
IMPLIED, OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, UNIVERSITY ADDITIONALLY
DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF UNIVERSITY AND
INVENTORS, FOR DAMAGES, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT,
SPECIAL, AND CONSEQUENTIAL DAMAGES, ATTORNEYS' AND EXPERTS' AND COURT COSTS
(EVEN IF UNIVERSITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, FEES OR
COSTS), ARISING OUT OF OR IN CONNECTION WITH THE MANUFACTURE, USE, OR SALE OF
THE PRODUCT(S) AND SERVICES LICENSED UNDER THIS AGREEMENT. LICENSEE, ITS
AFFILIATES, AND ITS SUBLICENSEES ASSUME ALL RESPONSIBILITY AND LIABILITY FOR
LOSS OR DAMAGE CAUSED BY A PRODUCT AND SERVICE MANUFACTURED, USED OR SOLD BY
LICENSEE, ITS SUBLICENSEES AND AFFILIATES WHICH IS A LICENSED PRODUCT OR
LICENSED SERVICE AS DEFINED IN THIS AGREEMENT.
ARTICLE 3
LICENSE GRANT
-------------
3.1 License Grant to LICENSEE. UNIVERSITY hereby grants LICENSEE the
-------------------------
following licenses:
4
<PAGE>
(a) a royalty-bearing, exclusive world-wide license, including the
right to grant sublicenses, in all fields, under all of UNIVERSITY's right,
title and interest, whether presently held or hereafter acquired, in and to the
University Patent Rights to develop, make, have made, use, sell, license, market
and otherwise exploit Licensed Products and Licensed Services or other products
or services in any field; and
(b) a non-exclusive royalty free license to develop, make, have made,
use, sell, license, market and otherwise exploit Licensed Product and Licensed
Services based on nonpatented Licensed Technology (i.e., not covered by a Valid
Patent Claim).
(c) a royalty-bearing, non-exclusive world-wide license, including
the right to grant sublicenses, under all of UNIVERSITY's right, title and
interest, whether presently held or hereafter acquired, in and to the Curved
Field Reflectron Patent Rights to develop, make, have made, use, sell, license,
market and otherwise exploit Licensed Products and Licensed Services within the
Field. LICENSEE acknowledges the existence of the licenses granted to Shimadzu-
Kratos and JEOL. UNIVERSITY will not grant any licenses under U.S. Patent No,
5,464,985, other than the existing licenses to ***. LICENSEE acknowledges that
without the consent of LICENSEE the licenses to *** may be assigned in
connection with an acquisition by either of them or may be terminated and a
substitute license be put in place that does not conflict with the existing or
target business of LICENSEE within the Field.
3.2 Reservation of Certain Rights. Notwithstanding the foregoing, the
-----------------------------
license granted to LICENSEE by the Agreement is subject to the reservation of:
(a) the rights of the United States of America as set forth in Public Laws 96-
517 and 98-620 (codified at 35 U.S.C. 200 et seq.) if U.S. Government funding
------
is used and (b) the retained rights of UNIVERSITY to use the UNIVERSITY Patent
Rights or Curved Field Reflectron Patent Rights for its internal research
purposes. UNIVERSITY shall have the right to render non-exclusive the license
set forth in Section 3.1(a) above with respect to particular "subject
inventions," as defined in the Bayh-Dole Act, if and only if: (i) LICENSEE is
not demonstrably engaged in a significant research, development, manufacturing,
marketing or licensing program with respect to such subject inventions; or (ii)
at any time after *** after the Effective Date, within ninety (90) days after
written notice from UNIVERSITY, LICENSEE has not put the subject inventions into
commercial use and is not keeping such subject inventions reasonably available
to the public; and (iii) such failure does not result from actions or inactions
of any agency whose approval is required for commercial sales. This right shall
be UNIVERSITY's sole remedy for failure by LICENSEE to put products to
commercial use or make them available to the public.
3.3 Technical Assistance.
--------------------
(a) Upon execution of the Agreement, UNIVERSITY shall disclose and
make available to LICENSEE all information available to UNIVERSITY and not
previously disclosed to LICENSEE regarding the Licensed Technology.
(b) During the term of the Agreement, upon reasonable notice and
during normal business hours, UNIVERSITY, acting through Dr. Robert J. Cotter,
(a) shall provide
*** Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately with the Commission.
5
<PAGE>
such technical assistance regarding the Licensed Technology as LICENSEE
reasonably requests to conduct its activities contemplated by the Agreement, (b)
shall make available to LICENSEE such technical personnel of UNIVERSITY as
reasonably necessary to provide the foregoing technical assistance, and (c)
shall disclose and make available to LICENSEE all information available to
UNIVERSITY and not previously disclosed to LICENSEE regarding the use of the
Licensed Technology. LICENSEE shall reimburse UNIVERSITY for research or
consulting costs agreed by the parties for any such technical assistance,
together with such reasonable out-of-pocket travel and other expenses incurred
by UNIVERSITY in providing such technical assistance as are approved in advance
by LICENSEE. UNIVERSITY shall provide LICENSEE with estimates of the anticipated
costs of any requested technical assistance prior to undertaking such technical
assistance. If such technical assistance requires a significant level of
research the UNIVERSITY and LICENSEE will negotiate a separate sponsored
research agreement to cover such research.
ARTICLE 4
PAYMENTS
--------
4.1 Processing Fee. LICENSEE will pay UNIVERSITY a processing fee of
--------------
*** promptly after execution of this Agreement.
4.2 Maintenance Fee. LICENSEE will pay UNIVERSITY a maintenance fee of
---------------
*** within thirty days after each anniversary of execution of this Agreement,
in order to maintain the licenses granted pursuant to Article 3.
4.3 Royalty. LICENSEE shall pay UNIVERSITY one or the other of the
-------
following royalties, if applicable:
(a) *** of the Net Selling Price received by LICENSEE of its
Affiliate for each Licensed Product having one or more features covered by a
Valid Patent Claim for which LICENSEE has an exclusive license, or *** of the
Net Selling Price received by LICENSEE for each such Licensed Product having one
or more features covered by a Valid Patent Claim for which LICENSEE has a non-
exclusive license;
(b) *** of the entire income stream received by LICENSEE or its
affiliates attributable to service income based in whole or in part on use of
either: (i) a Licensed Product in any jurisdiction where at least a component is
covered by a Valid Patent Claim, or (ii) methods or procedures covered by a
Valid Patent Claim, or (iii) components (other than a Licensed Product) covered
by a Valid Patent Claim, or used according to a method covered by a Valid Patent
Claim, where such Licensed Product, method, procedure or component or invention
is one for which LICENSEE has an exclusive license, or *** of the entire income
stream received by LICENSEE attributable to service income based in whole or in
part on use of either: (x) a Licensed Product in any jurisdiction where at least
a component is covered by a Valid Patent Claim, or (y) methods or procedures
covered by a Valid Patent Claim, or (z) components (other than a Licensed
Product) covered by a Valid Patent Claim, or used according to a method
*** - Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately, with the Commission.
6
<PAGE>
covered by a Valid Patent Claim, where such Licensed Product, method, procedure
or component or invention is one for which LICENSEE has a non-exclusive license;
(c) *** of the entire sublicensing income received by LICENSEE
attributable in whole or in part to use of Licensed Products or other components
or methods covered by a Valid Patent Claim for which LICENSEE has an exclusive
LICENSE, or *** of the entire sublicensing income received by LICENSEE
attributable in whole or in part to use of Licensed Products or other components
or methods covered by a Valid Patent Claim for which LICENSEE has a non-
exclusive license;
(d) *** of the Net Selling Price received by LICENSEE for
consumables, including chips, not covered by items (b) and (c) above, but sold
for use on mass spectrometer instruments for which LICENSEE has an exclusive
license or for use according to methods or procedures covered by a Valid Patent
Claim for which Licensee has an exclusive license, or *** of the Net Selling
Price received by LICENSEE for consumables, including chips, not covered by
items (b) and (c) above, but sold for use on mass spectrometer instruments for
which LICENSEE has a non-exclusive license or for use according to methods or
procedures covered by a Valid Patent Claim for which Licensee has a non-
exclusive license.
LICENSEE shall be required to pay royalties only with respect to jurisdictions
where its sale or income is attributable to activities that are covered by a
Valid Patent Claim for which LICENSEE has a license hereunder.
4.4 Payments. All royalties pursuant to Section 4.3 shall accrue on the
--------
date on which LICENSEE actually receives payment with respect to sales or income
with respect to particular Licensed Product or Licensed Services. All royalties
pursuant to Section 4.3 shall be paid on a quarterly basis, within 60 days
following the end of the quarter in which they accrued. Each payment shall be
accompanied by a report setting forth the calculation of the amount due.
4.5 Credits.
-------
(a) If LICENSEE must pay royalties to Third Parties for a product of
service for which it is also paying royalties to UNIVERSITY under Section 4.3
above, LICENSEE may credit against any amounts due UNIVERSITY *** of such
payment to Third Parties for such particular product or service. In addition, if
license fees and royalties payable to UNIVERSITY and to Third Parties on a
LICENSEE product or component thereof exceed *** of the net sales price of such
product of component or *** of LICENSEE's net income with respect to services or
sublicenses in any jurisdiction, LICENSEE may reduce any amounts due UNIVERSITY
pro rata with the amounts due Third Parties so that the total license fees and
royalties are reduced to *** or such net sales price or such net income,
respectively. In no event shall any payment otherwise due UNIVERSITY be reduced
by more than ***.
(b) LICENSEE may credit against any amounts due UNIVERSITY under this
Agreement, from sale or income generated in the jurisdiction of the infringement
suit, its share of expenses relating to the prosecution, defense or settlement
of infringement claims relating to the
*** - Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately, with the Commission.
7
<PAGE>
practice of the licenses granted hereunder or the Inventions or the Curved Field
Reflectron Invention; however such credit may not decrease the royalty due
UNIVERSITY by more than *** in any year, the difference being carried forward
as a credit for future years.
ARTICLE 5
INFRINGEMENT ACTIONS BY THIRD PARTIES
-------------------------------------
UNIVERSITY shall indemnify and hold harmless LICENSEE and LICENSEE's
permitted sublicensees and customers from and against any and all losses, costs,
damages and expenses, including reasonable attorney's fees, resulting from any
suit or action arising out of or relating to any infringement or alleged
infringement by LICENSEE or by LICENSEE's permitted sublicensees or customers of
a Third Party's patent rights in the Territory through the use, sale,
manufacture, or practice of a process, method or composition claimed under the
Licensed Technology. LICENSEE promptly shall notify UNIVERSITY in writing of any
such suit or action, and UNIVERSITY shall have the right, at its expense, to
intervene and assume control of such action; provided, however, that LICENSEE
shall have the rights to participate in any such suit or action, to be
represented by advisory counsel of its own selection at its own expense, and to
offset *** of the expenses incurred in such action against any
amounts due UNIVERSITY. Neither party shall settle such suit or action without
the consent of the other, which consent shall not be unreasonably withheld or
delayed. Each party shall cooperate fully in the defense of such suit or action
and shall furnish to the other all evidence and assistance in its control.
ARTICLE 6
PUBLICITY AND CONFIDENTIALITY
-----------------------------
6.1 Publicity. The parties shall agree on the form of a mutually
---------
acceptable public announcements of the transaction contemplated hereby. Each
party shall otherwise hold the financial terms of this transaction in
confidence, except that LICENSEE may reveal such terms to any other licensee for
purposes of calculating license fees or royalties due subject to an obligation
of confidentiality, or to any prospective investor.
6.2 Confidential Information. Each party shall exercise reasonable care to
------------------------
maintain in confidence all information of the other party (including samples)
disclosed by the other party and identified as, or acknowledged to be,
confidential (the "Confidential Information"), and shall not use, disclose or
grant rights to use of the Confidential Information except on a need-to-know
basis to those directors, officers, employees, agents, permitted sublicensees
and permitted assignees, to the extent such disclosure is reasonably necessary
in connection with such party's activities as authorized under this Agreement.
Each party shall notify the other promptly upon discovery of any unauthorized
use or disclosure of the other party's Confidential Information.
6.3 Permitted Disclosures. The nonuse and nondisclosure obligations
---------------------
contained in this article shall not apply to the extent that (a) any receiving
party (the "Recipient") is required (i) to disclose information by law, order or
regulation of a governmental agency or a court of
*** - Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately, with the Commission.
8
<PAGE>
competent jurisdiction, or (ii) to disclose information to any governmental
agency for purposes of obtaining approval to test or market a product or to
apply for a patent, provided that the Recipient shall provide written notice
thereof to the other party and sufficient opportunity to object, time
permitting, to any such disclosure or to request confidential treatment thereof;
or (b) the Recipient can demonstrate that (i) the information was public
knowledge at the time of such disclosure by the Recipient, or thereafter became
public knowledge, other than as a result of acts attributable to the Recipient
in violation hereof; (ii) the information was rightfully known by the Recipient
(as shown by its written records) prior to the date of disclosure to the
Recipient on an unrestricted basis by a Third Party not under a duty of
confidentiality to the other party; or (iv) the information was independently
developed by employees or agents of the Recipient without access to the
Confidential Information of the other party.
ARTICLE 7
INVENTIONS AND PATENTS
----------------------
7.1 Ownership of Inventions. Ownership of Licensed Technology developed
-----------------------
by individuals providing technical assistance on behalf of UNIVERSITY pursuant
to Section 3.3 of this Agreement shall be governed as if such Licensed
Technology were developed pursuant to the Sponsored Research Agreement.
7.2 Patent Rights Generally. Control over, and associated expenses for,
-----------------------
the filing, prosecution, and maintenance of patents and patent applications
relating to inventions licensed hereunder will be allocated according to the
Sponsored Research Agreement. In the event that UNIVERSITY obtains additional
licensees under any invention licensed by LICENSEE, LICENSEE shall pay only its
pro-rata share of patent-related expenses. LICENSEE shall have the right to
cease paying for the filing, prosecution, or maintenance of any patent or patent
application in any country upon thirty (30) days prior written notice to
UNIVERSITY. In such event, LICENSEE will have no further rights under this
Agreement with respect to such patent or patent application in such country, and
LICENSEE agrees to assign to UNIVERSITY any rights LICENSEE may have in such
patent or patent application in such country.
7.3 Reimbursement of Expenses. LICENSEE shall reimburse UNIVERSITY for
-------------------------
the reasonable expenses incurred by UNIVERSITY in relation to the filing,
prosecution, and maintenance of patents and patent applications licensed
hereunder; provided, however, that such expenses shall be equally divided among
LICENSEE and any other licensees of the Licensed Technology. Without limiting
the generality of the foregoing, LICENSEE will reimburse UNIVERSITY only one-
third of such expenses with respect to the Curved Field Reflectron Invention.
7.4 Enforcement of UNIVERSITY Patent Rights. UNIVERSITY shall notify
---------------------------------------
LICENSEE of any infringement in the Territory known to UNIVERSITY of the
Licensed Technology and shall provide LICENSEE with the available evidence, if
any, of such infringement. LICENSEE, at its expense, shall have the right to
determine the appropriate course of action to enforce rights in the Licensed
Technology or otherwise abate the infringement thereof, to take (or refrain from
taking) appropriate action to enforce the rights in
9
<PAGE>
the Licensed Technology, to control any litigation or other enforcement action
and to enter into, or permit, the settlement of any such litigation or other
enforcement action with respect to the Licensing Technology. UNIVERSITY shall
cooperate fully with LICENSEE in connection with such litigation or other
enforcement action and shall furnish to LICENSEE all evidence and assistance in
its control. The proceeds of any monetary judgement, reward or settlement from
such litigation or other enforcement action shall be used first to reimburse
LICENSEE for its expenses. UNIVERSITY will receive a percentage of such proceeds
remaining after deduction of such expenses equal to the running royalty rate set
forth in Section 4.3(a), (b), (c) or (d) most nearly applicable to the activity
in question, and LICENSEE will retain any remaining amounts.
ARTICLE 8
TERM AND TERMINATION
--------------------
8.1 Term. This Agreement shall expire upon the expiration of the last to
----
expire patent included within the UNIVERSITY Patent Rights or Curved Field
Reflectron Patent Rights.
8.2 Termination by LICENSEE. LICENSEE may terminate the Agreement, in its
-----------------------
sole discretion, upon written notice to UNIVERSITY.
8.3 Termination for Cause. Except as otherwise provided in the article
---------------------
below regarding force majeure, either party may terminate the Agreement upon or
after the breach of any material provision of the Agreement by the other party,
if the other party has not cured such breach within sixty (60) days after
written notice thereof by the non-breaching party.
8.4 Effect of Expiration or Termination. Expiration of termination of the
-----------------------------------
Agreement shall not relieve the parties of any obligation accruing prior to such
expiration or termination, and the provisions of Articles 5, 6, and 10 shall
survive the expiration or termination of the Agreement. Upon expiration of the
Agreement under Section 8.1 above, LICENSEE shall have a fully-paid, non-
exclusive license to make, have made, use, sell, license, market and otherwise
exploit Licensed Products and Licensed Technology anywhere in the world.
ARTICLE 9
FORCE MAJEURE
-------------
Neither party shall be held liable or responsible to the other party nor be
deemed to have defaulted under or breached the Agreement for failure or delay in
fulfilling or performing any term of this Agreement to the extent, and for so
long as, such failure or delay is caused by or results from causes beyond the
reasonable control of the affected party including but not limited to fires,
earthquakes, floods, embargoes, wars, acts of war (whether war is declared or
not), insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or other party.
ARTICLE 10
10
<PAGE>
MISCELLANEOUS
-------------
10.1 Limited Liability. In no event shall either party be liable to the
-----------------
other or any Third Party for any special, consequential or incidental damages
arising out of or related to this Agreement or with respect to any claim,
demand, action or other proceeding relating to this Agreement however caused, or
any theory of liability (including negligence), whether or not the party has
been advised of the possibility of such damages.
10.2 Notices. Any consent, notice or report required or permitted to be
-------
given or made under this Agreement by one party to the other party shall be in
writing, shall be delivered personally, by confirmed facsimile transmissions, or
by U.S. first class mail, courier or nationally-recognized delivery service, and
shall be addressed to the other party at its address indicated below, or to such
other address as the addressee shall have last furnished in writing to the
addressor. Except as otherwise provided in the Agreement, such consent, notice
or report shall be effective upon receipt by the addressee.
If to UNIVERSITY:
The Johns Hopkins University School of Medicine
Office of Technology Licensing
2024 E. Monument Street, Suite 2-100
Baltimore, Maryland 21205
Attention: Howard W. Califano, Esq.
Tel: (410) 955-4666
Fax: (410) 955-1245
If to LICENSEE:
Sequenom, Inc.
11555 Sorrento Valley Road, Suite C
San Diego, California 92121
Attention: Dr. Hubert Koster
Tel: (619) 350-0345
Fax: (619) 350-0344
with a copy to:
David R. Pierson, Esq.
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, Massachusetts 02109
Tel: (617) 832-1000
Fax: (617) 832-7000
10.3 Governing Law. This Agreement shall be governed by, and construed
-------------
and enforced in accordance with, the laws of the State of California, without
regard to the conflicts of
11
<PAGE>
law principles thereof, and shall not be governed by the United Nations
Convention on Contracts for the International Sale of Goods.
10.4 U.S. Export Laws and Regulations. Each party hereby acknowledges
--------------------------------
that the rights and obligations of this Agreement are subject to the laws and
regulations of the United States relating to the export of products and
technical information. Without limitation, each party shall comply with all
such laws and regulations.
10.5 No Other Rights. This Agreement shall not be construed to grant any
---------------
license or other rights to either party in any patent rights, know-how or other
technology of the other, except as expressly provided in this Agreement.
10.6 Waivers and Amendments. No change, modification, extension,
----------------------
termination or waiver of this Agreement, or any of the provisions herein
contained, shall be valid unless made in writing and signed by duly authorized
representatives of the parties hereto.
10.7 Entire Agreement. This Agreement and the Sponsored Research
----------------
Agreement embody the entire understanding between the parties and supersede any
prior understanding and agreements between them respecting the subject matter
hereof. There are no representations, agreements, arrangements or
understandings, oral or written, between the parties hereto relating to the
subject matter of this Agreement and the Sponsored Research which are not fully
expressed herein and therein.
10.8 Independent Contractors. UNIVERSITY and LICENSEE are independent
-----------------------
contractors and are not, and shall not represent themselves as, principal and
agent, partners or joint venturers. Neither party shall attempt to act, or
represent itself as having the power, to bind the other or create any obligation
on behalf of the other. Each party shall be solely responsible for the
employment, direction and control of its employees and their acts.
10.9 Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such a manner as to be effective and valid under
applicable law. The parties agree that (i) the provisions of this Agreement
shall be severable in the event that any of the provisions here are for any
reason whatever invalid, void or otherwise unenforceable, (ii) such invalid,
void or otherwise unenforceable provisions shall be replaced by other provisions
which are as similar as possible in terms to such invalid, void or otherwise
unenforceable provisions but are valid and enforceable, and (iii) the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
10.10 Captions. The captions herein have been inserted solely for
--------
convenience of reference and in no way define or limit the scope or substance of
any provision of this Agreement.
10.11 Use of Names. Neither party will use the name of the other party or
------------
of any investigator in any advertising or other form of publicity without the
prior written permission of the other, except that LICENSEE shall have the right
to identify UNIVERSITY and to disclose the terms of this Agreement in any
prospectus, offering memorandum, or other document or
12
<PAGE>
filing required by applicable securities laws or other applicable law or
regulation, provided that LICENSEE shall have given to UNIVERSITY at least five
(5) days prior written notice of the proposed text of any such identification of
disclosure for the purpose of giving UNIVERSITY the opportunity to comment on
such proposed text.
10.12 No Control; Indemnification. UNIVERSITY and the inventors of
---------------------------
Licensed Products and Licensed Services will not under the provisions of this
Agreement or otherwise, have control over the manner in which LICENSEE or its
Affiliates or its sublicensees or those operating for its account or third
parties who purchased Licensed Products or Licensed Services from any of the
foregoing entities, practice the inventions of Licensed Products or Licensed
Services. The LICENSEE shall defend and hold the UNIVERSITY, The Johns Hopkins
Health Systems, their present and former regents, trustees, officers, inventors
of PATENT RIGHTS, agents, faculty, employees and students harmless as against
any judgements, fees, expenses, or other costs arising from or incidental to any
product liability or other lawsuit, claim, demand or other action brought as a
consequence of the practice of said inventions by any of the foregoing entities,
whether or not JHU or said inventors, either jointly or severally, is named as a
party defendant in any such lawsuit, provided that any party claiming
indemnification under this Section 10.12 provided Sequenom with assistance and
sole control in the defense or settlement of any lawsuit, claim, demand or other
action. Practice of the inventions covered by Licensed Products and Licensed
Services by an Affiliate or an agent or a sublicensee or a third party on behalf
of or for the account of the LICENSEE or by a third party who purchases Licensed
Products and Licensed Services from the LICENSEE, shall be considered LICENSEE's
practice of said inventions for purposes of this Section 10.12. The obligation
of the Company to defend and indemnify as set out in this Section 10.12 shall
survive the termination of this Agreement.
10.13 Insurance. Prior to initial human testing or first commercial sale
---------
of any Licensed Product or Licensed Service as the case may be in any particular
country, the LICENSEE shall establish and maintain, in each country in which
LICENSEE, an Affiliate or sublicensee shall test or sell Licensed Products or
Licensed Services, product liability or other appropriate insurance coverage
appropriate to the risks involved in marketing Licensed Products and Licensed
Services and will annually present evidence to the UNIVERSITY that such coverage
is being maintained. Upon UNIVERSITY's request, the LICENSEE will furnish
UNIVERSITY with a Certificate of Insurance of each product liability insurance
policy obtained and agrees to increase or change the kind of insurance
pertaining to the Licensed Products and Licensed Services at the reasonable
request of the UNIVERSITY. The UNIVERSITY shall be listed as an additional
insured in LICENSEE's said insurance policies.
10.14 Certain Additional Definitions. As used in this Agreement, "herein"
------------------------------
and "hereof" shall refer to this Agreement as a whole, and "including" shall
mean "including but not limited to."
10.15 Additional Licenses. It is the intention of UNIVERSITY and LICENSEE
-------------------
that if UNIVERSITY and LICENSEE hereafter enter into additional sponsored
research agreements, any licenses granted to LICENSEE with respect to inventions
made pursuant thereto shall be on terms comparable to those set forth herein,
unless UNIVERSITY and LICENSEE otherwise agree in writing in such additional
sponsored research agreement.
13
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as a document under seal by their duly authorized officers, as of
the date first above written.
SEQUENOM, INC. THE JOHNS HOPKINS UNIVERSITY
/s/ Hubert Koster /s/ illegible
- ------------------------------ ----------------------------
By: Dr. Hubert Koster By:
Its: Executive Vice President Its:
Chief Technical Officer
14
<PAGE>
Exhibit 10.28
Agreement
between
Community Technology Fund, Office of Technology Transfer of Community
Technology Fund and Center for Advanced Biotechnology (BU) represented by Matt
Burns, Heather Tullar, Ashley Stevens and Charles Cantor.
and
Sequenom, San Diego, CA and Sequenom GmbH, Germany represented by Hubert
Koster.
1) The patents *** will be moved from the "Field of Use Limited
License" category to the Exclusive License category, as marked in Exhibit A.
2) As a precondition of Sequenom submitting payment of all retroactive and
future patent costs according to Section 3, BU will supply to Sequenom copies of
all relevant documents regarding the patent fillings and prosecution of said
cases.
3) Sequenom agrees that in the case that a license agreement is entered into
between BU and Packard Investments, it will pay retroactive and prospective
patent costs in the amount of *** of the "Field of Use Limited License"
category (estimated through 6/30/97 to be $95,995.00 divided by 2) and 100% of
the "Exclusive License" category (estimated through 6/30/97 to be $80,712.98)
immediately upon receipt of documents described in Section 2.
Should the License Agreement between BU and Packard not be fully executed
within ten (10) days of this Letter of Agreement, Sequenom agrees to pay the
full cost for retroactive and future patent costs for both the "Field of Use
Limited License" category and the "Exclusive License" category as previously
described. This payment is due immediately upon both delivery of the documents
described in Section 2 and notification of the canceling of the proposed License
Agreement between BU and Packard.
BU will make a good faith effort to recover a pro rata share of previously
incurred costs for the "Field of Use Limited License" category in future license
agreements and, if successful, will reimburse Sequenom the pro rata share.
4) The Sponsored Research Agreement will be continued from 9/15/96 through
9/14/98 with payments as listed in the letter from Sequenom dated 9/16/97
attached hereto as Exhibit B.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
5) The License Agreement between BU and Sequenom dated 6/1/96 will cover
inventions and patents describing developments in the laboratory of Dr. Charles
Cantor for the duration of the Sponsored Research Agreement in the field of
***
*** This will be clarified by an addendum to the existing license
agreement .
6) The scientific program of collaboration between Sequenom and BU will be
formulated and continuously updated by the Principal Investigator and Sequenom.
Agreed in Boston on October 8, 1997
/s/ illegible
------------------------------------
Sequenom
/s/ illegible
------------------------------------
Community Technology Fund
/s/ illegible
------------------------------------
Office of Technology Transfer
/s/ illegible
------------------------------------
Center for Advanced Biotechnology
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Invoice
- -------
Licensee Sequenom
Bill Prepared 8/27/97
Law Firm Baker & Botts
Agreement Date 7/1/96
Limited Field-of-Use License
<TABLE>
<CAPTION>
BU Case Docket Services Amount
------- ------ -------- ------
<S> <C> <C> <C>
92-42 0107 Inception - 5/15/97 $ 14,597.25
92-42 0124 Inception - 5/15/97 $ 24,354.30
92-42 0162 Inception - 5/15/97 $ 9,384.62
92-42 0168 Inception - 5/15/97 $ 28,923.45
92-42B 0186 Inception - 5/15/97 $ 14,677.37
92-42 0187 Inception - 5/15/97 $ 17,105.36
92-42 0215 Inception - 5/15/97 $ 6,347.31
92-42 0217 Inception - 5/15/97 $ 2,679.20
92-42B 0228 Inception - 5/15/97 $ 8,283.84
92-42 0325 Inception - 5/15/97 $ 1,245.45
---------------------------- ----------------------- ------------------
Total $ 127,598.15
Exclusive License
92-42C 0167 Inception - 5/15/97 $ 22,618.71
92-42C 0216 Inception - 5/15/97 $ 2,672.64
92-42C 0276 Inception - 5/15/97 $ 10,010.08
92-42C 0302 Inception - 5/15/97 $ 13,808.90
- --------------------------- ---------------------------- ----------------------- ------------------
Total $ 49,110.33
Grand Total $ 176,708.48
----------- ------------------
Payments Received 6/27/97 $ (19,330.05)
----------------------------
7/27/97 $ (19,330.05)
------------------
Balance Due $ 138,048.38
</TABLE>
<PAGE>
September 16, 1997
Charles Cantor
Center for Advanced Biotechnology
Boston University
36 Cummington Street
Boston, MA 02215
Dear Charles,
It was a pleasure having you at our facility in San Diego.
This letter comprises in principle our intention to move forward on a
renegotiated Research Agreement in return for a "field of use" on related
technology developed in your lab. It includes our budget proposal for the
retroactive period including September 1996 through September 1997 and outlines
the budget for September 1997 through September 1998.
The following budget proposals include consideration of the August 29, 1997 memo
from Matt Barber regarding the lab budgets for 9/96 - 9/97 and 9/97 - 9/98.
1996 - 1997 Budget
- ------------------
Our attached budget proposal for 1996 - 1997 of $112,454 though less than your
budget of $130,903 is a significant increase from our original proposal of
$81,657. The salary of the lab manager and reduced supplies are the material
items reduced from your proposal.
1997 - 1998 Budget
- ------------------
Budget restraints require us to reduce your 1997 - 1998 budget proposal. The
major items deleted include reducing Dr. Cantor's time reduced to 20% and
deleting the Lab Manager and grad student. The supplies and other expenses were
also reduced by 45%. The adjusted budget total of $219,013 still represents a
major investment over the coming year.
We hope you view this proposal as a significant commitment to continue our
valuable relationship with Boston University.
Best Regards,
/s/ Steve Zaniboni
Steve Zaniboni
Vice President, Finance & Administration
CC: H. Koster
M. Barber
<PAGE>
Sequenom,
Boston University Lab Budget
September 1996 to September 1997
<TABLE>
<CAPTION>
Salary F.T.E.
<S> <C> <C> <C>
C. Cantor - academic $155,687 10% $ 15,667
C. Cantor - summer $ 53,000 10% $ 5,300
J. Cantor - annual $ 32,887 76% $ 5,100
A. Hatch - annual $ 25,000 20% $ 5,101
C. Smith - academic $ 84,558 4.5% $ 3,805
C. Smith - summer $ 28,600 4.5% $ 1,287
Secretary $ 24,312 4.8% $ 1,167
Total Salary $ 37,327
Fringe
23.6% rate $ 6,809
Total Salary & Fringe $ 46,138
Direct Costs
Supplies
Chemicals $ 3,738
Biochemicals $ 4,486
Radioscopes $ 2,243
Photographic $ 748
Disposables $ 6,230
$ 17,444
Other Expenses
Communications $ 908
Equip. Maintenance $ 1,997
Publications $ 320
Journals & books $ 160
Miscellaneous $ 171
$ 3,557
Total Direct Costs $ 67,137
Indirect Costs 67.5% 45,317
Total Direct and Indirect Costs $112,454
</TABLE>
<PAGE>
Sequenom,
Boston University Lab Budget
September 1996 to September 1997
Salary F.T.E
C. Cantor - academic $162,533 20% $ 32,507
C. Cantor - summer $ 55,120 20% $ 11,024
J. Graber - annual $ 5,236 75% $ 5,236
C. Smith - academic $ 87,707 4.5% $ 3,947
C. Smith - summer $ 29,744 4.5% $ 1,338
Post Doc $ 28,747 100% $ 28,747
Secretary $ 24,312 5.5% $ 1,337
Total Salary $ 84,136
Fringe
23.8% rate $ 19,858
Total Salary & Fringe $ 103,992
Direct Coals
Suppliers
Chemicals $ 5,294
Biochemicals $ 6,353
Racfiosdopas $ 3,176
Photographic $ 1,059
Disposables $ 5,294
$ 21,175
Other Expenses
Communications $ 1,426
Equip. Maintenance $ 3,137
Publications $ 503
Journals & books $ 252
Miscellaneous $ 288
$ 5,587
Total Direct Costs $ 130,754
Indirect Costs 67.5% 88,259
Total Direct and Indirect Costs $ 219,013
<PAGE>
EXHIBIT 10.29
Collaboration Agreement
by and between
Bruker-Franzen Anajytik GmbH
Fahrenheitstr. 4
28359 Bremen hereinafter referred to as `Bruker'
and
Sequenom Instruments GmbH
Mendelssohnstr. 15 D
22761 Hamburg hereinafter referred to as `Sequenom'
November 24, 1997
Preamble
(1) Bruker-Franzen Analytik develops and manufactures mass spectrometers and
supplies such instruments on a worldwide scale.
Bruker-Franzen Analytik has exclusive intellectual property rights and
know-how, covering
. MALDI-TOF mass spectrometer technology
. Pulsed Ion Extraction
. Multi-Target Acquisition
. Postprocessing XMASS(TM) software.
Bruker-Franzen Analytik maintains an organisation appropriate for the
manufacture, marketing and customer service with regard to such mass
spectrometers.
(2) Sequenom has exclusive intellectual property rights and know-how, covering
Sequenom's DNA MassArray(TM) technology basis and comprising
. Sample preparation and sample conditioning of nucleic acids, optimized
for MS separation and detection
. DNA analysis application formats specifically designed for MS analysis
(BiomassSIZE(TM), BiomassSCAN(TM), BiomassPROBE(TM) BiomassSEQUENCE
(TM), BiomassINDEX(TM))
. Parallel processing features, applying DNA chips (SpectroChip(TM)) and
multiplexing
. Separation and detection of nucleic acids by MS, incl. analytical and
diagnostic applications.
(3) The parties intend to establish a broad relationship focusing on Nucleic
Acid Analysis by Mass Spectrometey subject to the experience within this
Collaboration.
<PAGE>
Collaboration
(1) Bruker-Franzen and Sequenom intend to collaborate in the manufacture and
marketing of and in the provision of customer service for ZD-Array MALDI-
TOF Mass Spectrometers designed to process Sequenom's SpectroChips(TM) (the
"Mass Spectrometer") under a joint Bruker-Franzen -- Sequenom logo.
The Mass Spectrometer will be made available as stand-alone instrument and
will be integrated by Sequenom in collaboration with highly qualified
instrument manufacturers in the area of microliter and nanoliter liquid
handling, mass spectrometry and system integration in modular analytical
lines (the "Modular System"), comprising automatic liquid handling modules,
DNA amplification and sequencing modules, sample-to-chip transfer modules
and controlling and data management units. The Modular System will be
designed to run applications of Sequenom's DNA MassArray(TM) technology
(2) Bruker-Franzen will design and manufacture the Mass Spectrometer, meeting
the specifications required for use in the DNA MassArray(TM) process and
dedicated and appropriate to process Sequenom's Spectrochips(TM) ,
including the XY-stage component and signal acquisition software. The
parties will mutually agree on specifications for the Mass Spectrometer and
the SpectroChip. Bruker will make available to Sequenom the complete
details of the interface, including software protocols and time behavior,
enabling Sequenom to develop the specific application DNA MassArray(TM)
software.
(3) The Mass Spectrometer will be available by June 30, 1998.
(4) Bruker-Franzen and Sequenom will promote the Mass Spectrometer under a
joint label. The procedure will be defined on a case-by-case basis.
(5) Bruker-Franzen will market and provide service for the Mass Spectrometer on
a world-wide scale and under the name of Bruker-Franzen and Sequenom.
(6) Sequenom will provide nucleic acid analysis services to customers and to
corporate partners using DNA MassArray(TM)
Sequenom will provide DNA MassArray(TM) application development, including
necessary software, to Mass Spectrometry users.
Sequenom will develop, manufacture and market SepctroChips(TM) for whatever
applications.
2
<PAGE>
Business Terms
(1) Bruker-Franzen will supply the Mass Spectrometer to the market at a
competitive market price (the "Market Price").
(2) Sequenom maintains the option to purchase from Bruker-Franzen the Mass
Spectrometer *** (the "Supply Price"). The Supply Price will be calculated
by ***, referring to the basic instrument, in the respective country of
instrument delivery.
(3) Bruker-Franzen Analytik will provide one Mass Spectrometer to Sequenom,
Hamburg as Beta test site by June 30, 1998 ***. Initially, a
prototype instrument equipped for handling of a single SpectroChip (TM)
will be supplied by March 30, 1998. The Modular System in Hamburg will be
used as demonstration and test site by both parties.
A second Mass Spectrometer will be supplied to Sequenom, San Diego, the
price being the Supply Price, by June 30, 1998.
(4) The Mass Spectrometer will be *** for the exclusive processing of
Sequenom's SpectroChip(TM).
Timelines
(1) The Collaboration Agreement will come into force with the date of
signature.
(2) The Collaboration agreement may be terminated by either party at 12 months
notice; such first notice of termination may, however, not be given earlier
than 30 Dec. 1999.
Date: December 4, 1997 Date: December 4, 1997
------------------------- ------------------------
Bruker-Franzen Sequenom
/s/ Dr. Frazen /s/ Dr. H. Koster
(Dr. H. Koster)
/s/ ppa H.J. [illegible]
*** - Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately, with the Commission.
3
<PAGE>
EXHIBIT 10.30
Contractual Agreement between Sequenom and GeSIM
------------------------------------------------
As of October 1, 1998.
----------------------
PREAMBLE
GeSIM's field of work is the development, production and marketing of components
and complete device systems for the dosage and pipetting of nanoliter volumes
(GeSIM nanoliter technology, hereinafter NLT). In particular, this involves the
development, production and distribution of micro-pipettes and nanoliter
plotters for various applications.
Furthermore, GeSIM develops, produces and distributes silicon chips of different
geometry and surface treatments (GeSim chip technology, hereinafter CT).
Sequenom`s field of work is the development and utilization of procedures for
the analyses of bio-polymers using mass spectrometry to separate, detect and
characterize the sample(s) or analysis products. To this end they combine the
chip concept with protected solid phase chemistry and enzymes. Sequenom
distributes the complete automation of this process. One essential step in this
process is the loading of SpectroChips ("SpectroChip" = trademark), which
requires the use of NLT.
The field of application of this agreement involves the preparation of samples
for the analysis of ***.
The co-operation between GeSIM and Sequenom comprises the optimization and
integration of ***.
The optimization and integration results achieved for Sequenom, including system
solutions developed for Sequenom, are licensed exclusively to Sequenom.
The specifications of the nano-plotter as a characterization of the current NLT
system, which has been positively validated by Sequenom for its own purposes,
are listed in Appendix A. The optimization and integration results achieved
through this exclusive co-operation, including the system solution developed for
Sequenom, is listed in Appendix B.
Appendices A and B are updated regularly, at least quarterly. Amendments by
GeSIM and SEQUENOM must be confirmed in writing.
Page 1
<PAGE>
(S) 1
Cooperation Goals of the Contractual Partners
(1) The goal of Sequenom is to commercialize the technology for the analysis
of *** as described in the Preamble, on the basis of their own patents and
their own know-how. ***.
(2) The goal of GeSIM is to produce, further develop and market device systems
consisting of ***, which are developed, constructed and produced for
Sequenom and the area of application directly associated with Sequenom, on
the basis of GeSIM's own patents and own know-how.
(S) 2
Confidentiality
(1) As concerns all information, technical knowledge and experience which have
been made available to the co-operating parties or which will be made
available to them in the future by the other party in connection with this
co-operation agreement, beginning December 2, 1997, the date of the initial
negotiations, both parties are obligated:
A) to keep this information confidential and not to provide it to a third
party, even if a confidential disclosure agreement has been signed;
B) not to use this information for commercial purposes without permission
from the other party, and
C) to provide this information only to those persons at their own company
who require it to carry out the agreed co-operation.
(S) 3
Exclusive Co-operation
(1) This Exclusive co-operation between SEQUENOM and GeSIM refers to the
development work to be carried out by GeSIM on behalf of SEQUENOM and
financially paid for by SEQUENOM. The basis of such development work is
individual contracts for projects with clearly defined goals.
*** Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately with the Commission.
Page 2
<PAGE>
(2) The optimization and integration results accomplished for/with Sequenom in
connection with this exclusive co-operation are exclusively for the use
of SEQUENOM. The results compiled for/with SEQUENOM and for each individual
area of application (`general' or `sample preparation' for *** are listed
in Appendix B, in so far as the results are used for/by SEQUENOM. Appendix
B shall be updated regularly, at least quarterly. Both parties shall
jointly compile the descriptions and the definitions of the results listed
in Appendix B.
(3) In addition, GeSIM is obligated not to make the results and products and
the associated know-how listed in Appendices A and B available to other
producers of mass spectrometers or developers of technologies and methods
for the analysis of ***.
(4) GeSIM's responsibilities to co-operate exclusively with Sequenom, as listed
under (S) 3.3, do not apply if Sequenom has not accepted or delivered ***.
(5) SEQUENOM shall buy from GeSIM ***. As a contractual partner, Sequenom GmbH
guarantees in connection with the above, that it is authorized to fulfill
this obligation to GeSIM. This purchase obligation does not apply if GeSIM
cannot provide these products and/or qualities under competitive conditions
and in the necessary quantity.
(S) 4
Delivery Guarantee
(1) Within the contractual period, GeSIM guarantees for the unconditional
availability of automatic nanoliter liquid handling modules or systems, as
well as for silicon chips in accordance with the specifications in
Appendices A and B.
(2) GeSIM guarantees that all production specifications as noted in the Systems
Manual shall at least be maintained, even in the case of further
development. The specifications listed in Appendix B are considered an
obligatory supplement to the Systems Manual.
(3) Changes to the delivery products are allowed in the area of technical
developments.
*** Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately with the Commission.
Page 3
<PAGE>
(S) 5
Prices
(1) GeSIM's price for the products delivered to Sequenom and Sequenom's clients
should be under competitive conditions.
(2) Sequenom shall receive from GeSIM a discount of *** for each additional
nano-liter plotter ordered.
(S) 6
Joint Marketing
(1) The nano-liter plotters and associated follow-up products developed
through this co-operation can be marketed under the name and brand GeSIM
and Sequenom.
(2) Sequenom will make an active contribution to the marketing
activities of GeSIM both in terms of personnel and editorially for
scientific presentations, conferences and exhibitions. Marketing
materials for joint campaigns will be created together.
(S) 7
Contractual Period
(1) This agreement is valid from now until December 31, 2001. The
exclusivity of the results granted to Sequenom as listed in Appendix B
at the end of this contract continues on after the end of the contract.
(2) Both parties are free to extend the contract any time.
(3) Should the ownership of either one of the co-operating partners
change during the duration of the contract, this will not affect the
agreement in any way.
*** Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately with the Commission.
Page 4
<PAGE>
(S) 8
Final Clause
(1) The parties are not allowed to transfer the rights or duties of this
agreement to any third party without the consent of the other party, unless
otherwise specified in this contract.
(2) This agreement replaces all other preceding arrangements or agreements
concluded between the co-operating partners regarding the stipulations of
this agreement. Changes and supplements to this agreement must be in written
form, unless there is a legally stricter form. The written form also applies
is the written form has been waived.
(3) Should any of these regulations be found to be partially or completely
legally ineffective, or lose their legal effectiveness or feasibility at a
later time, the rest of the agreement shall remain unaffected. This also
applies if the agreement is found to contain a loophole. The ineffective or
non-feasible regulation or loophole is to be replaced by an appropriate
regulation which comes as close to the original intentions of the co-
operating partners as far is legally possible, or what they would have
intended for the purpose and meaning of this agreement, if they had been
aware of this point before concluding the contract.
(4) The exclusive jurisdiction for all and any differences in connection with
this agreement is Hamburg.
Page 5
<PAGE>
APPENDIX A / Status: September 9, 1998
***
*** Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately with the Commission.
Page 6
<PAGE>
APPENDIX B:
***
*** Portions of this page have been omitted pursuant to Confidential Treatment
request and filed separately with the Commission.
Page 7
<PAGE>
Exhibit 10.30
Vereinbarung
zwischen
GeSiM Gesellschaft fur Silizium-Mikrosysteme mbH
Rossendorfer Technologiezentrum
Bautzner LandstraBe 45
01454 GroBerkmannsdarf
-nachfolgend: "GeSiM"
und
Sequenom Gesellschaft fur Genomanalytik mbH
Mendelsohnstr. 15D
22761 Hamburg
-nachfolgend: "SEQUENOM"
PRAAMBEL
Das Arbeitsgebiet der GeSiM besteht in der Entwicklung. Produktion und
Vermarktung von Komponeiten und kompletten Geratesystemen fur das Dosieren und
Pipettieren von Nanoliter-Volumina ( Nanoliter-Technologie der GeSiM, im
folgenden kurz NLT). Dies umfaBt insbesondere die Entwicklung, die Produktion
und den Vertrieb von Mikropipetten und Nano-Plottern fur unterschiedliche
Anwendungen.
Weiterhin entwickelt, produziert und vertreibt GeSiM Siliziumchips
unterschiedlicher Geometrie und Oberflachenbehandlung (Chiptechnologie der
GeSiM, im folgenden kurz CT).
Das Arbeitsgebiet der SEQUENOM besteht in der Entwicklung und dem Einsatz von
Verfahren zur Analyse von Biopolymeren mit massenspektrometrischer Auftrennung,
Detektion und Charakterisierung der Probe(n) bzw. der Analyseprodukte. Hierbei
wird ein Chip-Konzept mit geschutzter Festphasen-Chemie und -Enzymatik
verbunden. SEQUENOM betreibt die vollstandige Automatisierung des Verfahrens.
Hier ist ein essentieller Arbeitsschritt das Beladen von SpectroChips
("SpectroChip" = geschutzte Marke), das den Einsatz von NLT erfordert.
Das Anwendungsgebiet im Sinne dieser Vereinbarung umfaBt die Probenvorbereitung
zur Analyse von ***.
Die Zusammenarbeit zwischen GeSiM und SEQUENOM umfaBt die Optimierung und
Integration der ***.
Die fur SEQUENOM erzielten Optimierungs- und Integrationsergebnisse,
einschlieBlich fur SEQUENOM entwickelter Systemlosungen, stehen exklusiv
SEQUENOM zu.
Die Merkmale des Nano-Plotters im Sinne einer Charakterisierung des aktuellen
und durch, Sequenom fur seine Aufgabenstellungen positiv validierten NLT Systems
benennt Anhang A.. Die im Rahmen der exklusiven Zusammenarbeit fur Sequenom
erzielten Optimierungs-und Integrationsergebnisse, einschlieBlich den fur
Sequenom entwickelten Systemlosungen benennt
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Anhang B.
Anhange A und B werden regelmaBig, mindestens jedoch vierteljahrlich
fortgeschrieben. Die Erganzungen sind von GeSiM und SEQUENOM in schriftlicher
Form zu bestatigen.
(S) 1
Kooperationsziele der Vertragspartner
(1) Ziel von SEQUENOM ist es auf Basis eigener Patente und eigenen Know-hows
die in der Praambel beschriebene Technologie zur Analyse von *** zu
kommerzialisieren. ***
(2) Ziel von GeSiM ist es, Geratesysteme die aus *** bestehen und auf der Basis
eigener Patente und eigenen Know-hows entwickelt, konstruiert und
hergestellt werden, fur SEQUENOM und das mit SEQUENOM unmittelbar
verknupfte Anwendungsgebiet zu produzieren, weiterzuentwickeln und zu
vermarkten.
(S) 2
Geheimhaltung
(1) Die Parteien verpflichten sich, samtliche Informationen, technisches Wissen
und Erfahrungen, die sie sich ab dem 2. Dezember 1997, dem Datum der
ersten Verhandlungen, im Zusammenhang mit dem Kooperationsgegenstand von
der jeweils anderen Partei zuganglich gemacht haben bzw, sich in Zukunft
zuganglich machen werden.
(a) geheimzuhalten und auch nicht unter der Verpflichtung der
Geheimhaltung an Dritte weiterzugeben;
(b) nicht ohne Zustimmung der anderen Partei gewerblich zu verwerten, und
(c) sie im eigenen Hause nur denjenigen Personen zuganglich zu machen,
welche sie fur die Durchfuhrung der Kooperation benotigen.
(S) 3
Exklusive Zusammenarbeit
(1) Die exklusive Zusammenarbeit zwischen SEQUENOM und GeSim bezeichnet
Entwicklungsarbeiten, die im Auftrag der SEQUENOM und finanziell zu Lasten
der SEQUENOM bei GeSiM ausgefuhrt werden. Die Basis solcher
Entwicklungsarbeiten, sind individuell erteilte Auftrage mit eindeutig
definierten Zielen.
(2) Die mit/fur SEQUENOM erzielten Optimierungs- und Integrationsergebnisse als
Resultate der exklusiven Zusammenarbeit stehen exklusiv SEQUENOM zu.
2
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<PAGE>
Die mit/fur SEQUENOM erarbeiteten Ergebnisse und das jeweils zugehorige
Anwendungsgebiet (`allgemein' oder `Probenvorberitung zur ***) werden in
Anhang B aufgelistet, soweit diese Ergebnisse fur/von, Sequenom verwendet
werden. Der Anhang B wird regelmaBig, mindestens jedoch vierteljahrlich
fortgeschrieben. Beide Parteien erarbeiten die Beschreibungen und
Definitionen der erzielten Ergebnisse des Anhangs B gemeinsam.
(3) Daruber hinaus verpflichtet sich GeSiM, die in Anhang A und B aufgelisteten
Ergebnisse und Produkte und das damit im Zusammenhang stehende Know How
nicht fur Hersteller von Massenspektrometern oder Entwickler von,
Technologien und Methoden zur *** verfugbar zu machen.
(4) Die vorstehend unter (S)3 enthaltene Verpflichtung der GeSiM exklusiv mit
SEQUENOM zusammen zuarbeiten entfallt, wenn und soweit SEQUENOM innerhalb
von 12 Monaten nach der Unterzeichnung dieses Vertrages *** abgenommen bzw.
vermittelt hat.
(5) SEQUENOM wird ***. Die Sequenom GmbH als Vertragspartner sichert in
diesem Zusammenhang zu, daB Sie berechtigt ist, dese Verpflichtung
gegenuber GeSiM einzugehen. Diese Bezugsverpflichtung entfallt, falls
GeSiM die Verfugbarkeit von Produkten und/oder Qualitaten nicht zu;
wettbewerbsfahigen Konditionen und im erforderlichen Umfang sicherstellen
kann.
(S) 4
Liefergarantie
(1) GeSiM garantiert im Vertragszeitraum die uneingeschrankte Verfugbarkeit von
Modulen oder Systemen fur das automatisierte Nanoliter-Liquid-Handling
sowie fur Siliziumchips gemaB den Spezifikationen des Anhang A und B.
