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VIII
D
EXHIBIT 10.12
PROCESS DEVELOPMENT CONSORTIUM
MEMBERSHIP AGREEMENT
This Agreement is entered into as of February 28, 1999 (the "Effective
Date") by and between Argonaut Technologies, Inc., a Delaware corporation with
its principal place of business at 887 Industrial Road, Suite G, San Carlos,
California 94070 ("Argonaut"), and Eli Lilly and Company, an Indiana
corporation with its principal place of business at Lilly Corporate Center,
Indianapolis, Indiana 46285 ("Member").
WHEREAS, Argonaut has expertise in the development of instrumentation
utilizing automated organic chemistry for the preparation of small organic
molecules of broad chemical diversity;
WHEREAS, Argonaut has established a Process Development Consortium ("PDC")
to consist of up to ten (10) members which are from the pharmaceutical,
biotechnology, and chemical industries, and Argonaut, for the purpose of
discussing and identifying desirable features, concepts and designs for
instrumentation for automating process development.
WHEREAS, the Member wishes to be a member of the PDC, on the terms and
conditions herein.
NOW THEREFORE, the parties agree as follows:
CONCEPT VALIDATION
Every company who participates in individual meetings regarding the
Process Development Consortium has a high level of interest in the concept and
product. The product to be developed is code named "Process". There was
approval of the overall concept and validation of the primary specifications
and features.
SPECIFICATIONS
The general specifications for the Process Instrument are listed in
Exhibit A.
EXPECTED TIME LINE
The current expected time line is outlined in Exhibit B.
MEMBERSHIP ADVANTAGES
Member companies will benefit from early exposure to and hands on
experience with prototype instruments, interaction with peers from other
companies and most importantly, input into the design and development process
to ensure the development and commercialization of system for process chemistry
research and development needs.
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TERMS OF MEMBERSHIP
Term. The term of the Agreement is from the effective date of this
Agreement to the commercial release date of the Process Instrument.
Participation. There will be a minimum of seven (7) and a maximum of ten
(10) members in the Consortium.
Meetings. The Consortium will meet quarterly during the Term at Argonaut's
facilities in San Carlos, California, or another mutually agreed site. In
addition, Argonaut may meet with Member individually, as agreed by Argonaut and
such Member. Each party shall pay its own costs incurred in connection with
such meetings. Argonaut will be responsible for managing the Consortium,
including conducting the quarterly meetings, setting agendas and providing the
format for the discussion and exchange of ideas. Argonaut will bear the cost of
the meeting facilities.
Prototypes. Members will have an opportunity to use the prototype
instruments and software at Argonaut's San Carlos, CA facility on a scheduled
basis during the Term of this Agreement.
Fee. In consideration for its participation in the PDC, Member shall pay to
Argonaut, One Hundred and Five Thousand U.S. Dollars ($105,000). The payment is
due and payable within 30 days after execution of this agreement.
Quest 205 Instrument. Upon signing this Agreement, Argonaut shall ship to
Member one (1) unit of Quest 205 (part number 900144). The title to the Quest
205 Instrument shall pass to the Member FOB Shipping Point. The Member will be
responsible for all applicable taxes, duties, VAT and freight charges.
Process Instrument. Argonaut shall ship to Member one (1) unit of the
commercial Process Instrument according to Exhibit B. The title to the Process
Instrument shall pass to the Member FOB Shipping Point. The Member will be
responsible for all applicable taxes, duties, VAT and freight charges.
Failure to Complete Consortium. If Argonaut fails to have at least seven
(7) members join the Consortium by March 31, 1999, Argonaut shall, by April 30,
1999, refund to Member all amounts paid less the price of the Quest 205
Instrument [*].
Priority. In consideration for its participation in the PDC, and provided
that Member timely pays Argonaut the amounts set forth above, Member will be
entitled to priority status and discount with regard to the purchase of
subsequent commercial "Process" Instruments, not including the original Process
Instrument delivered under this Agreement. To implement priority status and take
advantage of the related discount, a purchase order must be received by June 30,
1999 to receive a [*] discount from the commercial, non-academic regional list
price established by Argonaut (the "List Price"). To implement priority status
and take advantage of the related discount, a purchase order must be received by
September 30, 1999 to receive a [*] discount from the commercial, non-academic
regional list price established by Argonaut (the "List Price"). Shipment
priority among Member and other PDC members will be based on the order of
receipt of purchase orders from Member or such other PDC members.
[*] Confidential Treatment Requested
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Confidential Information. In connection with the performance of this
Agreement, Argonaut or Member may not disclose confidential or proprietary
technical or business information to the other. There shall be no
Confidentiality Agreement in force under this Agreement, except for the
financial terms of this Agreement.
Publicity. In connection with the performance of this Agreement, Argonaut
may use Member names in press release's announcing the formation of the
Consortium and Process Instrument related items.
Purchase Orders. Lilly shall submit to Argonaut its standard form of
purchase order for the equipment to be delivered hereunder, including, but not
limited to, the Process Instrument and Quest 205 Instrument delivered as a
result of Member joining the Consortium, and, notwithstanding anything in this
agreement to the contrary, the terms of such purchase order shall govern
Member's acquisition of such equipment hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers.
ELI LILLY AND COMPANY ARGONAUT TECHNOLOGIES, INC.
BY: Richard F. Eizenber BY: Mark W. Schwartz, Ph.D
TITLE: Executive Director TITLE: Vice President,
Marketing and Business Development
SIGNATURE: /s/ RICHARD F. EIZENBER SIGNATURE: /s/ MARK W. SCHWARTZ
BY: _______________________________
TITLE: ____________________________
SIGNATURE: ________________________
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EXHIBIT A
[*]
[*] Confidential Treatment Requested
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[*]
[*] Confidential Treatment Requested
5
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APPENDIX B
ARGONAUT TECHNOLOGIES'
Process Synthesizer Instrument
Consortium Timelines
The timeline detailed below is the current timeline Argonaut believes is
appropriate for the development of the Process Synthesizer. This timeline is
subject to changes based on input from Consortium members, changes to technical,
instrument or software specifications, or unforeseen technical problems. This
timeline should be taken as an indication of the current expectation and current
goals of the Process Development effort, but by no means the unequivocal
timeline for the development of the product.
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1. Consortium Membership Completed: ............................... March 1999
2. First Consortium Meeting: ...................................... March 1999
Features and Specification Review and Justification
Software Discussion
Validation Experiments
3. First Generation Prototype Operational.......................... February 1999
4. Chemistry Performed: ........................................... February 1999
5. Second Consortium Meeting: ..................................... May 1999
Review Prototype
Review Chemistry
Prototype Software Design Review
Prototype Hardware Design Review
6. Prototype Software Distribution: ............................... July 1999
7. Advanced Prototype Instrument Operational: ..................... August 1999
8. Prototype Chemistry: ........................................... September 1999
9. Third Consortium Meeting: ...................................... September 1999
10. Manufactured Pre-production Units Assembled: ................... October 1999
11. Chemistry Validation: .......................................... October 1999
12. First Commercial Unit Shipments to Consortium Members: ......... December 1999
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