(2) GeSiM garantiert, daB alle in der Systembeschreibung definierten
Produktmerkmale auch im Falle von Weiterentwicklungen mindestens
eingehalten werden. Spezifikationen, die in Anhang B aufgenommen werden,
gelten hierbei als verbindliche Erganzungen der Systembeschreibung.
(3) Anderungen am Liefergegenstand im Rahmen der technischen Weiterentwicklung
sind zulassig.
3
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Confidential Treatment and filed separately with the Commission.
<PAGE>
(S) 5
Preise
(1) Die von GeSiM fur die Lieferung von Produkten an SEQUENOM und an von
SEQUENOM benannte Partner oder Kunden festgelegten Preise sollten zu
wettbewerbsfahigen Konditionen angeboten werden.
(2) SEQUENOM erhalt von GeSiM einen PreisnachlaB von *** fur jeden weiteren
bestellten Nano-Plotter.
(S) 6
Gemeinsame Vermarktung
(1) Die im Rahmen dieser Kooperation entwickelten Nano-Plotter und
entsprechende Nachfolgeprodukte konnen gemeinsam unter dem Namen und der
Marke von GeSiM und SEQUENOM vermarktet warden.
(2) SEQUENOM wird einen aktiven Beitrag zu den Marketingaktivitaten von GeSiM
sowohl personell als auch redaktionell fur wissenschaftliche
Prasentationen, Konferenzen und Messen ebringen. Werbematerial fur
gemeinsame Kampagnen wird auch gemeinsam erstellt.
(S) 7
Vertragsdauer
(1) Diese Vereinbarung gilt zunachst bis zum Ablauf des 31. Dezember 2001. Fur
die in Anhang B zum Zeitpunkt der Vertragsbeendigung aufgelisteten
Ergebnisse dauert die an Sequenom erteilte Exklusivitat auch nach
Vertragsbeendigung fort.
(2) Die Parteien sind frei, die Vereinbarung jederzeit zu verlangem.
(3) Kommit es im Verlauf der Geltungsdauer dieser Vereinbarung zum Wechsel von
Eigentumsverhaltnissen bei einem der Vertragspartner, so beruhrt dies die
Fortgeltung dieser Vereinbarung nicht.
(S) 8
SchluBestimmungen
(1) Die Parteien sind nicht berechtigt, ohne Zustimmung der anderen
Vertragsparteien Rechte oder Pflichten aus dieser Vereinbarung an Dritte zu
ubertragen, sofern nicht in diesem Vertrag ein Abweichendes bestimmt ist.
(2) Diese Vereinbarung ersetzt alle vorangegangenen Absprachen und
Vereinbarungen der Parteien im Hinblick auf den Regelungsgegenstand dieser
Vereinbarung. Anderungen und Erganzungen dieser Vereinbarung bedufen der
Schriftform, soweit nicht gesetzlich
4
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<PAGE>
eine strengere Form zu beachten ist. Das Schriftformerfordernis gilt auch
fur den Verzicht auf die Schriftform.
(3) Sollten Bestimmungen dieser Vereinbarung ganz oder teilweise nicht
rechtswirksam sein oder ihre Rechtswirksamkeit oder Durchfuhrbarkeit spater
verlieren, soll hierdurch die Gultigkeit der ubrigen Bestimmungen der
Vereinbarung nicht beruhrt werden. Das gleiche gilt, soweit sich
herausstellen sollte, daB die Vereinbarung eine Regelungslucke enthalt.
Anstelle der unwirksamen oder undurchfuhrbaren Bestimmung oder zur
Ausfullung der Regelungslucke soll eine angemessene Regelung gelten, die
soweit rechtlich moglich, dem am nachsten kommt, was die Vertragsparteien
gewollt hatten oder nach dem Sinn und Zweck dieser Vereinbarung gewollt
haben wurden, hatten sie den Punkt bei AbschluB dieser Vereinbarung
bedacht.
(4) AusschlieBlicher Gerichtsstand fur samtliche Rechtsstreitigkeiten aus oder
im Zusammenhang mit dieser Vereinbarung ist Hamburg.
GroBerkmannsdorf, den 1.10.1998 Hamburg, den 1.10.1998
------------- ------------------
GeSiM SEQUENOM
/s/ illegible /s/ Toni Schuh
- ----------------------------------- ---------------------------------
Name: Name: Toni Schuh
5
<PAGE>
Anhang A / Stand 9-1998
________________________________________________________________________________
***
6
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Confidential Treatment and filed separately with the Commission.
<PAGE>
Anhang B:
***
7
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Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 10.31
LICENSE AGREEMENT
Between
PROF. DR. FRANZ HILLENKAMP
Bahlmannstr. 5, 48147 Munster, Germany
hereinafter the "Inventor"
And
SEQUENOM, INC.
11555 Sorrento Valley Road, San Diego, CA 92121, USA
Represented by SEQUENOM GmbH, Mendelsohnstr. 15D,
2276 Hamburg, FRG
hereinafter "SEQUENOM"
PREAMBLE
(1) Collaboration
The Inventor has been acting as a consultant for SEQUENOM for several years.
In respect of the main area of activity of SEQUENOM, the mass spectrometric
analysis of nucleic acids, the consulting on the part of the Inventor is
exclusive (Annex 1, Consulting Agreement).
The parties collaborate closely in the area of mass spectrometric analysis
of nucleic acids and other biopolymers in the framework of projects, which may
be supported in part by third parties, among others BNBF. These projects are or
will be at least proportionately financed by SEQUENOM.
(2) Inventions and Proprietary Rights
The Inventor has made the inventions listed in Annex 2 in the area of MALDI
(Matrix Assisted Laser Desorption/Ionization) (Annex 2 makes no claim to being
complete). Further inventions in the area of mass spectrometric analysis of
nucleic acids and other biopolymers are expected.
The inventions are grouped into:
a) ***
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
The granting of licenses for the above-described existing and future patent
rights from the Inventor to SEQUENOM in the area of the above-described
collaboration is governed by the following Agreement.
(S) 1
CONTRACTUAL RIGHTS
(1) Area of work
The Inventor in his capacity as a consultant to SEQUENOM collaborates
with SEQUENOM both (a) in the area of mass spectrometric analysis of nucleic
acids as well as (b) in the performance of joint research and developmental work
in the area of mass spectrometric high throughput analysis of biopolymers. The
term high throughput analysis may be described in this context among other
things by the following parameters:
- routine mass spectrometric measurements of more than 60 single samples
per hour
and
- volume of a single sample of less than 100 nanoliters, applied both
directly or indirectly to the sample carrier of the mass spectrometer
by means of miniaturized arrays.
In respect of the areas of work named under (a) and (b), the Inventor
collaborates with SEQUENOM as the exclusive commercial partner, i.e., licensee,
or together with SEQUENOM and additional partners, on condition that SEQUENOM
agrees to it.
(2) Contractual Rights
Contractual Rights as defined by this agreement are present and future
patents applied for and/or granted and patentable results according to items a)-
c) of the preamble. The Inventor shall use best efforts to solely own the
intellectual property which was produced on his part under the terms of the
collaboration. In the event of joint inventions of co-workers of the Inventor
which are subject to the Law governing inventions of employees, the Inventor
shall within his sphere of influence see to it that the inventions are claimed
without restrictions and are transferred to SEQUENOM in accordance with the
conditions stipulated herein.
Patents already applied for or granted under the terms of the collaboration
are listed in Annex 2 (Annex 2 makes no claim to being complete).
(S) 2
CONTRACTUAL KNOW-HOW
The Inventor has extensive know-how in the technical field of the
Contractual Rights transferred hereby, and the collaboration agreed upon herein,
in particular in the preparation of samples and in the configuration and
operation of instrumentation and the interpretation of mass spectra. This know-
how is of essential importance for the practical implementation of the
Contractual Rights.
2
<PAGE>
(S) 3
GRANTING OF RIGHTS
1. The Inventor gives SEQUENOM a worldwide exclusive license for the unlimited
use of the Contractual Rights and the Contractual Know-how. The license is
limited to the area of work as defined in (S) 1 (1).
If it is not possible to grant an exclusive license for the area of work
because of the general conditions (limitations) for the public promotion of
research, or because of other prior written agreements, if applicable, including
third party participants in the project, then the Contractual Rights transferred
shall at least cover the exclusive rights of use for SEQUENOM's essential area
of mass spectrometric high throughput analysis of nucleic acids (as defined
above).
(S) 4
CONTINUED DEVELOPMENT OF CONTRACTUAL RIGHTS
1. The Inventor shall use best efforts within the scope of his research to
promote the future development of the Contractual Rights and to maintain the
technical lead over alternative developments. The Inventor does not hereby
assume an obligation to undertake specific research measures (directions) or to
guarantee success.
2. The Inventor shall include into the contractual relationships all new
developments resulting from his efforts in respect of the Contractual Rights,
the Contractual Know-how and the area of collaboration. In particular, he shall
maintain the know-how at the latest state of development by regularly updating
the records with research and test results. SEQUENOM shall have regular access
to the updated records.
(S) 5
GUARANTEE OF THE LICENSOR
The Inventor/Licensor is not aware of any facts, in particular proprietary
rights, which preclude the use of existing Contractual Rights. The Inventor,
however, does not assume liability therefor. The Inventor shall rather
endeavor, together with SEQUENOM, to design around obstacles, if they preclude
the use of the Contractual Rights.
(S) 6
ROYALTIES
1. For the granting of the described license for the Contractual Rights,
SEQUENOM shall pay to the Inventor a royalty in the amount of *** of the
net sales realized by SEQUENOM using the Contractual Rights - independently of
the number of Contractual Rights used. Sales are the proceeds - after receipt of
payment by SEQUENOM - from the sale of
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
3
<PAGE>
products, which are based on Contractual Rights and/or the application of which
requires the use of the Contractual Rights, or services which are rendered using
the Contractual Rights.
2. For sales that are realized using exclusively the Contractual Rights, which
result from the collaboration (see (S)1) of SEQUENOM and the Inventor, and in
which the Inventor or one of his co-workers is named as (co-)inventor, the
royalty is *** .
3. In case the sum total of all royalties which SEQUENOM has to pay to third
parties exceeds the value of *** for given proceeds, the royalties payable to
the Inventor shall be *** in order to
reduce it to exactly *** of the given proceeds.
4. SEQUENOM refunds all expenses to the Inventor which he has incurred or
incurs in connection with applying for, maintaining and defending patents for
the Contractual Rights, provided that these Contractual Rights are transferred
exclusively to SEQUENOM. Included herein is the cost of applying for,
maintaining and defending patents in other countries. The parties to the
agreement shall discuss the procedures concerning patents matters as required.
If licenses for a given patent or a given patent application are granted to
third parties for areas of application which are not exclusive to SEQUENOM, then
all expenses as described above are shared as a rule proportionately by SEQUENOM
and this (these) third party (parties). Expenses already paid by SEQUENOM shall
be reimbursed proportionately by this (these) third party (parties). The
Inventor is thus obliged to transfer this obligation to possible third party
licensees. The Inventor shall also, by prior agreement, be reimbursed for
expenses which arise in connection with obtaining or reinstatement of patent
right according to Annex 2, paragraph 2.
5. Royalties are always due at the end of a calendar year and after receipt of
payment for the underlying sales by SEQUENOM.
(S) 7
CONFIDENTIALITY
1. The parties undertake mutually to keep confidential all information
exchanged or to be exchanged during the duration of this agreement and knowledge
acquired concerning fundamentals, developments, improvements and other details
in respect of the Contractual Rights and the Contractual Know-how as well as
matters regarding the execution of the agreement, even if they have not been
expressly designated as secret or confidential. This does not apply, if the
disclosure is necessary to transfer the know-how to licensees in other areas of
the agreement or other areas of application, in order to obtain official
approvals, or to disclose the results obtained to the public or to professional
circles.
2. Both parties undertake to impose this obligation of confidentiality on their
co-workers or employees, who because of their occupation can acquire useful
knowledge of the Contractual Rights and the Contractual Know-how. This
obligation of confidentiality is to be imposed on the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
4
<PAGE>
staff also after termination of their employment contract or assistance
relationship as postgraduates or doctoral candidates.
3. The Inventor undertakes to impose on other licensees corresponding
obligations for confidentiality in other areas of the agreement or areas of
application.
4. This obligation of confidentiality continues beyond the duration of the
agreement. It remains in effect until the know-how becomes public.
5. The contracting parties shall inform each other in oral or written form
about planned publications which contain information according to (S) 7,
paragraph (1). A time limit of 3 months shall be provided to the respective
party from the time of complete disclosure to publication for raising an
objection or for applying for relevant proprietary rights. In case an objection
is raised, the parties shall try to reach a solution which is acceptable to both
sides. An objection may only be raised or maintained for an important reason.
(S) 8
DURATION OF AGREEMENT
1. The agreement ends at the end of the tenth calendar year after the first
calendar year for which licenses are paid according to its conditions unless it
is renewed at the latest six months before the end.
2. Beyond that, the agreement ends automatically, if the royalties from
SEQUENOM to the Inventor are below the amount of DM 10,000.00 in two successive
calendar years. This provision may be applied by both parties at the earliest
three years after signing of the agreement.
3. In case of termination of the agreement according to paragraph (2), all
rights and obligations concerning the Contractual Rights and the Contractual
Know-how revert back to the Inventor. If the Inventor realizes income from the
continued use of the patents or the know-how of this agreement from other
licensees, SEQUENOM shall receive a *** share but no more than the amount of
patent costs assumed by SEQUENOM.
(S) 9
FINAL PROVISIONS
1. SEQUENOM has the right to grant sublicenses of the Contractual Rights. In
case of the granting of sublicenses, SEQUENOM shall have the obligation to
ensure that all rights of the Inventor resulting from this agreement are also
applicable to the sublicenses.
2. The Inventor undertakes to maintain the Contractual Rights including
additional applications and the applications made in the course of the
agreement, as far as they
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
5
<PAGE>
concern the area of the Contractual Rights or to offer them to SEQUENOM, and not
to assign them to third parties without SEQUENOM's consent.
3. The agreement is subject to the written form. Modifications require the
written form. This is also applicable to this written form clause itself.
4. Should individual provisions of this agreement be or become invalid or
unenforceable, the validity of the agreement shall otherwise not be affected;
the parties shall undertake to replace the invalid or unenforceable provision by
an effective amendment which comes closest to the commercial purpose of the
invalid or unenforceable provision.
5. Place of jurisdiction is the residence or principle place of business of the
respective defendant(s) within the Federal Republic of Germany.
Munster, January 20, 1999 San Diego/Hamburg, January 14, 1999
Prof. Dr. Franz Hillenkamp SEQUENOM, Inc.
Prof. Dr. Hubert Koster
President & CEO
SEQUENOM, GmbH
Dr. Toni Schuh
Managing Director
6
<PAGE>
ANHANG 1: BERATERVERTRAG
Consulting Services Agreement as of October 4, 1996, by and between Franz
Hillenkamp, Sequenom, Inc., San Diego, and Sequenom GmbH, Hamburg.
<PAGE>
ANHANG 2
(1) With respect to intellectual property naming Franz Hillenkamp as inventor,
Sequenom, Inc. will file and prosecute all US patent applications,
continuations-in-part, continuations, divisionals and their foreign counterparts
including international PCT applications and any other foreign filings outside
the United States for the inventions, improvements and intellectual property
related to:
1. US 5,777,324 "Method and Apparatus for MALDI Analysis" - Parent
2. US 08/934,455 "Method and Apparatus for MALDI Analysis" - CIP
3. WO 98/12734 "Method and Apparatus for MALDI Analysis" - PCT
4. Australia "Method and Apparatus for MALDI Analysis" - National Filing
5. Japan "Method and Apparatus for MALDI Analysis" - National Filing
6. Canada "Method and Apparatus for MALDI Analysis" - National Filing
7. Europe "Method and Apparatus for MALDI Analysis" - National Filing
8. US 09/074,936 "IR MALDI Mass Spectrometry of Nucleic
Acids Using Liquid Matrices" - Parent
9. In Preparation "IR MALDI Mass Spectrometry of Nucleic
Acids Using Liquid Matrices" - CIP to US 09/074,936
(2) Franz Hillenkamp is an inventor of patents in the area of cooperation, which
applicants are third parties, such as the former company Finnigan MAT - based in
Bremen, Germany - over which the inventor has the direct right of disposal.
These patents are also considered part of this agreement, if they are
disposable.
8
<PAGE>
ADDENDUM TO LICENSE AGREEMENT
-----------------------------
AND PATENT ASSIGNMENT
---------------------
THIS ADDENDUM TO LICENSE AGREEMENT AND PATENT ASSIGNMENT (the "Addendum and
Patent Assignment") is made as of this 29st day of September 1999, by Professor
Dr. Franz Hillenkamp, an individual (the "Inventor"), and SEQUENOM, Inc., a
Delaware corporation ("SEQUENOM").
R E C I T A L S
---------------
A. Dr. Hillenkamp and SEQUENOM have entered into a License Agreement dates
as of January 14, 1999 (the "License Agreement), pursuant to which SEQUENOM has
licensed from Dr. Hillenkamp, and Dr. Hillenkamp has licensed to SEQUENOM,
certain patents and now-how of Dr. Hillenkamp.
B. Dr. Hillenkamp and SEQUENOM desire to modify the License Agreement as
set forth in this Addendum and Patent Assignment.
NOW, THEREFORE, for mutual consideration, Inventor and SEQUENOM agree as
follows:
1. Assignment of the Inventions and Patent Rights of the Inventor.
---------------------------------------------------------------
Inventor does hereby assign to SEQUENOM, it successors and assigns, all of
Inventor's right, title and interest in and to the Inventions and Patent Rights
as set forth in the patents and patent applications set forth below (the
"Patents"):
(a) USSN 09/074,936; filed May 7, 1998;
(b) CIP of USSN 09/074,936; filed May 7, 1999;
(c) PCT application claiming priority to USSN 09/074,936; filed May
7, 1999;
(d) Continuation of USSN 09/074,936; filed May 10, 1999; and
(e) Any and all other U.S. and foreign patent applications which are
related to the patents listed above in sections a-d and do not
add new matter including divisionals, reissues, reexamined and
continuing patent applications and issued patents and any
extensions and supplementary protection certificates.
<PAGE>
2. Execution of Documents. Inventor shall execute formal assignment
-----------------------
documents specific to each patent or patent application which will be recorded
with the United States Patent and Trademark Office and other patent offices as
appropriate.
3. Reversionary Assignments. Upon the occurrence of any of the following
-------------------------
conditions, SEQUENOM hereby agrees to reassign to Inventor, his successors and
assigns, that portion of SEQUENOM's right, title and interest in and to all
subject matter claimed in any patents issuing from USSN 09/074,936,
continuation and divisional applications thereof, and patents worldwide claiming
priority from USSN 09/074,936, that is directed solely to IR - MALDI mass
spectrometric analysis of nucleic acids using liquid matrices and that is
supported in USSN 09/074,936. The conditions of such reassignment are expressly
limited to:
(a) Termination of the License Agreement in accordance with Section
8, Paragraph 1 or Paragraph 2 of the License Agreement;
(b) Breach of a material provision of the License Agreement by
SEQUENOM, provided that such breach is not cured within 60 days
after the giving of written notice by Dr. Hillenkamp specifying
such breech; or
(c) An act of bankruptcy by SEQUENOM, voluntarily filing or filing
against SEQUENOM of a petition for bankruptcy or reorganization
unless such petition is dismissed within 60 days of filing, or
appointment of a trustee or receiver for the business assets or
operations of SEQUENOM.
All other rights under the patents shall be retained by SEQUENOM, including, but
not limited to, mass spectrometric analysis of other (i.e., other than nucleic
acids) biological macromolecules and mass spectrometric methods involving
particular technologies including primer hybridization and extension,
array-based analysis formats, high-throughput-based analysis formats,
macromolecule immobilization and linkage techniques, mass modification of
macromolecules, releasable mass tag labeling of macromolecules, positional
macromolecule sequencing methods, multiplex analyses of macromolecules,
enzyme-based macromolecule sequencing methods and low-volume fluid dispensing
systems.
4. Successors and Assignees. This Addendum and Patent Assignment is
-------------------------
executed pursuant to the License Agreement and is entitled to the benefits
thereof and shall be binding upon and inure to the benefits of the Inventor and
SEQUENOM and their respective successors and assigns.
5. Sublicense. The Inventor maintains the right to offer sublicenses to
-----------
assigned inventions which are not included in the research areas of mass
spectrometric analysis of nucleic acids and high-throughput mass spectrometric
analysis of biopolymers as defined in the license agreement.
6. Effect of Addendum and Patent Assignment. In the event of a conflict
-----------------------------------------
between the terms of License Agreement and the terms of this Addendum and Patent
Assignment, the terms of the Addendum and Patent Assignment shall prevail.
2
<PAGE>
7. Definitions. All capitalized terms used herein and not otherwise
-----------
defined in the Addendum and Patent Assignment shall have the meanings attributed
to them in the License Agreement.
IN WITNESS WHEREOF, Inventor and SEQUENOM have executed this Addendum and
Patent Assignment on the date first above written.
INVENTOR:
/s/ Franz Hillenkamp
-----------------------------------
Professor Dr. Franz Hillenkamp
SEQUENOM:
SEQUENOM, Inc.
/s/ Hubert Koster
------------------------------------
Professor Dr. Hubert Koster
President and Chief Executive Officer
SEQUENOM:
SEQUENOM, GmbH.
/s/ Toni Schuh
-------------------------------------
Dr. Toni Schuh
Managing Director
3
<PAGE>
ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
)ss.
COUNTY OF )
On this ____ day of June 1999, before me, _______________________, the
undersigned Notary Public, personally appeared _______________ personally known
to me (or proved to me on the basis of satisfactory evidence) to be the person
who executed the above and foregoing ADDENDUM TO LICENSE AGREEMENT AND PATENT
ASSIGNMENT.
WITNESS my hand and official seal.
____________________________
Notary Public in and for said State
4
<PAGE>
Exhibit 10.31
LIZENVERTRAG
zwischen
Prof. Dr. Franz Hillenkamp
Bahlmannstr. 5, 48147 Munster, Deutschland
- nachfolgend "Erfinder" -
auf der einen Seite
und
SEQUENOM, Inc.
11555 Sorrento Valley Road, San Diego, CA 92121, USA,
vertreten durch SEQUENOM GmbH, Mendelssohnstr. 15 D, 22761 Hamburg, FRG
- nachfolgend "SEQUENOM" -
auf der anderen Seite.
Vorbemerkung
(1) Zusammenarbeit
Der Erfinder ist seit einigen Jahren als Berater von SEQUENOM tatig. Mit Bezug
auf ein Hauptarbeitsgebiet der SEQUENOM, der massenspektrometrischen Analytik
von Nukleinsauren, ist die Beratertatigkeit von Seiten des Erfinders
ausschlieBlich (Anhang 1, Beratervertrag).
Die Parteien arbeiten auf dem Gebiet der massenspektrometrischen Analyse von
Nukleinsauren und ggf. anderen Biopolymeren im Rahmen von Projekten, die von
Dritten, u.a. dem BMBF, teilweise gefordert werden konnen, eng zusammen. Diese
Vorhaben werden zumindest anteilig von SEQUENOM finanziert bzw. finanziert
werden.
(2) Erfindungen und Schutzrechte
Im Gebiet der MALDI (Matrix Assisted Laser Desorption/Ionization) -
massenspektrometrischen Analytik von Nukleinsauren und anderen Biopolymeren hat
der Erfinder die im Anhang 2 aufgelisteten Erfindungen getatigt (Anhang 2 erhebt
keinen Anspruch auf Vollstandigkeit).
Seite 1 von 7
<PAGE>
Weitere Erfindungen im Bereich der massenspektrometrischen Analytik von
Nukleinsauren und anderen Biopolymeren werden erwartet.
Die Erfindungen gliedern sich in
(a) ***
***
***
Die Vergabe von Lizenzen an den oben beschriebenen bestehenden und zukunftigen
Schutzrechten des Erfinders an SEQUENOM fur das Gebiet der oben beschriebenen
Zusammenarbeit regelt der folgende Vertrag.
(S) 1
Vertragsrechte
(1) Arbeitsgebiet
Der Erfinder arbeitet sowohl (a) in seiner Eigenschaft als Berater von SEQUENOM
fur das Arbeitsgebiet massenspektrometrische Analytik von Nukleinsauren als auch
(b) bei der Durchfuhrung von gemeinsamen Forschungs- und Entwicklungsarbeiten im
Arbeitsgebiet massenspektrometrische Hochdurchsatzanalytik von Biopolymeren mit
SEQUENOM zusammen. Der Begriff Hochdurchsatzanalytik ist in diesem Zusammenhang
unter anderem durch folgende Parameter beschreibbar:
- - routinemaBige massenspektrometrische Vermessung von mehr als 60
Einzelproben pro Stunde
und
- - Auftragvolumen einer Einzelprobe von weniger als 100 Nanolitern, sowohl auf
den Probentrager des Massenspektrometers direkt oder indirekt mittels
miniaturisierter Arrays.
Hinsichtlich der unter (a) und (b) genannten Arbeitsgebiete arbeitet der
Erfinder mit SEQUENOM als dem ausschlieBlichen kommerziellen Partner, i.e.
Lizenznehmer, oder im Verbund mit SEQUENOM und weiteren Partnern - die
Zustimmung von SEQUENOM vorausgesetzt - zusammen.
Seite 2 von 7
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<PAGE>
(2) Vertragsrechte
Vertragsrechte im Sinne dieser Vereinbarung sind derzeitige und zukunftige
angemeldete und/oder erteilte Patente und patentfahige Ergebnisse nach den
Ziffern a) -c) der Vorbemerkung. Der Erfinder wird sich bemuhen, daB er uber
das im Rahmen der Zusammenarbeit von seiner Seite hervorgebrachte geistige
Eigentum allein verfugungsberechtigt ist. Im Fall der Miterfinderschaft von
Mitarbeitern des Erfinders, die dem Arbeitnehmererfindergesetz unterliegen, wird
der Erfinder im Rahmen seiner EinfluBmoglichkeiten Sorge tragen, daB die
Erfindungen uneingeschrankt in Anspruch genommen und zu den hier festgelegten
Bedingungen auf SEQUENOM ubertragen werden.
Bereits im Rahmen der Zusammenarbeit beantragte oder erteilte Patente sind in
Anhang 2 aufgelistet (Anhang 2 erhebt keinen Anspruch auf Vollstandigkeit).
(S) 2
Vertrags-Know-How
Der Erfinder verfugt uber umfangreiches Know-how auf dem Gebiet der
Vertragsrechte und der vereinbarten Zusammenarbeit, insbesondere zur
Probenpraparation und zu optimalen Geratekonfigurationen und -betriebsweisen und
der Auswertung von Massenspektren. Diese Know-how ist fur die praktische
Umsetzung der Vertragsrechte von wesentlicher Bedeutung.
(S) 3
Rechtseinraumung
1. Der Erfinder erteilt SEQUENOM eine weltweite ausschlieBliche Lizenz zur
uneingeschrankten Verwendung der Vertragsrechte und des Vertrags-Know-hows.
Die Lizenz ist beschrankt auf das unter (S)1, (1), definierte
Arbeitsgebiet.
Sollte aufgrund der allgemeinen Forderungsbedingungen, die bei offentlicher
Forschungsforderung zur Anwendung kommen konnen, oder aufgrund anderer,
vorab gemeinsam getroffener schriftlicher Vereinbarungen, gegebenenfalls
unter Einbeziehung dritter Projektbeteiligter, die Einraumung einer
ausschlieBlichen Lizenz fur das Arbeitsgebiet nicht moglich sein, so werden
die an SEQUENOM zu vergebenden ausschlieBlichen Nutzungsrechte an den
Vertragsrechten zumindest das fur SEQUENOM essentielle Arbeitsgebiet der
massenspektrometrischen Hochdurchsatzanalytik von Nukleinsauren (gemaB
obiger Definition) abdecken.
Seite 3 von 7
<PAGE>
(S) 4
Fortentwicklung der Vertragsrechte
1. Der Erfinder ist im Rahmen seiner Forschung auch in Zukunft bemuht, die
Entwicklung der Vertragsrechte zu fordern und den technischen Vorsprung vor
Alternativentwicklungen zu erhalten. Eine Verpflichtung zu spezifischen
ForschungsmaBnahmen oder zur Gewahrleistung eines Erfolges geht der
Erfinder hiermit nicht ein.
2. Der Erfinder wird samtliche bei ihm anfallenden Fortentwicklungen
betreffend die Vertragsrechte, das Vertrags-Know-how und das Gebiet der
Zusammenarbeit in die Vertragsbeziehungen einbringen und insbesondere das
Know-how durch Fortschreibung der Forschungs- und Testergebnisse in den
Unterlagen standig auf dem letzten Stand der Entwicklung halten. SEQUENOM
hat standigen Zugang zu den Fortschreibungen der Unterlagen.
(S) 5
Gewahrleistung des Lizenzgebers
Dem Erfinder/Lizenzgeber sind keine Tatsachen bekannt, insbesondere keine
Schutzrechte, die einer Nutzung bestehender Vertragsrechte entgegenstehen. Der
Erfinder ubernimmt hierfur jedoch keine Haftung. Vielmehr wird er sich,
gemeinsam mit SEQUENOM, um eine Umgehung von Hindernissen bemuhen, falls solche
einer Nutzung der Vertragsrechte entgegenstehen.
(S) 6
Lizenzgebuhren
1. Fur die Gewahrung der beschriebenen Lizenz an den Vertragsrechten zahlt
SEQUENOM an den Erfinder eine Lizenzgebuhr in Hohe von *** der Netto-
Einkunfte, die SEQUENOM unter Nutzung von Vertragsrechten erzielt,
unabhangig von der Zahl genutzter Vertragsrechte. Einkunfte sind Erlose -
nach Zahlungseingang bei SEQUENOM - aus dem Verkauf von Produkten, denen
Vertragsrechte zugrunde liegen und/oder deren Anwendung den Zugriff auf
Vertragsrechte erfordern, beziehungsweise Dienstleistungen, die unter
Nutzung der Vertragsrechte erbracht werden.
2. Fur Einkunfte, die unter ausschlieBlicher Nutzung von Vertragsrechten
erzielt werden, die aus der Zusammenarbeit (siehe (S)1) von SEQUENOM und
dem Erfinder hervorgehen, und in denen der Erfinder oder einer seiner
Mitarbeiter als (Mit)erfinder genannt sind, *** sich die
Lizenzgebuhr ***.
3. Falls die Summe aller Lizenzgebuhren, die SEQUENOM an Dritte abfuhren muB,
fur einen gegebenen Erlos den Wert von *** des Erloses uberschreitet,
werden die an den
Seite 4 von 7
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Confidential Treatment and filed separately with the Commission.
<PAGE>
Erfinder zu zahlenden Lizenzgebuhren durch *** um sie auf genau *** des
gegebenen Erloses zu reduzieren. Der Korrekturfaktor darf den Wert von 0,5
jedoch nicht unterschreiten.
4. SEQUENOM erstattet dem Erfinder alle Ausgaben, die ihm im Zusammenhang mit
der Anmeldung, Aufrechterhaltung und Verteidigung von Patenten fur
Vertragsrechte entstanden sind oder entstehen, soweit diese Vertragsrechte
ausschlieBlich an SEQUENOM vergeben werden. Eingeschlossen sind Kosten fur
Patentanmeldungen in anderen Landern, die bei der Aufrechterhaltung und
ggf. Verteidigung etc. entstehen. Uber das die Patente betreffende
Vorgehen werden sich die Vertragsparteien jeweils absprechen. Werden fur
ein gegebenes Patent bzw. eine gegebene Patentanmeldung Lizenzen fur
Anwendungsgebiete, die nicht exklusiv SEQUENOM zustehen, an Dritte
vergeben, so werden alle oben beschriebenen Ausgaben in der Regel anteilig
von SEQUENOM und diesem(n) Dritten getragen. Von SEQUENOM bereits
getatigte Ausgaben werden von diesem(n) Dritten anteilig erstattet. Der
Erfinder ist insofern verpflichtet, diese Auflage an etwaige Dritte
Lizenznehmer vertraglich weiterzugeben. Erstattet werden dem Erfinder nach
vorheriger Absprache auch Kosten, die im Zusammenhang mit der
Gewinnung/Wiedergewinnung von Schutzrechten nach Anhang 2 Absatz (2)
entstehen.
5. Lizenzgebuhren werden jeweils zum Ende eines abgelaufenen Kalenderjahres
und nach Zahlungseingang der zugrundeliegenden Einkunfte bei SEQUENOM
fallig.
(S) 7
Geheimhaltung
1. Die Parteien verpflichten sich gegenseitig zur Geheimhaltung aller wahrend
der Laufzeit dieses Vertrages ausgetauschten bzw. auszutauschenden
Informationen und erworbenen Kenntnisse uber Grundlagen, Entwicklungen,
Verbesserungen und sonstige Details betreffend die Vertragsrechte und das
Vertrags-Know-how sowie die die Vertragsabwicklung beruhrenden Dinge, auch
wenn sie nicht ausdrucklich als geheim oder vertraulich bezeichnet worden
sind. Dies gilt nicht, soweit die Offenbarung notwendig ist, um das Know-
how in anderen Vertragsgebieten oder in anderen Anwendungsgebieten an
dortige Lizenznehmer zu ubertragen, um etwaige behordliche Genehmigungen zu
erwirken, oder um die mit den
Vertragsrechten erzielten Ergebnisse in der Offentlichkeit bzw. gegenuber
der Fachwelt bekannt zu machen.
2. Beide Parteien verpflichten sich, diese Geheimhaltungsverpflichtung ihren
Mitarbeitern bzw. Betriebsangehorigen aufzuerlegen, die aufgrund ihrer
Tatigkeit verwertbare Kenntnisse von den Vertragsrechten oder dem Vertrags-
Know-how erlangen konnen. Diese Geheimhaltungsverpflichtung ist den
Mitarbeitern auch fur die Zeit nach
Seite 5 von 7
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Confidential Treatment and filed separately with the Commission.
<PAGE>
Beendigung des Arbeitsvertrages bzw. des Betreuungsverhaltnisses als
Diplomanden oder Doktoranden aufzuerlegen.
3. Der Erfinder verpflichtet sich, anderen Lizenznehmern fur andere Vertrags-
oder Anwendungsgebiete entsprechende Geheimhaltungsverpflichtungen
aufzuerlegen.
4. Diese Geheimhaltungsverpflichtung besteht uber die Laufzeit des Vertrages
hinaus fort. Sie wirkt solange, bis das Know-how offenkundig wird.
5. Die Vertragsparteien werden sich uber geplante Veroffentlichungen in
gesprochener oder geschriebener Form, die lnformationen nach (S) 7 Abs. (1)
enthalten, informieren. Vom Zeitpunkt der vollstandigen Offenlegung bis
zur Veroffentlichung wird dem jeweils anderen Partner eine First von drei
Monaten zum Widerspruch oder zur Anmeldung relevanter Schutzrechte
eingeraumt. Im Falle eines Widerspruchs werden sich die Parteien um eine
fur beide Seiten akzeptable Losung bemuhen. Ein Widerspruch kann nur aus
wichtigem Grund eingelegt oder aufrechterhalten werden.
(S) 8
Vertragslaufzeit
1. Der Vertrag endet am Ende des zehnten Kalenderjahres nach dem ersten
Kalenderjahr, fur das Lizenzen nach seinen Bestimmungen gezahlt werden,
wenn er nicht spatestens sechs Monate vor Ende erneuert wird.
2. Der Vertrag endet daruber hinaus automatisch, wenn die Lizenzzahlungen von
SEQUENOM an den Erfinder in zwei aufeinanderfolgenden Kalenderjahren den
Betrag von DM 10,000,00 unterschreiten. Diese Bestimmung kann fruhestens
drei Jahre nach Unterzeichnung des Vertrags durch beide Parteien angewendet
werden.
3. Im Falle einer Beendigung des Vertrages nach Abs. (2) fallen alle Rechte
und Verpflichtungen an den Vertragsrechten und am Vertrags-Know-how an den
Erfinder zuruck. Erzielt der Erfinder Einnahmen aus weiteren Nutzungen der
Patente oder des Know-hows dieses Vertrages von anderen Lizenznehmern, so
ist SEQUENOM an den Einnahmen mit *** zu beteiligen bis zur Hohe der von
SEQUENOM ubernommenen Patentkosten.
(S) 9
SchluBbestimmungen
1. SEQUENOM hat das Recht, Unterlizenzen an den Vertragsrechten zu vergeben.
Im Fall der Vergabe von Unterlizenzen steht SEQUENOM fur die Verpflichtung
ein, daB alle sich aus diesem Vertrag ergebenden Rechte des Erfinders auch
fur die Unterlizenzen gelten.
Seite 6 von 7
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<PAGE>
2. Der Erfinder verpflichtet sich, die Vertragsrechte, einschlieBlich der
Zusatzanmeldungen und der im Laufe des Vertrages vorgenommenen Anmeldungen,
soweit sie den Bereich der Vertragsrechte betreffen, aufrechtzuerhalten
bzw. SEQUENOM anzubieten und sie nicht ohne Zustimmung von SEQUENOM an
Drifte zu ubertragen.
3. Der Vertrag unterliegt der Schriftform. Anderungen bedurfen der
Schriftform. Dies gilt auch fur diese Schriftformklausel selbst.
4. Sollten einzelne Bestimmungen dieses Vertrages unwirksam sein oder werden,
so beruhrt das die Wirksamkeit des Vertrages im ubrigen nicht; die Parteien
verpflichten sich vielmehr, die unwirksame Bestimmung durch eine wirksame
Regelung zu ersetzen, die dem wirtschaftlichen Zweck der unwirksamen
Bestimmung am nachsten kommt
5. Gerichtsstand ist der Wohn- bzw. Firmensitz der/des jeweilig Beklagten
innerhalb der Bundesrepublik Deutschland.
Munster, den 20.1.99 San Diego / Hamburg, den 14. Januar 1999
/s/ Franz Hillenkamp /s/ Hubert Koster
- --------------------------- ----------------------------------
Prof. Dr. Franz Hillenkamp SEQUENOM, Inc.
Prof. Dr. Hubert Koster
President & CEO
/s/ Toni Schuh
----------------------------------
SEQUENOM, GmbH
Dr. Toni Schuh
Geschaftsfuhrer
Seite 7 von 7
<PAGE>
Anhang 1: Beratervertrag
Consulting Services Agreement as of October 4, 1996, by and between Franz
Hillenkamp, Sequenom, Inc., San Diego, and Sequenom GmbH, Hamburg.
<PAGE>
Anhang 2
(1) With respect to intellectual property naming Franz Hillenkamp as inventor,
Sequenom, Inc. will file and prosecute all US patent applications,
continuations-in-part, continuations, divisionals and their foreign counterparts
including international PCT applications and any other foreign filings outside
the United States for the inventions, improvements and intellectual property
related to:
1. US 5,777,324 "Method and Apparatus for MALDI Analysis" - Parent
2. US 08/934,455 "Method and Apparatus for MALDI Analysis" - CIP
3. WO 98/12734 "Method and Apparatus for MALDI Analysis" - PCT
4. Australia "Method and Apparatus for MALDI Analysis" - National filing
5. Japan "Method and Apparatus for MALDI Analysis" - National filing
6. Canada "Method and Apparatus for MALDI Analysis" - National filing
7. Europe "Method and Apparatus for MALDI Analysis" - National filing
8. US 09/074,936 "IR MALDI Mass Spectrometry of Nucleic Acids Using Liquid
Matrices" - Parent
9. In Preparation "IR MALDI Mass Spectrometry of Nucleic Acids Using Liquid
Matrices - CIP to US 09/074,936
(2) Franz Hillenkamp ist Erfinder von Schutzrechten auf dem Gebiet der
Zusammenarbeit, deren Anmelder Dritte, z.B. die ehemalige Firma Finnigan MAT mit
Sitz in Bremen, ist, uber die der Erfinder aber eingeschrankt oder
uneingeschrankt verfugen kann. Diese Schutzrechte gelten soweit verfugbar
ebenfalls als Vertragsrechte.
<PAGE>
EXHIBIT 10.32
SUPPLY AGREEMENT
by and between
Tactical Fabs, Inc. ("Seller")
51 Whitney Place
Freemont, CA 94539
and
SEQUENOM, Inc. ("Buyer")
11555 Sorrento Valley Rd
San Diego, CA 92121-1331
This Agreement dated April 1, 1999 (the "Execution Date") is by and between
SEQUENOM, Inc., a corporation organized and existing under the laws of the State
of California and having its principal office at 11555 Sorrento Valley Road, San
Diego, California 92121-1331 ("Buyer"), and Tactical Fabs, Inc., a corporation
organized and existing under the laws of the State of California and having its
principal office at 51 Whitney Place, Fremont, CA 94539 ("Seller").
INTRODUCTION
The parties agree that the Seller shall design, manufacture and supply chips
("DIE") as specified by Buyer under this Agreement. Seller and Buyer in
addition agree to work cooperatively to further pursue the development of DIE
for applications in mass spectrometry.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises and covenants set forth below, Seller and Buyer mutually agree as
follows:
Article 1. DEFINITIONS
When used in this Agreement, each of the following, terms shall have the
meanings set forth in this Article I:
SECTION 1.1 "Affiliate" means any corporation, company, partnership, joint
venture and/or firm which controls, is controlled by, or is under common control
with a specified person or entity. For purposes of this Section 1.1, "control"
shall mean (a) in the case of corporate entities, direct or indirect ownership
of at least fifty percent (50%) of the stock or shares having the right to vote
for the election of directors, and (b) in the case of non-corporate entities,
direct or indirect ownership of at least fifty percent (50%) of the equity
interest with the power to direct the management and policies of such non-
corporate entities.
Confidential Page 1
<PAGE>
SECTION 1.2 "Agreement" shall mean this Supply Agreement, as amended from
time to time.
SECTION 1.3 "Delivery Date" shall mean a date for which delivery of Product
is properly requested in a purchase order.
SECTION 1.4 "Initial Term" shall have the meaning set forth in Section 5. 1.
SECTION 1.5 "Party" means Buyer or Seller; "Parties" means Buyer and Seller.
As used in this Agreement, references to "third parties" do not include a Party
or its Affiliates.
SECTION 1.6 "Product" shall mean each product supplied hereunder by Seller in
its completed and functional form and that is listed in and meets in all
material respects the specifications set forth in Exhibit I, attached hereto and
made a part hereof, as such Exhibit is amended by the parties from time to time.
SECTION 1.7 "Change of Control" means a merger, consolidation, sale or other
transfer of all or substantially all of the assets of either Party to a third
party.
SECTION 1.8 "Confidential Information" means all materials, know-how or other
information, including, without limitation, proprietary information and
materials (whether or not patentable) regarding a Party's technology, products,
business information or objectives, which is designated as confidential in
writing by the disclosing Party, whether by letter or by the use of an
appropriate stamp or legend, prior to or at the time any such material, trade
secret or other information is disclosed by the disclosing Party to the other
Party. Notwithstanding the foregoing to the contrary, materials, know-how or
other information which is orally, electronically or visually disclosed by a
Party, or is disclosed in writing without an appropriate letter, stamp or
legend, shall constitute Confidential Information of a Party (a) if the
disclosing Party, within thirty (30) days after such disclosure, delivers to the
other Party a written document or documents describing the materials, know-how
or other information and referencing the place and date of such oral, visual,
electronic or written disclosure and the names of the persons to whom such
disclosure was made, or (b) such information is of the type that is customarily
considered to be confidential information by persons engaged in activities that
are substantially similar to the activities being engaged in by the Parties
hereunder. Notwithstanding the foregoing, any technical or financial
information of a Party disclosed at a meeting of Seller and the Buyer or
disclosed through an audit or royalty reports shall constitute Confidential
Information of a Party unless otherwise specified.
SECTION 1.9 "Executive Officers" means the Chief Executive Officer of Buyer
(or an executive of Buyer designated by such Chief Executive Officer) and the
Chief Executive Officer of Seller (or an officer of Seller designated by such
Chief Executive Officer).
SECTION 1.10 ADDITIONAL DEFINITIONS. Each of the following definitions set
forth in the section of this Agreement indicated below:
DEFINITION SECTION
Confidential 2
<PAGE>
"Breaching Party" "Extension Period" "Intellectual Property" "Non-Breaching
Party" "Notification" "Response Period" "Software Developments" "Specified
Process Technology" "Termination Date" "Backorder"
Article 2. SALE AND PURCHASE OF PRODUCTS
SECTION 2.1 SALE AND PURCHASE. Seller, within the limitations contained in
this Article, agrees to exclusively sell to Buyer such quantities of Product as
Buyer may order in accordance herewith. Subject to the provisions of Section
4.1 and 5.1 hereof, so long as this Agreement shall remain in effect, Buyer
agrees, for itself, its Affiliates and sublicensees, to satisfy solely through
Buyer's purchase of Products under this Agreement *** of Buyer's and Buyer's
Affiliates' and sublicensees' requirements of Product or any other products with
the characteristics that meet the specifications as described in Exhibit I
("Requirements").
It is understood that Seller shall have the right in connection with supply
hereunder to subcontract with third parties as Seller deems advisable to
manufacture Product, provided, however, that Seller shall remain fully
responsible hereunder and the subcontractors are bound by the terms and
conditions hereunder.
SECTION 2.2 QUANTITY; FORECASTS.
A. Buyer and Seller will mutually agree within thirty (30) days of signing
this Agreement, an initial order volume and the first delivery date. Buyer
at this time will provide a reasonable best estimate of the next three
quarter's forecast for the Product.
B. Commencing on the second year of this Agreement, Buyer will provide Seller
a forecast of Buyer's quantity requirements for such Product for at least
the next four (4) full calendar quarters. Thereafter, Buyer shall deliver
to Seller at or prior to the end of each calendar quarter, Buyer's firm
order for such Product for the second calendar quarter following such
calendar quarter and a forecast of its quantity requirements for such
Product for the three (3) following calendar quarters.
C. Commencing in the second year of this Agreement, the amount of any Product
forecasted for delivery in the first of the three calendar quarters
forecasted of year two of this Agreement shall be ***
*** of the most recent previous forecast for such a quarter.
D. After the first year of this Agreement the total amount of each Product
ordered by Buyer for delivery in any calendar quarter for which an order is
required may ***
** of Buyer's most recent forecast of its requirements for
such Product for such quarter. In addition, Seller's supply obligation will
not extend ***
*** of Buyer's most recent forecast of its requirements for
such
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Confidential
3
<PAGE>
Product for such quarter. If a Buyer Product requirement for any quarter
exceeds *** of Buyer's most recent forecast of it requirements for such
Product for such calendar quarter, Seller and Buyer will discuss in good
faith the additional amount, if any, that Seller is willing to supply
consistent with its other obligations and Buyer will adjust its order
accordingly. Buyer shall indemnify Seller and reimburse it promptly upon
request for all reasonable out of pocket costs and expenses, including the
cost of carrying increased inventory, to the extent caused by any deviation
in order quantities from the limits imposed by the preceding sentence, and
Seller will act reasonably to mitigate any such costs and expenses.
SECTION 2.3 TECHNOLOGY CHANGE
*
SECTION 2.4 BACKORDERS.
A. Backorders are defined as orders that have not been fully received at the
Buyer within the guaranteed order lead time.
B. Backorders must show an approximate shipping date and indicate the reason
for such backorder.
C. The Seller is required to provide any backorders without service or
delivery charges.
D. It is the responsibility of the Seller to manage backorders and provide the
Buyer, at no additional cost, with required product to ensure stock-outs do
not occur.
E. The Seller will be in default if the Product is backordered for more than
ten (10) working days, or if the Buyer feels that the approximate shipping
date provided by the Seller for the backordered Product(s) jeapordizes the
Buyer's commercial operations and the operation of its Customers.
(i) In case of default, and after notifying the Seller, Buyer may obtain
the same quantity of the Product from other suppliers.
(ii) The Seller will be responsible, for the cost difference between the
Product and the Product from other suppliers.
SECTION 2.5 DELIVERY.
A. Delivery will be Free On Board (FOB) the Buyer's receiving dock and will
include delivery, packaging, and unloading costs. The Buyer will not
assume any of these costs.
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Confidential
4
<PAGE>
B. Include all costs in the quoted unit price.
* Seller agrees the terms of this Agreement may be renegotiated upon written
notice from Buyer, with such renegotiated terms to take effect no sooner
than 90 days after such initial notice from Seller to Buyer, if, in the
opinion of the Buyer, the Product provided by the Seller has been displaced
by other technologies; provided however, Buyer shall afford Seller a
reasonable opportunity to supply alternative technology.
C. Seller will package the Products in accordance with the specifications
set forth in Exhibit I hereto. Seller will include with each shipment
copies of all applicable quality and testing records.
SECTION 2.6 REJECTION OF PRODUCT IN CASE OF NONCONFORMITY.
A. Buyer may reject any portion of shipment of Product that does not
conform to the specifications contained in Exhibit I. In order to reject
a shipment, Buyer must (i) give notice to Seller of Buyer's intent to
reject the shipment within ten (10) days of receipt together with a
detailed written indication of the reasons for such possible rejection,
and (ii) as promptly as reasonably possible thereafter, provide Seller
with notice of final rejection and the full basis thereof. After notice
of intent to reject is given, Buyer shall cooperate with Seller in
determining whether rejection is necessary or justified. If no such
notice of intent to reject is timely received, Buyer shall be deemed to
have accepted such delivery of Product, provided, however, in the case
of Products having latent defects which upon diligent examination by
Buyer could not have been discovered, Buyer must give notice of Buyer's
intent to reject within thirty (30) days after discovery of such
defects, provided that such notice may in no event be given later than
ninety (90) days after receipt of the shipment. In any event, Buyer
shall pay for the shipment as otherwise provided herein and shall be
entitled to a refund of the purchase price (together with insurance and
freight charges if applicable) of properly rejected Products at the time
they are ultimately rejected. Seller shall notify Buyer as promptly as
reasonable possible whether it accepts Buyer's basis for any rejection.
B. Whether or not Seller accepts Buyer's basis for rejection, promptly on
receipt of a notice of rejection, Seller shall use its reasonable
efforts, at Buyer's request to provide replacement Product which shall
be purchased by Buyer as provided in this Agreement.
C. Unless Seller requests the return of the rejected batch within sixty
(60) days of receipt of buyer's notice of rejection, Buyer shall destroy
such batch promptly and provide Seller with certification of such
destruction. Buyer shall, upon receipt of Seller's request for return,
promptly dispatch said batch to Seller, at Seller's cost.
Article 3. PRICE AND PAYMENTS
SECTION 3.1 PRICE. The price Buyer shall pay to Seller for Product purchased
hereunder is as indicated in Exhibit II. Prices shall be negotiated on a annual
basis between the two parties with price negotiations commencing no later than
three (3) months prior to the
Confidential 5
<PAGE>
anniversary date and completed no later than two (2) months prior to the
anniversary date of this Agreement.
SECTION 3.2 Prices quoted in Exhibit II are net costs, in United States
dollars. Federal Tax and State Sales Tax extra, where applicable. Duty and
brokerage costs, if applicable are to be included in unit prices.
SECTION 3.3 CURRENCY AND METHOD OF PAYMENTS; LATE PAYMENTS. All payments
under this Agreement shall be made in United States dollars by wire transfer to
such bank account as Seller may designate from time to time within no more than
ten (10) days when such payment is due. Buyer shall pay interest to Seller on
the aggregate amount of any payments that are not paid on or before the date
such payments are due under this Agreement at a rate per annum equal to ***
as reported by Seller's bank from time to time calculated on the number of days
such payment is delinquent.
ARTICLE 4. ANNUAL BUSINESS REVIEW
SECTION 4.1 Within thirty (30) days of the anniversary date of this Agreement
both Parties shall meet to review the performance of each party under this
Agreement and if necessary outline steps to improve performance.
Article 5. PARTIAL TERMINATION
SECTION 5.1 TERMINATION OF PURCHASE OBLIGATIONS; FAILURE TO DELIVER. In
addition to any termination of this Agreement under Article 6 hereof, this
Agreement shall terminate as to a particular Product as follows:
A. If at any time after the Initial Term (as defined in Section 5.1) Buyer
notifies Seller that Buyer has received a written good faith firm quote
from a reputable third party supplier of recognized standing (other than an
Affiliate) to supply Buyer for a period of
***
*** Seller shall have sixty (60) days
after receipt of such notice to notify Buyer that Seller intends or does
not intend to reduce its then applicable transfer price of such Product to
a price ***
*** upon the expiration of such sixty (60) day period. If Seller
fails to give such notice or notifies Buyer that it does not intend to so
reduce its then applicable transfer price of such Product, Buyer may, upon
thirty (30) days' prior notice to Seller, elect to terminate its
obligations hereunder to purchase, and Seller's obligations to supply, such
Product. Notwithstanding the foregoing, Buyer shall have no rights under
this Section 4.1 (A) if the third-party quote is given in connection with
or in anticipation of some other relationship with the Buyer.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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B. If Seller fails to timely deliver *** of the amount of any Product ordered
by Buyer as required hereunder for any reason, excluding force majeure, as
measured over any period of ninety (90) or more consecutive days, then
Buyer may upon twenty (20) days' prior notice to Seller elect to terminate
Buyer's obligations to purchase, and Seller's obligation to supply, such
Product hereunder.
Article 6. TERMINATION, RIGHTS AND OBLIGATIONS UPON
TERMINATION
SECTION 6.1 TERM. Unless terminated for any particular Product pursuant to
Sections 5.1(A) or 5.1(B) hereof or by either party pursuant to the other
provisions of this Article 6, this Agreement shall continue in effect until
three (3) years from the date of First Commercial Sale of the first Product
supplied hereunder (the "Initial Term"), and shall thereafter remain in effect
until terminated by either Party upon at least ninety (90) days prior written
notice to the other Party.
SECTION 6.2 TERMINATION FOR DEFAULT. If either party materially defaults in
the performance of any material Agreement, condition or covenant of this
Agreement and such default or noncompliance shall not have been remedied, or
steps initiated to remedy the same to the other party's reasonable satisfaction,
within ninety (90) days (or 10 days in the case of non-payment) after receipt by
the defaulting party of a notice thereof from the other party, the party not in
default may terminate this Agreement.
SECTION 6.3 RIGHTS AND OBLIGATIONS ON EXPIRATION OR TERMINATION. Except to
the extent expressly provided to the contrary, the following provisions shall
survive the termination of this Agreement: this Section 6.3 and Articles 7
through 10. Any rights of Seller to payments accrued through termination as
well as obligation of the parties under firm orders for purchase and delivery of
Products at the time of such termination shall remain in effect, except that in
the case of termination under Section 6.2, the terminating party may elect
whether obligations under firm orders will remain in effect, except that Seller
will have no obligation with respect to Delivery Dates more than six (6) months
after termination.
Article 7. CONFIDENTIALITY
SECTION 7.1 CONFIDENTIAL INFORMATION. All Confidential Information disclosed
by a Party to any other Party during the term of this Agreement shall not be
used by the receiving Party except in connection with the activities
contemplated by this Agreement, shall be maintained in confidence by the
receiving Party (except to the extent reasonably necessary for regulatory
approval of products developed by Buyer, Seller or any of their respective
Affiliates), and shall not otherwise be disclosed by the receiving Party to any
other person, firm, or agency, governmental or private, without the prior
written consent of the disclosing Party, except to the extent that the
Confidential Information (as determined by competent documentation):
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Confidential
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A. was known or used by the receiving Party prior to its date of disclosure to
the receiving Party; or
B. either before or after the date of the disclosure to the receiving Party is
lawfully disclosed to the receiving Party by sources other than the
disclosing Party rightfully in possession of the Confidential Information;
or
C. either before or after the date of the disclosure to the receiving Party
becomes published or generally known to the public (including information
known to the public through the sale of products in the ordinary course of
business) through no fault or omission on the part of the receiving Party
or its sublicensees; or
D. is independently developed by or for the receiving Party without reference
to or reliance upon the Confidential Information; or
E. is required to be disclosed by the receiving Party to comply with
applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, PROVIDED THAT the receiving Party provides prior
written notice of such disclosure to the disclosing Party and takes
reasonable and lawful actions to avoid and/or minimize the degree of such
disclosure, PROVIDED THAT, specific information shall not be deemed to be
within any of these exclusions merely because it is embraced by more
general information falling within these exclusions.
SECTION 7.2 EMPLOYEE AND ADVISOR OBLIGATIONS. Seller and Buyer each agree
that they shall provide Confidential Information received from any of the other
Parties only to their respective employees, consultants and advisors, and to the
employees, consultants and advisors of such Party's Affiliates, who have a need
to know and have an obligation to treat such information and materials as
confidential.
SECTION 7.3 COMPETITION. Seller agrees that for the term or the Agreement
and for a period of three (3) years after the expiration of the Agreement,
Seller shall not share, contract or make available for purposes of sale, any
information, technology, process technology and/or product technology developed
under this Agreement by either party with its customers or potential customers
that are either manufacturers of mass spectrometers or companies that perform or
intend to perform biopolymer analysis using mass spectrometry.
SECTION 7.4 EQUITABLE RELIEF. Seller acknowledges and agrees that due to the
unique nature of Buyer's Proprietary Information, there can be no adequate
remedy at law for any breach of its obligations hereunder, that any such breach
may allow Seller or third parties to unfairly compete with Buyer resulting in
irreparable harm to Buyer, and therefore, that upon any such breach or threat
thereof, Buyer shall be entitled to injunctions and other appropriate equitable
relief in addition to whatever remedies it may have at law.
SECTION 7.5 TERM. All obligations of confidentiality imposed under this
Article 7 shall continue for a period of at least five (5) years following
termination or expiration of this Agreement.
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Article 8. REPRESENTATIONS AND WARRANTIES
SECTION 8.1 REPRESENTATION OF AUTHORITY; CONSENTS. Seller and Buyer each
represent and warrant to the other Parties that as of the Execution Date it has
full right, power and authority to enter into this Agreement, this Agreement has
been duly executed by such Party and constitutes a legal, valid and binding
obligation of such Party, enforceable in accordance with its terms, and all
necessary consents, approvals and authorizations of all government authorities
and other persons required to be obtained by such Party in connection with the
execution, delivery and performance of this Agreement have been and shall be
obtained.
SECTION 8.2 NO CONFLICT. Each Party represents to the other Parties that
notwithstanding anything to the contrary in this Agreement, the execution and
delivery of this Agreement and the performance of such Party's obligations
hereunder (a) do not conflict with or violate such Party's Articles of
Incorporation and Bylaws or any requirement of applicable laws or regulations
and (b) do not and shall not conflict with, violate or breach or constitute a
default or require any consent under, any contractual obligation of such Party.
SECTION 8.3 KNOWLEDGE OF PENDING OR THREATENED LITIGATION. Each Party
represents and warrants to the other Parties that there is no claim,
investigation, suit, action or proceeding pending or, to the knowledge of such
Party, expressly threatened, against such Party before or by any governmental
entity or arbitrator that, individually or in the aggregate, could reasonably be
expected to (i) have a material adverse effect on such Party, (ii) materially
impair the ability of such Party to perform any obligation under this Agreement
or (iii) prevent or materially delay or alter the consummation of any or all of
the transactions contemplated hereby.
SECTION 8.4 EMPLOYEE AND CONSULTANT OBLIGATIONS. Each Party represents and
warrants that all of its employees, officers, and consultants have executed
agreements or have existing obligations under law requiring, in the case of
employees and officers, assignment to such Party of all inventions made during
the course of and as the result of their association with such Party and, in the
case of employees, officers and consultants, obligating the individual to
maintain as confidential such Party's Confidential Information as well as
confidential information of a third party which such Party may receive, to the
extent required to support such Party's obligations under this Agreement.
SECTION 8.5 FULL DISCLOSURE. Each Party has disclosed to the other Parties
in good faith, all material information such Party believes is relevant to the
subject matter of this Agreement, and to such Party's ability to observe and
perform its obligations hereunder.
SECTION 8.6 WARRANTIES. Seller warrants to Buyer that, when shipped to Buyer
by Seller, the Products will conform in all respects to the specifications set
forth in Exhibit I, as then in effect, and (ii) will not be adulterated.
BUYER'S SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF THE FOREGOING WARRANTIES OR
FOR PRODUCT DEFECTS SHALL BE ITS RIGHT UNDER SECTIONS 2.6 AND 9.1 HEREOF OR
REPLACEMENT OF OR, AT SELLER'S OPTION OF IF REPLACEMENT IS IMPRACTICAL, REFUND
FOR RETURNED NONCONFORMING UNITS OF PRODUCT PROVIDED TO SELLER WITHIN
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THREE (3) MONTHS AFTER THE ORIGINAL NONCONFORMING UNITS (BUT NOT REPLACEMENTS)
ARE SHIPPED BY SELLER. EXCEPT FOR THE FOREGOING WARRANTIES, SELLER DOES NOT
WARRANT THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PRODUCTS
OR THE PERFORMANCE OR NONINFRINGEMENT THEREOF, DOES NOT MAKE ANY WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO PRODUCTS, SPECIFICATIONS, SUPPORT, SERVICE
OR ANYTHING ELSE AND DOES NOT MAKE ANY WARRANTY TO BUYER'S CUSTOMERS OF AGENTS.
SELLER HAS NOT AUTHORIZED ANYONE TO MAKE ANY REPRESENTATION OR WARRANTY OTHER
THAN AS PROVIDED ABOVE. THE FOREGOING LIMITATIONS OF WARRANTIES SHALL NOT IN ANY
WAY LIMIT BUYER'S RIGHTS UNDER SECTION 9.1 THEREOF.
Article 9. MISCELLANEOUS PROVISIONS
SECTION 9.1 PRODUCT LIABILITY INDEMNIFICATION.
A. BUYER. Buyer agrees to defend Seller and its affiliates at Buyer's cost,
and will indemnify and hold Seller and their respective directors,
officers, employees and agents ("the Seller Indemnified Parties") harmless
from and against any losses, costs, damages, fees or expenses arising out
of any claim relating to (i) any breach by Buyer of any of their respective
representations, warranties or obligations pursuant to this Agreement, or
(ii) personal injury from the use, sale or other disposition of any product
or service offered by Buyer and/or its respective licensees or
collaborators. In the, event of any such claim against the Seller
Indemnified Parties by any third party, Seller shall promptly notify Buyer
in writing of the claim and Buyer shall manage and control, at their sole
expense, the defense of the claim and Buyer shall manage and control, at
their sole expense, the defense of the claim and its settlement. The
Seller Indemnified Parties shall cooperate with Buyer and may, at their
option and expense, be represented in-any such action or proceeding. Buyer
shall not be liable for any litigation costs or expenses incurred by the
Seller Indemnified Parties without Buyer's prior written authorization. In
addition, Buyer shall not be responsible for the indemnification of any
Seller Indemnified Party arising from any negligent or intentional acts by
such party.
B. SELLER. Seller agrees to defend Buyer and its Affiliates at Seller's cost,
and will indemnify and hold Buyer and their Affiliates and their respective
directors, officers, employees and agents (the "Buyer Indemnified Parties")
harmless from and against any losses, costs, damages, fees or expenses
arising out of any claim relating to (i) any breach by Seller of any of its
representations, warranties or obligations pursuant to this Agreement or
(ii) personal injury from the development or manufacture of an Product.
Provided however, Seller shall have no indemnity obligations for any
personal injury claims arising after delivery of the Product to Buyer, or
arising out of the use or sale of the Product by Seller or its licenses or
collaborators. In the event of any claim against the Buyer Indemnified
Parties by any third party, Buyer shall promptly notify Seller in writing
of the claim and Seller shall manage and control, at its sole expense, the
defense of the claim and its settlement. The Buyer Indemnified Parties
shall cooperate with Seller and may, at their option and expense, be
represented in any such action or
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proceeding. Seller shall not be liable for any litigation costs or expenses
incurred by the Buyer Indemnified Parties without Seller's prior written
authorization. In addition, Seller shall not be responsible for the
indemnification of any Buyer Indemnified Party arising from any negligent
or intentional acts by such party.
SECTION 9.2 GOVERNING LAW. This Agreement shall be construed and the
respective rights of the Parties hereto determined according to the substantive
laws of the State of California notwithstanding the provisions governing
conflict of laws under such California law to the contrary, except matters of
intellectual property law which shall be determined in accordance with the
national intellectual property laws relevant to the intellectual property in
question.
SECTION 9.3 ASSIGNMENT. Neither Seller, on one hand, nor Buyer, on the
other hand, may assign this Agreement in whole or in part without the consent of
the other, except if such assignment occurs in connection with the sale or
transfer of all or substantially all of the business and assets of Seller, on
the one hand, or Buyer, on the other, to which the subject matter of this
Agreement pertains. Notwithstanding the foregoing, any Party may assign its
rights (but not its obligations) pursuant to this Agreement in whole or in part
to an Affiliate of such Party.
SECTION 9.4 AMENDMENTS. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof, and supersedes
all previous arrangement with respect to the subject matter hereof, whether
written or oral. Any amendment or modification to this Agreement shall be made
in writing signed by both Parties.
SECTION 9.5 NOTICES.
Notices to Buyer shall be addressed to:
Sequenom, Inc.
11555 Sorrento Valley Rd
San Diego, CA 91212-1331
Attention: Chief Executive Officer
Facsimile No.: (619) 350-0344
Notices to Seller shall be addressed to:
Tactical Fabs, Inc.
51 Whitney Place
Freemont, CA 94539
Attention: Chief Executive Officer
Facsimile No.: (510) 770-8879
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Any Party may change its address by giving notice to the other Parties in
the manner herein provided. Any notice required or provided for by the
terms of this Agreement shall be in writing, and shall be (a) sent by
registered or certified mail, return receipt requested, postage prepaid,
(b) sent via a reputable overnight courier service, or (c) sent by
facsimile transmission, in each case properly addressed in accordance with
the paragraph above. The effective date of notice shall be the actual date
of receipt by the Party receiving the same.
SECTION 9.6 FORCE MAJEURE. No failure or omission by the Parties hereto in
the performance of any obligation of this Agreement shall be deemed a breach of
this Agreement or create any liability if the same shall arise from any cause or
causes beyond the control of the Parties, including, but not limited to, the
following: acts of God; acts or omissions of any government; any miles,
regulations or orders issued by any governmental authority or by any officer,
department, agency or instrumentality thereof; fire; storm; flood; earthquake;
accident; war; rebellion; insurrection; riot; and invasion and provided that
such failure or omission resulting from one of the above causes is cured as soon
as is practicable after the occurrence of one or more of the above-mentioned
causes.
SECTION 9.7 PUBLIC ANNOUNCEMENTS. Any announcements or similar publicity
with respect to the execution of this Agreement shall be agreed upon among the
Parties in advance of such announcement. All Parties understand that this
Agreement is likely to be of significant interest to investors, analysts and
others, and that any of the Parties therefore may make such public announcements
with respect thereto. The Parties agree that any such announcement will not
contain confidential business or technical information and, if disclosure of
confidential business or technical information is required by law or regulation,
will make reasonable efforts to minimize such disclosure and obtain confidential
treatment for any such information which is disclosed to a governmental agency
or group. Each Party agrees to provide to the other Parties a copy of any
public announcement as soon as reasonably practicable under the circumstances
prior to its scheduled release. Except under extraordinary circumstances, each
Party shall provide the other with an advance copy of any press release at least
five (5) business days prior to the scheduled disclosure. Each Party shall have
the right to expeditiously review and recommend changes to any announcement
regarding this Agreement or the subject matter of this Agreement. Except as
otherwise required by law, the Party whose press release has been reviewed shall
remove any information the reviewing Party reasonably deems to be inappropriate
for disclosure.
SECTION 9.8 INDEPENDENT CONTRACTORS. It is understood and agreed that the
relationship between the Parties hereunder is that of independent contractors
and that nothing in this Agreement shall be construed as authorization for
either Seller, on the one hand, or Buyer, or the other hand, to act as agent for
the other.
SECTION 9.9 NO STRICT CONSTRUCTION. This Agreement has been prepared jointly
and shall not be strictly construed against any Party.
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SECTION 9.10 HEADINGS. The captions or headings of the sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
SECTION 9.11 NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the part
of Seller, on the one hand, or Buyer on the other hand, to exercise, and no
delay in exercising, any right, power, remedy or privilege under this Agreement,
or provided by statute or at law or in equity or otherwise, shall impair,
prejudice or constitute a waiver of any such right, power, remedy or privilege
or be construed as a waiver of any breach of this Agreement or as an
acquiescence therein, nor shall any single or partial exercise of any such
right, power, remedy or privilege preclude any other or further exercise thereof
or the exercise of any other right, power, remedy or privilege.
SECTION 9.12 SEVERABILITY. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the
fullest extent permitted by law, (a) all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the Parties as nearly as may be possible
and (b) such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, Seller and Buyer
hereby waive any provision of law that would render any provision hereof
prohibited or unenforceable in any respect.
SECTION 9.13 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, taken together,
shall constitute one and the same instrument.
SECTION 9.14 THIRD PARTY BENEFICIARIES. No person or entity other than Buyer,
Seller and their respective Affiliates and permitted assignees hereunder shall
be deemed an intended beneficiary hereunder or have any right to enforce any
obligation of this Agreement.
Article 10. INTELLECTUAL PROPERTY
SECTION 10.1 INTELLECTUAL PROPERTY. Seller represents and warrants to Buyer
that as of the Execution Date:
(i) it is not aware of any claim made against it asserting the invalidity,
misuse, unregistrability, unenforceability or non-infringement of any
of its intellectual property which is the subject of this Agreement
(the "Intellectual Property") or challenging its right to use or
ownership of any of the Intellectual Property or making any adverse
claim of ownership thereof;
(ii) it is not aware of any pending, or threatened claim or litigation
which alleges that Seller's activities to date relating to the
Intellectual Property have violated, or by conducting its business as
currently proposed to be conducted hereunder would violate, the
intellectual property rights of any other person;
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(iii) to the best of Seller's knowledge, there has been no infringement or
misappropriation by a third party of any of the Intellectual
Property;
(iv) to Seller's knowledge, its activities to date have not infringed or,
by conducting its business as proposed to be conducted hereunder
would not infringe, any of the intellectual property rights of any
other person.; and
(v) all Seller Process Technology Patent Rights or Seller Product
Technology Patent Rights are owned by Seller or, to Seller's
knowledge, are validly licensed to Seller, provided, however, that in
no event shall this subsection (v) be interpreted as a representation
or warranty that the Seller Process Technology or Seller Product
Technology does not infringe or misappropriate intellectual property
rights of any third party.
SECTION 10.2 PATENT AND PRODUCT RIGHTS. Title to inventions, developments or
discoveries arising from co-operation conducted under the Supply Agreement shall
be determined in accordance with United States Patent Law, Title 35 United
States Code.
A. Buyer Inventions - All rights to inventions or discoveries made solely by
Buyer shall belong to Buyer and shall be disposed of in accordance with
Buyer policy.
B. Seller Inventions - All rights to inventions or discoveries made solely by
Seller shall belong to the Seller and shall be disposed of in accordance
with Seller policy.
C. Joint Inventions - All rights to inventions or discoveries made jointly by
Seller and Buyer shall be jointly-owned.
To the extent that the Seller has the legal right to do so, the Seller shall
offer to the Buyer, in accordance with the provisions of the following
paragraph, a time-limited first right to negotiate a commercial, royalty-bearing
license, to make, use, and sell any Seller or Joint Invention conceived and
first actually reduced to practice in the performance of research under this
Supply Agreement and having an application in *** for the term of any patent
thereon.
The Seller shall disclose to the Buyer any inventions, process technologies and
product technologies arising under this Supply Agreement. The Buyer shall hold
such disclosure on a confidential basis and will not disclose the information to
any third party without consent of the Seller.
Article 11. EXTENSION OF INITIAL TERM
The Parties acknowledge that they may find it to be mutually beneficial to
continue the relationship established by this Agreement after the termination of
the Initial Term.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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Consequently, the Parties hereby agree to negotiate in good faith, prior to six
(6) months before the expiration of the Initial Term, whether or not to extend
the Initial Term an terms and conditions that are mutually acceptable to the
Parties.
Article 12. APPROVAL/SIGNATURES
This Agreement shall inure to the benefit of and shall be binding upon the
parties hereto, and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above
written.
Sequenom, Inc. Tactical Fabs, Inc.
By /s/ Hubert Koster By /s/ Gerald G. Henderson
------------------------------ ---------------------------------
Name (Print) Hubert Koster, PhD. Name (Print) Gerald G. Henderson
--------------------- -----------------------
Title President & CEO Title President
---------------------------- ------------------------------
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Exhibit I Product Specification
See attached
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DIAGRAM
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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EXHIBIT II PRODUCT PRICING:
Production cost for the "D" Chip in quantities at die level.
QTY *** QTY *** QTY ***
*** *** ***
Wafers and process to be purchased in *** Shipping will be pre-paid and added.
Payment terms are Net 30 days.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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EXHIBIT 10.33
OEM SUPPLY & LICENSE AGREEMENT
This Agreement made this 15th day of June, 1999 ("Effective Date") is by and
between PerSeptive Biosystems, Inc., a Division of the PE Biosystems Business of
PE Corporation ("PerSeptive"), a Delaware corporation with a place of business
at 500 Old Connecticut Path, Framingham, MA 01701 and Sequenom, Inc.
("Sequenom"), a Delaware corporation with a place of business at 11555 Sorrento
Valley Road, San Diego, CA 92121.
RECITALS
PerSeptive has expertise in the development and manufacture of mass
spectrometry instrument workstations (the "Mass Spec Products"), and desires to
manufacture and sell to Sequenom Mass Spec Products.
Sequenom is desirous of purchasing certain Mass Spec Products from
PerSeptive for incorporation into system products to be sold by Sequenom, and in
connection with such sale to obtain from PerSeptive rights to market and resell
PerSeptive's Mass Spec Products to Sequenom's Customers.
PerSeptive is willing to supply Mass Spec Products to Sequenom and to grant
Sequenom rights to resell such products as part of its system product offering,
all in accordance with the terms and conditions set forth in this Agreement.
Based on the foregoing recitals and in consideration of the mutual
covenants and promises herein contained, the parties agree as follows:
1. DEFINITIONS For purposes of this Agreement and all Exhibits attached
-----------
hereto, the following terms shall have the meaning set forth below:
1.1 "Affiliate" means with respect to either Party a person or entity,
including without limiting the generality of the foregoing, corporations,
partnerships and joint ventures, that directly or indirectly through one or
more intermediaries, controls, is controlled by or is under common control
with such person or entity. "Control" (and, with correlative meanings, the
term "controlled by" and "under common control with") means the possession
of the power to direct or cause the direction of the management and
policies of such person or entity, whether through the ownership of voting
stock, by contract or otherwise. In the case of a corporation, "control"
shall mean, among other things, the direct or indirect ownership of fifty
percent (50%) or more of its outstanding voting stock.
1.2 "Agreement" means this OEM Agreement, as amended from time to time.
1.3 "Agreement Year" means any twelve month period during the term of this
Agreement commencing on the Effective Date or any anniversary date thereof.
1.4 "Backorders" has the meaning set forth in Section 5. 1.
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1.5 "Confidential Information" means all materials, know-how or other
information, including, without limitation, proprietary information and
materials (whether or not patentable) regarding a Party's technology,
products, business information or objectives, which is designated as
confidential in writing by the disclosing Party, whether by letter or by
the use of an appropriate stamp or legend, prior to or at the time any such
material, trade secret or other information is disclosed by the disclosing
Party to the other Party. Notwithstanding the foregoing to the contrary,
materials, know-how or other information which is orally, electronically or
visually disclosed by a Party, or is disclosed in writing without an
appropriate letter, stamp or legend, shall constitute Confidential
Information of a Party (a) if the disclosing Party, within thirty (30) days
after such disclosure, delivers to the other Party a written document or
documents describing the materials, know-how or other information and
referencing the place and date of such oral, visual, electronic or written
disclosure and the names of the persons to whom such disclosure was made,
or (b) such information is of the type that is customarily considered to be
confidential information by persons engaged in activities that are
substantially similar to the activities being engaged in by the Parties
hereunder. Notwithstanding the foregoing, any technical or financial
information of a Party disclosed by PerSeptive to Sequenom or visa versa or
disclosed through an audit or sales report shall constitute Confidential
Information of a Party unless otherwise specified.
1.6 "Customer" means the end-user customer who purchases a Sequenom system
that includes Product(s).
1.7 "Cutoff period" has the meaning set forth in Section 4.3.
1.8 "Delivery Date" means the date on which delivery of Product(s) is
properly requested in a Purchase Order and accepted by PerSeptive.
1.9 "Discount Recapture" has the meaning set forth in Section 3.3.
1.10 "Intellectual Property Rights" has the meaning set forth in Section
4.11.
1.11 "Invoice" means a PerSeptive in voice issued to Sequenom in
accordance with the terms of this Agreement.
1.12 "Party" means Sequenom or PerSeptive; "Parties" means Sequenom and
PerSeptive. As used in this Agreement, references to "third parties" means
persons or entities other than a Party or its Affiliates.
1.13 "Products" means the current, specific Mass Spec Products identified
by PerSeptive's part numbers listed on Exhibit 2.1 attached hereto, a
general description of which is set forth opposite each such part number,
including the licenses required for the operation of the Products as
outlined in Section 13. Products shall also include any such products as
changed or modified by PerSeptive in a manner that does not substantially
alter the form, fit or function of any such product.
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1.14 "Projected Quantity" has the meaning set forth in Section 3.2.
1.15 "Purchase Order" means a Sequenom purchase order issued to PerSeptive
in accordance with the terms of this Agreement.
1.16 "Release date" has the meaning set forth in Section 4.3.
1.17 "Specifications" means information specifying the technical and
performance criteria for Products that is published in PerSeptive's
Standard Operating Procedure (SOP) documents in effect on the date Products
are shipped in response to a Purchase Order. Upon request, PerSeptive will
provide such documents to Sequenom under the confidentiality provisions of
Section 15.
1.18 "Trademarks" means PerSeptive's trademarks, logos, trade dress, etc.
which are affixed either to the Products or on the packages/containers in
which such Products are shipped, or which are included in written materials
relating to or mentioning the Products.
2. PRICE
-----
2.1 Exhibit 2.1 attached hereto sets forth the current published retail
prices ("List Price") for the Products and related installation and support
services and license fees, and the net sales price payable by Sequenom.
PerSeptive agrees to provide Products and services to Sequenom at prices
which reflect a discount ***
*** from List Price as more fully set forth in Exhibit 2.1.
PerSeptive shall provide Sequenom with at least ninety (90) days notice
of any pricing changes that may occur from time to time during the term of
this Agreement. Sequenom shall pay to PerSeptive for each Product ordered
pursuant to this Agreement an amount equal to the retail list price of such
Product, as set forth on the Exhibit 2.1 in effect at the time the order is
received by PerSeptive, less the discount applicable to such Product set
forth on Exhibit 2. 1.
2.2 Prices given in Exhibit 2.1 are exclusive of, and Sequenom shall be
responsible for the payment of, shipping charges (including freight and
insurance customs fees, installation, field service maintenance and support
(unless field service occurs within the warranty period), extended
warranty, as well as any applicable sales, use, service, value added and
similar taxes.
3. DISCOUNTS
---------
3.1 To qualify for the discounts set forth in Exhibit 2.1, Sequenom agrees
to purchase *** Products having ***
*** (a "System Product") over the three-year term of this
Agreement.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
3
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3.2 Subject to the provisions of Section 4, on the Effective Date and on
or before three (3) months prior to the end of an Agreement Year, Sequenom
will issue a Purchase Order for the number of System Products that Sequenom
intends to purchase in the coming year. For each Agreement Year, the
projected quantity of System Products to be purchased by Sequenom
("Projected Quantity") is as follows:
Year 1 *** Products
Year 2 *** Products
Year 3 *** Products
3.3 To maintain the discount from list price of the Products as set forth
in Exhibit 2.1, Sequenom must order for delivery in any Agreement Year no
less than *** *** of the Projected Quantity
("Required Purchases"). If in any Agreement Year Sequenom does not meet its
quota of Required Purchases, the discount provided Sequenom shall be reduced
*** *** *** Such reduction in discount shall remain in effect until such
time as Sequenom shall have ordered in accordance with the terms of this
Agreement and released for delivery a sufficient quantity of System Products
to make up the prior year(s) deficiency(ies) and satisfy the current year's
pro rata Required Purchases.
3.4 Notwithstanding the provisions of Section 3.3, and subject to the last
sentence of this Section 3.4, all Invoices issued with respect to orders
for delivery placed by Sequenom under this Agreement shall reflect the
applicable discount set forth in Exhibit 2. 1. However, the dollar amount
equal to the Discount Recapture, if any, will be calculated by PerSeptive,
and notice thereof provided to Sequenom, within forty five (45) days after
the end of each Agreement Year, with any such amount being carried forward
from year to year during the term of this Agreement. At the end of the
second Agreement Year, PerSeptive will invoice Sequenom for any Discount
Recapture due, and Sequenom agrees to pay such invoice within thirty (30)
days of its issuance. If by the end of the second Agreement Year Sequenom
has ordered and released for delivery less than *** System Products,
PerSeptive may in its sole discretion discontinue or modify the discounts
set forth in Exhibit 2.1 on all future orders placed by Sequenom during the
term of this Agreement.
3.5 Notwithstanding any provision to the contrary as may be contained
herein, if at the end of the third Agreement Year Sequenom shall not have
ordered and released for delivery *** System Products, it shall be
obligated to purchase from PerSeptive within the next ninety (90) days that
number of System Products equal to the difference between the number of
System Products actually ordered by Sequenom and *** at a fully discounted
price equal to the discounted price set forth in Exhibit 2.1
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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4. ORDERS
------
4.1 Orders for the purchase of Products hereunder shall be submitted to
PerSeptive on a Purchase Order and shall specifically reference this
Agreement. All orders are subject to acceptance by PerSeptive, which shall
not be unreasonably withheld. All terms and conditions of sale of Products
are set forth in this Agreement. In the event of a conflict between the
terms and conditions of this Agreement and the terms and conditions on a
Purchase Order or Invoice, the terms and conditions of this Agreement shall
prevail except for terms of a Purchase Order specifically designated by
PerSeptive as terms that supercede the inconsistent terms in this
Agreement.
4.2 Upon acceptance of a Purchase Order, PerSeptive shall use commercially
reasonable efforts to manufacture the Products in accordance with the
Specifications and to ship such Products in accordance with the delivery
requirements and Delivery Dates set forth in Section 6.
4.3 Purchase Orders will include the quantities and types of Products to
be purchased by Sequenom during the coming year together with an estimated
schedule of when such Products are to be released for delivery ("release
date"). Except for Products scheduled to be released within a rolling
three (3) month period from any calendar date (the "cutoff period"),
Sequenom may adjust the quantity, type and release date of the Products
listed on the Purchase Order at its discretion. The quantity and type of
Products scheduled to be released within the cutoff period can not be
altered.
4.4 PerSeptive's supply obligation hereunder will not extend to more that
*** *** of Sequenom's Projected Quantity of Products for the year in
question. If Sequenom's Product requirements for any quarter exceeds *** of
Sequenom's Projected Quantity of Products, PerSeptive and Sequenom will
discuss in good faith the additional amount, if any, that PerSeptive is
willing to supply consistent with its other obligations and Sequenom will
adjust its order accordingly. Sequenom shall reimburse PerSeptive promptly
upon request for all reasonable out of pocket costs and expenses, including
the cost of carrying increased inventory, to the extent caused by any
deviation in order quantities from the limits imposed by the preceding
sentence, and PerSeptive will act reasonably to mitigate any such costs and
expenses.
4.5 PerSeptive agrees to use its commercially reasonable efforts to
provide Sequenom with notice ninety (90) days in advance of (i) any changes
to the Products listed in Exhibit 2.1 that alter the form, fit or function
of the Product or (ii) the discontinuance of any Product. PerSeptive
reserves the right in its sole and absolute discretion to modify the form,
fit or function of any Product, or to otherwise modify any Product, and to
discontinue the manufacture of any Product except for Products which have
been discontinued PerSeptive shall remain obligated to fill orders as have
been placed by Sequenom that are subject to accepted Purchase Orders.
Sequenom reserves the right to terminate this contract with no penalty with
sixty (60) day written notice should the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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Products change significantly thereby rendering the Products incompatible
with Sequenom's products or should the change adversely effect Sequenom's
ability to sell its products. Notwithstanding any such termination, Sequenom
shall remain obligated to purchase all Products subject to Purchase Orders
issued by Sequenom.
4.6 Sequenom hereby grants to PerSeptive and PerSeptive reserves a
purchase money security interest in each Product purchased hereunder, and
in any proceeds thereof, for all amounts owing to PerSeptive for or related
to the product. Upon request by PerSeptive, Sequenom shall sign any
document required for PerSeptive to perfect such security interest.
Payment in full of the purchase price of any Product purchased hereunder
shall release the security interest on that Product.
4.7 PerSeptive shall ship in accordance with PerSeptive's standard
practices. Sequenom may specify different shipping instructions, subject
to agreement by PerSeptive, provided that Sequenom will be subject to an
additional charge if the alternate method increases the cost of shipping
equal to the increased cost.
4.8 Unless otherwise agreed to in writing by PerSeptive, all Products
shall be packed, if appropriate, for shipment and storage in accordance
with PerSeptive's standard practices. All packing shall conform to
requirements of carrier's tariffs.
4.9 All Products are subject to PerSeptive's standard tolerances for
specifications. PerSeptive reserves the right to make substitutions and
modifications in the Specification of any Product, provided that such
substitutions or modifications do not materially affect the performance of
the Products.
4.10 All patents, copyrights, trade secrets and other intellectual
property rights (collectively, "Intellectual Property Rights") in or
related to the Products sold hereunder are and will remain the exclusive
property of PerSeptive or its licensors. Sequenom shall not hereby acquire
any Intellectual Property Rights in the Products except as expressly set
forth in this Agreement.
4.11 PerSeptive does not warrant the validity or enforceability of any
Intellectual Property Rights relating to any Products. PerSeptive warrants
and represents, however, that at the time of the sale it is not aware of
any infringement of any patents or patent applications or other
Intellectual Property Rights owned by third parties which would prevent
Sequenom from using or selling the Products.
4.12 PerSeptive shall have the sole and exclusive right to evaluate any
suit, claim or proceeding brought against Sequenom alleging that a Product
purchased by Sequenom from PerSeptive and sold hereunder infringes any
Intellectual Property Rights of others and to take any and all legal action
PerSeptive shall deem appropriate with respect thereto. PerSeptive will
pay any cost of damages finally awarded against Sequenom in any such
action. Sequenom shall have the right to participate and be represented in
any such suit by its own counsel at its own expense, but Sequenom shall not
agree to, and PerSeptive shall have no liability for, any settlement,
compromise or dismissal of such
6
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suit, or costs incurred in connection therewith, without PerSeptive's
consent. Should the use of any Products by Sequenom be enjoined, or if
PerSeptive believes that the use of the Products may infringe the
Intellectual Property Rights of others, PerSeptive may, at its option,
require Sequenom to discontinue the use of the allegedly infringing Product
and shall either (i) substitute an equivalent non-infringing Product, (ii)
modify the Product so that it no longer infringes but remains equivalent,
(iii) obtain for Sequenom, at PerSeptive's own expense, the right to
continue use of such Product, or (iv) refund the purchase price for such
Product. At PerSeptive's request, Sequenom shall promptly return the Product
to PerSeptive, at PerSeptive's expense. The foregoing states the entire
liability of PerSeptive for Intellectual Property Right infringement.
5. BACKORDERS
----------
5.1 Backorders are defined as orders for System Products (excluding any
piece, spare or similar component parts) that have not been fully received
at the designated delivery point within the guaranteed order lead-time,
subject to Section 6.1 below.
5.2 Backorders must show an approximate shipping date and indicate the
reason for such backorder.
5.3 PerSeptive is required to provide any backorders without any extra
service or delivery charges.
5.4 It is the responsibility of PerSeptive to manage backorders and
provide Sequenom, at no additional cost, with the required Products
designated in a Purchase Order and to ensure their timely delivery.
(i) In case of default, and after notifying PerSeptive, Sequenom may
obtain the equivalent Products from other suppliers.
(ii) PerSeptive will be responsible, for the cost difference between
the Products and the Products from other suppliers.
5.5 PerSeptive will be in default if the Products are backordered for more
than ten (10) working days, or if Sequenom feels that the approximate
shipping date provided by PerSeptive for the backordered Product(s)
jeopardizes Sequenom's commercial operations and the operation of its
Customers.
6. DELIVERY
--------
6.1 PerSeptive shall use commercially reasonable efforts to deliver
Products to Sequenom on or within five (5) business days after the Delivery
Dates set forth in Purchase Orders accepted by PerSeptive. Unless
PerSeptive otherwise agrees, all Delivery Dates shall be ninety (90) days
or more from the date the Purchase Order is delivered to PerSeptive.
7
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6.2 In the event circumstances of force majeure as defined in Section 19.1
exist which would prevent or delay delivery of Products by PerSeptive,
PerSeptive shall have the right to apportion Products available for
delivery among its various customers.
7. SHIPMENT AND RISK OF LOSS
-------------------------
7.1 All Products delivered pursuant to the terms of this Agreement shall
be F.O.B. PerSeptive manufacturing Plant, freight and insurance prepaid and
added to the invoice, to Sequenom's address or other place of delivery as
designated time to time by Sequenom, provided, however, that if delivery is
requested to a site other than Sequenom's address set forth in Section 18,
Sequenom shall be responsible to qualify delivery to such other site by
specifying in sufficient detail to PerSeptive all of the necessary shipping
and installation requirements for such site. Sequenom shall indemnify and
hold PerSeptive harmless, including the reimbursement of all reasonable
expenses incurred by PerSeptive, as a result of Sequenom's failure to
properly qualify delivery. Sequenom shall use its best efforts to assist
PerSeptive in arranging any desired insurance (in amounts that Sequenom
shall determine) and transportation, via airfreight unless otherwise
specified in writing, to any destinations specified in writing from time to
time. All customs, duties, costs, taxes, insurance premiums, and other
expenses relating to such transportation and delivery shall be at
Sequenom's expense.
7.2 Title, with the exception of certain technology that is licensed to
Sequenom as provided in this Agreement, and risk of loss with respect to
all Products shall pass from PerSeptive to Sequenom upon transfer to the
carrier.
8. INSTALLATION AND ACCEPTANCE
---------------------------
8.1 Installation of Products by PerSeptive may be purchased by Sequenom at
the time of issuance of a Purchase Order by including a statement that
installation by PerSeptive of the designated Product is requested, or at
any other time. If a Purchase Order with installation by PerSeptive
included is accepted by PerSeptive, PerSeptive shall install the Product,
in accordance with PerSeptive's then standard installation practice, at the
Customer location or Sequenom's location, as designated on the Purchase
Order or as otherwise agreed. The cost of installation for the Product in
question will be included on the Purchase Order and may be invoiced by
PerSeptive with the invoice for the Product, or when installation by
PerSeptive is otherwise agreed to, may be separately invoiced by
PerSeptive, at PerSeptive's discretion. PerSeptive will use commercially
reasonable efforts to schedule and complete installation in a timely
fashion. PerSeptive and Sequenom will cooperate with each other to
coordinate each other's installation efforts.
8.2 For Products installed by PerSeptive, PerSeptive shall have no
obligation to integrate the Product with any product of Sequenom, who shall
be solely responsible for system integration.
8.3 For Products installed by PerSeptive, installation shall be complete,
and acceptance by Sequenom shall occur, when the Product passes
PerSeptive's standard
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installation and test procedures in effect at the time of installation. For
Products that are not installed by PerSeptive, acceptance by Sequenom occurs
upon shipment and will be deemed to have occurred unless Sequenom
demonstrates within thirty (30) days after delivery that the Product does
not pass PerSeptive's standard installation and test procedures or satisfy
the applicable Specifications, in which case acceptance occurs when such
procedures are passed. Sequenom shall notify PerSeptive in writing of its
rejection of the Product, specifying in sufficient detail the nature of the
problem, and shall await PerSeptive's instructions with regard to
disposition of the rejected Product which shall come no less than forty
eight (48) hours after receiving the notification. PerSeptive shall use its
reasonable best efforts to either repair on-site or off site, or, at its
option, to replace the rejected Product with conforming Product. In any
event, a Product that passes PerSeptive's standard installation and test
procedures shall be at the Customer's facility as soon as commercially
feasible. PerSeptive will use its reasonable commercial efforts to provide a
Product that passes such tests no later than ten (10) working days after the
initial Product failed the installation and test procedures. If instructed
by PerSeptive, and upon receipt by Sequenom of a return authorization from
PerSeptive, Sequenom shall ship back to PerSeptive any defective Product or
any component thereof at Sequenom's cost. PerSeptive shall ship any
replacement product back to Sequenom or the Customer at PerSeptive's cost.
Refund including any freight and insurance costs incurred for authorized
returned Products, repair or replacement shall be Sequenom's remedy for any
rejection of any Product. Products may not be returned to PerSeptive under
any circumstances without PerSeptive's prior written authorization. Any
Product not repairable on-site and returned hereunder to PerSeptive may be
conformed to comply with the Specifications at PerSeptive's facilities and
thereafter used to fill a future Sequenom order.
9. TRAINING
--------
9.1 PerSeptive commits to train, tuition free, two (2) designated Sequenom
employees in the installation and routine maintenance of the Products. The
training will be conducted concurrently in a single class of two (2) weeks
duration at PerSeptive's facility as part of PerSeptive's standard training
programs and will be scheduled and executed within one hundred twenty (120)
days of the Effective Date. Sequenom may request from time to time due to
employee changes or increased customer demand, and PerSeptive shall grant,
additional training of the type set forth above. The training will be
scheduled on a mutually agreed upon basis and shall be invoiced to Sequenom
at a rate of ***
10. PAYMENT
-------
10.1 Upon or after delivery of the Product to the F.O.B. point, PerSeptive
shall submit an Invoice therefor. Sequenom agrees to pay the amount of
Invoices submitted by PerSeptive within thirty (30) days from date of
Invoice.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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10.2 If payment is not received by the due date, a service charge may be
added at the rate of 1.5 % per month (18% per year) or the maximum legal
rate, whichever is less, to unpaid invoices from the due date thereof.
Sequenom agrees to pay such service charges and agrees to reimburse
PerSeptive reasonable attorney's fees and other out of pocket expenses of
collection if PerSeptive engages counsel and/or incurs expenses to collect
overdue amounts.
10.3 In the event that Sequenom shall fail to pay any past due Invoice
within ten (10) days of receipt of notice from PerSeptive, PerSeptive may,
at any time and in its sole discretion, limit or cancel the credit of
Sequenom as to time and amount, and as a consequence, may demand full
payment or partial payment before delivery of any unfilled Purchase Order
of this Agreement, and may demand assurance of Sequenom's due performance.
Upon making such demand, PerSeptive may suspend production, shipment,
and/or deliveries. If, within the period stated in such demand, but in no
event longer than thirty (30) days, Sequenom fails to agree and comply with
such different terms of payment, and/or fails to give adequate assurance of
due performance, PerSeptive may (i) by notice to Sequenom, treat such
failure or refusal as a repudiation by Sequenom of the accepted Purchase
Orders not then fully performed, whereupon PerSeptive may cancel all
further deliveries and any amounts unpaid hereunder shall immediately
become due and payable; or (ii) make shipments under reservation of a
security interest and demand payment against tender of documents of title.
11. RESALE RESTRICTIONS
-------------------
11.1 PerSeptive hereby grants a right to Sequenom to resell the Products,
bundled with the Sequenom system as described in Section 11.2, only to
locations ***
***
***
***
*** . If a location other than those listed above is designated as the
place of installation on a Purchase Order accepted by PerSeptive, the
parties shall be deemed to have agreed on such other location.
11.2 It is the intention of the parties that this Agreement represents a
value added resale business relationship. Accordingly, Sequenom's resale
of Products shall be in conjunction with other Sequenom products,
***
***. Sequenom shall have no right to resell any Product purchased
hereunder as a stand-alone Mass Spec Product, and any attempt to do so
shall be deemed a material breach of this Agreement by Sequenom for which
there is no right of cure, notwithstanding anything contained in this
Agreement to the contrary.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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11.3 As set forth in Section 15.1, the price of Products payable by
Sequenom pursuant to this Agreement is Confidential Information of
PerSeptive, and Sequenom shall not furnish such price in any quote of any
Sequenom system that includes a Product, or quote other items separately so
that such price can be deduced, or otherwise disclose such price to any
third party.
12. WARRANTY
--------
12.1 PerSeptive warrants that the Products will conform to the
Specifications at the time of delivery and will be free from defects in
materials and workmanship for a period of six (6) months. The warranty
period begins on the date of installation if the Products are installed by
PerSeptive, but in no event later than thirty (30) days after shipment, or
otherwise on the date of delivery. The foregoing warranties do not include
periodic maintenance or calibration recommended for some Products, unless
specifically covered in the express written warranty terms, if any,
accompanying the delivery of such Products. To the extent then generally
available to PerSeptive customers, Sequenom may purchase extended support
coverage or a service contract on Products purchased pursuant to this
Agreement at PerSeptive's then applicable retail rate, less *** .
12.2 If PerSeptive receives notice of defects or nonconformance to the
Specifications during the warranty period, PerSeptive will, at its option,
repair (and recalibrate only as necessitated by repairs) or replace the
affected Products. If PerSeptive is unable, within the times designated in
Section 12.6, to repair, replace or correct a defect or non-conformance in a
Product to a condition as warranted, Sequenom will be entitled to a refund
of the purchase price upon prompt return of the Product to PerSeptive.
PerSeptive will pay expenses for shipment of both defective and repaired or
replacement Products.
12.3 The above warranties do not apply to defects resulting from improper
or inadequate maintenance or calibration by Sequenom or its Customers;
Sequenom or third party supplied hardware or software, interfacing or
supplies; unauthorized modification; improper use or operation outside of
the Specifications for the Product; abuse, negligence, accident, loss or
damage in transit; improper site preparation; or unauthorized maintenance
or repair.
12.4 Sequenom's sole remedies under PerSeptive's warranty shall be limited
to repair or replacement of the Product that failed to conform to such
warranty, or refund of the purchase price of the Product. Repair,
replacement or refund shall be at the sole discretion of PerSeptive.
12.5 THE FOREGOING WARRANTIES ARE EXCLUSIVE AND NO OTHER WARRANTY, EXPRESS
OR IMPLIED, IS GIVEN BY PERSEPTIVE, INCLUDING THOSE OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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12.6 All Product defects or suspected defects during the warranty period
will be managed by an authorized Sequenom representative (who has undergone
training as provided in Section 9) who shall place a call to PerSeptive's
designated service center followed up with the description of the Product
problem in sufficient detail as to allow PerSeptive to assess the source of
the problem. All service calls placed by Sequenom will be responded to
either by fax or by phone within two (2) business days with a proposed
remedy to the Customer's problem being determined by PerSeptive as soon as
commercially feasible after Sequenom's initial service call. PerSeptive
will use its reasonable commercial efforts to see to it that the Customer's
Product is either fully operational or that a replacement instrument is
delivered to the Customer if it is determined that an on-site repair is not
possible with the allotted time within ten (10) business days of the
initial service call. Any Product not repairable on-site and returned
hereunder to PerSeptive may be conformed to comply with the Specifications
at PerSeptive's facilities and thereafter used to fill a future Sequenom
order.
13. LICENSE RIGHTS
--------------
13.1 The Products purchased pursuant to this Agreement are described and
claimed in one or more of the following U.S. Patents:
*** , as well as in corresponding foreign patents and
patent applications *** . The price of each Product includes
a prepaid royalty of *** of its list price, and in consideration for such
royalty. PerSeptive hereby grants to Sequenom a non-exclusive license solely
to use and sell land not to make or have made) the Products with Delayed
Extraction (TM) technology claimed in the DE Patents and to extend such
license solely to those Customers of Sequenom who purchase such Product as
part of a Sequenom system. Any such sublicense extended to its Customers by
Sequenom as provided herein must incorporate the terms of the license
provided in this Section 13.1 in a written sublicense agreement acceptable
to PerSeptive in form and substance, which will be made available to
PerSeptive upon request. No other license is granted to Sequenom either
directly or by implication, estoppel or otherwise by PerSeptive under this
Section 13. 1.
13.2 PerSeptive represents that it is the exclusive licensee, with the
right to sublicense, of U.S. Patent Nos. 5,288,644; 5,453,247; and
5,643,798, and the nonexclusive licensee, with right to sublicense, subject
to certain rights of the licensor to recapture exclusive rights, of U.S.
Patent No. 5,045,694 (collectively, the "DNA Patents"). PerSeptive grants
a non-exclusive sublicense to Sequenom, upon the purchase of the Product,
to all patent rights (except for rights of manufacture either directly or
indirectly) in the DNA Patents, thereby providing Sequenom the freedom to
use, sell and conduct DNA Sequencing and related methods using the Product,
under the DNA Patents, and to sublicense such rights solely to those
Customers of Sequenom who purchase such Product as part of a Sequenom
system. The price of each Product includes a prepaid license fee of ***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
12
<PAGE>
per product. Any sublicense extended to its Customers by Sequenom as
provided herein must incorporate the terms of the license provided in this
Section 13.2 in a written sublicense agreement acceptable to PerSeptive in
form and substance, which will be made available to PerSeptive upon
request. No other license is granted to Sequenom either directly or by
implication, estoppel or otherwise by PerSeptive under this Section 13.2.
13.3 PerSeptive hereby grants to Sequenom a limited license to use and
modify the Delayed Extraction technology and the DNA Patents only to the
extent necessary and solely for the purposes of internal use, testing and
marketing.
14. TRADEMARKS; PROMOTIONAL MATERIALS
---------------------------------
14.1 PerSeptive hereby grants Sequenom a non-transferable,
nonsublicensable, nonexclusive license to use the Trademarks, without
modification unless approved by PerSeptive as set forth in Section 14.2,
solely in connection with Sequenom with Sequenom marketing, and
distribution of the Products and Sequenom system. Sequenom may place its
own trademarks and brand identification on the Products it purchases
hereunder provided that (i) Sequenom's trademarks and identification are
displayed in a size no greater than of those of PerSeptive and (ii)
Sequenom's trademarks and identification are placed on the Products in a
manner that is not likely to cause confusion with PerSeptive's trademarks
and brand identification.
14.2 Within thirty (30) days of the Effective Date, Sequenom will submit
for approval by PerSeptive, which shall not be unreasonably withheld, a
design layout showing the use of Sequenom's trademarks and brand
identification on the Products. Any subsequent changes to such layout will
similarly require PerSeptive's approval.
14.3 All advertisements and other promotional materials and other
descriptions of systems that include Products published by Sequenom shall
include a notation that the Products have been manufactured by PerSeptive
under agreement with Sequenom and an indication of the applicable license
rights accompanying the sale of Products as set forth in Sections 13.1 and
13.2.
15. CONFIDENTIALITY
---------------
15.1 During the term of this Agreement, all Confidential Information
exchanged or developed under this Agreement shall be kept strictly
confidential by either party and shall not be used by either party nor
disclosed by either party to any third party for any purpose except those
of this Agreement and within either party's own organization only to
employees or consultants who have undertaken a similar obligation for the
time during and after the term of their employment or consulting contract.
This obligation shall not extend to any Confidential Information that is
now or subsequently becomes part of the public domain through no breach of
this Agreement. By way of example but not by way of limitation, all
information relating to PerSeptive's sale of Products (e.g., price,
quantity, discount, delivery schedule, Product improvements, SOP documents,
operation
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manuals, schematics, design specifications, manufacturing procedures, etc.)
and Specifications shall be deemed PerSeptive's Confidential Information.
15.2 The provisions of Section 15.1 shall survive any termination of this
Agreement and continue in force for a period of five (5) years following
the effective date of any such termination.
16. LIMITATION OF LIABILITY; INDEMNIFICATION
----------------------------------------
16.1 Except solely with respect to damages for personal injury caused by
PerSeptive's negligence or willful misconduct, PerSeptive's liability
arising out of this Agreement, including without limitation on account of
any breaches or default, or from or on account of any Products sold
pursuant to this Agreement, or the use thereof, arising from whatever
cause, whether tort, breach of contract, warranty, or otherwise, excepting
solely fraud, is limited to one million dollars ($1,000,000) in the
aggregate. This Section does not limit liability for bodily injury of a
person.
16.2 NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY,
IN NO EVENT SHALL PERSEPTIVE BE LIABLE, WHETHER IN CONTRACT, TORT,
WARRANTY, OR UNDER ANY STATUTE (INCLUDING WITHOUT LIMITATION ANY TRADE
PRACTICE, UNFAIR COMPETITION OR OTHER STATUTE OF SIMILAR IMPORT) OR ON ANY
OTHER BASIS, FOR INDIRECT, PUNITIVE, MULTIPLE, INCIDENTIAL, CONSEQUENTIAL
OR SPECIAL DAMAGES SUSTAINED BY SEQUENOM OR ANY OTHER PERSON ARISING OUT OF
OR IN CONNECTION WITH ANY ASPECT OF THIS AGREEMENT OR ITS PERFORMANCE OR
ANY FAILURE IN PERFORMANCE OR BREACH, OR THE USE OR PERFORMANCE, OR
CONSEQUENCES OF USE OR PERFORMANCE, OF ANY PRODUCTS MANUFACTURED OR
FURNISHED BY PERSEPTIVE WHETHER OR NOT FORESEEABLE AND WHETHER OR NOT
PERSEPTIVE IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGE, INCLUDING, WITHOUT
LIMITATION, DAMAGES ARISING FROM OR RELATED TO LOSS OF USE, LOSS OF DATA,
FAILURE OR INTERRUPTION IN THE OPERATION OF ANY EQUIPMENT OR SOFTWARE,
DELAY IN REPAIR OR REPLACEMENT, OR FOR LOSS OF REVENUE OR PROFITS, LOSS OF
GOODWILL, OR LOSS OF BUSINESS UNLESS EXPLICITLY PROVIDED FOR HEREIN.
16.3 Sequenom agree to defend PerSeptive and its Affiliates at its cost
and expense, and will indemnify and hold PerSeptive, its Affiliates and
their respective directors, officers, employees and agents (the "PerSeptive
Indemnified Parties") harmless from and against any liabilities, losses,
costs, damages, fees or expenses (including reasonable attorney's fees)
arising out of any claim relating to (i) any breach by Sequenom of any of
its representations, warranties or obligations pursuant to this Agreement
or (ii) personal injury or property damage from the use, sale or other
disposition of any Product or service offered by Sequenom and/or its
respective licensees or collaborators or (iii)
14
<PAGE>
the negligence or willful misconduct of Sequenom, except in all cases to the
extent caused by the negligence or Willful misconduct of PerSeptive.
16.4 PerSeptive agrees to defend Sequenom and its Affiliates at its cost
and expense, and will indemnify and hold Sequenom, its Affiliates and their
respective directors, officers, employees and agents (the "Sequenom
Indemnified Parties") harmless from and against any liabilities, losses,
costs, damages, fees or expenses (including reasonable attorney's fees)
arising out of any claim relating to (i) any breach by PerSeptive of any of
its representations, warranties or obligations pursuant to this Agreement
or (ii) personal injury or property damage from the negligent development
and manufacture of any Product or service offered by PerSeptive or its
licensees or collaborators or (iii) the negligence or willful misconduct of
PerSeptive, except in all cases to the extent caused by the negligence or
willful misconduct of Sequenom.
16.5 Whenever any claim shall arise for indemnification hereunder, the
party seeking indemnification (the "Indemnified Party") shall promptly
notify the party from whom indemnification is sought (the "Indemnifying
Party"). Such notice shall specify the nature of the claim and, when
known, the facts constituting the basis for, as well as the amount or an
estimate of the amount of the liability arising from, such claim. Failure
to promptly notify shall not relieve a Party from its indemnity obligations
hereunder except to the extent of prejudice caused by such failure. The
Indemnified Party shall not settle or compromise any claim by a third party
for which it is entitled to indemnification hereunder without the prior
written consent of the Indemnifying Party, which shall not be unreasonably
withheld, unless suit shall have been instituted against it and the
Indemnifying Party shall not have taken control of such suit after
notification thereof as provided in Section 16.6.
16.6 In connection with any claim giving rise to indemnity under Section
16 of this Agreement, the Indemnifying Party at its sole cost and expense
may, upon written notice to the Indemnified Party, assume the defense of
any such claim or legal proceeding if it acknowledges to the Indemnified
Party in writing its obligations to indemnify the Indemnified Party with
respect to all elements of such claim. The Indemnified Party shall be
entitled to participate in (but not control) the defense of any such
action, with its counsel and at its own expense. If the Indemnifying Party
does not assume the defense of any such claim or litigation resulting
therefrom within thirty (30) days after the date notice of such claim is
given, the Indemnified Party may defend against such claim or litigation,
without prejudice to pursue its rights of indemnity. In such event, the
Indemnified Party may defend in a manner as it may deem appropriate,
including, but not limited to, settling such claim or litigation, but only
after giving written notice of the same to the Indemnifying Party, on such
terms as the Indemnified Party may deem appropriate, and the Indemnifying
Party shall be entitled to participate in (but not control) the defense of
such action, with its counsel and at its own expense. The Parties shall
cooperate with each other in the defense of any such third party claim
pursuant to this Section 16.
15
<PAGE>
17. TERM AND TERMINATION
--------------------
17.1 The term of this Agreement shall be for the period beginning on the
Effective Date and ending three (3) years thereafter.
17.2 This Agreement shall terminate upon written notice by one Party to
the other in the event the other Party shall become insolvent, or shall ask
its creditors for a moratorium, or shall file a voluntary bankruptcy
petition, or shall suffer appointment of a temporary or permanent receiver,
trustee, or custodian, for all or a substantial part of its assets who
shall not be discharged within sixty (60) days.
17.3 Either Party may terminate this Agreement for default by the other
Party to perform any of its obligations under this Agreement by notifying
the other Party in writing of such default and allowing the other party
thirty (30) days within which to cure such default, unless the default is
the failure to pay money, in which case the defaulting party shall have
only five days to cure such default after receiving written notice of
nonpayment. If such default is not cured within thirty (30) days from
receipt of such notice of default (or five (5) days in the case of non-
payment of money owed), the non-defaulting party may terminate this
Agreement by written notice to the defaulting party.
17.4 Except to the extent expressly provided to the contrary, the
following provisions shall survive the termination of this Agreement: this
Section 17.4, Section 15, Section 16, Section 18, and Section 19. Any
rights of Seller to payments accrued through termination as well as
obligation of the parties under firm orders for purchase and delivery of
Products at the time of such termination shall remain in effect, except
that in the case of termination under Section 17.3, the terminating party
may elect whether obligations under firm orders will remain in effect and
except that PerSeptive will have no obligation to manufacture and deliver
Products that have Delivery Dates more than six (6) months after the date
of termination.
18. NOTICES
-------
18.1 All notices and requests required or authorized hereunder shall be
given in writing either by personal delivery; by registered or certified
mail, return receipt requested; or by fax or telex. Such notice shall be
deemed to have been given upon, such date that it is so personally
delivered; the date three (3) days after it is deposited in the mail; or
the date the same is received by the receiving party's fax or telex
machine, irrespective of the date appearing therein.
If to PerSeptive: If to Sequenom:
PerSeptive Biosystems, Inc. Sequenom, Inc.
500 Old Connecticut Path 11555 Sorrento Valley Road, Suite C
Framingham, MA 01701 San Diego, CA 92121-1331
16
<PAGE>
Attention: General Counsel Attention: Business Development
Tel: (508) 383-7700 Tel: (619) 350-0345
Fax: (508) 383-7468 Fax: (619) 350-0344
19. GENERAL
-------
19.1 Force Majeure
Except with respect to the payment of money, neither party shall be liable
for any failure or delay in its performance under this Agreement due to
causes, including, but not limited to, acts of God, acts of civil or
military authority, fires, epidemics, floods, earthquakes, riots, wars,
sabotage, labor shortages or disputes, and governmental actions, which are
beyond its reasonable control; provided that the delayed party: (i) gives
the other party written notice of such cause and (ii) uses its reasonable
efforts to correct such failure or delay in its performance. The delayed
party's time for performance or cure under this Paragraph 19.1 shall be
extended for a period equal to the duration of the cause.
19.2 Relationship of Parties
The parties to this Agreement are independent contractors. Neither party
nor their respective employees, consultants, contractors or agents are
agents, employees or joint ventures of the other, nor do they have any
authority to bind the other by contract or otherwise to any obligation.
Neither party will not represent to the contrary, either expressly,
implicitly, by appearance or otherwise.
19.3 Assignment
Neither PerSeptive, on one hand, nor Sequenom, on the other hand, may
assign this Agreement in whole or in part without the consent of the other,
except if such assignment occurs in connection with the sale or transfer of
all or substantially all of the business and assets of PerSeptive, on the
one hand, or Sequenom, on the other, to which the subject matter of this
Agreement pertains. Notwithstanding the foregoing, any Party may assign
its rights (but not its obligations) pursuant to this Agreement in whole or
in part to an Affiliate of such Party.
19.4 Successors in Interest
Subject to Section 19.3, the rights and liabilities of the parties hereto
will bind and inure to the benefit of their respective successors,
executors and administrators, as the case may be.
19.5 Applicable Law
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts, U.S.A, exclusive of its
conflicts of law rules. Any litigation or other dispute resolution between
the parties relating to this Agreement shall
17
<PAGE>
take place in the District of Massachusetts. The parties consent to the
personal jurisdiction of and venue in the state and federal courts within
that District.
19.6 Severability
If for any reason a court of competent jurisdiction finds any provision of
this Agreement, or portion thereof, to be unenforceable, that provision of
the Agreement shall be enforced to the maximum extent permissible so as to
effect the intent of the parties, and the remainder of this Agreement shall
continue in full force and effect.
19.7 No Waiver
Failure by either party to enforce any provision of this Agreement shall
not be deemed a waiver of future enforcement of that or any other
provision.
19.8 Counterparts
This Agreement may be executed in one or more counterparts, each of which
will be deemed an original, but all of which will constitute but one and
the same instrument.
19.9 Complete Agreement
This Agreement, including all Exhibits, constitutes the entire agreement
between the parties with respect to the subject matter hereof, and
supersedes and replaces all prior or contemporaneous understandings or
agreements, written or oral, regarding such subject matter. No amendment
to or modification of this Agreement shall be binding unless in writing and
signed by a duly authorized representative of both parties.
19.10 Third Party Beneficiaries
No third party beneficiary rights are conferred or are intended to be
conferred by this Agreement.
19.11 Headings
Headings in this Agreement are for convenience only, and shall not be used
to and shall not effect the meaning or interpretation of this Agreement.
19.12 Full Disclosure
Any representations made by the Parties in this Agreement or any Exhibit
hereto do not contain any untrue statement of a material fact or omit any
material fact necessary in order to make the statements contained therein
misleading.
18
<PAGE>
19.13 Public Announcements
Any announcements or similar publicity with respect to the execution of
this Agreement shall be agreed upon among the Parties in advance of such
announcement. All Parties understand that this Agreement is likely to be
of significant interest to investors, analysts and others, and that any of
the Parties therefore may make such public announcements with respect
thereto. The Parties agree that any such announcement will not contain
confidential business or technical information and, if disclosure of
confidential business or technical information is required by law or
regulation, will make reasonable efforts to minimize such disclosure and
obtain confidential treatment for any such information which is disclosed
to a governmental agency or group. Each Party agrees to provide to the
other Parties a copy of any public announcement as soon as reasonably
practicable under the circumstances prior to its scheduled release. Except
under extraordinary circumstances, each Party shall provide the other with
an advance copy of any press release at least five (5) business days prior
to the scheduled disclosure. Each Party shall have the right to
expeditiously review and recommend changes to any announcement regarding
this Agreement or the subject matter of this Agreement. Except as
otherwise required by law, the Party whose press release has been reviewed
shall remove any information the reviewing Party reasonably deems to be
inappropriate for disclosure.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first indicated above.
PerSeptive Biosystems, Inc. Sequenom, Inc.
By: /s/ Joseph E. Malandrakis By: /s/ Hubert Koster
------------------------- -------------------------
Name: Joseph E. Malandrakis Name: Hubert Koster
Title: VP/ General Manger Title: President & CEO
Legal: A.T. Karnalirs
19
<PAGE>
EXHIBIT 2.1
Product Price and Discount Schedule
<TABLE>
<CAPTION>
Part No. Description *** *** ***
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
V888520 Voyager-DE Biospectrometry Workstation with Data ***
System*
License Fee for DNA Patents
- ----------------------------------------------------------------------------------------------------------------------
V700454 500 MHz Acquisition System* ***
- ----------------------------------------------------------------------------------------------------------------------
V999999 Negative Ion Capability ***
- ----------------------------------------------------------------------------------------------------------------------
V700388 Sample Video Monitor System ***
(US, Canada and Japan Only)
- ----------------------------------------------------------------------------------------------------------------------
V700718 Sample Video Monitor System ***
(EU and rest of world)
- ----------------------------------------------------------------------------------------------------------------------
V700715 High Current Detector for Voyager-DE
(factory installed)
- ----------------------------------------------------------------------------------------------------------------------
V888630 Voyager-DE PRO Biospectrometry Workstation with Data ***
System (US Canada and Japan only)*
License Fee for DNA Patents
- ----------------------------------------------------------------------------------------------------------------------
V899630 Voyager-DE PRO Biospectrometry Workstation with Data ***
System (EU and rest of world)*
License Fee for DNA Patents
- ----------------------------------------------------------------------------------------------------------------------
V725113 2 GHz Acquisition System* ***
- ----------------------------------------------------------------------------------------------------------------------
V700400 CID Module ***
- ----------------------------------------------------------------------------------------------------------------------
V700716 High Current Detector for Voyager-DE PRO ***
(factory installed)
- ----------------------------------------------------------------------------------------------------------------------
N/A Installation for Voyager-DE Workstation** ***
- ----------------------------------------------------------------------------------------------------------------------
N/A Installation for Voyager-DE PRO Workstation** ***
- ----------------------------------------------------------------------------------------------------------------------
N/A Field Labor Support Rate ***
- ----------------------------------------------------------------------------------------------------------------------
N/A Extended Support for Voyager-DE Workstation ***
a) BioMaintenance Plan
b) BioAssurance Plan
c) BioAssurance Plus Plan
- ----------------------------------------------------------------------------------------------------------------------
N/A Extended Support for Voyager-DE PRO Workstation *** ***
a) Maintenance Plan
b) BioAssurance Plan
c) BioAssurance Plus Plan
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Minimum Required Configuration for System Product
** Includes Travel Expenses
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
20
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
EXHIBIT 10.34
- -------------------------------
ARS CFDA NO. 10.001 Page 1
- ------------------------------------------------------------------------------------------------------------------------------------
United States Department of Agriculture TYPE OF RESEARCH AGREEMENT
EXTRAMURAL AGREEMENT Specific Cooperative Agreement
- ------------------------------------------------------------------------------------------------------------------------------------
TITLE OF PROJECT AGREEMENT NO. TYPE OF ACTION
58-5438-9-120 New
-----------------------------------------------------------------------
Development and Use of a High Speed Genotypign PERIOD OF AGREEMENT
System for Livestock 15-Jun-99 thru 01-Feb-01
- ------------------------------------------------------------------------------------------------------------------------------------
FEDERAL OBLIGATION CHANGE IN FEDERAL OBLIGATION
$436,000.00 []+ []- N/A
- ------------------------------------------------------------------------------------------------------------------------------------
AGENCY (Name and Address) CRIS NO. AUTHORITY
USDA, Agricultural Research Service 5438-31000-048-01s 7USC 3318(b)
-----------------------------------------------------------------------
Northern Plains Area OBLIGATION DISTRIBUTION
Grants and Agreements Office Accounting Code Amount
1201 Oakridge Drive, Suite 150
Fort Collins, CO 80525-5562 9015438020 $436,000.00
- ------------------------------------------------------------------------------------------------------------------------------------
ARS AUTHORIZED DEPARTMENTAL OFFICER'S DESIGNATED COOPERATOR (Name and Address)
REPRESENTATIVE (Name and Address)
Gary L. Bennett Sequenom, Inc.
USDA, Agricultural Research Service 11555 Sorrento Valley Road
U.S. Meat Animal Research Center San Diego, CA 92121-1331
Box 166
Clay Center, NE 68933
- ------------------------------------------------------------------------------------------------------------------------------------
ARS FINANCE OFFICE (Complete Mailing Address) COOPERATOR'S DESIGNATED REPRESENTATIVE (Name and Address)
USDA, Agricultural Research Service Daniel P. Little
Northern Plains Area Sequenom, Inc.
Budget and Fiscal Office 11555 Sorrento Valley Road
1201 Oakridge Drive, Suite 150 San Diego, CA 92121-1331
Fort Collins, CO 80525-5562
- ------------------------------------------------------------------------------------------------------------------------------------
APPLICABLE PROVISIONS AND REGULATIONS
This Agreement includes the following: Payment:
[X] Statement of Work; of [_] HHS/Payment Management System
[_] Project Summary; or [X] Invoice/Treasury Check (Electronic Funds Transfer)
[_] Proposal; and [_] Advance Payment Authorized
[X] Budget (Form ARS-454/455) [_] Pre-Award Costs Authorized (See Below)
[X] USDA Civil Rights Poster (Form AD-475A); and
Provisions: Reporting Requirements:
[X] General (Form ARS-452) Submit: [X] Performance Reports [X] Financial Reports
[_] Special (Form ARS-453) [_] Quarterly [_] Quarterly
Regulations: [_] Semi-annual [_] Semi-annual
[_] 7 CFR 3015.205 (by reference) [X] Annual [X] Annual
[_] 7 CFR 3016 (by reference) [X] Final [X] Final
[_] 7 CFR 3019 (by reference) [_] Annual Report of Inventions and Subcontracts
[X] 7 CFR 3015.175(b), Copyrights (by reference) To: [X] ADODR
[X] 37 CFR Part 401.14, Patents and Inventions [_] Recipient Organization
(by reference)
Appendices and Schedules:
[_] Appendix A - Application for Funding (ARS-403)
[_] Appendix B - Current and Pending Federal Financial Assistance Support (ARS-408)
[_] Appendix C - Research Assurance Statement (ARS-411)
[_] Appendix D - Civil Rights Assurance Certification (ARS-405)
[_] Appendix E - Civil Rights Questionnaire (ARS-406)
[X] Appendix F - Certification Regarding Debarment, Suspension and other
Responsibility Matters - Primary Covered Transactions (AD-1047)
[_] Appendix G - Certification Regarding Debarment, Suspension and other Responsibility Matters - Lower
Tier Covered Transactions (AD-1048)
[X] Appendix H - Certification Regarding Drug-Free Workplace Requirements - Non-individuals (AD-1049)
[_] Appendix I - Certification Regarding Drug-Free Workplace Requirements - Individuals (AD-1050)
[X] Appendix J - Certification/Disclosure Requirements Related to Lobbying (SF-LLL)
[_] Appendix K - Intellectual Property Rights (Applicable to International Agreements only)
[X] Appendix L - Report of Inventions and Subcontracts
Other (Specify):
[X] ADODR Instructions
[X] Organization Certifications (Page 2)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE UNITED STATES DEPARTMENT OF AGRICULTURE
- ------------------------------------------------------------------------------------------------------------------------------------
AUTHORIZED DEPARTMENTAL OFFICER TYPED NAME DATE
/s/ James E. Quaratino James E. Quaratino 5-14-99
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE PERFORMING ORGANIZATION
(Signature of persons authorized to incur contractual obligations)
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNATURE TYPED NAME AND TITLE DATE
/s/ Hubert Koster Hubert Koster, President/CEO May 13, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNATURE TYPED NAME AND TITLE DATE
/s/ Toni Schuh Toni Schuh, Exec. VP, Business May 13, 1999
Development
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
AGREEMENT NO.: 58-5438-9-120 Page 2 of 5
Sequenom, Inc.
San Diego, CA
(Check appropriate boxes)
[_] THE PERFORMING ORGANIZATION CERTIFIES THAT IT IS:
OR
[_] THE SPONSORING ORGANIZATION CERTIFIES THAT IT IS:
Type of Performing/Sponsoring Organization: (Check one only)
[_] USDA/RE&E Laboratory
[_] Other Federal Research Agency
[_] State Agricultural Experiment Station (SAES)
[_] Land-Grant University of 1862
[_] Land-Grant University of 1890 or Tuskegee University
[_] Private University or College
[_] Public University or College (Non Land-Grant)
[_] Private Profit-making
[_] Private Non-profit
[_] State or Local Government
[_] Veterinary School or College
[_] Cooperative Extension Service
[_] Small Business
[_] Minority Owned Business
[_] Female Owned Business
[_] Individual
[_] Other (specify)
Please provide the organization's/individual's:
Tax Identification Number (TIN) 77-0365889
-------------------------------------------------
OR
Employer Identification Number (EIN) ___________________________________________
OR
Social Security Number (SSN) ___________________________________________________
Form ARS-451, page 2 DEC. 98 USDA-ARS
<PAGE>
- --------------------------------------------------------------------------------
Page 3 of 5
Agreement No. 58-5438-9-120
Sequenom - San Diego, CA
- --------------------------------------------------------------------------------
OBJECTIVE:
The objective of this cooperative research project is to develop and implement a
high speed mass spectrophotometer based genotyping system for livestock. This
requires a system to utilize primers for single nucleotide polymorphism (SNP) in
livestock.
APPROACH:
A mass spectrophotometer based high speed genotyping system is required for use
of SNP's to genotype livestock populations. To efficiently use expressed
sequence tags (EST) sequence data in livestock and link this information with
the human genome database, we must be able to genotype SNP's in livestock
populations. Preliminary studies with the Sequenom DNA MassArray analytical
system have demonstrated this system can be used effectively to genotype SNP's
in livestock. This system will be implemented and upgraded to develop markers
for SNP's and map these markers on the ARS linkage maps.
STATEMENT OF MUTUAL INTEREST:
Both parties are actively engaged in independent research projects to identify
and implement efficient SNP genotyping systems. This project combines Sequenom's
expertise and technology relating to their DNA MassArray Basic System Plus and
ARS's expertise and technology relating to SNP marker development to develop and
implement a high speed SNP genotyping system. The parties agree that meeting the
objectives of this project will strengthen and enhance ongoing research within
the scope of this agreement.
THE COOPERATOR AGREES TO:
1. Work closely with ARS in planning and providing engineering and systems
support for conducting the research outlined below.
2. Conduct at ARS facilities and elsewhere as appropriate, engineering and
systems support research to upgrade the DNA MassArray Analytical System for use
in developing markers for SNP's..... activities include:
a. Provide for the use during this project of a DNA MassArray Basic System
Plus incorporating the following components: a High-speed Bruker/SEQUENOM Array
Mass Spectrometer; a Spectrojet Nanoliter Dispenser; a SEQUENOM BioMASS
lnformatics Workstation and use of appropriate software; Beckman Multimek
Instrument with SEQUENOM Magnetic Lifters. Provide hardware and software
upgrades to the system as they become available.
b. Provide SEQUENOM 96 D SpectroChipTM , reagents, and the magnetic beads
required in sample preparation for 200,000 elements (excluding the reagents
provided for by ARS and
<PAGE>
- --------------------------------------------------------------------------------
Page 4 of 5
Agreement No. 58-5438-9-120
Sequenom - San Diego, CA
- --------------------------------------------------------------------------------
outlined below). An element is defined as a sample pad on SEQUENOM's
SpectroChipTM (Patent US 5,605,798).
c. Assist in developing markers to run on this "system."
d. Assist in integrating DNA MassArray data with the ARS livestock database.
ARS AGREES TO:
1. Work closely with the cooperator in planning and conducting the research
outlined above.
2. Conduct research on the following aspects of the project:
a. Develop primers to amplify specific regions of DNA (Primers and PCR
reagents will be provided by ARS).
b. Identify SNP markers within the amplified fragments.
c. Synthesize probe primers that can be used with the DNA MassArray Basic
System to genotype the SNPs (reagents to be provided by ARS include primers,
neucleotides, enzymes, biotinylated primers).
d. Utilize SNP genotypic data to place the markers on the linkage map.
MUTUAL AGREEMENTS:
1. The estimated budget, Form ARS-454, is hereby incorporated into the
agreement. The awarding agency will reimburse the Cooperator for costs related
to salaries, material, supplies in the amount of $436,000, and will contribute
in-house resources in the amount of $574,900. As evidence of the Cooperator's
contribution to this project the Cooperator will provide in-house resources in
the amount of $312,187.50.
2. Payments to the Cooperator will be made quarterly via Electronic Funds
Transfer (EFT), upon submission of a properly executed invoice. See ARS-452,
Part 15 (Attached). Reimbursement for the use of the DNA MassArray Basic System
will be made after delivery of the system and evidence that ARS can produce
acceptable results; reimbursement of expenses associated with the BioMass Probe
reaction units ($150,000/100,000 elements) will be based on quantity used; and
the monthly maintenance fee will be reimbursed on a quarterly basis.
3. The use of the DNA MassArray Basic System Plus and Spectrochip (System)
will be solely used for purposes of livestock SNP analysis. The Cooperator shall
retain title and
<PAGE>
- --------------------------------------------------------------------------------
Page 5 of 5
Agreement No. 58-5438-9-120
Sequenom - San Diego, CA
- --------------------------------------------------------------------------------
ownership of these equipment items. ARS agrees to use this System only in the
ordinary course of testing and will not reproduce or modify the System or any
portion thereof. ARS agrees not to transfer the System or any part of thereof or
use it for the benefit of a third party or attempt to discover underlying
Proprietary Information. ARS agrees to take reasonable measures to maintain in
confidence Proprietary Information regarding the SEQUENOM DNA MassArray Basic
System.
4. Correspondence and documentation regarding this Agreement should cite
Agreement Number 58-5438-9-120 and copies of such correspondence and
documentation between the Cooperator and the ADODR shall be sent by the
originating party to the ADO at:
James E. Quaratino
USDA, Agricultural Research Service
Northern Plains Area
Grants and Agreements Office
1201 Oakridge Drive, Suite 150
Fort Collins, CO 80525-5562
<PAGE>
U.S. DEPARTMENT OF AGRICULTURE
AGRICULTURAL RESEARCH SERVICE
COOPERATIVE AGREEMENT BUDGET
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
COOPERATOR:
Sequenom, Inc. ARS ARS
San Diego, CA TO IN-HOUSE COOPERATOR
AGREEMENT NO. 58-5438-9-120 REIMBURSE COSTS CONTRIBUTION(S)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
A. Salaries and Wages
1. Pl(s)/PD(s)............................... $114,100.00
-------------------------------------------------------------
2. Other Professional Personnel.............. $37,500.00
-------------------------------------------------------------
3. Support Personnel......................... $70,800.00 $56,250.00
-------------------------------------------------------------
Total Wages and Salaries.................. $0.00 $184,900.00 $93,750.00
- ---------------------------------------------------------------------------------------------------------------------
B. Fringe Benefits (if charged as Direct Costs). $0.00 $23,437.50
- ---------------------------------------------------------------------------------------------------------------------
C. Total Salaries, Wages, and Fringe Benefits (A
plus B)...................................... $0.00 $8,900.00 $117,187.50
- ---------------------------------------------------------------------------------------------------------------------
D. Nonexpendable Equipment (Attach supporting data) $0.00
(List items and dollar amounts for each item)
- ---------------------------------------------------------------------------------------------------------------------
E. Materials and Supplies....................... $0.00 $90,000.00 $70,000.00
- ---------------------------------------------------------------------------------------------------------------------
F. Travel
1. Domestic (including Canada).................. $0.00
-------------------------------------------------------------
2. Foreign (List destination and amount
for each trip) $0.00
- ---------------------------------------------------------------------------------------------------------------------
G. Publication Costs/Page Charges............... $0.00
- ---------------------------------------------------------------------------------------------------------------------
H. Automated Data Processing (Computer) Costs... $0.00
- ---------------------------------------------------------------------------------------------------------------------
I. All Other Direct Costs (Attach supporting data) . $300,000.00
.... Livestock
DNA Mass Array System, 400000 $436,000.00
Maintenance fee 36000
(List items and dollar amounts for each item)
- ---------------------------------------------------------------------------------------------------------------------
J. Total Direct Costs (C through 1)............. $436,000.00 $574,900.00 $187,187.50
- ---------------------------------------------------------------------------------------------------------------------
K. Indirect Costs (Specify rate and base)........ $125,000.00
Rate ______% Base ________
- ---------------------------------------------------------------------------------------------------------------------
L. Total Costs (J plus K) ....................... $436,000.00 $574,900.00 $312,187.50
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
COMMENTS
This agreement provides for use of the DNA MassArray Basic System Plus as
defined in agreement.
NOTES:
1. A separate budget is required for each funding period.
2. Federal Statute (7 U.S.C. 3318 (b)(1 )(B) ) requires a contribution of
resources by all parties toward meeting the objectives of the Cooperative
Agreement.
3. ARS is prohibited from reimbursing State Cooperative Institutions for
indirect costs or tuition remission. Indirect costs will be reimbursed only
upon receipt of an approved Indirect Cost Rate Schedule.
4. Unrecovered indirect costs may be used to meet a portion of the resource
contribution requirement toward the cooperative effort.
5. Unallowable costs as defined in OMB Circulars, A-21, A-122, or A-87 as
applicable, cannot be considered a resource contribution.
- -------------------------------------------------------------------------------
ARS-454 (10/98)
<PAGE>
United States Department of Agriculture
General Provisions
Non-Assistance Cooperative Agreement
________________________________________________________________________________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Subject Page
------- ----
<S> <C>
1. Definitions...................................................... 1
2. Legal Authority Certification.................................... 2
3. Level of Performance............................................. 2
4. Funding Availability............................................. 2
5. Assurances....................................................... 2
6. Allowable Costs.................................................. 3
7. ADODR Responsibilities........................................... 3
8. Prior Approvals.................................................. 3
9. Project Continuance.............................................. 4
10. Reporting Requirements........................................... 4
11. Technical Supervision............................................ 5
12. Rules of the Workplace........................................... 5
13. Patents and Copyrights........................................... 5
14. Project Data..................................................... 6
15. Payments......................................................... 6
16. Debt Collection.................................................. 6
17. Acknowledgment of Support
and Disclaimer................................................... 7
18. Capital Improvement and Travel................................... 7
19. Advertising...................................................... 7
20. Title to Equipment............................................... 7
21. Equipment Management Requirements................................ 7
22. Motor Vehicle Accident Liability................................. 7
23. Liability - Other................................................ 7
24. Termination by Mutual Agreement.................................. 8
25. Suspension or Termination for Cause.............................. 8
26. Questions and Survey Plans....................................... 8
27. Retention and Access Requirements
for Records...................................................... 8
</TABLE>
___________________________________________________________________________
1. DEFINITIONS
The following terms shall have the meaning set forth below:
a. Awarding Agency - The USDA Agency making the award; Agricultural Research
Service (ARS), Economic Research Service (ERS), or the National
Agricultural Statistics Service (NASS), and for subawards, the
Cooperator.
b. Authorized Departmental Officer (ADO) - The Awarding Agency Official
authorized to enter into, administer, and terminate Non-Assistance
Cooperative Agreements.
c. Non-Assistance Cooperative Agreement - An Agreement, which is neither a
Procurement Contract nor an Assistance-Type Cooperative Agreement, that
furthers agricultural research, extension, or teaching programs in which
the objectives of the agreement serve a mutual interest of the parties
and all parties contribute resources to the accomplishment of those
objectives, hereinafter referred to as the Agreement.
d. Cooperator - The signature party or parties to this Agreement receiving
Federal funds.
e. International Cooperator - The signature party or parties to this
Agreement receiving Federal funds incorporated and or headquartered
outside the continental United States and its territories.
f. Authorized Departmental Officer's Designated Representative (ADODR) - The
Awarding Agency's technical representative, acting within the scope of
delegated authority, who is responsible for participating with the
Cooperator in the accomplishment of this Agreement's objectives and
monitoring and evaluating the Cooperator's performance.
g. Principal Investigator (PI) - The Cooperator's technical representative
who is responsible for conducting the effort of the Cooperator in the
accomplishment of this Agreement's objectives.
h. Treasury Check - A method of receiving payment by paper check from the
U.S. Treasury.
i. HHS/PMS Health and Human Services/Payment Management System - a method of
receiving payment by electronic draw down.
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j. Electronic Funds Transfer (EFT) Electronic transfer of funds to the
Cooperator's bank account.
k. OMB - Office of Management and Budget
l. CFR - Code of Federal Regulations
M. USC - United States Code
n. FAR - Federal Acquisition Regulations
2. LEGAL AUTHORITY CERTIFICATION
The Cooperator hereby certifies that it possesses legal authority to enter into
this Agreement.
3. LEVEL OF PERFORMANCE
The Cooperator will use its best efforts to provide performance under this
Agreement within the Federal obligation amount shown on page 1 of this Agreement
and will notify the ADODR when it is anticipated that performance under this
Agreement will exceed this amount. The Cooperator is not obligated to continue
performance under this Agreement, or otherwise incur costs in excess of the
Federal obligation amount, unless authorized by the ADO. Costs incurred in
excess of the Federal obligation shall not be reimbursed without approval and
written ratification by the Director, Extramural Agreements Division, ARS.
Unallowable costs will not be approved in any case.
4. FUNDING AVAILABILITY
The Awarding Agency's participation shall be subject to passage, by the Congress
of the United States, of an appropriation of funds for the fiscal year from
which expenditures may be legally made.
5. ASSURANCES
(Not applicable to Agreements awarded to International Cooperators)
The Cooperator hereby gives assurance that it will comply with the following:
a International Air Transportation Fair Competitive Practices Act of 1975,
Section 5 (49 USC 1517). Costs for foreign travel and related
transportation of property are allowable only to the extent that United
States flag air carriers are used.;
b. Nondiscrimination Requirements:
Rehabilitation Act of 1973 - Section 504; Sex Discrimination - Title IX
of the Education Amendments of 1972, as amended; Age Discrimination Act
of 1975; Civil Rights Act of 1964 - Title VI (42 U.S.C. 2000d).
The Cooperator also agrees to display form AD-475A, USDA Civil Rights
Poster entitled "And Justice for All," in common areas of its facility
where the federally assisted research is being conducted during the
performance period of the project. (Not applicable to awards with
International Cooperators).
C. Protection of Human Subjects Requirements: The Cooperator will comply
with the following provisions regarding the rights and welfare of human
subjects:
(1) The Cooperator is responsible for safeguarding the rights and
welfare of any human subjects involved in research, development,
and related activities supported by this Agreement. The Cooperator
may conduct research involving human subjects only as prescribed
An the statement of work and as approved by the Cooperator's
cognizant Institutional Review Board. Prior to conducting such
research, the Cooperator shall obtain and document a legally
sufficient informed consent from each human subject involved. No
such informed consent shall include any exculpatory language
through which the subject is made to waiver, or to appear to
waiver, any of his or her legal rights, including any release of
the Cooperator or its agents from liability for negligence.
(2) The Cooperator agrees to comply with U.S. Department of Health and
Human Services' regulations regarding human subjects, appearing in
45 CFR Part 46 (as amended).
(3) It will comply with USDA policy which is to assure that the risks
do not outweigh either potential benefits to the subjects or the
expected value of the knowledge sought.
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(4) Selection of subject or groups of subjects shall be made without
regard to sex, race, color, religion, or national origin unless
these characteristics are factors to be studied.
d. Animal Welfare Act Requirements: The Cooperator agrees that it will
comply with the Animal Welfare Act, as amended, 7 U.S.C. 2131, et seq.,
and the regulations promulgated thereunder by the Secretary of
Agriculture (9 CFR, Subchapter A) pertaining to the care, handling, and
treatment of warm-blooded animals held or used for research, teaching, or
other activities supported by Federal funds. The Cooperator may request
registration of facilities and a current listing of licensed dealers from
the Regional Office of the Animal and Plant Health Inspection Service
(APHIS), USDA, for the Region in which their facility is located. The
location of the appropriate APHIS Regional Office, as well as information
concerning this requirement, may be obtained by contacting the Senior
Staff Officer, Animal Care Staff, USDA/APHIS, 4700 River Road, Riverdale,
Maryland 20737.
e. Recombinant DNA Research Requirements: The Cooperator will assume primary
responsible for implementing proper conduct on recombinant DNA research
and it will comply with the National Institute of Health Guidelines for
Recombinant DNA Research, as revised.
If the Cooperator wishes to send or receive registered recombinant DNA
material which is subject to quarantine laws, permits to transfer this
material into the U.S. or across state lines may be obtained by
contacting USDA/APHIS/PPQ, Scientific Services-Biotechnology Permits,
4700 River Road, Unit 133, Riverdale, Maryland 20737. In the event that
the Cooperator has not established the necessary biosafety committee, a
request for guidance or assistance may be made to the USDA Recombinant
DNA Research Officer.
f. That it will assist the Awarding Agency in complying with the: National
Historic Preservation Act of 1966 Section 106, as amended, (16 U.S.C.
470, Executive Order 11593); Archaeological and Historic Preservation Act
of 1966 (16 U.S.C. 469a-1 et. seg.);
-- ---
g. The Cooperator will comply with Federal regulations regarding equal
opportunity, nonsegregated facilities and affirmative action (41 CFR,
Chapter 60); and
h. USDA regulations at 7 CFR 3017 subparts A through E and 7 CFR 3018
regarding debarment and suspension, drug-free workplace, and anti-
lobbying act requirements.
i. The Single Audit Act (Public Law 98-502), as implemented by OMB Circular
A-1 33.
6. ALLOWABLE COSTS
a. Payment up to the amount specified in this Agreement shall be made only
for allowable, allocable, reasonable, and necessary costs in accordance
with the following cost principles in effect on the date of the award:
(1) For institutions of higher education - OMB Circular No. A-21;
(2) For State, local or federally-recognized Indian tribal
governments - OMB Circular No. A-87;
(3) For nonprofit organizations - OMB Circular No. A-122;
(4) For hospitals - Appendix C of 45 CFR Part 74; or
(5) For commercial organizations and those non-profit organizations
listed in attachment C to Circular A- 122 - FAR at 48 CFR part 31.
7. ADODR RESPONSIBILITIES
The ADO has delegated ADODR responsibilities to the individual named on page 1
of this Agreement, subject to the limitations as provided for in the ADODR
Designation and Instructions, (attached and made apart hereto).
8. PRIOR APPROVALS
Written approval of the ADO is required for the following:
a. To change the PI or to continue the research, education, or information
work, without the
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participation of the PI, for a period in excess of three continuous
months.
b. A substantial reduction of the effort devoted to the work by the PI.
c. Changes to the objectives of this Agreement, or the phenomenon or
phenomena under study.
d. Federal funding increases.
e. Period of performance extension.
f. Transfer of amounts within budgeted cost categories.
g. Reimbursement of pre-award costs.
h. Purchase of equipment.
i. Operation of government owned vehicles by Cooperator employees.
j. The subaward, transfer or contracting out of any work under this
Agreement. This provision does not apply to the purchase of articles,
supplies, equipment, and services which are both necessary for and merely
incidental to the work required under the Agreement.
Generally, no requests for changes to the scope of this Cooperative Agreement
will be approved.
Unilateral amendments to this agreement may be issued by the ADO for changes
which are purely administrative in nature.
9. PROJECT CONTINUANCE
Prior to completion of the work effort, the parties will review the results and
determine the benefits of continuing the project. In the event the project is
continued, this Agreement will be amended to provide for the additional work
efforts, obligations of the parties, and performance period.
10. REPORTING REQUIREMENTS
The Cooperator is responsible for monitoring and reporting performance to the
ADO through the ADODR, as follows; (See Form ARS-451, Page 1 of this Agreement,
for the applicable reporting frequency).
Pursuant to the Metric Conversion Act of 1975 Public Law 94-168), whenever
feasible, the Cooperator shall use the metric system in expressing units of
measurement in interim and final performance reports.
All reports must be written in the English language.
a. Interim Performance Reports.
Reports are to include:
(1) A summary of progress, including a comparison of actual
accomplishments with goal(s) established for the time period being
covered and the reasons for slippage if the objectives are not
met;
(2) An outline of any problems encountered or the occurrence of
unusual or favorable developments during the period; and
(3) A brief summary of work to be accomplished during the ensuring
reporting period.
b. Final Performance Report.
Unless otherwise specified in this Agreement, the final performance
report shall be due 90 calendar days following the expiration,
completion, or termination date of this Agreement. This report is to
include appropriate identifying data and the following information:
(1) A description of all work results, conclusions, and, if any,
recommendation;
(2) Titles of thesis or dissertations resulting, if any;
(3) Names of scientific or other collaborators connected with the
project, including students (show title or status, e.g., associate
professor, graduate student);
(4) Other deliverables as given in this Agreement;
(5) Copies of copyrighted or copyrightable materials including
computer software;
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(6) A description of inventions resulting from the work and a
statement of status concerning any protections sought;
(7) A copy of any publications resulting from this Agreement; and,
(8) Signature of PI and date.
C. Significant Developments.
Events may occur between scheduled performance reporting dates which
significantly impact the overall effort. Therefore, the Cooperator shall
promptly notify the ADODR when the following conditions or situations
surface.
(1) Unanticipated delays or adverse conditions which threaten to
materially impair its ability to meet the prime objective(s) of
this Agreement. This disclosure is to include a statement of any
action taken or contemplated and any assistance needed to resolve
the problem(s); or
(2) Favorable developments which are expected to enable it to meet
established schedules or goals sooner or at less cost than
anticipated or may produce more beneficial results than originally
planned.
d. Financial Reports.
(1) Financial Status Reports
The Cooperator agrees to submit financial status reports to the ADO
through the ADODR on Standard Form (SF) 269A (short form), Financial
Status Report, and a final report within 90 days of project completion.
(2) Itemized Expense Report
(Applicable if payment is by HHS/PMS payment method):
The Cooperator will furnish a detailed addendum attached to the
(SF) 269A (short form) or (SF) 269 (long form) containing the
following minimum information or using the Cooperator's format:
. Name of Institution
. Agreement Number
. Reporting Period
. Current Quarterly Drawdown
. Current Quarterly Expenses
Details of Current Quarter's Expenses: Salary and Non-Salary
e. Where program income is anticipated, Standard Form 269 (long form) shall
be used. Program income earned during the project period shall be added
to funds committed to the project by the Federal Awarding Agency and the
Cooperator and used to further eligible project or program objectives
unless otherwise specified by the ADO.
f. Report of Inventions and Subawards.
The Cooperator agrees to submit an annual report of inventions and
subawards and a final report within 90 days of project expiration,
completion, or termination in accordance with Schedule L, (attached and
made apart hereto). Negative reports required.
11. TECHNICAL SUPERVISION
The Awarding Agency may technically supervise work of a Cooperator's employees
performed at the Awarding Agency's facilities. The Awarding Agency may not,
however intervene in the employer-employee relationship between a Cooperator and
its employees. In addition, the Awarding Agency may not act so as to hire or
otherwise engage in the personnel management of a Cooperator's employees.
12. RULES OF THE WORKPLACE
Cooperator employees, while engaged in work at the Awarding Agency's facilities,
will abide by the Awarding Agency's "Rules of the Workplace" such as
(maintenance of a laboratory notebook dissemination of information, equipment
operation standards, hours of work, conduct and other incidental matters stated
in the rules and regulations of the Awarding Agency).
13. PATENTS AND COPYRIGHTS
(Not applicable to Agreements awarded to International Cooperators. See
Appendix K - International Property Rights - attached and made apart hereto for
Agreements with International Cooperators).
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a. Patents and Inventions.
The clause found at 37 CFR Part 401.14 is incorporated into this
Agreement by reference and is applicable to all organizations regardless
of size.
Terms are defined as follows:
(1) Contractor means the Cooperator Organization as identified on the
FORM ARS-451, a part hereof.
(2) Contract means this Agreement.
b. Communications.
(1) The central point of contact within the U.S. Department of
Agriculture for communications relating to the administration of
patents and copyrights is:
Deputy Asst. General Counsel for Patents
Research and Operations Division
Office of General Counsel
U.S. Department of Agriculture
Room 2328, South Building
Washington, D.C. 20250-1400
(2) Disclosure statements are made through the Authorized Departmental
Officer to:
Patent Coordinator
National Patent Program
USDA, Agricultural Research Service
1815 N. University Street
Peoria, IL 61604
(3) Utilization statements are made to the Patent Coordinator.
d. Copyrights.
The Awarding Agency reserves a royalty-free, nonexclusive, and
irrevocable license to exercise, and to authorize others to exercise, the
rights for Federal Government purposes. Subject to this license, the
owner is free to exercise, preserve, or transfer all its rights. The
Cooperator shall ensure that no Agreement is entered into for
transferring the rights which would conflict with the nonexclusive
license of the Awarding Agency.
The Cooperator awarding a subaward is allowed to impose subaward terms
reserving a nonexclusive license for itself, similar to the one reserved
by the Awarding Agency, with respect to any copyright or rights subject
to this section that arise under the subaward.
14. PROJECT DATA
Data which were collected, compiled, and evaluated under this Agreement shall be
shared and mutually interchanged by the Cooperator and the Awarding Agency, with
the final results of this project made available to both parties.
15. PAYMENTS
Payment will be made by either the HHS/PMS method, the Invoice/Treasury Check
method or EFT. (See Form ARS-451, Page 1 of this Agreement, for the applicable
method).
All payment requests are to be submitted in the English language.
a. Applicable if payment is by Invoice/Treasury Check method or EFT:
(i) Payments by the Awarding Agency to the Cooperator will be made by
the Invoice/Treasury Check method or EFT for expenditures for each
previous period as reflected on properly executed invoices or
vouchers to be prepared by the Cooperator and submitted to the ADO
through the ADODR. A properly executed invoice shall include, at a
minimum, the following information:
. Awarding Agency agreement number
. Organization's name, payment address, and Employee
Identification Number Tax Identification Number
. Itemized listing of costs to be reimbursed
. Specific time period covered by the invoice
. Signature of Authorized Organizational Representative
(ii) Checks covering payments under this Agreement will be drawn in the
name of the Cooperator unless a written request
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from the Cooperator accompanies the billing, requesting, for
purposes of check identification, that such checks also include
the name of a particular department of the Cooperator's
organization. If further check identification is needed, the
Cooperator may:
. number the invoice and request that it be shown on the check;
. submit the invoice in duplicate and request that one copy of
the invoice be returned with the check; or,
. request that the Cooperative Agreement number cited on the
invoice be shown on the check.
b. Applicable if payment will be made through the HHS/PMS payment method:
(i) HHS/PMS is administered by the Federal Assistance Financing Branch
(FAFB), Office of the Deputy Assistant Secretary, Finance which
will forward instructions for obtaining payment. Inquiries
regarding payments should be directed to:
Chief, Financial Assistance Financing Branch
PO Box 6021
Rockville, Maryland 20852
(301) 443-1660
c. Payment by the Awarding Agency to the Cooperator is contingent upon
receipt of reports in accordance with the terms and conditions of the
agreement. Payment may be withheld until reports are provided.
d. Reimbursement to the Cooperator for tuition remission is not allowable
under this Agreement.
e. Reimbursement to State Cooperative Institutions for indirect costs is
unallowable under this Agreement.
f. Indirect costs shall be paid only upon receipt of an approved negotiated
indirect cost rate schedule, where authorized by enabling legislation. No
indirect costs shall be advanced or reimbursed unless supported by an
approved indirect cost rate schedule.
16. DEBT COLLECTION
a. Any monies that are payable or may become payable from the United States
under this Agreement to any person or legal entity not an agency or
subdivision or a State or local government may be subject to
administrative offset for the collection of delinquent debt to the person
or legal entity owner to the United States under the Federal Claims
Collection Act of 1966, as amended by the Debt Collection Act of 1982 (31
USC 3701, 3711, 3716-3719); 4 CFR Part 102 and 7 CFR Part 3.
b. Information on the person's or legal entity's responsibility for a
commercial debt or delinquent consumer debt owed the United States will
be disclosed to consumer or commercial crediting reporting agencies.
17. ACKNOWLEDGMENT OF SUPPORT AND DISCLAIMER
The following acknowledgment of Awarding Agency support must appear in the
publications of any materials which is based upon or developed under this
Agreement (whether or not copyrighted):
"This material is based upon work supported by the U.S. Department of
Agriculture, under Agreement No. (Cooperator should enter the applicable
agreement number here)."
All such materials, must also contain the following disclaimer unless the
publication is formally cleared by USDA:
"Any opinions, findings, conclusion, or recommendations expressed in this
publication are those of the author(s) and do not necessarily reflect the
view of the U.S. Department of Agriculture."
a. Public Information working order; and,
Any public information concerning work carried out under this Agreement
will describe the contributions of both parties to the work effort. In
the event of a dispute, a separate publication may be made with effective
statements of acknowledgment and disclaimer.
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b. Technical Publication.
Any technical publication developed as a result of this Agreement shall
be submitted by the developing party to the other for advice and comment.
In event of dispute, a separate publication may be made, with effective
statements of acknowledgment and disclaimer.
18. CAPITAL IMPROVEMENTS AND TRAVEL
No part of the funds made available by the Awarding Agency to the Cooperator
shall be expended for capital improvements or travel of the Awarding Agency's
employees.
19. ADVERTISING
In advertising, the Cooperator will not refer in any manner to the Federal
Government or agencies thereof in connection with the use of the results of this
research without prior specific written authorization by the ADO. Unless
otherwise provided herein, information obtained as a result of this project will
be made available to the public in printed or other forms by the awarding Agency
at its discretion. The Cooperator will be given due credit for its cooperation
in the project.
20. TITLE TO EQUIPMENT
As authorized by 7 USC 3318d, title to expendable and nonexpendable equipment,
supplies, and other tangible personal property purchased under this Agreement
shall vest in the Cooperator from date of acquisition unless otherwise stated in
this Agreement.
21. EQUIPMENT MANAGEMENT REQUIREMENTS
The Cooperator's procedures for managing equipment purchased with Awarding
Agency funds are to meet the following requirements:
a. Maintain accurate and up-to-date property records;
b. Property is to be properly maintained in good working order; and,
c. Property is to be insured.
d. Either party may furnish equipment and/or facilities, at no cost to the
other, as may be mutually agreed to between the Cooperator and the ADODR
for successful completion of this project.
22. MOTOR VEHICLE ACCIDENT LIABILITY
(Not applicable to Agreements awarded to International Cooperators).
The Awarding Agency will assume responsibility for vehicle repair if the
Awarding Agency determines that the Cooperator's employee was authorized to use
the vehicle, the vehicle was used within the scope of the authorization, and the
Cooperator's employee was not negligent in causing damage. The Cooperator shall
be responsible for damage if the Awarding Agency finds that Cooperator was not
authorized to drive the vehicle, was negligent, or drove the vehicle outside the
scope of authorization.
23. LIABILITY - OTHER
The Cooperator agrees to indemnify and hold harmless, the Awarding Agency, its
employees, or contractors from and against all liability, claims, and demands on
account of personal injury, property loss, or damage of any kind whatsoever,
which arise out of, or are in any manner connected with, or are claimed to arise
out of or be in any manner connected with, the performance of this Cooperative
Agreement by the Cooperator's employees or agents.
The Cooperator shall provide and maintain the necessary types of insurances, as
may be needed under this Cooperative Agreement, including but not limited to
workers' compensation, employer's liability, and comprehensive general liability
in amounts sufficient to protect the Federal Government's interest in not being
subject to unwarranted damage claims resulting from the Cooperator's use of the
Awarding Agency's facilities.
It is further understood that the Awarding Agency shall not be held responsible
for any breakage, theft, or acts of vandalism to the Cooperator's equipment and
supplies during the period of the Cooperative Agreement.
24. TERMINATION BY MUTUAL AGREEMENT
This Agreement may be terminated by either of the parties upon 90 calendar days'
notice in writing of one party to the other party.
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25. SUSPENSION OR TERMINATION FOR CAUSE
The Awarding Agency reserves the right to suspend payment if the Cooperator
fails to comply with any terms and conditions of the Agreement, if there is
evidence of the misuse of funds by the Cooperator, if the parties fail to reach
a solution acceptable to both parties regarding any disagreement concerning the
Agreement, or if any other event substantially affects the material terms of
this Agreement.
26. QUESTIONNAIRES AND SURVEY PLANS
The Cooperator is required to submit to the Awarding Agency copies of
questionnaires and other forms for clearance in accordance with the Paperwork
Reduction Act of 1980 and 5 CFR 1320.
27. RETENTION AND ACCESS REQUIREMENTS FOR RECORDS
(This requirement is not applicable to International Cooperators).
a. Financial records, supporting documents, statistical records, and all
other records pertinent to an award shall be retained for a period of
three years from the date of submission of the final expenditure report
or, for awards that are renewed quarterly or annually, from the date of
the submission of the quarterly or annual financial report, as authorized
by the Federal Awarding Agency. The only exceptions are:
(i) If any litigation, claim, or audit is started before the
expiration of the 3-year period, the records shall be retained
until all litigation, claims or audit findings involving the
records have been resolved and final action taken.
(ii) Records for real property and equipment acquired with Federal
funds shall be retained for 3 years after final disposition.
b. The Federal Awarding Agency, the Inspector General, Comptroller General
of the United States, or any of their duly authorized representatives,
have the right of timely and unrestricted access to any books, documents,
papers, or other records of Cooperators that are pertinent to the
Agreement, in order to make audits, examinations, excerpts, transcripts
and copies of such documents. This right also includes timely and
reasonable access to a Cooperator's personnel for the purpose of
interview and discussion related to such documents. The rights of access
in this paragraph are not limited to the required retention period, but
shall last as long as records are retained.
c. This requirement shall be passed through to lower tier subcontractors or
subawards exceeding $10,000 in value.
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Appendix F
U.S. DEPARTMENT OF AGRICULTURE
- --------------------------------------------------------------------------------
Certification Regarding Debarment, Suspension, and Other
Responsibility Matters - Primary Covered Transactions
- --------------------------------------------------------------------------------
This certification is required by the regulations implementing Executive Order
12549, Debarment and Suspension, 7 CFR Part 3017, Section 3017.510,
Participants' responsibilities. The regulations were published as Part IV of the
January 30, 1989, Federal Register (pages 4722-4733). Copies of the regulations
----------------
may be obtained by contacting the Department of Agriculture agency offering the
proposed covered transaction.
(BEFORE COMPLETING CERTIFICATION, READ INSTRUCTIONS ON REVERSE)
(1) The prospective primary participant certifies to the best of its
knowledge and belief, that it and its principals:
(a) are not presently debarred, suspended, proposed for debarment,
declared ineligible, or voluntarily excluded from covered
transactions by any Federal department or agency;
(b) have not within a three-year period preceding this proposal
been convicted of or had a civil judgement rendered against
them for commission of fraud or a criminal offense in
connection with obtaining, attempting to obtain, or performing
a public (Federal, State or local) transaction or contract
under a public transaction; violation of Federal or State
antitrust statutes or commission of embezzlement, theft,
forgery, bribery, falsification or destruction of records,
making false statements, or receiving stolen property;
(c) are not presently indicted for or otherwise criminally or
civilly charged by a governmental entity (Federal, State or
local) with commission of any of the offenses enumerated in
paragraph (1)(b) of this certification; and
(d) have not within a three-year period preceding this
application/proposal had one or more public transactions
(Federal, State or local) terminated for cause or default.
(2) Where the prospective primary participant is unable to certify to any of
the statements in this certification, such prospective participant shall
attach an explanation to this proposal.
Sequenom 58-5438-9-120
- --------------------------------------------------------------------------------
Organization Name PR/Award Number or Project Name
Dr. Toni Schuh, Executive Vice President, Business Development
- --------------------------------------------------------------------------------
Name(s) and Title(s) of Authorized Representative(s)
/s/ illegible May 13, 1999
- --------------------------------------------------------------------------------
Signature (s) Date
1
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Appendix F
Instructions for Certification
------------------------------
1. By signing and submitting this form, the prospective primary participant is
providing the certification set on the reverse side in accordance with these
instructions.
2. The inability of a person to provide the certification required below will
not necessarily result in denial participation in this covered transaction. The
prospective participant shall submit an explanation of why cannot provide the
certification set out on this form. The certification or explanation will be
considered connection with the department or agency's determination whether to
enter into this transaction. However, failure of the prospective primary
participant to furnish a certification or an explanation shall disqualify such
person from participation in this transaction.
3. The certification in this clause is a material representation of fact upon
which reliance was placed when the department or agency determined to enter into
this transaction. If it is later determined that the prospective primary
participant knowingly rendered an erroneous certification, in addition to other
remedies available to the Federal Government, the department or agency may
terminate this transaction for cause or default.
4. The prospective primary participant shall provide immediate written notice
to the department or agency to whom this proposal is submitted if at any time
the prospective primary participant learns that its certification was erroneous
when submitted or has become erroneous by reason of changed circumstances.
5. The terms "covered transaction," "debarred," "suspended," "ineligible,"
"lower tier covered transaction," "participant," "person," "primary covered
transaction," "principal," "proposal," and "voluntarily excluded," as used in
this clause, have the meanings set out in the Definitions and Coverage sections
of the rule implementing Executive Order 12549. You may contact the department
or agency to which this proposal is being submitted for assistance in obtaining
a copy of those regulations.
6. The prospective primary participant agrees by submitting this form that,
should the proposed covered transaction be entered into, it shall not knowingly
enter into any lower tier covered transaction with a person who is debarred,
suspended, declared ineligible, or voluntarily excluded from participation in
this covered transaction, unless authorized by the department or agency entering
into this transaction.
7. The prospective primary participant further agrees by submitting this form
that it will include the clause titled "Certification Regarding Debarment,
Suspension, Ineligibility and Voluntary Exclusion - Lower Tier Covered
Transactions," provided by the department or agency entering into this covered
transaction, without modification, in all lower tier covered transactions and in
all solicitations for lower tier covered transactions.
8. A participant in a covered transaction may rely upon a certification of a
prospective participant in a lower tier covered transaction that it is not
debarred, suspended, ineligible, or voluntarily excluded from the covered
transaction, unless it knows that the certification is erroneous. A participant
may decide the method and frequency by which it determines the eligibility of
its principals. Each participant may, but is not required to, check the
Nonprocurement List.
9. Nothing contained in the foregoing shall be construed to require
establishment of a system of records in order to render in good faith the
certification required by this clause. The knowledge and information of a
participant is not required to exceed that which is normally possessed by a
prudent person in the ordinary course of business dealings.
10. Except for transactions authorized under paragraph 6 of these instructions,
if a participant in a covered transaction knowingly enters into a lower tier
covered transaction with a person who is suspended, debarred, ineligible, or
voluntarily excluded from participation in this transaction, in addition to
other remedies available to the Federal Government, the department or agency may
terminate this transaction for cause or default.
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Appendix H
U.S. DEPARTMENT OF AGRICULTURE
________________________________________________________________________________
Certification Regarding
Drug-Free Workplace Requirements (Grants)
Alternative 1 - for Grantees other than Individuals
________________________________________________________________________________
This certification is required by the regulations implementing Sections
5151-5160 of the Drug-Free Workplace Act of 1988 (Pub. L. 100-690, Title V,
Subtitle D; 41 U.S.C. 701 et. seq.), 7 CFR Part 301 7, Subpart F Section 301
7.600, Purpose. The January 31, 1 989 regulations were amended and published as
Part 11 of the May 25, 1990 Federal Register (pages 21681-21691). Copies of the
----------------
regulations may be obtained by contacting the Department of Agriculture agency
offering the grant.
(BEFORE COMPLETING CERTIFICATION, READ INSTRUCTIONS, ON PAGE 3)
Alternative 1
A. The grantee certifies that it will or will continue to provide a drug-free
Workplace by:
(a) Publishing a statement notifying employees that the unlawful
manufacture, distribution, dispensing, possession, or use of a
controlled substance is prohibited in the grantee's workplace and
specifying the actions that will be taken against employees for
violation of such prohibition;
(b) Establishing an ongoing drug-free awareness program to inform
employees about --
(1) The dangers of drug abuse in the workplace;
(2) The grantee's policy of maintaining a drug-free workplace;
(3) Any available drug counseling, rehabilitation, and
employee assistance programs; and
(4) The penalties that may be imposed upon employees for drug
abuse violations occurring in the workplace;
(c) Making it a requirement that each employee to be engaged in the
performance of the grant be given a copy of the statement required
by paragraph (a);
(d) Notifying the employee in the statement required by paragraph (a)
that, as a condition of employment under the grant, the employee
will --
(1) Abide by the terms of the statement; and
(2) Notify the employer in writing of his or her conviction for
a violation of a criminal drug statute occurring in the
workplace no later than five calendar days after such
conviction;
1
<PAGE>
Appendix H
(e) Notifying the agency in writing, within ten calendar days after
receiving notice under subparagraph (d)(2) from an employee or
otherwise receiving actual notice of such conviction. Employers of
convicted employees must provide notice, including position title, to
every grant officer on whose grant activity the convicted employee
was working, unless the Federal agency has designated a central point
for the receipt of such notices. Notice shall include the
identification number(s) of each affected grant;
(f) Taking one of the following actions, within 30 calendar days of
receiving notice under subparagraph (d)(2), with respect to any
employee who is so convicted --
(1) Taking appropriate personnel action against such an employee, up
to and including termination, consistent with the requirements
of the Rehabilitation Act of 1973, as amended; or
(2) Requiring such employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for such
purposes by a Federal, State or local health, law enforcement or
other appropriate agency;
(g) Making a good faith effort to continue to maintain a drug-free
workplace through implementation of paragraphs (a), (b), (c), (d),
(e) and (f).
B. The grantee may insert in the space provided below the site(s) for the
performance of work done in connection with the specific grant:
Place of Performance (Street address. city. county, State, zip code)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Check ___ it there are workplaces on file that are not identified here.
SEQUENOM 58-5438-9-120
- --------------------------------------------------------------------------------
Organization Name Award Number or Project Name
Dr. Toni Schuh, Executive Vice President, Business Development
- --------------------------------------------------------------------------------
Name and Title of Authorized Representative
/s/ illegible
________________________________________________________________________________
Signature Date
2
<PAGE>
Appendix H
Instructions for Certification
------------------------------
1. By signing and submitting this form, the grantee is providing the
certification set out on pages 1 and 2
2. The certification set out on pages 1 and 2 is a material representation of
fact upon which reliance is placed when the agency awards the grant. If it is
later determined that the grantee knowingly rendered a false certification, or
otherwise violates the requirements of the Drug-Free Workplace Act, the agency,
in addition to any other remedies available to the Federal Government, may take
action authorized under the Drug-Free Workplace Act.
3. Workplaces under grants, for grantees other than individuals, need not be
identified on the certification. If known, they may be identified in the grant
application. If the grantee does not identify the workplaces as the time of
application, or upon award, if there is no application, the grantee must keep
the identity of the workplace(s) on file in its office and make the information
available for Federal inspection. Failure to identify all known workplaces
constitutes a violation of the grantee's drug-free workplace requirements.
4. Workplace identifications must include the actual address of buildings (or
parts of buildings) or other sites where work under the grant takes place.
Categorical descriptions may be used (e.g., all vehicles of a mass transit
authority or State highway department while in operation, State employees in
each local unemployment office, performers in concert halls or radio studios).
5. If the workplace identified to the agency changes during the performance of
the grant, the grantee shall inform the agency of the change(s), if it
previously identified the workplaces in question (see paragraph 3).
6. Definitions of terms in the Nonprocurement Suspension and Debarment common
rule and Drug-Free Workplace common rule apply to this certification. Grantees'
attention is called, in particular, to the following definitions from these
rules:
"Controlled" substance means a controlled substance in Schedules I through V of
the Controlled Substances Act (21 U.S.C. 812) and as further defined by
regulation (21 CFR 1308.11 through 1308.15);
"Conviction" means a finding of guilt (including a plea of nolo contendere) or
imposition of sentence, or both, by any judicial body charged with the
responsibility to determine violations of the Federal or State criminal drug
statutes;
"Criminal drug statute" means a Federal or non-Federal criminal drug statute
involving the manufacture, distribution, dispensing, use or possession of any
controlled substance;
"Employee" means the employee of a grantee directly engaged in the performance
of work under a grant including: (i) all "direct charge" employees; (ii) all
"indirect charge" employees unless their impact or involvement is insignificant
to the performance of the grant; and, (iii) temporary personnel and consultants
who are directly engaged in the performance of work under the grant and who are
on the grantee's payroll. This definition does not include workers not on the
payroll of the grantee (e.g., volunteers, even if used to meet a matching
requirement; consultants or independent contractors not on the grantee's
payroll; or employees of subrecipients or subcontractors in covered workplaces).
3
<PAGE>
Appendix J
U.S. DEPARTMENT OF AGRICULTURE
AGRICULTURAL RESEARCH SERVICE
________________________________________________________________________________
NOTICE TO APPLICANTS
Certification/Disclosure Requirements
Related to Lobbying
________________________________________________________________________________
Section 319 of Public Law 101-121 (31 U.S.C.), signed into law on October 23,
1989, imposes new prohibitions and requirements for disclosure and certification
related to lobbying on recipients of Federal contracts, grants, cooperative
agreements, and loans. Certain provisions of the law also apply to Federal
commitments for loan guarantees and insurances; however, it provides exemptions
for Indian tribes and tribal organizations.
Effective December 23, 1989, current and prospective recipients (and their
subtier contractors and/or subgrantees) will be prohibited from using Federal
funds, other than profits from a Federal contract, for lobbying Congress or any
Federal agency in connection with the award of a particular contract, grant,
cooperative agreement or loan. In addition, for each award action in excess of
$100,000 (or $150,000 for loans) on or after December 23, 1989, the law requires
recipients and their subtier contractors and/or subgrantees to: (1) certify that
they have neither used nor will use any appropriated funds for payment to
lobbyists, (2) disclose the name, address, payment details, and purpose of any
agreements ,with lobbyists whom recipients or their subtier contractors or
subgrantees will pay with profits or nonappropriated funds on or after December
23, 1989; and (3) file quarterly updates about the use of lobbyists if material
changes occur in their use. The law establishes civil penalties for
noncompliance.
If you are a current recipient of funding or have an application, proposal or
bid pending as of December 23, 1989, the law will have the following immediate
consequences for you:
- - You are prohibited from using appropriated funds (other than profits from
Federal contracts) on or after December 23, 1989, for lobbying Congress or any
Federal agency in connection with a particular contract, grant, cooperative
agreement, or loan;
- - you are required to execute the attached certification at the time of
submission of an application or before any action in excess of $100,000 is
awarded; and
- - you will be required to complete the lobbying disclosure form if the
disclosure requirements apply to you.
Regulations implementing Section 319 of Public Law 101 - 121 have been published
as an Interim Final Rule by the Office of Management and Budget as Part III of
the February 26, 1990 Federal Register (pages 6736-6746).
Page 1 of 5
<PAGE>
Appendix J
U.S. DEPARTMENT OF AGRICULTURE
AGRICULTURAL RESEARCH SERVICE
________________________________________________________________________________
Certification Regarding Lobbying - Contracts, Grants,
Loans and Cooperative Agreements
________________________________________________________________________________
The undersigned certifies to the best of his or her knowledge and belief, that:
(1) No Federal appropriated funds have been paid or will be paid, by or on
behalf of the undersigned, to any person for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an officer
or employee of Congress, or an employee of a Member of Congress in connection
with the awarding of any Federal contract, the making of any Federal grant, the
making of any Federal loan, the entering into of any cooperative agreement, and
the extension, continuation, renewal, amendment, or modification of any Federal
contract, grant, loan or cooperative agreement.
(2) If any funds other than Federal appropriated funds have been paid or will
be paid to any person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection with this Federal
contract, grant, loan, or cooperative agreement, the undersigned shall complete
and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in
accordance with its instructions;
(3) The undersigned shall require that the language of this certification be
included in the award documents for all subawards at all tiers (including
subcontracts, subgrants, and contracts under grants, loans, and cooperative
agreements) and that all subrecipients shall certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was
placed when this transaction was made or entered into. Submission of this
certification is a prerequisite for making or entering into this transaction
imposed by section 1352, title 31, U.S. Code. Any person who fails to file the
required certification shall be subject to a civil penalty of not less than
$10,000 and not more than $100,000 for each such failure.
SEQUENOM 58-5438-9-120
- --------------------------------------------------------------------------------
Organization Name Award Number or Project Name
Dr. Toni Schuh, Executive Vice President, Business Development
- --------------------------------------------------------------------------------
Name and Title of Authorized Representative
/s/ illegible May 13, 1999
- --------------------------------------------------------------------------------
Signature Date
Page 2 of 5
<PAGE>
Appendix J
DISCLOSURE OF LOBBYING ACTIVITIES
Complete this form to disclose lobbying activities pursuant to 31 U.S.C. 1352.
(See reverse for public burden disclosure.)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Type of Federal Action: 2. Status of Federal Action: 3. Report Type:
[_] a. contract [_] a. bid/offer/application [_] a. initial filing
b. grant b. initial award b. material change
c. cooperative agreement c. post award
d. loan For Material Change Only
e. loan guarantee year ___ quarter ___
f. loan insurance date of last report
- ----------------------------------------------------------------------------------------------------------------------
4. Name and Address of Reporting Entity: 5. If Reporting in No. 4 is Subawardee,
Enter Name and Address of Prime:
[_] Prime [_] Subawardee
Tier ___, if known:
Congressional District, if known:
Congressional District, if known:
- ----------------------------------------------------------------------------------------------------------------------
6. Federal Department/Agency: 7. Federal Program Name/Description:
CFDA Number, if applicable:
- ----------------------------------------------------------------------------------------------------------------------
8. Federal Action Number, if known: 9. Award Amount, if known:
- ----------------------------------------------------------------------------------------------------------------------
10. a. Name and Address of Lobbying Entity b. Individuals Performing Services (including address
(if individual, last name, first name MI) if different from No. 10a)
(last name, first name, MI):
(attach Continuation Sheet(s) SF-lll-A, if necessary)
- ----------------------------------------------------------------------------------------------------------------------
11. Amount of Paycheck (check all that apply): 13. Type of Payment (check all
that apply): $__________________ [_] actual [_] planned [_] a. retainer
[_] b. on-time fee
[_] c. commission
[_] d. contingent fee
[_] e. deferred
[_] f. other; specify:__________
- ----------------------------------------------------------------------------------------------------------------------
12. Form of Payment (check all that apply): [_] a. cash
[_] b. in-kind; specify: nature __________
value __________
- ----------------------------------------------------------------------------------------------------------------------
14. Brief Description of Services Performed or to be Performed and Date(s) of Service, including officer(s),
employee(s), or Member(s) contacted, for Payment indicated in Item 11;
(attach Continuation Sheet(s) SF-LLL-A, if necessary)
- -----------------------------------------------------------------------------------------------------------------------
15. Continuation Sheet(s) SF-LLL-A attached: [_] Yes [_] No
- -----------------------------------------------------------------------------------------------------------------------
16. Information requested through this form is authorized by Title 31 Signature:________________________________
U.S.C. section 1352. This disclosure of lobbying activities
is a material representation of fact upon which reliance was Print Name:_______________________________
placed by the tier above when this transaction was made or
entered into. This disclosure is required pursuant to 31 Title:____________________________________
U.S.C. 1352. This information will be available for public
inspection. Any person who fails the required Telephone No.:_________________Date:______
disclosure shall be subject to a civil penalty of not
less than $10,000 and not more than $100,000 for each
such failure.
- -----------------------------------------------------------------------------------------------------------------------
Federal Use Only Authorized for Local Reproduction
Standard Form - LLL
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3 of 5
<PAGE>
Instructions for Completion of SF-LLL, Disclosure of Lobbying Activities
------------------------------------------------------------------------
This disclosure form shall be completed by the reporting entity, whether
subawardee or prime Federal recipient, at the initiation or receipt of a covered
Federal action, or a material change to a previous filing, pursuant to Title 31
U.S.C., Section 1352. The filing of a form is required for each payment or
agreement to make payment to any lobbying entity for influencing or attempting
to influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress in
connection with a covered Federal action. Use the SF-LLL-A Continuation Sheet
for additional information if the space on the form is inadequate. Complete all
items that apply for both the initial filing and material change report. Refer
to the implementing guidance published by the Office of Management and Budget
for additional information.
1. Identify the type of Federal covered action for which lobbying activity is
and/or has been secured to influence the outcome of a covered Federal action.
2. Identify the status of the Federal covered action.
3. Identify the appropriate classification of this report. If this is a
followup report caused by a material change to the information previously
reported, enter the year and quarter in which the change occurred. Enter the
date of the last previously submitted report by this reporting entity for this
covered Federal action.
4. Enter the full name, address, city, state and zip code of the reporting
entity. Include Congressional District, if known. Check the appropriate
classification of the reporting entity that designates if it is, or expects to
be, a prime or subaward recipient. Identify the tier of the subawardee, e.g.,
the first subawardee of the prime is the 1st tier. Subawards include but are not
limited to subcontracts, subgrants, and contract awards under grants.
5. If the organization filing the report in item 4 checks "Subawardee", then
enter the full name, address, city, state and zip code of the prime Federal
recipient. Include the Congressional District, if known.
6. Enter the name of the Federal agency making the award or loan commitment.
Include at least one organizational level below agency name, if known. For
example, Department of Transportation, United States Coast Guard.
7. Enter the Federal program name or description for the covered Federal
action (item 1). If known, enter the full Catalog of Federal Domestic Assistance
(CFDA) for grants, cooperative agreements, loans, and loan commitments.
8. Enter the most appropriate Federal identifying number available for the
Federal action identified in item 1 (e.g. Request for Proposal (RFP) number;
Invitation for Bid (IFB) number; grant announcement number; the contract, grant,
or loan award number, the application/proposal control number assigned by the
Federal agency). Include prefixes, e.g., "RFP-DE-90-001."
9. For a covered Federal action where there has been an award or loan
commitment by the Federal agency, enter the Federal amount of the award/loan
commitment for the prime entity identified in item 4 or 5.
10. (a) Enter the full name, address, city, state and zip code of the lobbying
entity engaged by the reporting entity identified in item 4 to influence
the covered Federal action.
(b) Enter the full names of the individual(s) performing services, and
include full address if different from 10(a). Enter Last Name, First Name,
and Middle Initial (MI).
11. Enter the amount of compensation paid or reasonably expected to be paid by
the reporting entity (item 4) to the lobbying entity (item 10). Indicate whether
the payment has been made (actual) or will be made (planned). Check all boxes
that apply. If this is a material change report, enter the cumulative amount of
payment made or planned to be made.
12. Check the appropriate box(es). Check all boxes that apply. If payment is
made through an in-kind contribution, specify the nature and value of the
in-kind payment.
13. Check the appropriate box(es). Check all boxes that apply. If other,
specify nature.
14. Provide a specific and detailed description of the services that the
lobbyist has performed, or will be expected to perform, and the date(s) of any
services rendered. Include all preparatory and related activity, not just time
spent in actual contact with Federal officials. Identify the Federal official(s)
or employee(s) contacted or the officer(s), employees), or Member(s) of Congress
that were contacted.
15. Check whether or not a SF-LLL-A Continuation Sheet(s) is attached.
16. The certifying official shall sign and date the form, print his/her name,
title, and telephone number.
________________________________________________________________________________
Public reporting burden for this collection of information is estimated to
average 30 minutes per response, including time for reviewing instructions,
searching existing data resources, gathering and maintaining data needed, and
completing and reviewing the collection of information. Send comments regarding
the burden estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to the Office of Management and
Budget, Paperwork Reduction Project (0348-0046), Washington, D.C. 20503.
________________________________________________________________________________
Page 4 of 5
<PAGE>
DISCLOSURE OF LOBBYING ACTIVITIES
CONTINUATION SHEET
_______________________________________________________________________________
Reporting Entity:_________________________________________ Page ___ of ____
________________________________________________________________________________
Federal Use Only Authorized for Local Reproduction
Standard Form - LLL - A
________________________________________________________________________________
Page 5 of 5
<PAGE>
Appendix L
Report of Inventions and Subawards
A. General
-------
1. The Cooperator shall submit interim and final invention reports and
promptly give notification of the award of subawards containing a
"Patent Rights" clause. Plains sheets of paper may be used to make
these reports.
2. An interim report is due at least every 12 months from date of award
and every 12 months thereafter.
3. A final report is due within 6 months of termination if the
Performing Organization is a small business firm or a domestic non-
profit organization and within 3 months for all others.
B. Interim and Final Reports must contain:
- ------------------------------------------
1. Name of Performing Organization.
2. Research Agreement Number.
3. Research Agreement award date.
4. Type of Report (Interim or Final).
5. Reporting Period.
6. Report of Inventions and Subawards content.
7. A listing of all inventions made including:
a. The name of inventor(s).
b. The title of invention(s).
c. The disclosure number, patent application in the United
States of foreign countries?
d. Has election been made to file patent applications in the United
States of foreign countries?
e. Have confirmation instrument assignments been forwarded to
ARS?
8. Certification or compliance with required invention identification
and disclosure procedures and certification of reporting all
inventions.
9. Any required information not previously reported on subawards
containing a "Patent Rights" clause awarded during the course of the
Cooperative Agreement.
C. Subaward Reports must contain:
------------------------------
1. Name of Performing Organization.
2. Cooperative Agreement Number.
3. Cooperative Agreement award date.
4. Type of Report (Interim or Final).
5. Report Period.
6. Name of subawardee or subawardees.
7. Complete address of subawardee or subawardees.
8. Subaward identification number or numbers.
9. The "Patent Rights" clause incorporated, including year and date of
clause.
10. Description of work performed under subaward(s).
11. Date of subaward(s).
12. Estimated completion date(s).
D. Negative reports are required.
Department of Defense Form 882, Report of Inventions and Subcontracts
may be used in lieu of the above narrative report.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
[REPORT OF INVENTIONS AND SUBCONTRACTS] FORM APPROVED
(Pursuant to "Patent Rights" Contract Clause) (See Instructions on Reverse Side) OMB NO_0704-0015
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1a. NAME OF CONTRACTOR/ C. CONTRACT NUMBER 2a. NAME OF GOVERNMENT c. CONTRACT NUMBER 3. TYPE OF REPORT (check one)
SUBCONTRACTOR PRIME CONTRACTOR |_| Interim |_| Final
- -----------------------------------------------------------------------------------------------------------------------------------
1b. ADDRESS (Include Zip d. AWARD DATE 2b. ADDRESS (Include d. AWARD DATE 4. REPORTING PERIOD (YY/MM)
Code) (YY/MM/DD) Zip Code) (YY/MM/DD) FROM: TO:
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION 1 - SUBJECT INVENTIONS
- -----------------------------------------------------------------------------------------------------------------------------------
SUBJECT INVENTIONS" REQUIRED TO BE REPORTED BY CONTRACTOR/SUBCONTRACTOR (If "None" So State)
- -----------------------------------------------------------------------------------------------------------------------------------
NAME OF INVENTOR(S) b. TITLE OF c. DISCLOSURE NO. D. ELECTION TO FILE C. CONFIRMATORY INSTRUMENT OR
(Last, First, Mi) INVENTION(S) PATENT APPLICATION PATENT APPLICATIONS ASSIGNMENT FORWARDED TO
SERIAL NO. OR PATENT NO. ----------------------- CONTRACTING OFFICE
UNITED FOREIGN
STATES
- -----------------------------------------------------------------------------------------------------------------------------------
YES NO YES NO YES NO
---------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
EMPLOYER OF INVENTOR(S) NOT EMPLOYED BY CONTRACTOR/SUBCONTRACTOR. g. ELECTED FOREIGN COUNTRIES IN WHICH A PATENT APPLICATION
WILL BE FILED.
- -----------------------------------------------------------------------------------------------------------------------------------
NAME OF INVENTOR I. NAME OF INVENTOR I. TITLE OF INVENTION II. FOREIGN COUNTRIES
(Last, First, MI) (Last, First, MI) OF PATENT APPLICATION
- -----------------------------------------------------------------------------------------------------------------------------------
NAME OF EMPLOYER II. NAME OF EMPLOYER
- ------------------------------------------------
ADDRESS OF EMPLOYER III. ADDRESS OF
(Include Zip code) EMPLOYER (Include
Zip code)
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION II - SUBCONTRACTS (Containing a "Patent Rights" Clause)
- -----------------------------------------------------------------------------------------------------------------------------------
SUBCONTRACTS AWARDED BY CONTRACTOR/SUBCONTRACTOR (If "None" so state).
- -----------------------------------------------------------------------------------------------------------------------------------
NAME OF SUBCONTRACTOR(S) b. ADDRESS (Include c. SUBCONTRACT NO.(S) d. DAR "PATENT RIGHTS" e. DESCRIPTION F. SUBCONTRACT
Zip Code) OF WORK TO BE DATES
PERFORMED (YYMMDD)
----------------------------------------------------------
CLAUSE DATE UNDER AWARD ESTIMATED
NO. (YYMM) SUBCONTRACT(S) COMPLETION
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION III - CERTIFICATION
- -----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION OF REPORT BY CONTRACTOR/SUBCONTRACTOR. (Not required if |_| Small Business of |_| Non-Profit Organization). (Check
appropriate box).
- -----------------------------------------------------------------------------------------------------------------------------------
NAME OF CONTRACTOR/SUBCONTRACTOR OFFICIAL c. I certify that the reporting party has procedures for prompt identification and
(Last, First, MI) timely disclosure of "Subject Inventions," that such procedures have been followed
and that all "Subject Inventions" have been reported.
_______________ ______________________________ _____________________ _________________________ ______
TITLE SIGNATURE OF AUTHOR CONTRACTOR/SUBCONTRACTOR
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INSTRUCTIONS
GENERAL
This form is for use in submitting INTERIM and FINAL invention reports to the
Contracting Officer and for use in the prompt notification of the award of
subcontracts containing a "Patent Rights" clause. If the form does not afford
sufficient space, multiple forms may be used or plain sheets of paper with
proper identification of information by Item may be attached.
An INTERIM report is due at least every 12 months from the date of contract
award and shall include (a) a listing of "Subject Inventions" during the
reporting period, (b) a certification of compliance with required invention
identification and disclosure procedures together with a certification of
reporting of all "Subject Inventions." and (c) any required information not
previously reported on subcontracts awarded during the reporting period and
containing a "Patent Rights" clause.
A FINAL report is due within 6 months if contractor is a small business firm of
domestic nonprofit organization and within 3 months for all others after
completion of the contract work and shall include (a) a listing of all "Subject
Inventions" required by the contract to be reported, and (b) any required
information not previously reported on subcontracts awarded during the course of
or under the contract and containing a "Patent Rights" clause.
While the form may be used for simultaneously reporting inventions and
subcontracts, it may also be used for reporting, promptly after award,
subcontracts containing a "Patent Rights" clause.
Dates shall be entered where indicated in certain Items on this form and shall
be entered in four or six digit numbers in the order of year and month (YYMM) or
year, month and day (YYMMDD). Example: April 1981 should be entered as 8104 and
April 15, 1981 should be entered as 810415.
Item la. Self-explanatory.
Item 1b. Self-explanatory.
Item lc. If "same" as item 2c, so state.
Item 1d. Self-explanatory.
Item 2a. If "same" as item 1a, so state.
Item 2b. Self-explanatory.
Item 2c. Procurement Instrument Identification (PII) number of
contract (DAR 20-203).
Item 2d. thru 5c. Self-explanatory.
Item 5f, ii and iii. The name and address of the employer of each inventor not
employed by the contractor subcontractor is needed inasmuch as the Government's
rights in a reported invention may not be determined solely by the terms of the
"Patent Rights" clause in the contract. Example (1): If an invention is made by
a Government employee assigned to work with a contractor, the Government rights
in such an invention will be determined under Executive Order 10096. Example
(2): I f an invention is made under a contract by joint inventors and one of the
inventors is a Government employee, the Government's rights in such an
inventor's interest in the invention will also be determined under Executive
Order 10096, except where the contractor is a small business or nonprofit
organization, in which case the provisions of Section 202(c) of P.L. 96-517 will
apply.
Item 5g, 1. Self-explanatory.
Item 5g, ii. Self-explanatory with the exception that the contractor or
subcontractor shall indicate, if known at the time of this report, whether
application will be filed under either the Patent Cooperation Treaty (PCT) or
the European Patent Convention (EPC).
If such is known, the letters PCT or EPC shall be entered after each listed
country.
Item 6a. Self-explanatory.
Item 6b. Self-explanatory.
Item 6c. Self-explanatory.
Item 6d. Patent Rights Clauses are located in 37 CFR Part 401.
Item 6c. thru 7b. Self-explanatory.
Item 7c. Certification not required by small business firms and domestic
nonprofit organizations
<PAGE>
<TABLE>
<S> <C> <C>
[LOGO] United State Research, Education, and Economics Office of the Area Director
Department of Agricultural Research Service Grants and Agreements
Agriculture
Reply to: 1201 Oakridge Drive, Suite 150
Fort Collins, CO 80526-5562
April 28, 1999 COM 970/229-5529
FAX 970/229-5531
E-mail: [email protected]
</TABLE>
SUBJECT: Delegation as Authorized Departmental Officer's (ADO) Designated
Representative (ADODR) and Instructions for
Specific Cooperative Agreement No. 58-5438-9-120 with Sequenom, Inc.
TO: Dr. Gary L. Bennett
U.S. Meat Animal Research Center
Clay Center, NE 68933
FROM: James E. Quaratino
Authorized Departmental Officer
You are hereby appointed the Authorized Departmental Officer's Designated
Representative (ADODR) for this Agreement. This appointment is effective until
expiration of the agreement including any extension or revocation by the
Authorized Departmental Officer (ADO). This appointment is specifically
delegated to you. None of the responsibilities may be redelegated to any other
individual without written approval of the ADO.
A. The ADODR shall:
1. Complete Form OGE-450, Executive Branch Confidential Financial
Disclosure Report. If you are required to complete such a form at
this time, one will be provided to you by the ARS Ethics office.
Questions regarding this may be directed to the Area Ethics Advisor
at (970) 229-5595.
2. Represent the ADO in the administration and supervision of this
Agreement within the limitations set forth in the Agreement and this
Instruction. Actions reserved for the ADO are set forth below.
3. Promptly refer to the ADO any matter which may endanger performance
of the Agreement that is outside your authority to resolve.
4. Become thoroughly familiar with and faithfully administer the terms
and conditions of the Agreement including the General provisions
(Form ARS-452), as applicable, and documents related thereto.
5. Ensure that the Agreement will not be used to avoid and/or subvert
any recognized procurement, property, fiscal, and personnel policies
and procedures.
6. Routinely monitor and evaluate performance under the Agreement
to ensure that the project is satisfactorily progressing.
<PAGE>
Agreement No.: 58-5438-9-120 Page 2 of 5
Sequenom, Inc.
San Diego, CA
7. For non-Letter of Credit payment procedures, receive, verify, and
recommend/not recommend claims for payment. Claims are billed:
(1) for actual expenditures incurred, (2) at intervals in
accordance with the terms and conditions of the Agreement, and
(3) using vouchers prepared by the Cooperator with costs itemized
by the budget categories agreed upon on the ARS-454, Cooperative
Agreement Estimated Budget Form. The ADODR forwards the voucher,
which indicates his/her payment recommendations, (signed and
dated) to the ADO. The ADO approves or disapproves claims for
advances or reimbursement.
8. Receive and approve or disapprove financial status reports and
progress reports at the intervals agreed upon in the Agreement.
Send copies to the ADO.
9. Receive reports, if any, of inventions made under the Agreement
and forward them to the ADO.
10. Ensure that performance, time, and adequate funds are
appropriately allocated to complete a project.
11. Ensure that two copies of the Final Report and publications
generated under this Agreement, if any, are sent to the National
Agricultural Library, Acquisitions and Serials Branch. Notice of
dissemination of the Final Report, with a copy of the Final
Report and, as appropriate, publications sent to the Library
shall be forwarded to the ADO for placement in the official
Agreement file. These submissions are to state the Agreement
number and Cooperator's name on the document.
12. Advise the ADO should there be any discriminatory acts observed
or suggested by a party to the Agreement.
13. Receive notices from the cooperator regarding actual or potential
labor disputes which would affect the performance under the
Agreement and immediately forward such notices to the ADO with
comments regarding the impact of the dispute on the Agreement.
14. Establish and maintain an administrative file of all documents
related to the implementation and administration of the
Agreement.
15. Sixty days (60) prior to expiration, review to determine the
current relevancy of the project to ARS program mission for the
purpose of renewing, amending or terminating the agreement.
16. Questions regarding the responsibilities and duties of the ADODR
or interpretation of any of the terms and conditions of the
Agreement are referred to the ADO.
NOTE: Discrimination on the basis of race, religion, color, sex, national
origin, age, physical disability, political beliefs, and martial or familial
status is prohibited.
<PAGE>
Agreement No.: 58-5438-9-120 Page 3 of 5
Sequenom, Inc.
San Diego, CA
B. Responsibilities Reserved to the ADO:
1. Upon recommendations by the ADODR, proposed amendments providing
for:
a. Changes, including additions, deletions and/or extensions to
or termination of the work to be performed under the
Agreement by either party.
b. Changes of Principal Investigator (PI) for a period in
excess of three consecutive months.
c. Increases or decreases to the Federal Obligation amount or
amount of the contribution by the Cooperator.
d. Subcontract awards to third parties for performing all or
any portion of the Agreement (see General Provisions, Form
ARS-452)
e. Approval of purchases for general-purpose equipment and/or
special purpose equipment costing $5,000 or more, printing
and binding, audiovisual materials or service, (see General
Provisions, Form ARS-452).
f. Approval of the acquisition of nonexpendable equipment,
computer services or equipment.
g. Approval for travel outside the United States, its
possessions, territories, and Canada (applicable to domestic
cooperators only) or special or mass movements of personnel.
2. Assures that reports on inventions are forwarded to the ARS, Patent
Program Coordinator. (Not applicable to negative reports).
C. Decisions on Disputes and Other Administrative Problems Arising during
this Cooperative Agreement
Disputes regarding the authorities and responsibilities of the ADODR and
the ADO must be submitted in writing to the ADODR. The cooperator must
submit questions related to disputes or other problems directly to the
ADO provided a copy is also sent to the ADODR. Problems that cannot be
resolved between the ADO, ADODR, and the cooperator shall be submitted to
the Director, Extramural Agreements Division, for resolution.
<PAGE>
Agreement No.: 58-5438-9-120 Page 4 of 5
Sequenom, Inc.
San Diego, CA
Acknowledgment
The following acknowledgment of receipt of this designation is provided for
completion by the Authorized Departmental Officer's Designated Representative
(ADODR).
Please sign and return a copy to:
USDA, ARS, NPA
Extramural Agreements
1201 Oakridge Dr., Suite 150
Fort Collins, CO 80525
I acknowledge receipt of the ADODR designation.
Gary L. Bennett
- ----------------------------------------------------------------------
ADODR Signature/SSN Date
cc:
USDA, ARS, Ethics Office
<PAGE>
EXHIBIT 10.35
BECKMAN COULTER, INC.
--and--
Sequenom, Inc.
OEM Supply Agreement
Page 1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
1 DEFINITIONS.......................................................... 3
2 PRICES............................................................... 4
3 SCOPE OF LICENSE GRANT............................................... 5
4 DISCOUNTS............................................................ 4
5 ORDERS............................................................... 6
6 DELIVERY............................................................. 7
7 SHIPMENT AND RISK OF LOSS............................................ 7
8 CERTIFICATION........................................................ 8
9 CONDITIONS........................................................... 9
10 PRODUCT MODIFICATIONS................................................ 9
11 PRODUCT ACCEPTANCE................................................... 10
12 PAYMENT.............................................................. 10
13 LIMITED WARRANTY..................................................... 11
14 PROPRIETARY RIGHTS AND INDEMNIFICATION............................... 11
15 EXCLUSION AND DISCLAIMER OF ALL OTHER WARRANTIES..................... 12
16 LIMITATION OF REMEDIES AND LIABILITIES............................... 13
17 FORCE MAJEURE........................................................ 14
18 EXPORT CONTROLS...................................................... 14
19 GOVERNING LAW AND JURISDICTION....................................... 16
20 SOFTWARE LICENSES.................................................... 15
21 TITLE & COPYRIGHT NOTICE............................................. 16
22 RENEWAL.............................................................. 17
23 PUBLICITY............................................................ 17
24 TERMINATION.......................................................... 17
25 GENERAL.............................................................. 18
EXHIBITS.................................................................. 21
EXHIBIT A - PRODUCT DESCRIPTION........................................... 22
EXHIBIT B - SEQUENOM PRICING SCHEDULE..................................... 36
EXHIBIT C - JOINT RESEARCH AND DEVELOPMENT................................ 37
EXHIBIT D - PRODUCT SPECIFICATIONS........................................ 38
EXHIBIT E - SPARE PARTS LIST.............................................. 39
</TABLE>
Page 2
<PAGE>
1 DEFINITIONS
a) "Agreement" is defined as the BCI Original Equipment Manufacturer
Agreement and includes all Exhibits and Schedules referred herein and
attached hereto
b) "Anniversary Date" is 12 months from the last date in time adjacent to
the signatures of the parties on the last page
c) "Exhibits" are those documents attached to, incorporated by reference
in, or added to this Agreement at a later date which describe
Products, support, or other business terms which are a part of this
agreement.
d) "Original Equipment Manufacture" is the sale of Products and/or
Software by BCI to Sequenom for the purpose of Sequenom incorporating
such Products and/or software into the Sequenom System and the resale
of such Products and/or software either as an integral part of the
Sequenom System, or as repair or replacement parts for such Sequenom
Systems.
e) "Sequenom" is Sequenom Inc., a Delaware Corporation having a place of
business at 11555 Sorrento Valley Road, San Diego, California,
92121-1331.
f) "Ordering Period" is the period commencing with the last date in time
adjacent the signatures on the last page of this agreement and ending
with the termination.
g) "Price List" is the list of the available Products and the prices for
the country of installation of the Sequenom system containing the
Product in effect on the date BCI accepts the Sequenom order for such
product.
h) "Products" means the current specific Liquid Handling Device and/or
accessories identified by BCI's part number's listed on Exhibit A
attached hereto, a general description of which is set opposite each
part number, Including the licenses and documentation required for the
operation of the product. Additional products and enhancements may be
added to Exhibit A with the mutual written agreement of BCI and
Sequenom.
i) "Software" is one or more programs, proprietary or licensed to BCI,
which is either listed separately as a Software product on the Price
List or included with a Product on the Price List.
j) "Sequenom System" means the proprietary system developed by or for
Sequenom, manufactured by or for Sequenom and sold by Sequenom
directly to end user's or to dealer-s or distributors for resale to
end users
Page 3
<PAGE>
2 PRICES
a) Sequenom shall pay BCI the list prices in effect at the point of
installation for the Products and Software covered by this agreement
described in Exhibit A. The discounts as shown in Exhibit B will be
applicable at time of purchase and will be in effect until termination
of this agreement.
b) The prices are FOB BCI's loading dock and do not include freight,
insurance, duties, custom brokers or any other special packaging or
handling. Prices for European destinations include freight, duty and
handling the nearest BCI affiliate.
c) Taxes are not included in prices and will be invoiced as separate
items in addition to the Products' sale/license price.
d) BCI may, by written notice to Sequenom, change (increase or decrease)
the current list prices at the point of destination, change the
transportation terms, terms of payment, minimum requirements per
shipment or any other of the terms and conditions in the agreement
covering the sale/license of the Products, only during a period of
sixty (60) days prior to the annual Anniversary Date of this
agreement. Sequenom's failure to object to any change, in writing,
received by BCI prior to the effective date of the change shall be
considered to be acceptance. BCI will advise Sequenom within fifteen
(15) days from receipt of timely written objection from Sequenom
whether BCI will (a) continue to supply on terms and conditions in
effect prior to the announced change or (b) enter Into negotiations
with Sequenom or (c) cancel if Sequenom refuses to accept the change.
If BCI elects to enter into negotiations under (b) of the preceding
sentence, and if within thirty (30) days from the date of BCI's
proposed change an agreement has not been reached and BCI has not
agreed to continue to supply on the terms and conditions in effect
prior to the announced change, then either party may by written notice
terminate the negotiations and cancel this Agreement. Unless as
otherwise agreed as part of the negotiation, price and other terms
applicable during the negotiation pedod shall be those in effect prior
to the announced change.
3 SCOPE OF LICENSE GRANT
Subject to Paragraphs 20 and 21, BCI hereby grants to Sequenom and Sequenom
accepts a non-exclusive, worldwide right and license to: (a) resell the
Products as part of the Sequenom System, and (b) the right to use and
prepare derivative works of the Software and to sell and license such
software and derivative works of the Sequenom System. For the avoidance of
doubt the foregoing rights and licenses does not include the right to sell
the Product itself or the Software itself, other than as a part of the
Sequenom System or as a
Page 4
<PAGE>
repair or a replacement part for the Sequenom System sold to an owner of a
Sequenom System.
4 DISCOUNTS
Sequenom Sales Incentives, attached as Exhibit B, may be instituted,
---------
changed or withdrawn only during a period of sixty (60) days prior to the
annual Anniversary Date of this agreement by prior written notice to
Sequenom. The procedures set forth in Paragraph 2 (d) shall apply to any
such change of the Sequenom Sales Incentives.
5 ORDERS
a) Sequenom agrees to and shall during the first twelve (12) months of
this agreement order, purchase and take /***/ Multimek Liquid Handlers
specified in Exhibit A, and BCI agrees to and shall manufacture sell
and deliver such Handlers. Such purchase and sale shall be under the
terms of this Agreement. Forecasted quantities to be ordered by
Sequenom during the second and third years of this Agreement shall be
agreed upon not later than 90 days prior to the expiration of the
current year. Pricing for the quantities ordered during years two and
three will be based on the quantities ordered and the Price List of
Exhibit B.
b) Orders for Products and Software must reference this Agreement, be
issued during the applicable Ordering Period, and specify delivery
within 90 days from order date. All such orders are subject to
acceptance by BCI,
c) Sequenom will issue orders from one location within its organization
and will specify "Ship To" addresses within the country where the
order is placed, unless otherwise mutually agreed.
d) All orders for Products and Software accepted by BCI are firm and
non-cancelable
6 DELIVERY
Subject ot Paragraph 5(a), BCI shall sell and supply to Sequenom, and
Sequenom shall purchase and take delivery from BCI, such quantity of
Products and Software as Sequenom may require for current use during each
Ordering Period. Delivery is subject to acceptance of the order by BCI and
to availability of the Products at the time Sequenom's order is received.
BCI will make commercially reasonable efforts to meet delivery dates quoted
or acknowledged, and to coordinate such delivery dates with Sequanom.
/***/ Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 5
<PAGE>
7 SHIPMENT AND RISK OF LOSS
a) BCI will ship according to BCI standard commercial practice. Special
packing or shipping instructions requested by Sequenom must be agreed
to by BCI in writing, and charges will be billed separately to
Sequenom.
b) All shipments by BCI shall be FOB BCI's point of manufacture in the
United States, except for European orders, which shall be FOB BCI's
affiliate. Title to and risk of loss for the products shall pass to
Sequenom upon delivery by BCI to a carrier designated by Sequenom and
selected by BCI if Sequenom does not designate a carrier.
8 CERTIFICATION
Sequenom hereby certifies that:
a) It is experienced in the use and operation of the Products and will be
primarily responsible for the marketing and support of the products to
Sequenom Customers. Sequenom may request marketing assistance from
BCI. BCI will supply such assistance subject to a written agreement
between the parties setting out the terms and conditions for such
assistance.
b) It is an Independent Agreement or, not an agent or legal
representative of BCI, and that any representation made or agreements
executed by Sequenom with third parties will be Sequenom's sole
responsibility.
c) The Products will be Incorporated in a Sequenom System consisting of a
substantial amount of other hardware and/or software which Sequenom
manufactures, develops, or, in the case of software, acquires the
right to license or sub-license ("Added Value") and which Sequenom
sells or leases to end-user's (other than Sequenom's corporate parent,
division, or any subsidiary of corporate parent) in the regular course
of business. This Added Value represents a significant functional and
value enhancement to the Products and Software. If Sequenom's Added
Value consists of software, the software solves a major application
need for the products being purchased.
Page 6
<PAGE>
d) It is responsible for maintaining support services for the entire
Sequenom System.
e) It is responsible for complying with all training requirements
designated by BCI on each Product and Software Sequenom carries. All
Sequenom personnel servicing the Products supplied by BCI will be
trained either by BCI or Sequenom on the Products within 30 days of
beginning work on any project involving Products supplied by BCI. The
cost of any additional training that is not provided with the standard
purchase package of the Products supplied by BCI is the responsibility
of Sequenom.
9 CONDITIONS
a) Discounts are available only for the Products listed on Exhibit A of
this Agreement.
b) Sequenom will have no claim against BCI for compensation or commission
from any sale, lease, license or transfer of the Products, or any
portion thereof, by BCI or a third party to Sequenom Customers.
c) BCI reserves the right, at its discretion and upon reasonable notice
to Sequenom, to verify Sequenom's compliance with the terms of this
Agreement. At BCI's request, Sequenom will provide BCI with
information to substantiate that Sequenom has fulfilled its
obligations under this terms of this Agreement.
d) Sequenom reserves the right, at its discretion and upon reasonable
notice to BCI, to verify BCI's compliance with the terms of this
Agreement. At Sequenom's request, BCI will provide Sequenom with
information to substantiate that BCI has fulfilled its obligations
under this terms of this Agreement.
10 PRODUCT MODIFICATIONS
Sequenom will submit in writing to BCI any proposed Product changes which
might affect either the performance, safety or radiated emissions
certifications of the Products. In the event BCI believes such changes may
have an adverse effect, BCI and Sequenom shall make the necessary
modifications to the warranty, specifications and liability provisions, if
any, of this Agreement before such changes to the Product are made to
thereby recognize such changes are made by Sequenom at its sole liability
and responsibility and against the advice of BCI.
Page 7
<PAGE>
11 PRODUCT ACCEPTANCE
Product installation is included in the purchase price. Acceptance of the
Products and Software sold hereunder by Sequenom will be, presumed unless
Sequenom notifies BCI within thirty (30) days after delivery that the
product does not meet the product specifications of Exhibit D. If BCI
agrees with Sequenom's test results It will repair or replace at BCI's
option, the affected product or Software in the most expeditious manner
available. The foregoing is Sequenom's sole and exclusive remedy and BCI's
sole and exclusive obligation.
12 PAYMENT
a) Payment will be due 30 days from the date of BCI's invoice. Charges
for Service Agreement Support services will be invoiced in advance.
BCI may change credit terms by providing written notice of the change.
b) A charge of 11/2% of the unpaid balance per month will be applied for
accounts open past thirty (30) days of invoice date. Sequenom agrees
to pay all costs of collecting any sums due to BCI hereunder,
including but not limited to legal fees and expenses.
c) If Sequenom fails to pay any sum when due or fails to perform under
this Agreement with BCI after 10 days written notice, BCI may
discontinue performance under this Agreement.
d) Sequenom hereby grants BCI a security interest in the Products and in
any proceeds as security for its obligations under this Agreement.
Sequenom shall assist and cooperate fully with BCI in any Uniform
Commercial Code (UCC) filing requested by BCI to perfection and
enforcement of such security interest.
13 LIMITED WARRANTY
BCI warrants to Sequenom that, /***/ the date of installation of the
Products, the Products so long as they remain unchanged and in the original
condition supplied by BCI will be free from defects in materials and
workmanship and shall conform to the specifications of attached Exhibit D.
BCI's sole obligation and liability for any breach of the warranty shall be
at BCI's sole option: (1) to replace the Products or Software, in whole or
in any part, provided Sequenom or Sequenom's Customer returns the Products
or Software, at BCI's expense, to be replaced; or (2) to repair or correct
the Products or Software, in whole or in any part; or (3) to refund the
applicable fee paid for the defective Product or Products, in whole or in
any part, which shall be deemed to be
/***/ Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 8
<PAGE>
termination of the License, if the fee is for the Products or Software as a
whole. The foregoing states Sequenom's sole and exclusive remedy and BCI's
sole and exclusive responsibility with respect to any alleged breach of
this limited warranty.
14 PROPRIETARY RIGHTS INDEMNIFICATION
In the event of a claim or lawsuit brought by a third party based upon the
Software use and\or the Product use, alone or in conjunction with or as
part of the Sequenom System, in accordance with the Specifications of
Exhibit D, infringes a trade secret, patent or copyright or other
proprietary right of a third party, then BCI, Inc. shall, at BCI's sole
discretion and option, do one of the following:
a) Procure for Sequenom the right to continue using the Software or
Product; or
b) Modify the Software or Product to render it non-infringing; or,
c) Provide substitute, non-infringing software or product which performs
substantially all of the functions and has substantially all of the
features of the Software or Product; provided that, Sequenom may,
after a thirty (30) day trial of the substitute software, reject the
substitute software, terminate this Agreement and obtain a prorated
refund in accordance with Subparagraph (d) hereof; or,
d) Terminate this Agreement and, if the term of the license was less than
five (5) years, refund to Sequenom a prorate amount of the purchase
price of the software or product paid by Sequenom based on a five (5)
year useful life with the five (5) years commencing on the date on
which software or product was received by Sequenom. The prorata amount
that will be refunded to Sequenom shall be determined by multiplying
the purchase price by Sequenom by a fraction, the numerator of the
fractions shall be 1825 minus the number of days that Sequenom had the
use of the Software or Product and the denominator of which shall be
1825; or
e) Defend the lawsuit and indemnify Sequenom for any damages which may be
awarded; provided that Sequenom provides prompt notice of the claim or
lawsuit to BCI, (ii) Sequenom turns over to BCI the complete control
of the defense of the lawsuit and any settlement or compromise
thereof, (iii) Sequenom cooperates fully with BCI and provides BCI
with such reasonable assistance, as BCI may request (at Beckman
Coulter, Inc.'s sole cost) in the defense of such lawsuit, and (iv)
Sequenom makes no admission or statements relative to the Software or
Product and the third party intellectual property without the express
written permission of BCI.
Page 9
<PAGE>
15 EXCLUSION AND DISCLAIMER OF ALL OTHER WARRANTIES
EXCEPT AS PROVIDED IN PARAGRAPH 13, THE PRODUCTS ARE PROVIDED WITHOUT
WARRANTY OF ANY KIND OR NATURE. BCI DOES NOT WARRANT, GUARANTEE, OR MAKE
ANY REPRESENTATIONS REGARDING THE USE OR THE RESULTS OF THE USE OF THE
PRODUCTS IN TERMS OF CORRECTNESS, ACCURACY, RELIABILITY, CURRENTNESS, OR
OTHERWISE. THE ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE OF THE
PRODUCTS IS ASSUMED BY SEQUENOM AND SEQUENOM'S CUSTOMERS. THE LIMITED
WARRANTY CONTAINED IN PARAGRAPH 13 IS BCI'S SOLE WARRANTY WITH RESPECT TO
THE PRODUCTS, SOFTWARE AND DOCUMENTATION AND ARE MADE IN LIEU OF AND
EXCLUDE ANY OTHER WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED
OR CREATED BY THE UCC OR THE USEAGE IN THE INDUSTRY OR THE COURSE OF
DEALINGS OF THE PARTIES, AS TO ANY MATTER WHATSOEVER, INCLUDING BUT NOT
LIMITED TO THOSE CONCERNING MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
16 LIMITATION OF REMEDIES AND LIABILITIES
EXCEPT AS SET FORTH IN PARAGRAPH 13, BCI SHALL NOT BE LIABLE, TO ANY EXTENT
WHATSOEVER, FOR ANY DAMAGES RESULTING FROM OR ARISING OUT OF THE USE OR
PERFORMANCE OF THE PRODUCTS OR THE SOFTWARE PROVIDED FOR IN THIS AGREEMENT,
REGARDLESS OF FORESEEABILITY OR THE FORM OF ACTION, WHETHER IN AGREEMENT,
BREACH OF WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR
OTHERWISE, AND INCLUDING BUT NOT LIMITED TO DAMAGES RESULTING FROM LOSS OF
DATA, LOSS OF ANTICIPATED PROFITS, OR ANY SPECIAL, INDIRECT, DIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES.
17 FORCE MAJEURE
In the event of war, fire, flood, earthquake, strike, labor trouble,
breakage of equipment, accident, dot, action of governmental authority and
laws, rules, ordinances and regulations, act of God, or contingencies
beyond the reasonable control of Sequenom or BCI, interfering with the
production, supply or transportation of such party at the time respecting
the Products and Software covered by this agreement, or in the event of
Inability to obtain on usual and customary prices and terms any goods and
components used in connection therewith, quantities so affected shall be
eliminated from the agreement without liability, but the agreement shall
otherwise remain unaffected. BCI may, during any period of shortage of
such goods and components due to force majeure as defined herein, allocate
its supply of such goods and components among the various users and
Sequenom therefore in any manner which it deems appropriate; provided that
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 10
<PAGE>
BCI shall have no obligation to obtain goods and components from a third
party under conditions BCI deems unreasonable in order to supply BCI's
excused shortfall; and provided further that any goods and components
obtained by BCI from a third party solely for BCI's internal use are not
subject to allocation.
18 EXPORT CONTROLS
Sequenom understands and recognizes that the Products and Software, in
whole or in part, may be subject to the Export Administration Regulations
of The United States Department of Commerce and other United States
government regulations relating to the export of technical data. All
commodities, technology and software exported from the United States shall
be exported in accordance with Export Administration Regulations.
Diversion contrary to U.S. law is prohibited. Sequenom agrees to comply
with all such regulations, including any future modifications thereof.
19 GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by, and construed under the Laws of the
State of Califonia and the United States, without regard to conflicts of
laws provisions thereof and without regard to the United Nations
Conventions on Contracts for the International Sale of Goods. The sole
jurisdiction and venue for actions related to the subject matter hereof
shall be the State and U.S. Federal Courts having within their jurisdiction
the location of BCI's principle place of business.
20 SOFTWARE LICENSES
a) For the purposes of this paragraph 20, the term "License" shall mean
Software License. The term "Use" means storing, loading, installing,
executing or displaying software on a computer, processor or
controller, or making a copy of software for archival or backup
purposes only.
b) Upon payment of the applicable fee, Sequenom may make and use one copy
of that software licensed directly from BCI.
c) Sequenom's License does not include the right to updates, upgrades or
other enhancements.
d) Software bundled with a hardware Product may be used only with that
hardware in the configuration in which that Product is sold by BCI or
subsequently upgraded by BCI.
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 11
<PAGE>
e) Sequenom's License confers no title or ownership in the Software and
no rights in any associated source code, and such license will not be
construed as a sale of any rights in Software.
f) Sequenom's entire License In Software is transferable to Sequenom's
Customer subject to payment to BCI of all fees by Sequenom. Sequenom
will immediately upon transfer deliver all copies of the Software to
the party to whom the Software is transferred in accordance with this
paragraph 20(f). License terms will be binding on involuntary
transferees. Sequenom's license will automatically terminate upon any
transfer. Any License duly transferred under this Agreement to
Sequenom's Customer shall survive termination of this Agreement.
g) Sequenom may not reverse engineer, disassemble or decompile the
Software without BCI's prior written consent.
h) BCI may terminate Sequenom's License in Software upon notice for
failure to comply with any applicable License terms. In the event of
termination of Sequenom's License for any other reason, Sequenom will
destroy or return to BCI the Software and all copies of the Software
immediately upon termination. Sequenom will remove and destroy all
copies of the Software from any adaptation into which they are merged.
This section does not apply to Software delivered to a Sequenom
Customer pursuant to the sale of a Sequenom System to such customer.
21 TITLE & COPYRIGHT NOTICE
Sequenom understands and agrees that the Products, in whole or in any part,
constitute proprietary information of BCI. Sequenom acknowledges that the
title to any form of intellectual property rights, confidential and
proprietary information incorporated into or embodied by the Products and
Software, firmware and documentation shall remain vested exclusively in
BCI. All copyright, trademark, mask work, patent and other intellectual
property rights in the Products or any part thereof including all
modifications, additions, or extensions of the Products and Software, shall
become vested exclusively In BCI. All copies of the software and
derivative works of the software will, on the first screen, carry a notice
of BCI's ownership of the software and any derivative works.
22 RENEWAL
This Agreement will remain in effect for twelve (12) months from the last
date in time adjacent the signatures of the authorized representatives of
the parties on the last page of this Agreement. This Agreement shall be
automatically renewed for successive twelve (12) month periods, subject to
the provisions of Paragraph 24.
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 12
<PAGE>
23 PUBLICITY
BCI agrees to allow Sequenom to publish, as long as this Agreement is in
effect, the name of BCI as an authorized Original Equipment Manufacturer of
the Products. BCI may, as long as this Agreement Is in effect, publicly
state and publish that Sequenom is an authorized Original Equipment
Manufacturer reseller of the Products. The form of either publication
shall be mutually agreed upon by both parties.
24 TERMINATION
a) Upon 30 days prior written notice, either party may terminate this
Agreement at the end of an Ordering Period, or any extension thereof.
Either party may also terminate this agreement at any time on thirty
(30) days written notice in the event of a material breach of the
terms of this Agreement, unless the other party cures such breach
within such 30 days of Notice of Breach each party shall define with
specificity the acts and sections of this Agreement which constitute
such breach.
b) If either party becomes insolvent, is unable to pay its debts when
due, files for bankruptcy, is the subject of involuntary bankruptcy,
has a receiver appointed, or has its assets assigned, the other party
may terminate this Agreement without notice and may cancel any
unfulfilled obligations.
c) The provisions of paragraphs 3 and 8, 13, 14 and 21 will survive the
termination or expiration of this Agreement.
25 GENERAL
a) ***
***
b) ***
***
c) If any provision of this agreement is held invalid or unenforceable,
such invalidity shall not affect the other provisions or application
of the Agreement which ran be given effect without the Invalid
provision or application, and to this end the provisions of this
Agreement are declared to be severable. If such invalidity becomes
known or apparent to Sequenom and BCI, Sequenom and BCI agree to
negotiate promptly in the good faith in an attempt to make appropriate
changes and adjustments to achieve as closely as possible consistent
with applicable law, the intent and spirit of such invalid provision.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 13
<PAGE>
d) Neither party may assign any rights or obligations of this Agreement
without prior written consent of the other party: provided that BCI
may assign this Agreement to a successor in interest to all, or
substanially all of the business or assets to which Agreement relates.
e) Neither party's failure to exercise any of its fights under this
Agreement will constitute or be deemed a waiver or forfeiture of those
rights.
f) This Agreement supersedes any previous communications, representations
or agreements between the parties, whether oral or written, regarding
transactions hereunder, excluding the current Confidentiality
Agreement dated September 23, 1998. Sequenom's additional or
different terms and conditions will not apply. This Agreement may not
be changed except by an amendment signed by an authorized
representative of each party.
g) Sequenom acknowledges that information and recommendations, Including
but not limited to technical and marketing information and
recommendations, are furnished by BCI without charge, and that BCI
assumes no obligation or liability for the advice given or results
obtained therefrom. Sequenom agrees to evaluate such information and
recommendations using its own independent skill and expertise, and
accepts all risks arising from the use or non-use of such Information
and/or recommendations.
h) Sequenom agrees that the terms and conditions of this Agreement
including Exhibits are not published by BCI and are confidential and
will not be disclosed by Sequenom to any third party.
IN WITNESS WHEREOF, the undersigned have executed this Agreement this ____st day
Of ____________, 1999.
AGREED TO: AGREED TO:
AGREED TO: AGREED TO:
Sequenom, Inc. Beckman Coulter, Inc.
11555 Sorrento Valley Road 4300 N. Harbor Blvd.
San Diego, California 92121-1331 Fullerton, California 92834-3100
By: /s/ Hubert Koster By: /s/ Detlef Sasse
--------------------- -----------------
Name: Hubert Koster Name: Detlef Sasse
------------------- ---------------
Title: President & CEO Title: Vice President
------------------ --------------
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 14
<PAGE>
EXHIBITS
The Exhibits attached and listed below are part of this Agreement
EXHIBIT A - Product Description
EXHIBIT B - Sequenom Pricing Schedule
EXHIBIT C - Joint Research and Development
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 15
<PAGE>
EXHIBIT A - PRODUCT DESCRIPTION
The following Beckman Coulter products are available from BCI. When BCI has new
Standard Products to be added to this list, an amended exhibit will be
distributed.
Multimek(TM) US Product Description
Multimek(TM) 96 Systems
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Part No. Included System Components Special
Order
- ----------------------------------------------------------------------------------------------------------------
Multimek 96 Pipettor Multimek Five- Fixed Tip PC Controller
Pro Position Wash 477866
Software Labware System
147210 Deck 147235
147220
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
267777 147201 X X X
200 (MU)L Disposable Tip Head,
Auto Tip Load Station,
Standard Config., 120 VAC
- ----------------------------------------------------------------------------------------------------------------
267778 147203 X X
200 (MU)L Disposable Tip Head,
Auto Tip Load Station,
Standard Config., 240 VAC
- ----------------------------------------------------------------------------------------------------------------
267771 147206 X X
200 (MU)L Disposable Tip Head,
Auto Tip Load Station,
Robotic Version, 120 VAC
- ----------------------------------------------------------------------------------------------------------------
267773 147208 X X
200 (MU)L Disposable Tip Head,
Auto Tip Load Station,
Robotic Version, 240 VAC
- ----------------------------------------------------------------------------------------------------------------
267779 147202 X X X X
200 (MU)L Disposable Tip Head,
Auto Tip Load Station,
Standard Config., 120 VAC
- ----------------------------------------------------------------------------------------------------------------
267780 147204 X X X
200 (MU)L Disposable Tip Head,
Auto Tip Load Station,
Standard Config., 120 VAC
- ----------------------------------------------------------------------------------------------------------------
267772 147207 X X X
200 (MU)L Disposable Tip Head,
Auto Tip Load Station,
Robotic Version, 120 VAC
- ----------------------------------------------------------------------------------------------------------------
267774 147209 X X X
200 (MU)L Disposable Tip Head,
Auto Tip Load Station,
Robotic Version, 240 VAC
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 16
<PAGE>
Multimek(TM) 96 Automated Pipettors
U.S. Product Description
All pipettors must be ordered with Multimek Pro software, a PC Controller and a
Labware Deck. Disposable tip systems include Auto Tip Load Stations. Standard
Multimek 96 systems feature a plastic Safety Shield enclosing the work area.
Robotic versions have work areas enclosed with Light Curtains on the front and
back for compatibility with robotic access. All instruments with 20-(MU)L heads
are Special Order items which may have longer delivery times.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Part No. Description
- ---------------------------------------------------------------------------------------------
<C> <S>
147201 Multimek 96 Pipettor with Disposable Tip Dispense Head (200 (MU)L) Standard
Configuration, 120 VAC.
- ---------------------------------------------------------------------------------------------
147203 Multimek 96 Pipettor with Disposable Tip Dispense Head (200 (MU)L) Standard
Configuration, 240 VAC.
- ---------------------------------------------------------------------------------------------
147206 Multimek 96 Pipettor with Disposable Tip Dispense Head (200 (MU)L) Robotic
Version, 120 VAC.
- ---------------------------------------------------------------------------------------------
147208 Multimek 96 Pipettor with Disposable Tip Dispense Head (200 (MU)L) Robotic
Version, 240 VAC.
- ---------------------------------------------------------------------------------------------
147202 Multimek 96 Pipettor with Disposable Tip Dispense Head (20 (MU)L) Standard
Configuration, i20 VAC.
- ---------------------------------------------------------------------------------------------
147204 Multimek 96 Pipettor With Disposable Tip Dispense Head (20 (MU)L) Standard
Configuration, 240 VAC.
- ---------------------------------------------------------------------------------------------
147207 Multimek 96 Pipettor with Disposable Tip Dispense Head (20 (MU)L) Robotic
Version, 120 VAC.
- ---------------------------------------------------------------------------------------------
147209 Multimek 96 Pipettor with Disposable Tip Dispense Head (20 (MU)L) Robotic
Version, 240 VAC.
- ---------------------------------------------------------------------------------------------
</TABLE>
Multimek(TM) 96 Required Accessories
U.S. Product Description
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Part No. Description
- ---------------------------------------------------------------------------------------------
<C> <S>
147210 Multimek Pro Software - Software for programming and running pipetting methods.
- ---------------------------------------------------------------------------------------------
477866 Multimek PC Controller - U.S. only.
U.S. only. IBM Pentium 200 MHz, 32 MB RAM, 1 GB Hard Drive, 1.44 MB
Floppy, 17" Monitor, Windows'95.
- ---------------------------------------------------------------------------------------------
147220 Multimek 96 Labware Deck, Five Position
Position #5 open. For use on disposable tip instruments without tip wash systems.
- ---------------------------------------------------------------------------------------------
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 17
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------------
<S> <C>
147221 Multimek 96 Labware Deck, Four Position
- -------------------------------------------------------------------------------------------
Positions #5 and #6 open. For use on disposable tip Instruments with tip wash
systems.
- -------------------------------------------------------------------------------------------
</TABLE>
Multimek(TM) 96 Optional Accessories
U.S. Product Description
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Part No. Description
- -------------------------------------------------------------------------------------------
<S> <C>
147230 Disposable Tip Dispense Head - 200 (MU)L
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
148027 20 (MU)L Disposable Tip Dispense Head Conversion Kit
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
147233 Disposable Tip Wash System
Includes wash station, wash pump, supply tank, and drain/waste tank.
Uses position #6 on Multimek deck.
- -------------------------------------------------------------------------------------------
</TABLE>
Circulator Bath
U.S. Product Description
The Circulating Reservoir for the Multimek 96 provides a continuous supply of
buffer, solvent or reagent on the Multimek work surface. A peristaltic pump
circulates liquid between a 96-well reservoir on the Multimek Labware Deck and a
glass supply bottle. The reservoir can be placed at any available position on
the Labware Deck. Liquid temperature can be regulated by placing the supply
bottle in a user-supplied circulator bath.
148026 Multimek Circulating Reservoir Kit
Includes: Circulating pump and two pump heads, 1.1 L supply bottle
(148028), delivery cap (148030), 96-well reservoir for Multimek
worksurface, Tygon and PharMed tubing and manual.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
System Components
- -------------------------------------------------------------------------------------------
Part No. Description
- -------------------------------------------------------------------------------------------
<C> <S>
148028 1.1 L Reservoir Bottle
- -------------------------------------------------------------------------------------------
148029 5.0 L Reservoir Bottle
- -------------------------------------------------------------------------------------------
148030 Reservoir Delivery Cap
- -------------------------------------------------------------------------------------------
148031 Tubing/Fitting Replacement Kit, Tygon
- -------------------------------------------------------------------------------------------
148032 Tubing/Fitting Replacement Kit, PharMed
- -------------------------------------------------------------------------------------------
148225 Multimek Teflon Circulation Reservoir
- -------------------------------------------------------------------------------------------
148033 Multimek Teflon Reservoir, Stand-Alone; not recirculating
- -------------------------------------------------------------------------------------------
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 18
<PAGE>
Multimek(TM) 96 Tips
U.S. Product Description
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Part No. Description
- -------------------------------------------------------------------------------------------
<C> <S>
148005 200 (MU)L Tips, Type 2, Nonsterile (Case of 10 Racks)
For use on 20Q (MU)L Disposable Tip Dispense Head.
- -------------------------------------------------------------------------------------------
267663 200 (MU)L Tips, Type 2, Nonsterile (Pallet of 125 Cases)
For use on 200 (MU)L Disposable Tip Dispense Head.
- -------------------------------------------------------------------------------------------
148004 200 (MU)L Tips, Type 2. Sterile (Case of 10 Racks)
For use on 200 (MU)L Disposable Tip Dispense Head.
- -------------------------------------------------------------------------------------------
267662 200 (MU)L Tips, Type 2, Sterile (Pallet of 125 Cases)
For use on 200 (MU)L Disposable Tip Dispense Head.
- -------------------------------------------------------------------------------------------
148003 50 (MU)L Tips, Type 2, Nonsterile (Case of 10 Racks)
For use on 20 (MU)L Disposable Tip Dispense Head.
- -------------------------------------------------------------------------------------------
267661 50 (MU)L Tips, Type 2, Nonsterile (Pallet of 125 Cases)
For use on 20 (MU)L Disposable Tip Dispense Head.
- -------------------------------------------------------------------------------------------
148003 50 (MU)L Tips, Type 2, Nonsterile (Case of 10 Racks)
For use on 20 (MU)L Disposable Tip Dispense Head.
- -------------------------------------------------------------------------------------------
267660 50 (MU)L Tips, Type 2, Sterile (Pallet of 125 Cases)
For use on 20 (MU)L Disposable Tip Dispense Head.
- -------------------------------------------------------------------------------------------
147252 20 (MU)L Tips, Type 1, Nonsterile (1 Nested Stack of 12 Sets of 96 Tips)
For use on 20 (MU)L Disposable Tip Dispense Head.
- -------------------------------------------------------------------------------------------
147243 P200 Type 2 Tip Hardware Conversion Kit
For instruments having serial numbers prior to 304139.APS.
- -------------------------------------------------------------------------------------------
</TABLE>
Multimek(TM) 96 Parts and Supplies
U.S. Product Description
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Part No. Description
- -------------------------------------------------------------------------------------------
<C> <S>
147299 Multimek 96 Light Curtain Kit
Components for utilizing a Multimek 96 on Beckman Coulter /SAGIAN integrated
systems.
- -------------------------------------------------------------------------------------------
148035 MultiPette Safety Upgrade Kit, Shield
- -------------------------------------------------------------------------------------------
148036 MultiPette Safety Upgrade Kit, Light Curtain
- -------------------------------------------------------------------------------------------
148094 Automatic Tip Loading Station - For 200 (MU)L Type 2 tips only.
- -------------------------------------------------------------------------------------------
147205 Automatic Tip Loading Station - For 20 (MU)L Type 1 tips.
- -------------------------------------------------------------------------------------------
147240 Deck Standoff Kit For use with 200 (MU)L Disposable Tip Head.
- -------------------------------------------------------------------------------------------
147241 Deck Standoff Kit for Use with 20 (MU)L Disposable Tip Head
- -------------------------------------------------------------------------------------------
147216 Multimek 96 Installation and Operations Binder
Includes Installation and Maintenance Manual, Basic Training Manual and
Tutorial Manual.
- -------------------------------------------------------------------------------------------
147211 Multimek 96 Installation and Maintenance Manual
- -------------------------------------------------------------------------------------------
147212 Multimek Pro Software Reference Manual
- -------------------------------------------------------------------------------------------
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 19
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------
147225 Multimek 96 Tutorial Manual
- ------------------------------------------------------------------------------------------------
147260 P20 Tip Box, Aluminum Reusable - Does not include tips.
- ------------------------------------------------------------------------------------------------
147261 P20 Tip Box, Lightweight Reusable - Does not include tips.
- ------------------------------------------------------------------------------------------------
147262 P20 Tip De-Nester
For easily de-nesting P20 tips into a reusable tip box for use on the Multimek 96.
- ------------------------------------------------------------------------------------------------
147263 Tip Transfer Tool, P200 - For transferring P200 tips from one tip box to another,
96 at a time.
- ------------------------------------------------------------------------------------------------
147264 Tip Transfer Tool, P20 - For transferring P20 tips from one tip box to another,
96 at a time.
- ------------------------------------------------------------------------------------------------
147330 Ball Screw Grease
- ------------------------------------------------------------------------------------------------
147295 Cleanout Needle for Fixed Tip Head
- ------------------------------------------------------------------------------------------------
147292 Wrench Kit
- ------------------------------------------------------------------------------------------------
</TABLE>
Multimek(TM) 96 Tips
U.S. Product Description
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Part No. Description
- ------------------------------------------------------------------------------------------------
<S> <C>
148005 200 (MU)L Tips, Type 2, Nonsterile (Case of 10 Racks)
For use on 200 (MU)L Disposable Tip Dispense Head.
- ------------------------------------------------------------------------------------------------
267663 200 (MU)L Tips, Type 2, Nonsterile (Pallet of 125 Cases)
For use on 200 (MU)L Disposable Tip Dispense Head.
- ------------------------------------------------------------------------------------------------
148004 200 (MU)L Tips, Type 2, Sterile (Case of 10 Racks)
For use on 200 (MU)L Disposable Tip Dispense Head.
- ------------------------------------------------------------------------------------------------
267662 200 (MU)L Tips, Type 2, Sterile (Pallet of 125 Cases)
For use on 200 (MU)L Disposable Tip Dispense Head.
- ------------------------------------------------------------------------------------------------
148003 50 (MU)L Tips, Type 2, Nonsterile (Case of 10 Racks)
For use on 20 (MU)L Disposable Tip Dispense Head.
- ------------------------------------------------------------------------------------------------
267661 50 (MU)L Tips, Type 2, Nonsterile (Pallet of 125 Cases)
For use on 20 (MU)L Disposable Tip Dispense Head.
- ------------------------------------------------------------------------------------------------
148003 50 (MU)L Tips, Type 2, Nonsterile (Case of 10 Racks)
For use on 20 (MU)L Disposable Tip Dispense Head.
- ------------------------------------------------------------------------------------------------
267660 50 (MU)L Tips, Type 2, Sterile (Pallet of 125 Cases)
For use on 20 (MU)L Disposable Tip Dispense Head.
- ------------------------------------------------------------------------------------------------
147252 20 (MU)L Tips, Type 1, Nonsterile (1 Nested Stack of 12 Sets of 96 Tips)
For use on 20 (MU)L Disposable Tip Dispense Head.
- ------------------------------------------------------------------------------------------------
147243 P200 Type 2 Tip Hardware Conversion Kit
- ------------------------------------------------------------------------------------------------
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 20
<PAGE>
Multimek(TM) 96 Parts and Supplies
U.S. Product Description
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Part No. Description
- ------------------------------------------------------------------------------------------------
<C> <S>
147299 Multimek 96 Light Curtain Kit
Components for utilizing a Multimek 96 on Beckman Coulter /SAGIAN integrated
systems.
- ------------------------------------------------------------------------------------------------
148035 MultiPette Safety Upgrade Kit, Shield
- ------------------------------------------------------------------------------------------------
148036 MultiPette Safety Upgrade Kit, Light Curtain
- ------------------------------------------------------------------------------------------------
148094 Automatic Tip Loading Station - For 200 (MU)L Type 2 tips only.
- ------------------------------------------------------------------------------------------------
147205 Automatic Tip Loading Station - For 20 (MU)L Type 1 tips.
- ------------------------------------------------------------------------------------------------
147240 Deck Standoff Kit
For use with 200 (MU)L Disposable Tip Head.
- ------------------------------------------------------------------------------------------------
147241 Deck Standoff Kit for Use with 20 (MU)L Disposable Tip Head
- ------------------------------------------------------------------------------------------------
147216 Multimek 96 Installation and Operations Binder
Includes Installation and Maintenance Manual, Basic Training Manual and Tutorial
Manual.
- ------------------------------------------------------------------------------------------------
147211 Multimek 96 Installation and Maintenance Manual
- ------------------------------------------------------------------------------------------------
i47212 Multimek Pro Software Reference Manual
- ------------------------------------------------------------------------------------------------
147225 Multimek 96 Tutorial Manual
- ------------------------------------------------------------------------------------------------
147260 P20 Tip Box, Aluminum Reusable - Does not include tips.
- ------------------------------------------------------------------------------------------------
147261 P20 Tip Box, Lightweight Reusable - Does not include tips.
- ------------------------------------------------------------------------------------------------
147262 P20 Tip De-Nester
For easily de-nesting P20 tips into a reusable tip box for use on the Multimek 96.
- ------------------------------------------------------------------------------------------------
147263 Tip Transfer Tool, P200 - For transferring P200 tips from one tip box to another,
96 at a time.
- ------------------------------------------------------------------------------------------------
147264 Tip Transfer Tool, P20 - For transferring P20 tips from one tip box to another,
96 at a time.
- ------------------------------------------------------------------------------------------------
147330 Ball Screw Grease
- ------------------------------------------------------------------------------------------------
147295 Cleanout Needle for Fixed Tip Head
- ------------------------------------------------------------------------------------------------
147292 Wrench Kit
- ------------------------------------------------------------------------------------------------
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 21
<PAGE>
Multimek 96 - Channel Pipettor
European Product Description
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Part No. Description
<S> <C>
267778 Multimek 96-Channel Pipeftor, 200(MU)L Standard (220\240 VAC)
-----------------
Includes:
- 147203 Multimek 96, 200(MU)L Disposable Tip Head, 220 / 240 VAC
- 147205 (Auto) Tip Load Station
- 147210 Multimek Pro Software
- 147220 Five Position Labware Deck
267773 Multimek 96-Channel Pipettor, 200(MU)L Robotic (220 / 240 VAC
----------------
Includes:
- 147208 Multimek 96, 200(MU)L Disposable Tip Head, 220 / 240 VAC
- 147205 (Auto) Tip Load Station
- 147210 Multimek Pro Software
- 147220 Five Position Labware Deck
267780 Multimek 96-Channel Pipeftor, 50(MU)L Standard (220 240 VAC)
----------------
includes:
- 147204 Multimek 96, 50(MU)L Disposable Tip Head, 220 / 240 VAC
- 147205 (Auto) Tip Load Station
- 147210 Multimek Pro Software
- 147220 Five Position Labware Deck
267774 Multimek 96-Channel Pipeftor, 50(MU)L Robotic (220 240 VAC
---------------
Includes:
- 147209 Multmek 96, 50(MU)L Disposable Tip Head, 220 / 240 VAC
- 147205 (Auto) Tip Load Station
- 147210 Multimek Pro Software
- 147220 Five Position Labware Deck
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 22
<PAGE>
Multimek 96 - Channel Pipeftor
European Product Description
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Part No. Description
<S> <C>
147203 Multimek 96-Channel Pipettor, 2OO(MU)L Standard (220 / 240 VAC
includes:
- 147230 200(MU)L Disposable Tip Head, volume range 5 - 2OOpI
- 147205 (Auto)Tip Load Stabon
147208 Multimek 96-Channel Pipettor, 200(MU)L Robotic (220 240 VAC
includes:
- Multimek 96
- 147299 Light curtain kit ( includes tip box holder, standoffs, screws,
serial port)
- 147230 200(MU)L Disposable Tip Head, volume range 5 - 200(MU)L
- 147205 (Auto)Tip Load Station
147204 Multimek 96-Channel Pipettor, 50(MU)L Standard (220 240 VAC
includes:
- 147231 20(MU)L Disposable Tip Head, volume range 1 - 20(MU)L
- 147205 (Auto)Tip Load Station
147209 Multimek 96-Channel Pipettor, 50(MU)L Robotic (220 240 VAC)
Includes:
- Multimek 96
- 147299 Light curtain kit ( includes tip box holder, standoffs, screws,
serial port)
- 147231 20(MU)L Disposable Tip Head, volume range 5 - 200(MU)L
- 147205 (Auto)Tip Load Station
147210 Multimek Pro Software
Software for programming and running pipetting methods.
147220 Multimek 96 Labware Deck, Five Position Position #5 open. For use on
disposable tip instruments without Up wash systems.
147221 Multimek 96 Labware Deck, Four Position Positions #5 and #6 open. For use on
disposable tip instruments with tip wash systems.
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 23
<PAGE>
Multimek 96 - Channel Pipettor
European Product Description
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Part No. Description
<S> <C>
147230 200(MU)L Disposable Tip Dispense Head including:
147 240 Deck Standoff Kit, Short
148103 50(MU)L Disposable Tip Dispense Head Conversion Kit
148014 Disposable Tip Wash System
Includes wash station, wash pump, supply tank, and drain/waste tank.
Uses position #6 on Multimek deck.
Multimek(TM) Circulating Reservoir
European Product Description
148010 Multimek Circulating Reservoir Kit
INCLUDES: Circulating pump and two pump heads, 1.lL supply bottle (148028),
delivery cap (148030), 96-well reservoir for Multimek work surface, Tygon and
PharMed tubing and manual.
Multimek Circulating Reservoir, System
Components
148028 1.1 L Reservoir Bottle
148029 5.0 L Reservoir Bottle
148030 Reservoir Delivery Cap
148031 Tubing/Fitting Replacement Kit, Tygon
148032 Tubing/Fitting Replacement Kit, PharMed
148225 Multimek Teflon Circulation Reservoir
148033 Multimek Teflon Reservoir, Stand-Alone
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 24
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Part No. Description
Multimek(TM) 96 Tips
European Product Description
<S> <C>
Multimek(TM)
148005 200 (MU)L Tips, Type 2, Nonsterile (Case of 10 Racks) For use on
200 (MU)L Disposable Tip Dispense Head
267663 200 (MU)L Tips, Type 2, Nonsterile (Pallet of 125 Cases) For use
on 200 p(MU)L Disposable Tip Dispense Head
148004 200 (MU)L l Tips, Type 2, Sterile (Case of 10 Racks) For use on
200 (MU)L Disposable Tip Dispense Head
267662 200 (MU)L Tips, Type 2, Sterile (Pallet of 125 Cases) For use on
200 (MU)L Disposable Tip Dispense Head
148003 50 (MU)L Tips, Type 2, Nonsterile (Case of 10 Racks) For use on
50 (MU)L Disposable Tip Dispense Head
267661 50 (MU)L Tips, Type 2, Nonsterile (Pallet of 125 Cases) For use
on 50 (MU)L Disposable Tip Dispense Head
148002 50 (MU)L Tips, Type 2, Sterile (Case of 10 Racks) For use on 50
(MU)L Disposable Tip Dispense Head
267660 50 (MU)L Tips, Type 2, Sterile (Pallet of 125 Cases) For use on
50 (MU)L Disposable Tip Dispense Head
Multimek(TM) Tip Conversion Kits
European Product Description
267633 Multimek P20 to P50/P200 Type 1 Tip Conversion Kit
Includes:
147293: Type 1 Tip Hardware Kit
147240: Short Standoffs
147337: Push Tab
267634 Multimek P20 to P50 Type 2 Tip Conversion Kit Includes:
148097: P50 Type 2 Tip Carrier
147337: Push Tab
267635 Multimek P20 to P200 Type 2 Tip Conversion Kit Includes:
147243: P200 Type 2 Tip Hardware Kit
147240: Short Standoffs
147337: Push Tab
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 25
<PAGE>
<TABLE>
<S> <C>
267636 Multimek P50/P200 Type 2 to P20 Tip Conversion Kit
Includes:
147205: Type 1 Tip Carrier
147293: Type 1 Tip Hardware Kit
147241: Tall Standoffs
147260: P20 Tip Box, Aluminum
267637 Multimek Type 2 to P50/P200 Type I Tip Conversion Kit
Includes:
147205: Type 1 Tip Carrier
147293: Type 1 Tip Hardware Kit
267638 Multimek P50/P200 Type I to P20 Tip Conversion Kit
Includes:
147241: Tall Standoffs
147260: P20 Tip Box, Aluminum
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Part No. Description
<S> <C>
Multimek(TM) 96 Parts and Supplies
European Product Description
147299 Multimek 96 Light Curtain Kit
Components for utilizing a Multimek 96 on Beckman Coulter/SAGIAN integrated
systems.
147035 MultiPette Safety Upgrade Kit, Shield
148036 MultiPette Safety Upgrade Kit, Light Curtain
148094 Automatic Tip Loading Station (For 200 (MU)L Type 2 tips only)
147205 Automatic Tip Loading Station (For 20 (MU)L Type 1 UPS)
147097 Automatic Tip Loading Station (For 50 (MU)L Type 2 tips)
147240 Deck Standoff Kit
For use with 200 (MU)L Disposable Tip Head
147241 Deck Standoff Kit
For use with 20 (MU)L Disposable Tip Head
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 26
<PAGE>
<TABLE>
<S> <C>
147216 Multimek 96 Installation and Operations Binder Includes
Installation and Maintenance Manual, Basic Training Manual and
Tutorial Manual
147211 Multimek 96 Installation and Maintenance Manual
147212 Multimek Pro Software Reference Manual
147225 Multimek 96 Tutorial Manual
147260 P20 Tip Box, Aluminum, reusable
147261 P20 Tip Box, lightweight, reusable
147262 P20 Tip De-Nester
147263 P200 Tip Transfer Tool
147264 P20 Tip Transfer Tool
147330 Ball Screw Grease
147295 Cleanout Needle for Fixed Tip Head
147292 Wrench Kit
<CAPTION>
Part No. Description
<S> <C>
Multimek(TM) 96 Stacker Carousel
European Product Description
148364 Single Stacker Carousel System for Multimek 96
Includes Carousel for mounting on left side of Multimek 96 Pipettor and
Multimek Stacker Carousel Software. Labware Deck and Stacker's ordered
separately.
267664 Double Stacker Carousel System for Multimek 96
Includes Carousels for mounting on left and right sides of Multimek 96
Pipettor, Multimek Stacker Carousel Software and two-position Labware Deck.
Stackers ordered separately.
148246 Stacker 20
148247 Stacker 10
148257 Stacker HD (capacity 45 Microplates
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 27
<PAGE>
<TABLE>
<S> <C>
148104 Labware Deck, Two-Position (1,2)
148105 Labware Deck, Three-Position (1,2,4)
148106 Labware Deck, Four-Position (1,2,4,6)
148258 Bar Code Reader for Multimek
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Part No. Description
Multimek Stacker Carousel Parts
European Product Description
<S> <C>
148366 Multimek Stacker Carousel Software
148404 Multimek Stacker Carousel Kit, Left Side
INCLUDES: Left Multimek Stacker Carousel Base, Control Pendant
with Cable (148240), Cable (148244), Wrenches (148353 and
148354), Bubble Level (148270) and Manual (148403).
148365 Multimek Stacker Carousel Kit, Right Side
INCLUDES: Right Multimek Stacker Carousel Base, Control Pendant
with Cable (148240), Cable (148244), and Serial Card for
Controller.
148240 Control Pendant with Cable
148241 Pendant Cable
148244 Communications Cable - Carousel to Controller
148270 Bubble Level
148353 Allen Wrench, 3/16 inch
148354 Allen Wrench, 5/16 inch
148403 Multimek Stacker Carousel Users Manual
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 28
<PAGE>
EXHIBIT B - SEQUENOM PRICING SCHEDULE
1 QUALIFICATION
Sequenom will be eligible for discounts for products purchased from BCI as
described In Exhibit A under the following Pricing Schedule A): Multimek
Workstation.
Sequenom will be eligible for discounts on Mufflmek Tools and Accessories
for products purchased from BCI under the following Pricing Schedule 0):
Muftimak Workstation Tools and Accessodes.
2 DISCOUNT LEVEL
Pricing Schedule A) Multimek Workstation
***
***
***
***
***
***
***
***
Pricing. Schedule B) Multimek Tools and Accessories
BCI will provide Sequenom a *** on all Multimek tools and/or accessories
ordered on a standalone basis.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 29
<PAGE>
Exhibit C - Joint Research and Development
1) BCI and Sequenom will collaborate to develop specifications, development
plans and schedules for ***
***
2) ***
***
***
***
***
3) ***
***
***
***
***
4) ***
***
***
***
***
5) ***
***
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 30
<PAGE>
Exhibit D- Product Specifications
***
***
***
***
***
***
***
***
***
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 31
<PAGE>
Exhibit "E" Spare Parts List
<TABLE>
<CAPTION>
PART NUMBER Beckman Description Quan U/M
Part #
- -------------------------------------------------------------------------------------------------------
MANUALS
- -------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
100-00-00232 147211 MULTIMEK 96 INSTALLATION AND 1 ea
MAINTENANCE MANUAL
100-36-00202 147222 MULTIMEK PRE-INSTALLATION MANUAL 1 ea
100-00-00262 148050 MULTIMEK MANUALS 1 ea
(includes: Software ref, Basic Training and
Tutorial Manuals)
MULTIMEK
- --------
075-05-00009 147310 LITTLE STAR CONTROLLER 1 ea
085-05-00067 147311 LITTLE STAR REMOTE KEYPAD 1 ea
085-05-00068 147341 LITTLE STAR REMOTE DISPLAY 1 ea
075-05-00010 147312 IMS CONTROLLER 1 ea
118-15-00006 147313 FUSE - 5 AMP 1 ea
118-15-00007 147314 FUSE - 7 AMP 1 ea
074-00-00019 148101 STEPPER MOTOR & ENCODER 1 ea
066-15-00013 147318 OPTICAL SENSOR / 90 DEGREE 1 ea
066-15-00014 147319 OPTICAL SENSOR / FLAT 1 ea
069-15-00055 147320 RS232 CABLE 1 ea
069-15-00056 147321 14 CONDUCTOR RIBBON CABLE 1 ea
069-15-00057 147322 10 CONDUCTOR FLEX FILM 1 ea
069-15-00058 147323 16 CONDUCTOR FLEX FILM 1 ea
090-05-00077 147324 BALL NUT 1 ea
071-05-00008 147325 SMALL TIMING BELT 1 ea
071-05-00009 147326 LARGE TIMING BELT 1 ea
085-05-00070 147328 AUTO TIP LOAD CARRIER SIDE ARM 1 ea
(RIGHT ARM)
085-05-00071 147329 AUTO TIP LOAD CARRIER SIDE ARM 1 ea
(LEFT ARM)
097-05-00013 147330 BALL SCREW GREASE 1 ea
113-05-00007 147331 TOUCH UP PAINT 1 ea
073-05-00011 147332 DISPENSE HEAD COVER 1 ea
090-05-00078 147333 Z-AXIS LEAD SCREW 1 ea
085-05-00072 147334 Z-AXIS FLAG 1 ea
085-05-00073 147335 X-AXIS HOME FLAG 1 ea
085-05-00074 147337 UNIVERSAL TIP BOX PUSH TAB 1 ea
064-00-00017 LARGE BIMBA AIR CYLINDER 1 ea
090-00-00133 AIR CYLINDER SHAFT SPACER 1 ea
114-00-00051 MULTIMEK CRATE 1 ea
</TABLE>
24-June-99 Confidential Information of Beckman Coulter, Inc. Page 32
<PAGE>
EXHIBIT 10.36
PUBLIC HEALTH SERVICE
COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT
This Cooperative Research and Development Agreement, hereinafter referred to as
the "CRADA," consists of this Cover Page, an attached Agreement, and various
Appendices referenced in the Agreement. This Cover Page serves to identify the
Parties to this CRADA:
(1) the following Bureau(s), Institute(s), Center(s) or Division(s) of the
National Institutes of Health ("NIH"), the Food and Drug Administration ("FDA"),
and the Centers for Disease Control and Prevention ("CDC"): Inherited Disease
Branch, National Human Genome Research Institute (NHGRI), hereinafter singly or
collectively referred to as the Public Health Service ("PHS"); and
(2) Sequenom, Inc, which has offices at I1 555 Sorrento Valley Road, San
Diego, CA 92121-0345, hereinafter referred to as the 'Collaborator."
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COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT
Article 1. Introduction
This Cooperative Research and Development Agreement (CRADA) between PHS and the
Collaborator will be effective when signed by all Parties. The research and
development activities which will be undertaken by each of the Parties in the
course of this CRADA are detailed in the Research Plan (RP) which is attached as
Appendix A. The funding and staffing commitments of the Parties are set forth in
Appendix B. Any exceptions or changes to the CRADA are set forth in Appendix C.
This CRADA is made under the authority of the Federal Technology Transfer Act,
15 U.S.C. (S)37 10a and is governed by its terms.
Article 2. Definitions
As used in this CRADA, the following terms shall have the indicated meanings:
2.1 "Affiliate" means any corporation or other business entity controlled by,
controlling, or under common control with Collaborator. For this purpose,
"control" means direct or indirect beneficial ownership of at least fifty
(50) percent of the voting stock or at least fifty (50) percent interest in
the income of such corporation or other business.
2.2 "Cooperative Research and Development Agreement" or "CRADA" means this
Agreement entered into by PHS pursuant to the Federal Technology Transfer
Act of 1986, as amended, 15 U.S.C. 37 10a et. seq. and Executive Order
--------
12591 of October 10, 1987.
2.3 "Government" means the Government of the United States as represented
through the PHS agency that is a Party to this agreement.
2.4 "IP" means intellectual property.
2.5 "Invention" means any invention or discovery which is or may be patentable
or otherwise protected under title 35, United States Code, or any novel
variety or plant which is or may be protectable under the Plant Variety
Protection Act (7 U.S.C. 2321 et. seq.).
--------
2.6 "Principal Investigator(s)" or "PIs" means the persons designated
respectively by the Parties to this CRADA who will be responsible for the
scientific and technical conduct of the RP.
2.7 "Proprietary/Confidential Information" means confidential scientific,
business, or financial information provided that such information does not
include:
2.7.1 information that is publicly known or available from other sources
who are not under a confidentiality obligation to the source of the
information;
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2.7.2 information which has been made available by its owners to others
without a confidentiality obligation;
2.7.3 information which is already known by or available to the receiving
Party without a confidentiality obligation; or
2.7.4 information which relates to potential hazards or cautionary
warnings associated with the production, handling or use of the
subject matter of the Research Plan of this CRADA.
2.8 "Research Materials" means all tangible materials other than Subject Data
first produced in the performance of this CRADA.
2.9 "Research Plan" or "RP" means the statement in Appendix A of the respective
research and development commitments of the Parties to this CRADA.
2.10 "Subject Invention" means any Invention of the Parties, conceived or first
actually reduced to practice in the performance of the Research Plan of
this CRADA.
2.11 "Subject Data" means all recorded information first produced in the
performance of this CRADA by the Parties.
Article 3. Cooperative Research
3.1 Principal Investigators. PHS research work under this CRADA will be
performed by the PHS laboratory identified in the RP, and the PHS Principal
Investigator (PI) designated in the RP will be responsible for the
scientific and technical conduct of this project on behalf of PHS. Also
designated in the RP is the Collaborator PI who will be responsible for the
scientific and technical conduct of this project on behalf of the
Collaborator.
3.2 Research Plan Change. The RP may be modified by mutual written consent of
the Principal Investigators. Substantial changes in the scope of the RP
will be treated as amendments under Article 13.6.
Article 4. Reports
4.1 Interim Reports. The Parties shall exchange formal written interim
progress reports on a schedule agreed to by the PIs, but at least within
twelve (12) months after this CRADA becomes effective and at least within
every twelve (12) months thereafter. Such reports shall set forth the
technical progress made, identifying such problems as may have been
encountered and establishing goals and objectives requiring further effort,
any modifications to the Research Plan pursuant to Article 3.2, and all
CRADA-related patent applications filed.
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4.2 Final Reports. The Parties shall exchange final reports of their results
within four (4) months after completing the projects described in the RP or
after the expiration or termination of this CRADA.
Article 5. Financial and Staffing Obligations
5.1 PHS and Collaborator Contributions. The contributions of the Parties,
including payment schedules, if applicable, are set forth in Appendix B.
PHS shall not be obligated to perform any of the research specified herein
or to take any other action required by this CRADA if the funding is not
provided as set forth in Appendix B. PHS shall return excess funds to the
Collaborator when it sends its final fiscal report pursuant to Article 5.2,
except for staffing support pursuant to Article 10.3. Collaborator
acknowledges that the U.S. Government will have the authority to retain and
expend any excess funds for up to one (1) year subsequent to the expiration
or termination of the CRADA to cover any costs incurred during the term of
the CRADA.in undertaking the work set forth in the RP.
5.2 Accounting Records. PHS shall maintain separate and distinct current
accounts, records, and other evidence supporting all its obligations under
this CRADA, and shall provide the Collaborator a final fiscal report
pursuant to Article 4.2.
5.3 Capital Equipment. Equipment purchased by PHS with funds provided by the
Collaborator shall be the property of PHS. All capital equipment provided
under this CRADA by one party for the use of another Party remains the
property of the providing Party unless other disposition is mutually agreed
upon by in writing by the Parties. If title to this equipment remains with
the providing Party, that Party is responsible for maintenance of the
equipment and the costs of its transportation to and from the site where it
will be used.
Article 6. Patent Applications
6.1 Reporting. The Parties shall promptly report to each other in writing each
Subject Invention and any patent applications filed thereon resulting from
the research conducted under this CRADA that is reported to them by their
respective employees. Each Party shall report all Subject Inventions to
the other Party in sufficient detail to determine inventorship. Such
reports shall be treated as Proprietary/Confidential Information in
accordance with Article 8.4.
6.2 Filing of Patent Applications. Each party shall be responsible for filing
patent or other EP applications in a timely manner and at its own expense.
The Parties will consult and mutually determine a filing strategy for
jointly owned subject inventions.
6.3 Patent Expenses. The expenses attendant to the filing of patent or other
IP applications generally shall be paid by the Party filing such
application. If an exclusive license to any Subject Invention is granted
to the Collaborator, the Collaborator shall be responsible for all past and
future out-of-pocket expenses in connection with the preparation, filing,
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prosecution and maintenance of any applications claiming such exclusively
licensed inventions and any patents or other IP grants that may issue on
such applications. The Collaborator may waive its exclusive license rights
on any application, patent or other IP grant at any time, and incur no
subsequent compensation obligation for that application, patent or IP
grant.
6.4 Prosecution of Intellectual Property Applications. Within one month of
-------------------------------------------------
receipt or filing, each Party shall provide the other Party with copies of
the applications and all documents received from or filed with the relevant
patent or other EP office in connection with the prosecution of such
applications. Each Party shall also provide the other Party with the power
to inspect and make copies of all documents retained in the patent or other
IP application files by the applicable patent or other IP office. Where
licensing is contemplated by Collaborator, the Parties agree to consult
with each other with respect to the prosecution of applications for PHS
Subject Inventions described in Article 6.3 and joint Subject Inventions
described in Article 6.4. If the Collaborator elects to file and prosecute
IP applications on joint Subject Inventions pursuant to Article 6.4, PHS
will be granted an associate power of attorney (or its equivalent) on such
IP applications.
Article 7. Licensing
7.1 Option for Commercialization License. With respect to Government IP rights
to any Subject Invention not made solely by the Collaborator's employees
for which a patent or other IP application is filed, PHS hereby grants to
the Collaborator an exclusive option to elect an exclusive or nonexclusive
commercialization license, which is substantially in the form of the
appropriate model PHS license agreement. This option does not apply to
Subject Inventions conceived prior to the effective date of this CRADA that
are reduced to practice under this CRADA, if prior to that reduction to
practice, PHS has filed a patent application on the invention and has
licensed it or offered to license it to a third party. The terms of the
license will fairly reflect the nature of the invention, the relative
contributions of the Parties to the invention and the CRADA, the risks
incurred by the Collaborator and the costs of subsequent research and
development needed to bring the invention to the marketplace. The field of
use of the license will be commensurate with the scope of the RP.
7.2 Exercise of License Option. The option of Article 7.1 must be exercised by
written notice mailed within three (3) months after either (i) Collaborator
receives written notice from PHS that the patent or other IP application
has been filed; or (ii) the date Collaborator files such IP application.
Exercise of this option by the Collaborator initiates a negotiation period
that expires nine (9) months after the exercise of the option. If the last
proposal by the Collaborator has not been responded to in writing by PHS
within this nine (9) month period, the negotiation period shall be extended
to expire one (1) month after PHS so responds, during which month the
Collaborator may accept in writing the final license proposal of PHS. In
the absence of such acceptance, or an extension of the time limits by PHS,
PHS will be free to license such IP rights to others.
NHGRI-Sequenom
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<PAGE>
In the event that the Collaborator elects the option for an exclusive
license, but no such license is executed during the negotiation period, PHS
agrees not to make an offer for an exclusive license on more favorable
terms to a third party for a period of six (6) months without first
offering Collaborator those more favorable terms. These times may be
extended at the sole discretion of PHS upon good cause shown in writing by
the Collaborator.
7.3 License for PHS Employee Inventions and Joint Inventions. Pursuant to 15
U.S.C. (S) 37 10a(b)(1)(A), for Subject Inventions made under this CRADA by
a PHS employee(s) or jointly by such employee(s) and employees of the
Collaborator pursuant to Articles 6.3 and 6.4 and licensed pursuant to the
option of Article 7.1, the Collaborator grants to the Government a
nonexclusive, nontransferable, irrevocable, paid-up license to practice the
invention or have the invention practiced throughout the world by or on
behalf of the Government. In the exercise of such license, the Government
shall not publicly disclose trade secrets or commercial or financial
information that is privileged or confidential within the meaning of 5
U.S.C. 552(b)(4) or which would be considered as such if it had been
obtained from a non-Federal party.
7.4 License in Collaborator Inventions. Pursuant to 15 U.S.C. (S) 3710a(b)(2),
for inventions made solely by Collaborator employees under this CRADA
pursuant to Article 6.2, the Collaborator grants to the Government a
nonexclusive, nontransferable, irrevocable, paid-up license to practice the
invention or have the invention practiced throughout the world by or on
behalf of the Government for research or other Government purposes.
7.5 Third Party License. Pursuant to 15 U.S.C. (S) 3710a(b)(1)(B), if PHS
grants an exclusive license to a Subject Invention made wholly by PHS
employees or jointly with a Collaborator under this CRADA, pursuant to
Articles 6.3 and 6.4, the Government shall retain the right to require the
Collaborator to grant to a responsible applicant a nonexclusive, partially
exclusive, or exclusive sublicense to use the invention in Collaborator's
licensed field of use on terms that are reasonable under the circumstances;
or if the Collaborator fails to grant such a license, to grant the license
itself. The exercise of such rights by the Government shall only be in
exceptional circumstances and only if the Government determines (i) the
action is necessary to meet health or safety needs that are not reasonably
satisfied by Collaborator, (ii) the action is necessary to meet
requirements for public use specified by Federal regulations, and such
requirements are not reasonably satisfied by the Collaborator; or (iii) the
Collaborator has failed to comply with an agreement containing provisions
described in 15 U.S.C. 3710a(c)(4)(B). The determination made by the
Government under this Article is subject to administrative appeal and
judicial review under 35 U.S.C. 203(2).
7.6 Joint Inventions Not Exclusively Licensed. In the event that the
Collaborator does not acquire an exclusive commercialization license to EP
rights in all fields in joint Subject Inventions described in Article 6.4,
then each Party shall have the right to use the joint
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Subject Invention and to license its use to others in all fields not
exclusively licensed to Collaborator. The Parties may agree to a joint
licensing approach for such EP rights.
Article 8. Proprietary Rights and Publication
8.1 Right of Access. PHS and the Collaborator agree to exchange all Subject
Data produced in the course of research under this CRADA. Research
Materials will be shared equally by the Parties to the CRADA unless other
disposition is agreed to by the Parties.
All Parties to this CRADA will be free to utilize Subject Data and Research
Materials for their own purposes, consistent with their obligations under this
CRADA.
8.2 Ownership of Subject Data and Research Materials. Subject to the sharing
requirements of Paragraph 8.1 and the regulatory filing requirements of
Paragraph 8.3, the producing Party will retain ownership of and title to
all Subject Inventions, all Subject Data and all Research Materials
produced solely by their investigators. Jointly developed Subject
Inventions, Subject Data and Research Materials will be jointly owned.
8.3 Dissemination of Subject Data and Research Materials. To the extent
permitted by law, the Collaborator and PHS agree to use reasonable efforts
to keep Subject Data and Research Materials confidential until published or
until corresponding patent applications are filed. Any information that
would identify human subjects of research or patients will always be
maintained confidentially. To the extent permitted by law, the
Collaborator shall have the exclusive right to use any and all CRADA
Subject Data in and for any regulatory filing by or on behalf of
Collaborator, except that PHS shall have the exclusive right to use Subject
Data for that purpose, and authorize others to do so, if the CRADA is
terminated or if Collaborator abandons its commercialization efforts.
Collaborator acknowledges the basic research mission of the PHS, and agrees
that after publication, PHS may make unpatented research materials arising
out of this CRADA available to third parties for further research.
8.4 Proprietary/Confidential Information. Each Party agrees to limit its
disclosure of Proprietary/Confidential Information to the amount necessary
to carry out the Research Plan of this CRADA, and shall place a
confidentiality notice on all such information. Confidential oral
communications shall be reduced to writing within 30 days by the disclosing
Party. Each Party receiving Proprietary/Confidential Information agrees
that any information so designated shall be used by it only for the
purposes described in the attached Research Plan. Any Party may object to
the designation of information as Proprietary/Confidential Information by
another Party. Subject Data and Research Materials developed solely by the
Collaborator may be designated as Proprietary/Confidential Information when
they are wholly separable from the Subject Data and Research Materials
developed jointly with PHS investigators, and advance designation of such
data and material categories is set forth in the RP. 'Me exchange of other
confidential information, e.g., patient-identifying data, should be
similarly limited and treated. Jointly developed Subject Data and Research
Material derived from the
NHGRI-Sequenom
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<PAGE>
Research Plan may be disclosed by Collaborator to a third party under a
confidentiality agreement for the purpose of possible sublicensing pursuant
to the Licensing Agreement and subject to Article 8.7.
8.5 Protection of Proprietary/Confidential Information.
Proprietary/Confidential Information shall not be disclosed, copied,
reproduced or otherwise made available to any other person or entity
without the consent of the owning Party except as required under court
order or the Freedom of information Act (5 U.S.C. 1 552). Each Party agrees
to use its best efforts to maintain the confidentiality of
Proprietary/Confidential Information. Each Party agrees that the other
Party is not liable for the disclosure of Proprietary/Confidential
Information which, after notice to and consultation with the concerned
Party, the other Party in possession of the Proprietary/Confidential
Information determines may not be lawfully withheld, provided the concerned
Party has been given an opportunity to seek a court order to enjoin
disclosure.
8.6 Duration of Confidentiality Obligation. The obligation to maintain the
confidentiality of Proprietary/Confidential Information shall expire at the
earlier of the date when the information is no longer Proprietary
Information as defined in Article 2.7 or three (3) years after the
expiration or termination date of this CRADA. The Collaborator may request
an extension to this term when necessary to protect
Proprietary/Confidential Information relating to products not yet
commercialized.
8.7 Publication. The Parties are encouraged to make publicly available the
results of their research. Before either Party submits a paper or abstract
for publication or otherwise intends to publicly disclose information about
a Subject Invention, Subject Data or Research Materials, the other Party
shall be provided thirty (30) days to review the proposed publication or
disclosure to assure that Proprietary/Confidential Information is
protected. The publication or other disclosure shall be delayed for up to
thirty (30) additional days upon written request by any Party as necessary
to preserve U.S. or foreign patent or other IP rights.
Article 9. Representations and Warranties
9.1 Representations and Warranties of PHS. PHS hereby represents and warrants
to the Collaborator that the official signing this CRADA has authority to
do so.
9.2 Representations and Warranties of the Collaborator.
(a) The Collaborator hereby represents and warrants to PHS that the
Collaborator has the requisite power and authority to enter into this CRADA
and to perform according to its terms, and that the Collaborator's official
signing this CRADA has authority to do so. The Collaborator further
represents that it is financially able to satisfy any funding commitments
made in Appendix B.
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(b) The Collaborator certifies that the statements herein are true,
complete, and accurate to the best of its knowledge. The Collaborator is
aware that any false, fictitious, or fraudulent statements or claims may
subject it to criminal, civil, or administrative penalties.
Article 10. Termination
10.1 Termination By Mutual Consent. PHS and the Collaborator may terminate this
CRADA, or portions thereof, at any time by mutual written consent. In such
event the Parties shall specify the disposition of all property,
inventions, patent or other EP applications and other results of work
accomplished or in progress, arising from or performed under this CRADA,
all in accordance with the rights granted to the Parties under the terms of
this Agreement.
10.2 Unilateral Termination. Either PHS or the Collaborator may unilaterally
terminate this entire CRADA at any time by giving written notice at least
thirty (30) days prior to the desired termination date, and any rights
accrued in property, patents or other IP rights shall be disposed of as
provided in paragraph 10.1.
10.3 Staffing. If this CRADA is mutually or unilaterally terminated prior to its
expiration, funds will nevertheless remain available to PHS for continuing
any staffing commitment made by the Collaborator pursuant to Article 5.1
above and Appendix B, if applicable, for a period of six (6) months after
such termination. If there are insufficient funds to cover this expense,
the Collaborator agrees to pay the difference.
10.4 New Commitments. No Party shall make new commitments related to this CRADA
after a mutual termination or notice of a unilateral termination and shall,
to the extent feasible, cancel all outstanding commitments and contracts by
the termination date.
10.5 Termination Costs. Concurrently with the exchange of final reports pursuant
to Articles 4.2 and 5.2, PHS shall submit to the Collaborator for payment a
statement of all costs incurred prior to the date of termination and for
all reasonable termination costs including the cost of returning
Collaborator property or removal of abandoned property, for which
Collaborator shall be responsible.
Article 11. Disputes
11.1 Settlement. Any dispute arising under this CRADA which is not disposed of
by agreement of the Principal Investigators shall be submitted jointly to
the signatories of this CRADA. If the signatories are unable to jointly
resolve the dispute within thirty (30) days after notification thereof, the
Assistant Secretary for Health (or his/her designee or successor) shall
propose a resolution. Nothing in this Article shall prevent any Party from
pursuing any additional administrative remedies that may be available and,
after exhaustion of such administrative remedies, pursuing all available
judicial remedies.
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11.2 Continuation of Work. Pending the resolution of any dispute or claim
pursuant to this Article, the Parties agree that performance of all
obligations shall be pursued diligently in accordance with the direction of
the PHS signatory.
Article 12. Liability
12.1 Property. The U.S. Government shall not be responsible for damages to any
Collaborator property provided to PHS, where Collaborator retains title to
the property, or any property acquired by Collaborator for its own use
pursuant to this CRADA.
12.2 NO WARRANTIES. EXCEPT AS SPECIFICALLY STATED IN ARTICLE 9, THE PARTIES MAKE
NO EXPRESS OR IMPLIED WARRANTY AS TO ANY MATTER WHATSOEVER, INCLUDING THE
CONDITIONS OF THE RESEARCH OR ANY INVENTION OR PRODUCT, WHETHER TANGIBLE OR
INTANGIBLE, MADE, OR DEVELOPED UNDER THIS CRADA, OR THE OWNERSHIP,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE RESEARCH OR ANY
INVENTION OR PRODUCT.
12.3 Indemnification. The Collaborator agrees to hold the U.S. Government
harmless and to indemnify the Government for all liabilities, demands,
damages, expenses and losses arising out of the use by die Collaborator for
any purpose of the Subject Data, Research Materials and/or Subject
Inventions produced in whole or part by PHS employees under this CRADA,
unless due to the negligence or willful misconduct of PHS, its employees,
or agents. The Collaborator shall be liable for any claims or damages it
incurs in connection with this CRADA. PHS has no authority to indemnify the
Collaborator.
12.4 Force Majeure. Neither Party shall be liable for any unforeseeable event
beyond its reasonable control not caused by the fault or negligence of such
Party, which causes such Party to be unable to perform its obligations
under this CRADA, and which it has been unable to overcome by the exercise
of due diligence. In the event of the occurrence of such a force majeure
event, the Party unable to perform shall promptly notify the other Party.
It shall further use its best efforts to resume performance as quickly as
possible and shall suspend performance only for such period of time as is
necessary as a result of the force majeure event.
Article 13. Miscellaneous
13.1 Governing Law. The construction, validity, performance and effect of this
CRADA shall be governed by Federal law, as applied by the Federal Courts in
the District of Columbia. Federal law and regulations will preempt any
conflicting or inconsistent provisions in this CRADA.
13.2 Entire Agreement. This CRADA constitutes the entire agreement between the
Parties concerning the subject matter of this CRADA and supersedes any
prior understanding or written or oral agreement.
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13.3 Headings. Tides and headings of the articles and subarticles of this CRADA
arc for convenient reference only, do not form a part of this CRADA, and
shall in no way affect its interpretation. The PHS component that is the
Party for all purposes of this CRADA is the Bureau(s), Institute(s),
Center(s) or Division(s) listed on the Cover Page herein.
13.4 Waivers. None of the provisions of this CRADA shall be considered waived
by any Party unless such waiver is given in writing to the other Party.
The failure of a Party to insist upon strict performance of any of the
terms and conditions hereof, or failure or delay to exercise any rights
provided herein or by law, shall not be deemed a waiver of any rights of
any Party.
13.5 Severability. The illegality or invalidity of any provisions of this CRADA
shall not impair, affect, or invalidate the other provisions of this
CRADA.
13.6 Amendments. If either Party desires a modification to this CRADA, the
Parties shall, upon reasonable notice of the proposed modification or
extension by the Party desiring the change, confer in good faith to
determine the desirability of such modification or extension. Such
modification shall not be effective until a written amendment is signed by
the signatories to this CRADA or by their representatives duly authorized
to execute such amendment.
13.7 Assignment. Neither this CRADA nor any rights or obligations of any Party
hereunder shall be assigned or otherwise transferred by either Party
without the prior written consent of die other Party.
13.8 Notices. All notices pertaining to or required by this CRADA shall be in
writing and shall be signed by an authorized representative and shall be
delivered by hand or sent by certified mail, return receipt requested,
with postage prepaid, to the addresses indicated on the signature page for
each Party. Notices regarding the exercise of license options shall be
made pursuant to Article 7.2. Any Party may change such address by notice
given to the other Party in the manner set forth above.
13.9 Independent Contractors. The relationship of the Parties to this CRADA is
that of independent contractors and not agents of each other or joint
venturers or partners. Each Party shall maintain sole and exclusive
control over its personnel and operations. Collaborator employees who will
be working at PHS facilities may be asked to sign a Guest Researcher or
Special Volunteer Agreement appropriately modified in view of the terms of
this CRADA.
13.10 Use of Name or Endorsements. By entering into this CRADA, PHS does not
directly or indirectly endorse any product or service provided, or to be
provided, whether directly or indirectly related to either this CRADA or
to any patent or other EP license or agreement which implements this CRADA
by its successors, assignees, or licensees. The Collaborator shall not in
any way state or imply that this CRADA is an endorsement of any such
product or service by the U.S. Government or any of its organizational
units or
NHGRI-Sequenom
PHS CRADA Model 3/15/99
Page 11 of 13
<PAGE>
employees. Collaborator issued press releases that reference or rely upon
the work of PHS under this CRADA shall be made available to PHS at least 7
days prior to publication for review and comment.
13.11 Exceptions to this CRADA. Any exceptions or modifications to this CRADA
that are agreed to by the Parties prior to their execution of this CRADA
are set forth in Appendix C.
13.12 Reasonable Consent. Whenever a Party's consent or permission is required
under this CRADA, such consent or permission shall not be unreasonably
withheld.
Article 14. Duration of Agreement
14.1 Duration. It is mutually recognized that the duration of this project
cannot be rigidly defined in advance, and that the contemplated time periods for
various phases of the RP are only good faith guidelines subject to adjustment by
mutual agreement to fit circumstances as the RP proceeds. In no case will the
term of this CRADA extend beyond the term indicated in the RP unless it is
revised in accordance with Article 13.6.
14.2 Survivability. The provisions of Articles 4.2, 5-8, 10.3-10.5, 11.1, 12.2-
12.4, 13.1, 13.10 and 14.2 shall survive the termination of this CRADA.
SIGNATURES BEGIN ON THE NEXT PAGE
NHGRI-Sequenom
PHS CRADA Model 3/15/99
Page 12 of 13
<PAGE>
CRADA SIGNATURE PAGE
FOR PHS:
/s/ Michael M. Gottesman 9/23/99
- ------------------------------------ --------------------------
Michael M. Gottesman, M.D. Date
Deputy Director for Intramural Research
National Institutes of Health
Mailing Address for Notices:
Technology Transfer Office
National Human Genome Research Institute (NHGRI)
National Institutes of Health
45 Center Drive MSC 6320
Building 45, Room 3As43
Bethesda, MD 20892-6320
Tel. (301) 435-0042
Fax (301) 402-9722
FOR COLLABORATOR
/s/ Hubert Koster 9/17/99
- ------------------------------------ --------------------------
Hubert Koster, Ph.D., Date
President and CEO
Sequenom, Inc.
Mailing Address for Notices:
Sequenom, Inc.
11555 Sorrento Valley Road
San Diego, CA 92121-1331
Tel. (619) 359-0345
Fax (619) 350-0344
NHGRI-Sequenom
PHS CRADA Model 3/15/99
Page 13 of 13
<PAGE>
APPENDIX A
RESEARCH PLAN
TITLE OF CRADA: Single Nucleotide Polymorphism Genotyping by Mass Spectroscopy
--------------------------------------------------------------
PHS CO-PRINCIPAL INVESTIGATORS: Robert L. Nussbaum M.D. and Francis S. Collins,
------------------------------------------------
M.D., Ph.D.
- -----------
his/her Laboratory: Inherited Disease Research Branch (IDRB) and the Genetic and
------------------------------------------------------------
Molecular Biology Branch (GMBB). National Human Genome Research Institute
- --------------------------------------------------------------------------
(NHGRI), National Institutes of Health (NIH)
- ---------------------------------------------
COMPANY CO-PRINCIPAL INVESTIGATORS: Daniel P. Little, Ph.D. and Andreas Braun,
------------------------------------------
Ph.D., M.D., Sequenom, Inc.
- ---------------------------
TERM OF CRADA: Three (3) years.
- -------------------------------
The Research Plan which follows this page should be concise but of sufficient
detail to permit reviewers of this CRADA to evaluate the scientific merit of the
proposed collaboration. The RP should explain the scientific importance of the
collaboration and the research goals of PHS and the COMPANY. The respective
contributions in terms of expertise and/or research materials of each of the
Parties should be summarized. Initial and subsequent projects contemplated under
the RP, and the time periods estimated for their completion, should be described
and pertinent methodological considerations summarized. Pertinent literature
references may be cited and additional relevant information included. Include
additional pages to identify the Principal Investigators of all other Parties to
this CRADA.
NHGRI-Sequenom CRADA
Appendix A (Research Plan)
Page 1 of 9
<PAGE>
SINGLE NUCLEOTIDE POLYMORPHISM GENOTYPING BY MASS SPECTROSCOPY
Robert L. Nussbaum, M.D.
Inherited Disease Research Branch (IDRB)
National Human Genome Research Institute (NHGRI)
National Institutes of Health (NIH)
Bethesda, MD
Francis S. Collins, M.D., Ph.D.
The Genetic and Molecular Biology Branch (GMBB)
National Human Genome Research Institute (NHGRI)
National Institutes of Health (NIH)
Bethesda, MD
Daniel P. Little, Ph.D.
Sequenom, Inc.
Boston, MA
Andreas Braun, Ph.D., M.D.
Sequenom, Inc.
San Diego, CA
1) GOALS OF THIS CRADA
This CRADA is a two-way research collaboration between 1) the IDRB/NHGRI/NIH
(Principal Investigator (PI): Robert L. Nussbaum) and Sequenom, Inc. of San
Diego, CA (PI: Daniel Little) and 2) GMBB/NHGRI/NIH (PI: Francis S. Collins) and
Sequenom, Inc. (PI: Andreas Braun).
The major CRADA goals are to:
***
NHGRI-Sequenom CRADA
Appendix A (Research Plan)
Page 2 of 9
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
***
2) DETAILED DESCRIPTION OF THE CRADA RESEARCH PLAN
A. IDRB Research Plan: Background and Significance
"Genetic factors appear to contribute to virtually every human
disease. Multiple genes and environmental factors influence most common
diseases. A dense map of DNA sequence variants should allow the
identification of alleles associated with disease, even for these complex
diseases."[1]
SNP stands for "single nucleotide polymorphism. SNPs are the most
common genetic variations and occur once every 100 to 300 bases. A key
aspect of research in genetics is the association of sequence variation
with heritable phenotypes. It is expected that SNPs will accelerate the
identification of disease genes by allowing researchers to look for
associations between a disease and specific differences (SNPs) in a
------------
population. This differs from the more typical approach of pedigree
analysis, which track transmission of a disease through a family. It is
much easier to obtain DNA samples from a random set of individuals in a
population than it is to obtain them from every member of a family over
several generations."[2]
The importance of using SNPs for identifying DNA variations associated
with disease is underscored by the NHGRI SNP initiative. Anonymized DNA
and cell lines from 450 individuals from various ethnic backgrounds are
being made available for SNP discovery efforts. Researchers who discover
SNPs are encouraged to place the sequence information in the public
domain in the NCBI SNP database [3].
NHGRI-Sequenom CRADA
Appendix A (Research Plan)
Page 3 of 9
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
"Once discovered, these polymorphisms can be used by additional
laboratories, using the sequence information around the polymorphism and
the specific experimental conditions."[2]
A number of public databases are already in operation, including NCBI's
dbSNP, (4360 SNPs as of April 1999), University of Uppsala's HgBase (3220 SNPs
as of 3/3/99) and the University of Washington (unknown number of SNPs as of May
1, 1999).
In order to make SNP genotyping possible on a large-enough scale to allow
genome-wide association studies, assays need to be developed that allow the
genotyping to be done in a massively parallel manner. Genotyping one locus per
individual is not compatible with the need to carry out the tens of thousands of
genotypes per individual in a sample of perhaps hundreds of individuals with a
particular phenotype and an equal number of controls.
SNP genotyping technology is a rapidly moving field with many methods being
developed and tested. One promising method is to harness the precision of mass
spectroscopy (MS) to detect the sequence variants represented by SNPs (see also
Figure I). MS provides a rapid, highly discriminating, and automatable detection
system that requires very small amounts of input DNA. The disadvantage of MS is
that only one sample can be assayed at one time (although in quick succession).
To make mass spectroscopy assays parallel; it is necessary first to design
assays so that multiple loci can be assayed at one time in such a way that the
alleles generated by the different loci are easily discriminated. Second, the
upfront processing of DNA for mass spectroscopy genotyping needs to be
multiplexed so that multiple loci can be processed for MS assay.
Sequenom has already developed considerable expertise in designing primers
that allow discrimination by mass spectroscometry (MS) of oligonucleotides whose
length (and therefore mass) differ just sufficiently to allow robust,
unequivocal determination of genotypes (see also http://www.sequenom.com). The
design of these assays is now done routinely but on an ad hoc basis, one assay
at a time, without attention to how multiplexing the PCR of loci and
multiplexing the MS detection could lead to interference between
oligonucleotides. PCR failures, or inability of MS to resolve alleles occurring
at different loci.
***
As more and more SNPs enter the public domain and more SNP assays are
developed that rely on MS to detect the alleles, reliable software is needed to
automatically scan new loci as they come along and to design primers and assays
in a way that attempts to maximize our ability to multiplex the PCR and the
allele detection in the context of a large and growing body of already existing
multiplexed assays. With tens of thousands of SNPs becoming available, the
ability to add new loci to increase map density will quickly outstrip any design
method that does not rely on computerized algorithms.
NHGRI-Sequenom CRADA
Appendix A (Research Plan)
Page 4 of 9
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
IDRB can easily assay SNPs one locus at a time using any number of
techniques, including single nucleotide extension, allele specific
oligonucleotide hybridization, allele specific restriction enzyme digestion.
These approaches are generally cumbersome, in that they require gel
electrophoresis, are difficult to automate, and are often difficult to
multiplex. The MassArray instrument, applied to multiplexed oligonucleotide
extension reactions, will allow high automated, high throughput genotyping. One
instrument, fed with appropriately multiplexed reactions, could easily generate
greater than 4 million genotypes per year at a fraction of the labor costs now
required to set up electrophoretic instruments and clean the data coming out of
electrophoretic assays. DNA MassArray(TM) is a platform technology that is
proprietary to the Collaborator and it will be utilized to carry out the CRADA
Research Plan. Improvements, upgrades and/or derivatives of the MassArray(TM)
instrument itself (excluding software) are not within the scope of this CRADA
Research Plan and therefore remain the property of Sequenom.
B. GMBB Research Plan: Background and Significance
The Finland-United States Investigation of non-insulin dependent diabetes
mellitus (NIDDM) FUSION project was initiated five years ago to search for genes
conferring susceptibility to Type 2 diabetes. The FUSION project is being
conducted in the GMBB. Families have been collected in Finland because of the
limited founder pool of that country, as well as the superb medical records
system. In Phase 1 of this study, clinical collaborators, led by Dr. Jaakko
Tuomilehto, have collected 2,500 DNA samples, including 716 affected sibling
pairs and a number of unaffected relatives. Detailed phenotyping has been
carried out on both the affecteds and unaffecteds, allowing determination of
various parameters of insulin metabolism, obesity, blood pressure, and a variety
of other potentially linked phenotypes. The study design has been published
(Diabetes Care 1998: 21:949-958). A follow up set ("FUSION II") of an additional
2,500 DNA samples has now been collected. This includes a replication study as
well as useful extensions of the initial families.
A 10cM genome scan, using microsatellite markers, has been carried out on the
initial 2,500 DNA samples, and sophisticated statistical genetic analyses have
been carried out to look for evidence of diabetes susceptibility genes or other
related quantitative traits. The most promising findings occur on chromosome 20,
where there is evidence for two and possibly three susceptibility genes
(Proceedings of National Academy of Sciences USA 1999; 96:2198-2203). Other
interesting regions occur on chromosomes 1, 3, 10 and 11.
As with all studies on polygenic disease, the challenge is now to go from these
encouraging indications of linkage to the actual responsible gene and the
variant within that gene which confers susceptibility. Using a variety of
statistical methodologies, it has been possible to narrow the three most
interesting regions on chromosome 20, and the best region on chromosome 11, to
roughly five centiMorgans each. One centiMorgan corresponds to roughly one
million base pairs. One can anticipate that the diabetes susceptibility gene
may be travelling on a discernable haplotype that extends across tens (or
possibly hundreds) of kilobases.
***
NHGRI-Sequenom CRADA
Appendix A (Research Plan)
Page 5 of 9
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
***
Based on our early unpublished data on linkage disequilibrium in Finland, we
believe that 100 SNPs in an interval of 5 centiMorgans (corresponding roughly to
a spacing of 50 kilobases) should be sufficient to discern a haplotype if one
exists. This would amount to a total of 400 SNPs. Fortunately, with the rapid
progress of the human genome project, SNPs are becoming available across the
genome, although not quite at this density. However, it is anticipated that
those will be appearing, and efforts will also be made by the FUSION group to
derive new ones in our area of greatest interest.
In addition to these localized efforts, which are guided by our own linkage
results, numerous examples of variations in candidate genes are coming to light.
It is important to test each of those to see whether they confer some degree of
susceptibility to diabetes or a related trait. We would expect as many as 100
candidate gene variants to appear over the next 12 months.
Thus we anticipate the need to type a total of 500 single nucleotide
polymorphisms over the next 12-18 months. Each of these, in order to be
optimally evaluated, would need to be tested against roughly 600 to 800 DNA
samples, these being carefully chosen from the complete FUSION set in order to
maximize the likelihood of success without carrying out an unnecessarily large
amount of genotyping.
The Sequenom mass spectrometry assay for SNPs is a particularly attractive
platform for carrying out this analysis, given the potential for very low error
rate and high throughput. If multiplexing of up to 10 SNPs in one tube can be
accomplished, the attractiveness of the system will be even greater. In many
ways, the goals of this collaborative effort are similar and synergistic with
the research plan described by Dr. Nussabaum (IDRB), which aims to develop and
test roughly 3,000 SNPs across the genome. GMBB's somewhat more modest effort,
targeted at 500 SNPs, would emphasize particular candidate regions for diabetes.
NHGRI-Sequenom CRADA
Appendix A (Research Plan)
Page 6 of 9
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission
<PAGE>
REFERENCES
1. NHGRI website
http://www.nhgri.nih.gov/Grant_info/Funding/discover_polymorphisms.html
-----------------------------------------------------------------------
2. NCBI web site FAQ
http://www.ncbi.nlm.nih.gov/SNP/get_html.cgi?whichHtml=faq#db descr
3. Francis S. Collins, Lisa D. Brooks, and Aravinda Chakravarti. A DNA
Polymorphism Discovery Resource for Research on Human Genetic Variation.
Genome Research Vol. 8, Issue 12, 1229-1231, December 1998.
3) RESPECTIVE CONTRIBUTIONS OF THE PARTIES
NHGRI Contributions (both IDRB and GMBB laboratories):
1. Development of PCR assays and internal oligonucleotide assays for 3000 SNPs
distributed throughout the genome.
2. Technology transfer of oligonucleotide sequences used for contribution (1)
above.
3. Development of software to automate oligonucleotide design to allow
multiplex assays and multiplex PCR so that many DNA samples can be
processed and assayed in parallel.
4. Personnel dedicated to the IDRB project:
Principal investigator (15%), four FTE (100%) positions. These include two
molecular biologist laboratory scientists, one computer programmer, and one
mass spectroscopist.
Personnel dedicated to the GMBB project: Two FTE (100% positions).
Sequenom Contributions:
1. Technology transfer (advice on reagents, etc.) for internal oligonucleotide
assays including previous experience with oligonucleotide design and
software programs for running pipetting robots used in sample preparation
and handling.
2. Use of a DNA MassArray(TM) Basic System: a modular, semi-automated system
made up of a proprietary matrix (a miniaturized DNA array called the
SpectroChip(TM)) and nanospotter technology to prepare samples for matrix
assisted laser desorption ionization (MALDI) mass spectrometry analysis of
mixtures of oligonucleotides.
3. Provide expert advice and consultation on optimum primer design. The
company's expertise in this area, which can only be obtained by first-hand
experience in designing these assays specifically for MS, will be necessary
in order to optimize multiplexing while still insuring robust, high-
resolution discrimination of alleles at multiplexed loci.
NHGRI-Sequenom CRADA
Appendix A (Research Plan)
Page 7 of 9
<PAGE>
these assays specifically for MS, will be necessary in order to optimize
multiplexing while still insuring robust, high-resolution discrimination of
alleles at multiplexed loci.
4) ABSTRACT OF THE RESEARCH PLAN FOR PUBLIC RELEASE
This is a two-way CRADA between two NHGRI laboratories (IDRB and GMBB) and
Sequenom, Inc. to develop SNP genotyping assays suitable for mass spectroscopy
such that multiple loci can be genotyped in parallel. The IDRB aims to develop
and test approximately 3,000 SNPs across the genome whereas the GMBB's main goal
is to identify and test approximately 500 SNPs targeted in candidate regions for
diabetes. Publicly available anonymous and intragenic polymorphisms may be
targeted for assay development.
5) RELATED CRADAs
None
6) RELATED MTAs
None
7) Related patent applications and patents
None
8) CRADA Conflict of Interest and Fair Access Form
Attached.
NHGRI-Sequenom CRADA
Appendix A (Research Plan)
Page 8 of 9
<PAGE>
FIGURE 1
[ARTWORK DESCRIPTION] SNP GENOTYPING
BY MASS
SPECTROMETRY
Anneal flanking oligos one of which is biotinylated, and perform PCR
[ARTWORK DESCRIPTION]
Denature and capture biotinylated strand while removing other strand and unused
PCR primers
[ARTWORK DESCRIPTION]
Anneal oligonucleotide and extend with mixtures of dideoxynucleotides &
deoxynucleotides to generate products that differ between the alleles
[ARTWORK DESCRIPTION] Oligonucleotides of different masses representing
the two alleles
Separate by mass spectrometry
Legend
[ARTWORK DESCRIPTION]
SNP: allele 1 . allele 2 .
double stranded DNA [ARTWORK DESCRIPTION]
oligonucleotide [ARTWORK DESCRIPTION]
biotin modification B
NHGRI - Sequenom CRADA
Appendix A (Research Plan)
Page 9 of 9
<PAGE>
APPENDIX B
FINANCIAL AND STAFFING CONTRIBUTIONS OF THE CRADA PARTIES
There will be no funds transferred from Sequenom, Inc. to NHGRI.
I. Staffing
- -----------
A. Sequenom, Inc. personnel contributions (FTEs) to the CRADA:
1 FTE (senior scientist (100%))
B. IDB/NHGRI/NIH personnel contributions (FTEs) to the CRADA:
4.15 FTEs (in total)
Robert Nussbaum (15%)-Principal Investigator
2 Molecular biologists; 1 computer programmer and 1 mass spectroscopist (all
100%)
C. FUSION personnel contributions (FTEs) to the CRADA:
2 FTEs
II. Equipment and Supplies
- --------------------------
Sequenom, Inc. will be providing one DNA MassArray(TM) Basic System to NHGRI (on
site in Dr. Nussbaum's laboratory) under a separate lease-to-own contract
agreement.
Sequenom will supply all needed consumables for the CRADA Research Plan-related
use of the DNA MassArray(TM) Basic System (which includes approximately 40-50
SpectroChips(TM)/month) and handle the support and maintenance of the DNA
MassArray(TM) Basic System instrument.
NHGRI-Sequenom
Appendix B, Page 1 of 1
<PAGE>
APPENDIX C
EXCEPTIONS OR MODIFICATIONS TO THIS CRADA
1) Modify the definition of 2.10 Subject Invention by adding ***. Furthermore
it is understood that DNA MassArray(TM), defined as nucleic acid analysis
from arrays by mass spectrometry, which includes existing processes,
methods, instrumentation that are proprietary to the Collaborator, is a
platform technology that will be utilized to carry out the Research Plan."
to the end of the first sentence.
Paragraph 2.10 reads as follows:
2.10 "Subject Invention" means any Invention of the Parties, conceived or
first actually reduced to practice in the performance of the Research
Plan of this CRADA, ***. Furthermore it is understood that DNA
MassArray(TM), defined as nucleic acid analysis from arrays by mass
spectrometry, which includes existing processes, methods,
instrumentation that are proprietary to the Collaborator, is a
platform technology that will be utilized to carry out the Research
Plan.
2) Within Article 6 Patent Applications add new subarticles 6.2 Collaborator
Employee Inventions, 6.3 PHS Employee Inventions and 6.4 Joint Inventions.
Renumber all subsequent subparagraphs of Paragraph 6 (e.g., 6.2-6.4
renumbered as 6.5-6.7, respectively).
6.2 Collaborator Employee Inventions. Collaborator may elect to retain
intellectual property rights to each Subject Invention made solely by
Collaborator employees. If Collaborator does not elect to retain its
intellectual property rights, Collaborator shall offer to assign these
intellectual property rights to the Subject Invention to the other
Party pursuant to Article 6.5. If PHS declines such assignment,
Collaborator may release its intellectual property rights as it may
determine.
NHGRI-Sequenom
Appendix C--Modifications to PHS 3/15/99 model
Page 1 of 5
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
6.3 PHS Employee Inventions. PHS on behalf of the U.S. Government may
elect to retain intellectual property rights to each Subject Invention
made solely by PHS employees. If PHS does not elect to retain
intellectual property rights, PHS shall offer to assign these
intellectual property rights to such Subject Invention to the other
Party pursuant to Article 6.5. If Collaborator declines such
assignment, PHS may release intellectual property rights in such
Subject Invention to its employee inventors pursuant to Article 6.5.
6.4 Joint Inventions. Each Subject Invention made jointly by PHS and
Collaborator shall be jointly owned by the PHS and Collaborator. If
any Party decides not to retain its intellectual property rights to a
jointly owned Subject Invention, it shall offer to assign its rights
to the other inventing Party pursuant to Article 6.6. If the other
Parties declines such assignment, the offering Party may dispose of
its intellectual property rights as provided in Articles 6.2, 6.3 and
6.5.
3) Add the following two sentences to the beginning of Paragraph 6.5 Filing of
Patent Applications: "It is understood by Collaborator that it is the
policy of NIH to consider filing patent applications only on discoveries
where there is a clear demonstration that patent protection and
commercialization of these discoveries will result in a benefit to the
public health. In NIH's view, raw genomic DNA sequence, in the absence of
demonstrated biological information, lacks demonstrated specific utility
and therefore such information and/or discoveries are considered
inappropriate material for patent filing."
Paragraph 6.5 reads as follows:
6.5 Filing of Patent Applications. It is understood by Collaborator that
it is the policy of NIH to consider filing patent applications only on
discoveries where there is a clear demonstration that patent
protection and commercialization of these discoveries will result in a
benefit to the public health. In NIH's view, raw genomic DNA sequence,
in the absence of demonstrated biological information, lacks
demonstrated specific utility and therefore such information and/or
discoveries are considered inappropriate material for patent filing.
Each party shall be responsible for filing patent or other IP
applications in a timely manner and at its own expense and after
consultation with the other Party. The Parties will consult and
mutually determine a filing strategy for jointly owned subject
inventions.
4) In the last sentence of 6.6 Patent Expenses add "or nonexclusive" after
"Collaborator may waive its exclusive" and before "...license rights on any
application, patent or other intellectual property grant."
Paragraph 6.6 reads as follows:
NHGRI-Sequenom
Appendix C--Modifications to PHS 3/15/99 model
Page 2 of 5
<PAGE>
6.6 Patent Expenses. The Party filing such application generally shall pay
the expense attendant to the filing of patent or other intellectual
property applications. If an exclusive license to any Subject
Invention is granted to Collaborator, Collaborator shall be
responsible for all past and future out-of-pocket expenses in
connection with the preparation, filing, prosecution and maintenance
of any applications claiming such exclusively-licensed inventions and
any patents or other intellectual property grants that may issue on
such applications. Collaborator may waive its exclusive or
nonexclusive license rights on any application, patent or other
intellectual property grant at any time, and incur no subsequent
compensation obligation for that application, patent or intellectual
property grant.
5) Add the following new second sentence to Article 7.1 Option for
Commercialization License: "The exclusive commercialization license option
only applies to DNA MassArray(TM) specific Subject Inventions generated
under this CRADA."
Article 7.1 now reads as follows:
7.1 Option for Commercialization License. With respect to Government IP
rights to any Subject Invention not made solely by the Collaborator's
employees for which a patent or other IP application is filed, PHS
hereby grants to the Collaborator an exclusive option to elect an
exclusive or nonexclusive commercialization license, which is
substantially in the form of the appropriate model PHS license
agreement The exclusive commercialization license option only applies
to DNA MassArray(TM) -specific Subject Inventions generated under this
CRADA. This option does not apply to Subject Inventions conceived
prior to the effective date of this CRADA that are reduced to practice
under this CRADA, if prior to that reduction to practice, PHS has
filed a patent application on the invention and has licensed it or
offered to license it to a third party. The terms of the license will
fairly reflect the nature of the invention, the relative contributions
of the Parties to the invention and the CRADA, the risks incurred by
the Collaborator and the costs of subsequent research and development
needed to bring the invention to the marketplace. The field of use of
the license will be commensurate with the scope of the RP.
6) In the first sentence of Article 7.5-Third Party license add the word
"Collaborator's" after "...or exclusive sublicense to use the invention in"
and before "licensed field of use on terms that are reasonable under the
circumstances; or if the Collaborator fails to grant such a license, to
grant the license itself."
Article 7.5 reads as follows:
NHGRI-Sequenom
Appendix C--Modifications to PHS 3/15/99 model
Page 3 of 5
<PAGE>
7.5 Third Party License. Pursuant to 15 U.S.C. (S) 3710a(b)(1)(B), if PHS
grants an exclusive license to a Subject Invention made wholly by PHS
employees or jointly with a Collaborator under this CRADA, pursuant to
Articles 6.3 and 6.4, the Government shall retain the right to require
the Collaborator to grant to a responsible applicant a nonexclusive,
partially exclusive, or exclusive sublicense to use the invention in
Collaborator's licensed field of use on terms that are reasonable
under the circumstances; or if the Collaborator fails to grant such a
license, to grant the license itself. The exercise of such rights by
the Government shall only be in exceptional circumstances and only if
the Government determines (i) the action is necessary to meet health
or safety needs that are not reasonably satisfied by Collaborator,
(ii) the action is necessary to meet requirements for public use
specified by Federal regulations, and such requirements are not
reasonably satisfied by the Collaborator; or (iii) the Collaborator
has failed to comply with an agreement containing provisions described
in 15 U.S.C. 3710a(c)(4)(B). The determination made by the Government
under this Article is subject to administrative appeal and judicial
review under 35 U.S.C. 203(2).
7) Add the following three sentences to the end of Article 8.1 Right of
Access: "The Parties agree that DNA sequence information (such as SNPs and
related genotype and/or phenotype information), associated research
reagents, methodologies and/or data previously generated by NIH, or newly
generated under this CRADA by NIH, are Research Resources. NIH reserves
the right to distribute such resources and researches tools to others and
use them for their own purposes. The Parties further agree that data
generated by any Party through the use of such Research Resources with
anyone other than the Parties to this Agreement does not constitute Subject
Data."
Article 8.1 now reads as follows:
8.1 Right of Access. PHS and the Collaborator agree to exchange all
Subject Data produced in the course of research under this CRADA.
Research Materials will be shared equally by the Parties to the CRADA
unless other disposition is agreed to by the Parties. The Parties
agree that DNA sequence information (such as SNPs and related genotype
and/or phenotype information), associated research reagents,
methodologies and/or data previously generated by NIH, or newly
generated under this CRADA by NIH, are Research Resources. NIH
reserves the right to distribute such resources and researches tools
to others and use them for their own purposes. The Parties further
agree that data generated by any Party through the use of such
Research Resources with anyone other than the Parties to this
Agreement does not constitute Subject Data.
8) In the last sentence of 8.2 Ownership of Subject Data and Research
Materials add "...except that any Research Resources and/or data generated
under this CRADA are subject to NIH's right to distribute them to others
and use them for its own purposes"
NHGRI-Sequenom
Appendix C--Modifications to PHS 3/15/99 model
Page 4 of 5
<PAGE>
after "Jointly developed Subject Inventions, Subject Data and Research
Materials will be jointly owned."
Article 8.2 reads as follows:
8.2 Ownership of Subject Data and Research Materials. Subject to the
sharing requirements of Paragraph 8.1 and the regulatory filing
requirements of Paragraph 8.3, the producing Party will retain
ownership of and title to all Subject Inventions, all Subject Data and
all Research Materials produced solely by their investigators. Jointly
developed Subject Inventions, Subject Data and Research Materials will
be jointly owned except that any Research Resources and/or data
generated under this CRADA are subject to NIH's right to distribute
them to others and use them for its own purposes.
9) In the first sentence of 8.6 Duration of Confidentiality Obligation change
the term from three (3) years to five (5) years.
Article 8.6 reads as follows:
8.6 Duration of Confidentiality Obligation. The obligation to maintain the
confidentiality of Proprietary/Confidential Information shall expire
at the earlier of the date when the information is no longer
Proprietary Information as defined in Article 2.7 or five (5) years
after the expiration or termination date of this CRADA. The
Collaborator may request an extension to this term when necessary to
protect Proprietary/Confidential Information relating to products not
yet commercialized.
NHGRI-Sequenom
Appendix C--Modifications to PHS 3/15/99 model
Page 5 of 5
<PAGE>
EXHIBIT 10.39
CONSULTING SERVICES AGREEMENT
THIS AGREEMENT is entered into this 1st day of October, 1996, by and
between Sequenom, Inc. of Boston, MA/USA and Sequenom Instruments GmbH of
Hamburg/Germany (the "Company") and Prof. Dr. Franz Hillenkamp ("Consultant").
NOW, THEREFORE, it is agreed as follows:
1. Definitions
As used herein:
(a) The term "Products" shall mean the devices, reagents, kits and
diagnostic services proposed to be developed by, or with the assistance of,
Consultant hereunder as defined, and with the specifications set forth in
Exhibit A hereto.
(b) The term "Technology" shall mean the results and product
(interim and/or final) of the consulting services performed by Consultant
hereunder, whether tangible or intangible, including, without limitation, each
and every invention, formula, trade secret, software program (including without
limitation, object code, source code, flow charts, algorithms and related
documentation), listing, routine, manual, specification, technique, product,
concept, know-how, or similar property, whether or not patentable or
copyrightable, and whether or not embodied in any Products that are made,
developed, perfected, designed conceived or first reduced by practice by
Consultant, either solely or jointly with others, in the course and scope of the
consulting services performed hereunder.
2. Engagement or Performance of Services
(a) Engagement
----------
The Company hereby engages Consultant to perform consulting
services in accordance with the terms and conditions of this Agreement. The
specific tasks and services to be performed by Consultant are set forth in
Exhibit A attached hereto. If such services include the development of specific
Products, the specifications of such Products are set forth in Exhibit A
attached hereto.
(b) Facilities, Equipment and Supplies
----------------------------------
The Company will provide to the Consultant the facilities,
equipment and supplies specified in Exhibit A attached hereto. The Company and
Consultant shall submit joint proposals to suitable funding agencies such as the
Commission of the European Communities or the German Federal Department of
Education and Research (BMBF), to cover all added costs incurred through the
joint research project conducted under this Agreement and deemed necessary to
achieve the milestones defined in Exhibit B (6). Consultant shall, at his own
cost and expense, provide all other facilities, equipment and supplies necessary
to perform the consulting services hereunder.
(c) Other Services
--------------
The Company acknowledges and agrees that, subject to its
obligations hereunder, Consultant shall have the right to engage in researches
and development and consulting activities in all areas other than MALDI analysis
of nucleic acids. Such activities in the field of MALDI analysis of nucleic
acids are permissible, provided, however, that Consultant
<PAGE>
shall not perform any consulting services for an actual or potential competitor
of the Company during the term of this Agreement and for a period of one (1)
year after termination of this Agreement.
(d) Primary Duty
------------
The Company and the Consultant recognize that Consultant's
primary duty as a member of the University of Munster (the "University") is to
the University. The Company and the Consultant agree that the University's
policies and Consultant's obligations to the University shall be observed in the
event a conflict arises with this Agreement. The same applies to funding
agencies who fund Consultant's research through research contracts with the
University of Munster or by funds administered by the University of Munster.
(e) Compensation
------------
As compensation for the consulting services provided by
Consultant hereunder, the Company shall pay to Consultant the amounts specified,
at the time(s) specified, on Exhibit B attached hereto.
(f) Expenses
--------
In addition to the compensation specified in subsection 2(e), the
Company will pay reasonable out-of-pocket expenses incurred by Consultant and
approved in advance by the Company in the furtherance of or in connection with
the performance of consulting services hereunder.
(g) No Violation of Others' Rights
------------------------------
Consultant represents and warrants that in the course of
performing services hereunder Consultant will not infringe or wrongfully
appropriate any patents, copyrights, trade secret rights, or other intellectual
property rights of any person or entity anywhere in the world.
3. Protection of Confidential Information
On or before the date hereof, the Company and the Consultant shall
have entered into a separate agreement regarding Consultant's use of
confidential information (attached as Exhibit C).
4. Property Rights
All rights, title and interest in and to the Products (if any) and the
Technology developed under this Agreement shall at all times be and remain the
sole and exclusive property of the Company, and the Products and the Technology
shall be deemed to works make for hire. The parties agree that any patents,
trademarks or copyrights that may issue relating to any of the Products or the
Technology shall be in the name of and assigned to the Company. Patents and
rights resulting from research and development, the results of which are
disclosed to the Company before or at the time of signature of this Agreement
can be licensed and/or sold by Company only with Consultant's written consent.
In case the Company has an interest in developing the technology, a license
agreement shall be negotiated according to standard and fair marketing
conditions.
<PAGE>
5. Term and Termination
The term of this Agreement shall be as set forth in Exhibit A attached
hereto. Unless otherwise specified in Exhibit A, either party may terminate
this Agreement at any time upon thirty ( 30) days written notice delivered to
the other. The provision of Sections 3 and 4 hereof shall survive the
termination of this Agreement.
6. Miscellaneous
(a) Use of University's Name
------------------------
With the limited exception of citing Consultant's faculty title,
the Company and its affiliates will not use the names, likeness, or logos of the
University, any of its schools or divisions in any of their fund raising or in
investment documents, general publications, advertisements, or marketing and
promotional materials without the prior written permission of the University.
(b) Relationship of Parties
-----------------------
Consultant shall at all times during the performance of his
services hereunder be an independent contractor, maintaining sole and exclusive
control over its business and operations. At no time will either party hold
itself out to be the agent, employee, lessee, sublessee, partner or joint
venturer of the other party. Neither party hereto shall have the express or
implied right or authority to assume or create any obligation on behalf of or in
the name of the other party, or to bind the other party in regard to any
contract, agreement or undertaking with any third party.
(c) Entire Agreement
----------------
This Agreement, together with the exhibits attached hereto,
constitutes the entire Agreement between the parties relating to the subject
matter hereof and supersedes all prior written or oral negotiations,
representations or agreements. No modification of this Agreement shall be
binding on either party unless it is in writing and signed by both parties.
(d) Severability
------------
The provisions of this Agreement are severable, and if one or
more provisions are judicially determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions or portions of this
Agreement shall nevertheless be binding on and enforceable by and between the
parties hereto.
(e) Assignment
----------
This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the parties hereto; provided, however, that
Consultant and Company shall not transfer or assign this Agreement without the
prior written consent of the other party.
(f) Governing Law
-------------
The rights and obligations of the parties to this Agreement shall
be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
(g) Headings
--------
Section headings are for convenience of reference only and shall
not be considered in the interpretation of this Agreement.
<PAGE>
(h) Unavoidable Delays
------------------
Either party shall be excused for any delays or defaults in the
performance of this Agreement (except the payment of amounts due and payable
hereunder) unavoidably caused by the act of the other, the act of any agent of
the other, the act of any governmental authority, acts of God, the elements, war
litigation, strikes, walkouts, or any other cause beyond its reasonable control.
Each party shall use all reasonable diligence to avoid any such delay or default
and to resume performance under this Agreement as soon as practicable after such
delay or default.
(i) Notices
-------
All notices, requests, demands and other communications to be
given pursuant to this Agreement shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed by registered or certified mail,
return receipt requested, postage prepaid, or by facsimile transmission if a
true and correct copy is sent the same day by first class mail, postage prepaid,
or by dispatch by in internationally recognized express courier service, and in
each case addressed as follows:
If to Consultant: Prof. Dr. Franz Hillenkamp
---------------- Bahlmannstr. 5
D-48147 Munster
If to the Company: Sequenom, Inc.
----------------- c/o Sequenom Instruments GmbH
Mendelssohnstrasse 15 D
D-22761 Hamburg/Germany
Attn.: Prof. Dr. Hubert Koester
with copy to: Foley, Hoag & Eliot
------------ One Post Office Square
Boston, MA 02109/USA
Attn.: David Pearson, Esq.
or such other address as either party hereto shall have designated by notice in
writing to the other party.
(j) Attorney's Fees and Costs
-------------------------
Should litigation arise concerning the enforcement or
interpretation of this Agreement, the prevailing party shall be entitled to
recover its reasonable attorney's fees and costs as determined by the court.
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
SEQUENOM, Inc. CONSULTANT:
By: /s/ Fareed Kureshy /s/ Franz Hillenkamp
---------------------------- -----------------------------
Title: President 9/1/96
-------------------------
SEQUENOM Instrument GmbH:
By: /s/ Helmut Shuhsler
------------------------
Title: illegible
------------------------
Sequenom Instruments GmbH
Mendelssohnstr. 15 D
22761 Hamburg
Tel. 040 - 89 96 76-0
Fax. 040/89 96 76-10
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. F. Hillenkamp /Aug. 1996 -6-
- -------------------------------------------------------------------------------
EXHIBIT A
---------
TERM
The term of the Agreement shall be the period from June 1, 1996 to May 31, 1999,
subject to termination in accordance with Section 5.
DESCRIPTION OF SERVICES AND TASKS
The Consultant will:
(1) provide advice and technical assistance to Sequenom on all aspects of mass
spectrometry of nucleic acids, including sample presentation and
applications in the area of DNA/RNA detection, the development of
technologies to improve reproducibility, sensitivity and resolution as well
as extension of mass range in MALDI-TOF mass spectrometry of nucleic acids;
(2) provide technical advice that will assist Sequenom in its applications for
patents for technology currently developed by Sequenom, or developed by and
for Sequenom during the period of his consultantship, in particular
defining aspects of these technologies that distinguish them from prior
art;
(3) assist Sequenom in locating and recruiting for employment personnel skilled
in mass spectrometry and related technologies, with appropriate expertise
in instrument design, construction and specific application areas;
(4) make every reasonable effort to attend all meetings of the Scientific
Advisory Board and participate in all discussions and decisions related to
strategies, technical approaches and technical progress for the overall
project;
and, in addition to regular communication with Sequenom personnel via telephone,
fax, courier or normal mail, spend up to two days per month at Sequenom
Instruments GmbH, Hamburg/Germany, or the location of Sequenom, Inc. in the USA.
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. F. Hillenkamp /Aug. 1996 -7-
- -------------------------------------------------------------------------------
EXHIBIT B
---------
COMPENSATION AND PAYMENT SCHEDULE
In return, Sequenom will provide to the Consultant:
(1) ***
(2) ***
(3) ***
(4) ***
(5) options to purchase 9,000 shares of the common stock of Sequenom, with
3,000 of such options to vest on June 30, 1997, 3,000 to vest on June 30,
1998, and the remaining 3,000 shares to vest on June 30, 1999; such options
shall have an exercise price per share equal to the fair market value of
the common stock on the date of grant as determined by the Board of
Directors;
(6) options to purchase 15,000 shares of the common stock of Sequenom, with
such options to be portioned in number in accordance with the priorities
set for the three milestones below, and such options to vest in full on
June 30, 2004, provided, however, that the vesting of the defined portions
of such shares shall be accelerated upon completion of each of the
following milestones:
(a) ***
(b) ***
(c) ***
(7) the options shall have an exercise price per share equal to the fair market
value of the common stock on the date of grant as determined by the Board
of Directors.
*** Portions of this page have been ommitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. F. Hillenkamp /Aug. 1996 -8-
- -------------------------------------------------------------------------------
EXHIBIT C
---------
CONFIDENTIALITY AGREEMENT
Under tile terms of tile Consulting Agreement, the Consultant is under
obligation not to disclose any business information or Company secrets to
unauthorized parties and/or to persons outside the Company.
Maintaining confidentiality is a constituent part of the Consultant's loyalty to
the Company and protects business and Company secrets. Company secrets are data
and materials identified as confidential or those which, upon careful
consideration, a Consultant can recognize as being confidential (e.g. technical
expertise, even if not patentable, supply sources for goods, customer lists,
price schedules, calculations, investment plans, etc., including also the
Consultant's own inventions made in the performance of the Consulting Agreement.
Details of any production or analytical methods of which the Consultant may gain
knowledge and regarding which the Company as license holder is committed to
maintain strictest confidentiality are also classified as secret. This applies
to details of production processes to which the Company has gained access in the
course of an exchange of know-how with another Company or which are classified
secret by the Company under its commitment to confidentiality with another
Company.
The Consultant further undertakes to maintain strictest confidentiality
regarding all matters of the Company's business also after termination of the
Consulting Agreement. In this context the Consultant is obliged, if so
required, to sign a respective personal commitment to confidentiality vis-a-vis
third parties.
In the event of any violation of this Agreement to confidentiality, the Company
is entitled to impose a penalty for each violation, without prejudice to the
Company's right to claim for higher damages, or the Company's right to
termination of the Consulting Agreement.
Consultant retains the right to publish results obtained as a result of or in
connection with the services delivered under this Agreement. Consultant shall
inform Company about intended publications at the earliest convenience and shall
provide Company with all relevant material, in particular draft manuscripts.
Company may delay publication by a maximum of three months if all or part of the
material is deemed to contain patentable material or material which can be
legally protected by other means. Consultant shall provide Company with all
available material necessary to file for such rights. In case of other tangible
information, both parties will make every reasonable effort to limit the
published information so as not to interfere with the justified commercial
interest of the Company under the provision that the scientific content of the
publication be retained.
Consultant: /s/ Franz Hillenkamp 9/1/96
-----------------------------------
-----------------------------------
Prof. Dr. Franz Hillenkamp
Sequenom, Inc.: /s/ Fareed Kureshy
-----------------------------------
Name Fareed Kureshy
Title: President
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. F. Hillenkamp /Aug. 1996 -9-
- -------------------------------------------------------------------------------
Sequenom Instruments GmbH: /s/ Helmut Schuhsler
-----------------------------------
Name: Dr. Helmut Schuhsler
Title: (Illegible)
Sequenom Instruments GmbH
Mendelssohnstr. 15 D
22761 Hamburg
Tel. 040 - 89 96 76-0
Fax. 040/89 96 76-10
<PAGE>
EXHIBIT 10.40
CONSULTING SERVICES AGREEMENT
THIS AGREEMENT is entered into this 30th day of January, 1997, by and
between Sequenom, Inc. (the "Company") of San Diego, CA/USA and Sequenom
Instruments GmbH of Hamburg/Germany (the "Company") and Prof. Dr. Peter
Roepstorff ("Consultant").
NOW, THEREFORE, it is agreed as follows:
1. Definitions
As used herein:
(a) The term "Products" shall mean the devices and reagents proposed
to be developed by, or with the assistance of, Consultant hereunder as defined,
and with the specifications set forth in Exhibit A hereto.
(b) The term "Technology" shall mean the results and product (interim
and/or final) of the consulting services performed by Consultant hereunder,
whether tangible or intangible, including, without limitation, each and every
invention, formula, trade secret, software program (including without
limitation, object code, source code, flow charts, algorithms and related
documentation), listing, routine, manual, specification, technique, product,
concept, know-how, or similar property, whether or not patentable or
copyrightable, and whether or not embodied in any Products that are made,
developed, perfected, designed conceived or first reduced to practice by
Consultant, either solely or jointly with others, in the course and scope of the
consulting services performed hereunder.
2. Engagement or Performance of Services
(a) Engagement
----------
The Company hereby engages Consultant to be a member of its
Scientific Advisory Board and to perform consulting services in accordance with
the terms and conditions of this Agreement. The specific tasks and services to
be performed by Consultant are set forth in Exhibit A attached hereto. If such
services include the development of specific Products, the specifications of
such Products are set forth in Exhibit A attached hereto.
(b) Facilities, Equipment and Supplies
----------------------------------
The company will provide to the Consultant the facilities,
equipment and supplies specified in Exhibit A attached hereto. *** It is
understood that milestones cannot be achieved unless funding by either funding
agencies or the Company is available. Consultant shall, at his own cost and
expense, provide all other facilities, equipment and supplies necessary to
perform the consulting services hereunder.
(c) Other Services
--------------
The Company acknowledges and agrees that, subject to its
obligations hereunder, Consultant shall have the right to engage in researches
and development and
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. Peter Roepstorff 2
- --------------------------------------------------------------------------------
consulting activities in all areas other than ***. Such activities in the field
of *** are permissible, provided, however, that Consultant shall not perform any
consulting services for an actual or potential competitor of the Company during
the term of this Agreement and for a period of one (1) year after termination of
this Agreement. It is understood that the consulting activities in all areas
other than ***, are non exclusive.
(d) Primary Duty
------------
The Company and the Consultant recognize that Consultant's
primary duty as a member of the faculty of Odense University (the "University")
is to the University. The Company and the Consultant agree that the University's
policies and Consultant's obligations to the University shall be observed in the
event a conflict arises with this Agreement. The same applies to funding
agencies who fund Consultant's research through research contracts with the
University of Odense or by funds administered by the University of Odense.
(e) Compensation
------------
As compensation for the consulting services provided by
Consultant hereunder, the Company shall pay to Consultant the amounts specified,
at the time(s) specified, on Exhibit B attached hereto.
(f) Expenses
--------
In addition to the compensation specified in subsection 2(e), the
Company will pay reasonable out-of-pocket expenses incurred by Consultant and
approved in advance by the Company in the furtherance of or in connection with
the performance of consulting services hereunder.
(g) No Violation of Others' Rights
------------------------------
Consultant represents and warrants that in the course of
performing services hereunder Consultant will not infringe or wrongfully
appropriate any patents, copyrights, trade secret rights, or other intellectual
property rights of any person or entity anywhere in the world.
3. Protection of Confidential Information
On or before the date hereof, the Company and the Consultant shall
have entered into a separate agreement regarding Consultant's use of
confidential information (attached as Exhibit C).
4. Property Rights
All rights, title and interest in and to the Products (if any) and the
Technology developed under this Agreement shall at all times be and remain the
sole and exclusive property of the Company, and the Products and the Technology
shall be deemed to be works made for hire. The parties agree that any patents,
trademarks or copyrights that may issue relating to any of the Products or the
Technology shall be in the name of and assigned to the Company. Patents and
rights resulting from research and development, the results of which are
disclosed to the Company before or at the time of signature of this Agreement
can be licensed and/or sold by Company only with Consultant's written consent.
In case the Company has an interest in
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. Peter Roepstorff 3
- --------------------------------------------------------------------------------
developing the technology, a license agreement shall be negotiated according to
standard and fair marketing conditions.
5. Term and Termination
The term of this Agreement shall be as set forth in Exhibit A attached
hereto. Unless otherwise specified in Exhibit A, either party may terminate
this Agreement at any time upon thirty days written notice delivered to the
other. The provision of Sections 3 and 4 hereof shall survive the termination
of this Agreement.
6. Miscellaneous
(a) Use of University's Name
------------------------
With the limited exception of citing Consultant's faculty title,
the Company and its affiliates will not use the names, likeness, or logos of the
University, any of its schools or divisions in any of their fund raising or in
investment documents, general publications, advertisements, or marketing and
promotional materials without the prior written permission of the University.
(b) Relationship of Parties
-----------------------
Consultant shall at all times during the performance of his
services hereunder be an independent contractor, maintaining sole and exclusive
control over its business and operations. At no time will either party hold
itself out to be the agent, employee, lessee, sublessee, partner or joint
venturer of the other party. Neither party hereto shall have the express or
implied right or authority to assume or create any obligation on behalf of or in
the name of the other party, or to bind the other party in regard to any
contract, agreement or undertaking with any third party.
(c) Entire Agreement
----------------
This Agreement, together with the exhibits attached hereto,
constitutes the entire agreement between the parties relating to the subject
matter hereof and supersedes all prior written or oral negotiations,
representations or agreements. No modification of this Agreement shall be
binding on either party unless it is in writing and signed by both parties.
(d) Severability
------------
The provisions of this Agreement are severable, and if one or
more provisions are judicially determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions or portions of this
Agreement shall nevertheless be binding on and enforceable by and between the
parties hereto.
(e) Assignment
----------
This Agreement shall insure to the benefit or and be binding upon
the successors and assigns of the parties hereto; provided, however, that
Consultant shall not transfer or assign this Agreement without the prior written
consent of the Company.
(f) Governing Law
-------------
The rights and obligations of the parties to this Agreement shall
be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. Peter Roepstorff 4
- --------------------------------------------------------------------------------
(g) Headings
--------
Section headings are for convenience of reference only and shall
not be considered in the interpretation of this Agreement.
(h) Unavoidable Delays
------------------
Either party shall be excused for any delays or defaults in the
performance of this Agreement (except the payment of amounts due and payable
hereunder) unavoidably caused by the act of the other, the act of any agent of
the other, the act of any governmental authority, acts of God, the elements,
war, litigation, strikes, walkouts, or any other cause beyond its reasonable
control. Each party shall use all reasonable diligence to avoid any such delay
or default and to resume performance under this Agreement as soon as practicable
after such delay or default.
(i) Notices
-------
All notices, requests, demands and other communications to be
given pursuant to this Agreement shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed by registered or certified mail,
return receipt requested, postage prepaid, or by facsimile transmission if a
true and correct copy is sent the same day by first class mail, postage prepaid,
or by dispatch by in internationally recognized express courier service, and in
each case addressed as follows:
If to Consultant: Prof. Dr. Peter Roepstorff
---------------- Kolding Landevej 43
DK-7000 Fredericia/Denmark
If to the Company: Sequenom, Inc.
----------------- c/o Sequenom Instruments GmbH
Mendelssohnstrasse 15 D
D-22761 Hamburg/Germany
Attn.: Prof. Dr. Hubert Koster
with copy to: Foley, Hoag & Eliot
One Post Office Square
Boston, MA 02109/USA
Attn.: David Pearson, Esq.
or such other address as either party hereto shall have designated by notice in
writing to the other a party.
(j) Attorney's fees and Costs
-------------------------
Should litigation arise concerning the enforcement or
interpretation of this Agreement, the prevailing party shall be entitled to
recover its reasonable attorney's fees and costs as determined by the court.
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. Peter Roepstorff 5
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
SEQUENOM, Inc. CONSULTANT:
By: /s/ illegible /s/ illegible
------------------------- ----------------------------
Title: CTO
----------------------
SEQUENOM Instruments GmbH:
By: /s/ illegible
-------------------------
Title: illegible
----------------------
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. Peter Roepstorff 6
- --------------------------------------------------------------------------------
EXHIBIT A
---------
TERM
The term of the Agreement shall be the period from March 1, 1997 to February 28,
2000, subject to termination in accordance with Section 5.
DESCRIPTION OF SERVICES AND TASKS
The Consultant will:
(1) be a member of the Sequenom Scientific Advisory Board;
(2) provide advice and technical assistance to Sequenom on all aspects of ***
and proteins, including applications in the area of ***.
(3) provide technical advice, in particular also with reference to ***
(4) assist Sequenom in *** and related technologies, with appropriate expertise
in applications of ***
(5) make every reasonable effort to attend all meetings of the Scientific
Advisory Board and participate in all discussions and decisions related to
strategies, technical approaches and technical progress for the overall
project;
and, in addition to regular communication with Sequenom personnel via telephone,
fax, courier or normal mail, spend up to one day per month at Sequenom
Instruments GmbH, Hamburg/Germany, or the location of Sequenom, Inc. in the USA.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. Peter Roepstorff 7
- --------------------------------------------------------------------------------
EXHIBIT B
---------
COMPENSATION AND PAYMENT SCHEDULE
In return, Sequenom will provide to the Consultant:
(1) ***
(2) ***
(3) ***
(4) ***
(5) options to purchase 9,000 shares of the common stock of Sequenom, with
3,000 of such options to vest on March 31, 1998, 3,000 to vest on March 31,
1999, and the remaining 3,000 shares to vest on March 31, 2000; such
options shall have an exercise price per share equal to the fair market
value of the common stock on the date of grant as determined by the Board
of Directors;
(6) options to purchase 15,000 shares of the common stock of Sequenom, with
such options to be portioned in number in accordance with the priorities
set for the three milestones below, and such options to vest in full on
March 31, 2005, provided, however, that the vesting of the defined portions
of such shares shall be accelerated upon completion of each of the
following milestones:
(a)
(b) to be defined
(c)
(7) the options shall have an exercise price per share equal to the fair market
value of the common stock on the date of grant as determined by the Board
of Directors.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
CONSULTING AGREEMENT
Prof. Dr. Peter Roepstorff 8
- --------------------------------------------------------------------------------
EXHIBIT C
---------
CONFIDENTIALITY AGREEMENT
Under the terms of the Consulting Agreement, the Consultant is under obligation
not to disclose any business information or company secrets to unauthorized
parties and/or to persons outside the Company.
Maintaining confidentiality is a constituent part of the Consultant's loyalty to
the Company and protects business and company secrets. Company secrets are data
and materials identified as confidential or those which, upon careful
consideration, a Consultant can recognize as being confidential (e.g. technical
expertise, even if not patentable, supply sources for goods, customer lists,
price schedules, calculations, investment plans, etc., including also the
Consultant's own inventions made in the performance of the Consulting Agreement.
This agreement to confidentiality is deemed to extend and apply also to any co-
workers involved in the execution of the collaboration project with the Company.
Details of any production or analytical methods of which the Consultant may gain
knowledge and regarding which the Company as license holder is committed to
maintain strictest confidentiality are also classified as secret. This applies
to details of production processes to which the Company has gained access in the
course of an exchange of know-how with another company or which are classified
secret by the Company under its commitment to confidentiality with another
company.
The Consultant further undertakes to maintain strictest confidentiality
regarding all matters of the Company's business also after termination of the
Consulting Agreement. In this context the Consultant is obliged, if so
required, to sign a respective personal commitment to confidentiality vis-a-vis
third parties.
In the event of any violation of this agreement to confidentiality, the Company
is entitled to impose a penalty for each violation, without prejudice to the
Company's right to claim for higher damages, or the Company's right to
termination of the Consulting Agreement.
Consultant: /s/ Prof. Dr. Peter Reopstorff
------------------------------
Prof. Dr. Peter Roepstorff
SEQUENOM, Inc. /s/ Dr. Hubert Koster
------------------------------
Name: Dr. Hubert Koster
Title: CTO
SEQUENOM Instruments GmbH: /s/ illegilbe
------------------------------
Name: illegible
Title: illegible
<PAGE>
EXHIBIT 10.41
CONSULTING SERVICES AGREEMENT
-----------------------------
THIS AGREEMENT is entered into this 17th day of February, 1997, by and
------ ---------
between Sequenom, Inc. (the "Company") and Prof. Dr.med.Dr.rer.nat Ulf.B.
Gobel ("Consultant").
NOW, THEREFORE, it is agreed as follows:
1. Definitions.
2. As used herein:
(a) The term "Products" shall mean the devices, reagents, kits and
diagnostic assays and services proposed to be developed by, or with the
assistance of, Consultant hereunder as defined, and with the specifications set
forth in Exhibit A hereto.
---------
(b) The term "Technology" shall mean the results and product (interim
and/or final) of the consulting services performed by Consultant hereunder,
whether tangible or intangible, including, without limitations each and every
invention, formula, trade secret, software program (including without
limitation, object code, source code, flow charts, algorithms and related
documentation), listing, routine, manual, specification, technique, product,
concept, know-how, or similar property, whether or not patentable or
copyrightable, and whether or not embodied in any Products that are made,
developed, perfected, designed conceived or first reduced to practice by
Consultant, either solely or jointly with others, in the course and scope of the
consulting services performed hereunder.
2. Engagement or Performance of Services.
(a) Engagement.
----------
The Company hereby engages Consultant to perform consulting
services in accordance with the terms and conditions of this Agreement. The
specific tasks and services to be performed by Consultant are set forth in
Exhibit A attached hereto. If such services include the development of specific
- ---------
Products, the specifications of such Products are set forth in Exhibit A
---------
attached hereto.
(b) Facilities, Equipment and Supplies.
----------------------------------
The Company will provide to the Consultant the facilities,
equipment and supplies specified in Exhibit A attached hereto. Consultant shall
---------
to some extent, at his own cost and expense, provide all other facilities,
equipment and supplies necessary to perform the consulting services hereunder.
It is understood that major expenses and costs will be covered by joint projects
sponsored by e.g. DFG, BMBF or EU.
(c) Other Services.
--------------
The Company acknowledges and agrees that, subject to its
obligations hereunder, Consultant shall have the right to engage in researches
and development and consulting activities for himself and others during the term
of this Agreement; provided, however, that Consultant shall not perform any
consulting services for an actual or potential competitor of the Company during
the term of this Agreement and for a period of one (1) year after termination of
this Agreement.
<PAGE>
Consulting Services Agreement
Prof. Dr. U.B. Gobel, Berlin -2-
- --------------------------------------------------------------------------------
(d) Primary Duty.
------------
The Company and the Consultant recognize that Consultant's
primary duty as a member of the Charite University Clinic of Berlin (the
"University") is to the University. The Company and the Consultant agree that
the University's policies and Consultant's obligations to the University shall
be observed in the event a conflict arises with this Agreement.
(e) Compensation.
------------
As compensation for the consulting services provided by
Consultant hereunder, the Company shall pay to Consultant the amounts specified,
at the time(s) specified on Exhibit B attached hereto.
(f) Expenses.
--------
In addition to the compensation specified in subsection 2(e), the
Company will pay reasonable out-of-pocket expenses incurred by Consultant and
approved in advance by the Company in the furtherance of or in connection with
the performance of consulting services hereunder.
(g) No Violation of Others' Rights.
------------------------------
Consultant represents and warrants that in the course of
performing services hereunder Consultant will not infringe or wrongfully
appropriate any patents, copyrights, trade secret rights, or other intellectual
property rights of any person or entity anywhere in the world.
3. Protection of Confidential Information.
On or before the date hereof, the Company and the Consultant shall
have entered into a separate agreement regarding Consultant's use of
confidential information (attached as Exhibit C).
---------
4. Property Rights.
All rights, title and interest in and to the Products (if any) and the
Technology shall at all times be and remain the sole and exclusive property of
the Company, and the Products and the Technology shall be deemed to works make
for hire. The parties agree that any patents, trademarks or copyrights that may
issue relating to any of the Products or the Technology shall be in the name of
and assigned to the Company. In the event of successful commercialization of
patented technology generated through the participation of Consultant, a license
agreement will be negotiated in good faith, reflecting the extent of
Consultant's participation and the Company's financial contributions as well as
related innovations created by Company personnel in the course of the
development.
Publication or presentation of results generated during the
performance of Consultant's services is desired. However, such publication or
presentation is subject to Company's prior approval which shall not be
unreasonably withheld. However, a period of 60 days is anticipated for
clearance of Consultant's request for publication and/or presentation of results
in order to determine whether parts of such scientific results are patentable or
would disclose trade secrets in which case those parts of the results should be
omitted from the publication and/or presentation.
<PAGE>
Consulting Services Agreement
Prof. Dr. U.B. Gobel, Berlin -3-
- --------------------------------------------------------------------------------
5. Term and Termination.
The term of this Agreement shall be as set forth in Exhibit A attached
hereto. Unless otherwise specified in Exhibit A, either party may terminate
this Agreement at any time upon thirty ( 30) days written notice delivered to
the other. The provision of Sections 3 and 4 hereof shall survive the
termination of this Agreement.
6. Miscellaneous.
(a) Use of University's Name.
------------------------
With the limited exception of citing Consultant's faculty title,
the Company and its affiliates will not use the names, likeness, or logos of the
University, any of its schools or divisions in any of their fund raising or in
investment documents, general publications, advertisements, or marketing and
promotional materials without the prior written permission of the University.
(b) Relationship of Parties.
-----------------------
Consultant shall at all times during the performance of his
services hereunder be an independent contractor, maintaining sole and exclusive
control over its business and operations. At no time will either party hold
itself out to be the agent, employee, lessee, sublessee, partner or joint
venturer of the other party. Neither party hereto shall have the express or
implied right or authority to assume or create any obligation on behalf of or in
the name of the other party, or to bind the other party in regard to any
contract, agreement or undertaking with any third party.
(c) Entire Agreement.
----------------
This Agreement, together with the exhibits attached hereto,
constitutes the entire agreement between the parties relating to the subject
matter hereof and supersedes all prior written or oral negotiations,
representations or agreements. No modification of this Agreement shall be
binding on either party unless it is in writing and signed by both parties.
(d) Severability.
------------
The provisions of this Agreement are severable, and if one or
more provisions are judicially determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions or portions of this
Agreement shall nevertheless be binding on and enforceable by and between the
parties hereto.
(e) Assignment.
----------
This Agreement shall insure to the benefit or and be binding upon
the successors and assigns of the parties hereto; provided, however, that
Consultant shall not transfer or assign this Agreement without the prior written
consent of the Company.
(f) Government Law.
--------------
The rights and obligations of the parties to this Agreement shall
be governed by and construed in accordance with the laws of the State of
California.
(g) Headings.
--------
Section headings are for convenience of reference only and shall
not be considered in the interpretation of this Agreement.
<PAGE>
Consulting Services Agreement
Prof. Dr. U.B. Gobel, Berlin -4-
- --------------------------------------------------------------------------------
(h) Unavoidable Delays
------------------
Either party shall be excused for any delays or defaults in the
performance of this Agreement (except the payment of amounts due and payable
hereunder) unavoidably caused of God, the elements, war, litigation, strikes,
walkouts, or any other cause beyond its reasonable control. Each party shall
use all reasonable diligence to avoid any such delay or default and to resume
performance under this Agreement as soon as practicable after such delay or
default.
(i) Notices.
-------
All notices, requests, demands and other communications to be given
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given if delivered by hand or mailed by registered or certified mail,
return receipt requested, postage prepaid, or by facsimile transmission if a
true and correct copy is sent the same day by first class mail, postage prepaid,
or by dispatch by in internationally recognized express courier service, and in
each case addressed as follows:
If to Consultant: Prof Dr. Dr. Ulf B. Gobel
Universit@tsklinikum CHARIT
Dorotheenstr. 96/Wilhelmstr. 67
D-10117 Berlin
If to the Company: Sequenom, Inc.
c/o Sequenom Instruments GmbH
Mendelssohnstrasse 15 D
D-22761 Hamburg / Germany
Attn.: Prof. Dr. Hubert Kster
with copy to: Foley, Hoag & Eliot
One Post Office Square
Boston, MA 02109 / USA
Attn.: David Pearson, Esq.
or such other address as either party hereto shall have designated by notice in
writing to the other party.
(j) Attorney's Fees and Costs
-------------------------
Should litigation arise concerning the enforcement or interpretation
of this Agreement, the prevailing party shall be entitled to recover its
reasonable attorney's fees and costs as determined by the Court.
<PAGE>
Consulting Services Agreement
Prof. Dr. U.B. Gobel, Berlin -5-
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
SEQUENOM, Inc. CONSULTANT:
By: /s/ H. Koster /s/ Ulf B. Gobel
---------------------------- -----------------------------
Name: Dr. H. Koster Dr. Dr. Ulf B Gobel
Title: CEO
<PAGE>
Consulting Services Agreement
Prof. Dr. U.B. Gobel, Berlin -6-
- --------------------------------------------------------------------------------
EXHIBIT A
---------
TERM
The term of the Agreement shall be the period from June 1, 1996 to May 31, 1999,
subject to termination in accordance with Section 5.
DESCRIPTION OF SERVICES AND TASKS
The Consultant will:
(1) provide advice and technical assistance to Sequenom on all aspects of
clinical microbiology, including but not limited to the detection and
diagnosis of microorganisms, viruses of clinical relevance;
(2) provide technical advice that will assist Sequenom in its applications for
patents for technology currently developed by Sequenom, or developed by and
for Sequenom during the period of his consultantship, in particular
defining aspects of these technologies that distinguish them from prior
art;
(3) assist Sequenom in locating and recruiting for employment personnel skilled
in clinical microbiology and the detection and diagnosis of microorganisms,
etc. of clinical relevance with expertise in molecular clinical
microbiology and related state-of-the-art technologies;
(4) attend meetings of the Scientific Advisory Board and participate in all
discussions and decisions related to strategies, technical approaches and
technical progress for the overall project;
(5) and, all addition to regular communication with Sequenom personnel via
telephone, fax, courier or normal mail, spend up to two days per month at
Sequenom Instruments GmbH, Hamburg/Germany, or the location of Sequenom,
Inc. in the USA.
<PAGE>
Consulting Services Agreement
Prof. Dr. U.B. Gobel, Berlin -7-
- --------------------------------------------------------------------------------
EXHIBIT B
---------
COMPENSATION AND PAYMENT SCHEDULE
In return, Sequenom will provide to the Consultant:
(1) ***
(2) ***
(3) ***
(4) ***
(5) options to purchase 5,000 shares of the common stock of Sequenom, with 50%
of such options to vest in full on December 31, 1997, and the remaining 50%
to vest on December 31, 1998; such options shall have an exercise price per
share equal to the fair market value of the common stock on the date of
grant as determined by the Board of Directors;
(6) options to purchase 15,000 shares of the common stock of Sequenon, with
such options to vest in full on December 31, 2004, provided, however, that
the vesting of 5,000 of such shares shall be accelerated upon completion of
each of the following milestones;
(a)
(b) TO BE DEFINED
(c)
(7) the options shall have an exercise price per share equal to the fair market
value of the common stock on the date of grant as determined by the Board
of Directors.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
Consulting Services Agreement
Prof. Dr. U.B. Gobel, Berlin -8-
- --------------------------------------------------------------------------------
EXHIBIT C
---------
CONFIDENTIALITY AGREEMENT
Under the terms of the Consulting Agreement, the Consultant is under obligation
not to disclose any business information or company secrets to unauthorized
parties and/or to persons outside the Company.
Maintaining confidentiality is a constituent part of the Consultant's loyalty to
the Company and protects business and company secrets. Company secrets are data
and materials identified as confidential or those which, upon careful
consideration, a Consultant can recognize as being confidential (e.g. technical
expertise, even if not patentable, supply sources for goods, customer lists,
price schedules, calculations, investment plans, etc., including also the
Consultant's own inventions made in the performance of the Consulting Agreement.
Details of any production or analytical methods of which the Consultant may gain
knowledge and regarding which the Company as license holder is committed to
maintain strictest confidentiality are also classified as secret. This applies
to details of production processes to which the Company has gained access in the
course of an exchange of know-how with another company or which are classified
secret b the Company under its commitment to confidentiality with another
company.
The Consultant further undertakes to maintain strictest confidentiality
regarding all matters of the Company's business also after termination of the
Consulting Agreement. In this context the Consultant is obliged, if so
required, to sign a respective personal commitment to confidentiality vis--vis
third parties.
In the event of any violation of this agreement to confidentiality, the Company
is entitled to impose a penalty for each violation, without prejudice to the
Company's right to claim for higher damages, or the Company's right to
termination of the Consulting Agreement.
Consultant: SEQUENOM:
/s/ Dr. Ulf B.Gobel /s/ illegible
- ----------------------- ----------------------
Dr. Dr. Ulf B Gobel Name/Title
Date: 12/22/1996 Date: 2/18/97
---------------- ----------------
<PAGE>
EXHIBIT 10.42
CONSULTING SERVICES AGREEMENT
THIS AGREEMENT is entered into this 1st day of March 1999, by and between
Sequenom, Inc. (the "Company") and Dr. John Cashman ("Consultant").
NOW, THEREFORE, it is agreed as follows:
1. Definitions: As used herein:
-----------
(a) The term "Products" shall mean the devices, if any, proposed to be
developed by, or with the assistance of, Consultant hereunder as
defined, and with the specifications set forth in Exhibit hereto.
(b) The term "Technology" shall mean the results and product (interim
and/or final) of the consulting services performed by Consultant
hereunder, whether tangible or intangible, including, without
limitation, each and every invention, formula, trade secret,
software program (including without limitation, object code,
source code, flow charts, algorithms and related documentation),
listing, routine, manual, specification, technique, product,
concept, know-how, or similar property, whether or not patentable
or copyrightable and whether or not embodied in any Products, that
are made, developed, perfected, designed, conceived or first
reduced to practice by Consultant, either solely or jointly with
others, in the course and scope of the consulting services
performed hereunder. Technology will exclude results and or
products developed in conjunction with co-sponsored Federal or
other grants.
2. Engagement and Performance of Services
--------------------------------------
(a) Engagement. The Company hereby engages Consultant to perform
----------
consulting services in accordance with the terms and conditions
of this agreement. The specific task and services to be
performed by Consultant are set forth on Exhibit A attached
hereto. If such services include the development of specific
Products, the specifications of such Products are as set forth on
Exhibit A attached hereto.
(b) Facilities, Equipment and Supplies. The Consultant shall provide,
----------------------------------
at his own cost, supplies necessary to perform the consulting
services hereunder.
(c) Other Services. The Company acknowledges and agrees that,
--------------
subject to its obligations hereunder, Consultant shall have the
right to engage in research and development and consulting
activities for himself and others during the term of this
Agreement; provided, however, that Consultant shall not perform
any consulting services for an actual or potential competitor of
the Company involved in *** as a primary service or product during
the term of this agreement.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
(d) Duration of Services. The Company and the Consultant recognize
--------------------
that duration of services will not exceed one (1) year.
(e) Compensation. As compensation for the consulting services
------------
provided by Consultant hereunder, the Company shall pay to
Consultant *** with the first installment beginning on March 1,
1999. In addition, the Consultant will receive one thousand five
hundred (1500) incentive stock options (ISO) on March 1, 2000
priced at the Fair Market Value.
(f) Expenses. In addition to the compensation specified in
--------
subsection (e), the Company will pay reasonable expenses incurred
by Consultant and approved in advance by the Company in the
----------------------------------
furtherance of or in connection with the performance of
consulting services hereunder. These expenses include but are
not limited to ***.
(g) No Violation of Other's Rights. Consultant represents and
------------------------------
warrants that in the course of performing services hereunder
Consultant will not infringe or wrongly appropriate any patents,
copyrights, trade secret rights, or other intellectual property
rights of any person or entity anywhere in the world.
3. Protection of Confidential Information. On or before the date hereof,
--------------------------------------
the Company and the Consultant shall have entered into a separate
agreement regarding Consultant's use of confidential information.
4. Property Rights. All right, title and interest in and to the Products
---------------
(if any) and the Technology shall at all times be and remain the sole
and exclusive property of the Company, and the Products and the
Technology shall be deemed to be works made for hire. The parties
agree that any patents, trademarks or copyrights that may issue
relating to any of the Products or the Technology shall be in the name
of and assigned to the Company.
5. Term and Termination. The terms of this agreement may be terminated
--------------------
only by written notice at any time. The provisions of Sections 3 and
4 hereof shall survive the termination of this Agreement.
6. Miscellaneous.
-------------
(a) Relationships of Parties. Consultant shall at all time during
------------------------
the performance of his services hereunder be an independent
contractor, maintaining sole and exclusive control over its
business and operations. At no time will either party hold
itself out to be the agent, employee, lessee, sublessee, partner
or joint venturer of the other party. Neither party hereto shall
have the express or implied right or authority to assume or
2
<PAGE>
create any obligation on behalf of or in the name of the other
party, or to bind the other party in regard to any contract,
agreement or undertaking with any third party with the exception
of mutually agreed upon Federal and other grants.
(b) Entire Agreement. This Agreement, together with the exhibits
----------------
attached hereto, constitutes the entire agreement between the
parties relating to the subject matter hereof and supersedes all
prior written or oral negotiations, representations or
agreements. No modification of this Agreement shall be binding
on either party unless it is in writing and signed by both
parties.
(c) Severability. The provisions of this Agreement are severable,
------------
and if one or more provisions are judicially determined to be
illegal or otherwise unenforceable, in whole or in part, the
remaining provisions or portions of this Agreement shall
nevertheless be binding on and enforceable by and between the
parties hereto.
(d) Assignment. This Agreement shall inure to the benefit of and be
----------
binding upon the successors and assigns the parties hereto;
provided, however, that Consultant shall not transfer or assign
this Agreement without the prior written consent of the Company.
(e) Governing Law. The rights and obligations of the parties to this
-------------
agreement shall be governed by and construed in accordance with
the laws of California.
(f) Headings. Section headings are for convenience of reference only
--------
and shall not be considered in the interpretation of this
Agreement.
(g) Unavoidable Delays. Either party shall be excused for any delays
------------------
or defaults in the performance of this Agreement (except the
payment of amounts due and payable hereunder) unavoidably caused
by the act of the other, the act of any agent of the other, the
act of any governmental authority, acts of God, the elements,
war, litigation, strikes, walkouts, or any other cause beyond
reasonable control. Each party shall use all reasonable
diligence to avoid any such delay or default and to resume
performance under this Agreement as soon as practicable after
such delay or default.
(h) Notices. All notices, requests, demands and other communications
-------
to be given pursuant to this Agreement shall be in writing and
shall be deemed to have been duly given if delivered by hand or
mailed by registered or certified mail, return receipt same day
by First Class mail, postage prepaid, or by dispatch by an
internationally recognized express courier service, and in each
case addressed as follows:
3
<PAGE>
If to Consultant: Dr. John Cashman
---------------- Director
Human Biomolecular Research Institute
5310 Eastgate Mall
San Diego, CA 92121
If to the Company: Sequenom, Inc.
----------------- 11555 Sorrento Valley Road
San Diego, CA 92121
Attn: Dr. Andi
Vice President, Genomics
or such other address as either party hereto shall have designated
by notice in writing to the other party.
(i) Attorneys' Fees and Costs. Should litigation arise concerning
--------------------------
the enforcement or interpretation of this Agreement, the
prevailing party shall be entitled to recover its reasonable
attorney's fees and costs as determined by the court.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
SEQUENOM, INC. CONSULTANT:
By: /s/ A. Braun /s/ John Cashman
-------------------------- ---------------------------
Date: 5-20-99 May 20, 1999
Dr. Andi Braun, VP Genomics Dr. John Cashman
4
<PAGE>
EXHIBIT A
---------
The term of the Agreement shall be the period from March 1, 1999 to February 28,
2000, subject to termination in accordance with Section 5.
DESCRIPTION OF SERVICES AND TASKS
The consultant will:
1. Provide advice and technical assistance to Sequenom on ***
2. Provide ***
3. Setup of ***
4. Publish together with Sequenom data from scientists' application of DNA Mass
Array.
*** Portions of this page have been omitted pursuant to a request for
confidential treatment and filed separately with the commission.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SEQUENOM, INC. SEQUENOM Sequenom GmbH
11555 Sorrento Valley Road LOGO Mendelssohnstrasse 15 D
San Diego, CA 92121-1331 USA D-22761 Hamburg Germany
Tel. +1-619-350-0345 Tel. +49-40-899676-0
Fax. +1-619-350-0344 Fax. +49-40-899676-10
www.sequenom.com www.sequenom.com
</TABLE>
EXHIBIT 10.43
CONSULTING SERVICES AGREEMENT
THIS AGREEMENT is entered into this first day of March, by and between
Sequenom, Inc. (the "Company") and Dr. Lindsay Farrer ("Consultant").
NOW, THEREFORE, it is agreed as follows:
1. Definitions: As used herein:
-----------
(a) The term "Products" shall mean the devices, if any, proposed to be
developed by, or with the assistance of, Consultant hereunder as
defined, and with the specifications set forth in Exhibit hereto.
(b) The term "Technology" shall mean the results and product (interim
and/or final) of the consulting services performed by Consultant
hereunder, whether tangible or intangible, including, without
limitation, each and every invention, formula, trade secret, software
program (including without limitation, object code, source code, flow
charts, algorithms and related documentation), listing, routine,
manual, specification, technique, product, concept, know-how, or
similar property, whether or not patentable or copyrightable and
whether or not embodied in any Products, that are made, developed,
perfected, designed, conceived or first reduced to practice by
Consultant, either solely or jointly with others, in the course and
scope of the consulting services performed hereunder.
2. Engagement and Performance of Services
--------------------------------------
(a) Engagement. The Company hereby engages Consultant to perform
----------
consulting services in accordance with the terms and conditions of
this agreement. The specific task and services to be performed by
Consultant are set forth on Exhibit A attached hereto. If such
services include the development of specific Products, the
specifications of such Products are as set forth on Exhibit A
attached hereto.
(b) Facilities, Equipment and Supplies. The Consultant shall provide,
----------------------------------
at his own cost, supplies necessary to perform the consulting
services hereunder.
(c) Other Services. The Company acknowledges and agrees that,
--------------
subject to its obligations hereunder, Consultant shall have the
right to engage in research and development and consulting
activities for himself and others during the term of this
Agreement; provided, however, that Consultant
<PAGE>
shall not perform any consulting services for an actual or
potential competitor of the Company during the term of this
agreement.
(d) Duration of Services. The Company and the Consultant recognize
--------------------
that duration of services will not exceed one (1) year.
(e) Compensation. As compensation for the consulting services
------------
provided by Consultant hereunder, the Company shall pay to
Consultant *** agreement that the project must not exceed ***. In
addition Consultant will receive two thousand (2,000) ISO's valued
in one (1) year.
(f) Expenses. In addition to the compensation specified in
--------
subsection 2 (d), the Company will pay reasonable out of pocket
expenses incurred by Consultant and approved in advance by the
Company in the furtherance of or in connection with the
performance of consulting services hereunder.
(g) No Violation of Other's Rights. Consultant represents and
------------------------------
warrants that in the course of performing services hereunder
Consultant will not infringe or wrongly appropriate any patents,
copyrights, trade secret rights, or other intellectual property
rights of any person or entity anywhere in the world.
3. Protection of Confidential Information. On or before the date hereof,
--------------------------------------
the Company and the Consultant shall have entered into a separate
agreement regarding Consultant's use of confidential information.
4. Property Rights. All right, title and interest in and to the Products
---------------
(if any) and the Technology shall at all times be and remain the sole
and exclusive property of the Company, and the Products and the
Technology shall be deemed to be works made for hire. The parties
agree that any patents, trademarks or copyrights that may issue
relating to any of the Products or the Technology shall be in the name
of and assigned to the Company. If the Consultant is acting on the
behalf of his employer then any Agreement between the employer and
Company shall take precedence.
5. Term and Termination. The terms of this agreement may be terminated
--------------------
at any time. The provisions of Sections 3 and 4 hereof shall survive
the termination of this Agreement.
6. Miscellaneous.
-------------
(a) Relationships of Parties. Consultant shall at all time during
------------------------
the performance of his services hereunder be an independent
contractor, maintaining sole and exclusive control over its
business and operations. At no time will either party hold itself
out to be the agent, employee, lessee, sublessee, partner or joint
venturer of the other party. Neither party hereto shall have the
express or implied right or authority to assume or
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
2
<PAGE>
create any obligation on behalf of or in the name of the other
party, or to bind the other party in regard to any contract,
agreement or undertaking with any third party.
(b) Entire Agreement. This Agreement, together with the exhibits
----------------
attached hereto, constitutes the entire agreement between the
parties relating to the subject matter hereof and supersedes all
prior written or oral negotiations, representations or agreements.
No modification of this Agreement shall be binding on either party
unless it is in writing and signed by both parties.
(c) Severability. The provisions of this Agreement are severable,
------------
and if one or more provisions are judicially determined to be
illegal or otherwise unenforceable, in whole or in part, the
remaining provisions or portions of this Agreement shall
nevertheless be binding on and enforceable by and between the
parties hereto.
(d) Assignment. This Agreement shall inure to the benefit of and be
----------
binding upon the successors and assigns the parties hereto;
provided, however, that Consultant shall not transfer or assign
this Agreement without the prior written consent of the Company.
(e) Governing Law. The rights and obligations of the parties to this
-------------
agreement shall be governed by and construed in accordance with
the laws of California.
(f) Headings. Section headings are for convenience of reference only
--------
and shall not be considered in the interpretation of this
Agreement.
(g) Unavoidable Delays. Either party shall be excused for any delays
------------------
or defaults in the performance of this Agreement (except the
payment of amounts due and payable hereunder) unavoidably caused
by the act of the other, the act of any agent of the other, the
act of any governmental authority, acts of God, the elements, war,
litigation, strikes, walkouts, or any other cause beyond
reasonable control. Each party shall use all reasonable diligence
to avoid any such delay or default and to resume performance under
this Agreement as soon as practicable after such delay or default.
(h) Notices. All notices, requests, demands and other communications
-------
to be given pursuant to this Agreement shall be in writing and
shall be deemed to have been duly given if delivered by hand or
mailed by registered or certified mail, return receipt same day by
First Class mail, postage prepaid, or by dispatch by an
internationally recognized express courier service, and in each
case addressed as follows:
If to Consultant: Dr. Lindsay Farrer
---------------- Chief, Genetics Program
3
<PAGE>
Boston University School Of Medicine
715 Albany Street
Boston, MA 02118
If to the Company: Sequenom, Inc.
----------------- 11555 Sorrento Valley Road
San Diego, CA 92121
Attn: Dr. Andi Braun
VP R&D - Medical Applications
or such other address as either party hereto shall have designated by
notice in writing to the other party.
(i) Attorneys' Fees and Costs. Should litigation arise concerning
-------------------------
the enforcement or interpretation of this Agreement, the
prevailing party shall be entitled to recover its reasonable
attorney's fees and costs as determined by the court.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
SEQUENOM, INC. CONSULTANT:
By: /s/ A. Braun /s/ Lindsay Farrer
---------------------------- ----------------------
Title: VP R&D-Med Appl. Dr. Lindsay Farrer
-------------------------
4
<PAGE>
EXHIBIT A
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The term of the Agreement shall be the period from March 1, 1999 to February 28,
2000, subject to termination in accordance with section 5.
DESCRIPTION OF SERVICES AND TASKS
The consultant will:
1. Provide advice and technical assistance to Sequenom on setup of a
Biostatistics function unit in San Diego, including hiring people and
choosing state-of-the-art software tools for computing.
2. Provide supervision of hired biostatisticians.
3. Assist in study design of Genomics research projects conducted within
Sequenom but also together with third parties. If the Consultant is acting
on the behalf of his employer then any Agreement between the employer and
Sequenom shall take precedence.
4. Make every reasonable effort to regular communications with Sequenom
personnel via phone, fax, courier, or normal mail and spend up to three
times for at least 2 days in Sequenom San Diego.
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Selected
consolidated financial data" and "Experts" and to the use of our report dated
January 23, 2000 in Amendment No. 5 to the Registration Statement (Form S-1
No. 333-91665) and related Prospectus of Sequenom, Inc.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
San Diego, California
January 27, 2000
