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EXHIBIT 10.16
RESEARCH COLLABORATION AGREEMENT
BETWEEN
ARGONAUT TECHNOLOGIES
AND
UNIVERSITY COLLEGE LONDON
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THIS AGREEMENT is made the 1st day of September 1999
BETWEEN:
ARGONAUT TECHNOLOGIES of 887 Industrial Road, Suite G, San Carlos, California
94070, USA
and
UNIVERSITY COLLEGE LONDON of Gower Street, London, WC1E 6BT, UK
BACKGROUND:
A) Argonaut Technologies ("Argonaut") is a company specialising in the
development of equipment and chemical processes in the field of parallel
organic synthesis.
B) The Wolfson Institute for Biomedical Research ("WIBR") is an Institute of
University College London ("UCL") with expertise in the validation of
potential drug targets and the development of lead molecules based
thereon.
C) Trident(TM) is an automated chemical library synthesis system developed
and marketed by Argonaut.
D) Argonaut and WIBR now wish to enter into a research collaboration whereby
Argonaut places a Trident machine at WIBR laboratories and WIBR will
perform method development and use the machine for its own and
collaborative research projects in accordance with the following terms and
conditions:
NOW IT IS HEREBY AGREED as follows:
1. CONDITIONS AND INTERPRETATION
1.1 In this Agreement the following words and phrases shall have the following
meanings, unless the context requires otherwise:
"Affiliate" means any person, organisation or entity, which is
directly or indirectly controlled by, controlling or
under common control with any Party. The term "control"
(including, with correlative meaning, the terms
"controlled by" and "under common control with") as used
with respect to any person
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or entity means the possession, directly or
indirectly, of the power to direct, or cause the
direction of, the management and policies of such
a person, organisation or entity, the ownership of
voting securities, or by contract, court order,
Statutory Instrument or otherwise. The ownership
of voting securities of a person, organisation or
entity, shall not, in itself, constitute "control"
for the purposes of this definition unless said
ownership is of a majority of the outstanding
securities entitled to vote of such a person,
organisation or entity.
"Agreement" means this agreement, as may be varied or
supplemented from time to time in accordance with
the provisions of this agreement.
"Commencement Date" shall mean the date of the last signature below.
"Dedicated Employee" the UCL employee funded by Argonaut under the
terms of this Agreement.
"Demonstration Visit" shall mean occasions whereby a potential or
existing Argonaut client is brought to WIBR for
the purposes of discussing the Trident.
"Force Majeure" means act of god, war, riot, civil commotion,
malicious damage, explosion, fire, flood, strike,
lock-out, shortage of materials or labour,
accident, breakdown of plant or machinery,
compliance with any law or governmental order,
rule, regulation or direction, or any other cause
beyond a Party's reasonable control.
"Method Development" means any work specifically requested by Argonaut
to be carried out at WIBR to develop and/or
validate chemical processes. An Operating Plan
detailing the work to be undertaken, costs and
timescales will be agreed between the Parties
prior to commencing such Method Development.
"Party" or "Parties" means Argonaut and/or UCL.
"Primary Demonstration means where potential Argonaut client is brought
Visit" to WIBR to see the Trident in operation and
discuss its application with the Dedicated
Employee. Such a visit does not involve the
demonstration of client specified chemistry.
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"Secondary Demonstration Visit" means where a potential Argonaut client is
brought to WIBR to have client specified
chemistry demonstrated on the Trident.
1.2 In this Agreement:
1.2.1 unless the context otherwise requires, all references to a
particular Clause shall be a reference to that clause in this
Agreement, as may be amended from time to time pursuant to the terms
hereof;
1.2.2 the headings are inserted for convenience only and shall be ignored
when construing this Agreement;
1.2.3 unless the contrary intention appears, words importing the masculine
gender shall include the feminine and vice versa and words in the
singular include the plural and vice versa and words importing the
whole shall be treated as including a reference to any part thereof;
1.2.4 unless the contrary intention appears, words denoting persons shall
include any individual, partnership, company, corporation, joint
venture, trust, association, organisation or other entity, in each
case whether or not having separate legal personality;
1.2.5 reference to the words "include" or "including" are to be construed
without limitation to the generality of the preceding words; and
1.2.6 reference to any statute, statutory instrument or regulation
includes any modification or re-enactment of that statute, statutory
instrument or regulation.
2. FUNDING
2.1 Argonaut will upon a date to be agreed between the Parties following the
execution of this Agreement, arrange for delivery of one Trident to WIBR.
Argonaut will be responsible for the costs of delivery and installation of
the Trident;
2.2 Argonaut will pay for the cost of one full-time person, the "Dedicated
Employee", employed at WIBR to operate the Trident and agree to pay an
overhead charge on this UCL salary of one hundred and twenty percent (120%)
as set out in Annex 1;
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2.3 Argonaut will in addition provide and pay for any training required by the
Dedicated Employee in respect of operation and routine maintenance of the
Trident;
2.4 Argonaut will reimburse UCL in full for the initial set-up costs of the
Dedicated Employee up to a maximum of L10,000 (ten thousand pounds
sterling), with items over L500 (five hundred pounds sterling) itemised;
2.5 Argonaut will reimburse UCL in full for consumables used either during the
setting up and testing of the Trident at WIBR or during any subsequent
Method Development undertaken by WIBR in the course of this collaboration
such costs not to exceed L16,000 per annum. UCL shall include in its
quarterly invoice the pro rata amount of the L16,000 per annum consumable
budget agreed as set out in Annex 1. On each anniversary of this Agreement,
an audit of the actual consumable expenses incurred by UCL will be
undertaken and any amount not spent of the annual budget will be deducted
from the final quarter's invoice;
2.6 Argonaut will, at all times retain ownership of the Trident, subject to
Clause 9.3, and will assume responsibility for the servicing and repair of
the Trident throughout the term of this collaboration;
2.7 Where Demonstration Visits are arranged, subject to Clause 3 of this
Agreement, Argonaut will fully reimburse UCL for any expenses incurred as a
result of demonstrating the Trident or entertaining the visiting client;
and
2.8 UCL will issue Argonaut with an invoice covering the payments due to UCL on
a quarterly in arrears basis. Payments to UCL will be due no late than
thirty (30) days from the date of the invoice.
3. DEMONSTRATION VISITS
3.1 From time to time Argonaut, or an affiliate, may request that it is able to
use the Trident situated at WIBR for the purposes of demonstrating the
device to prospective Argonaut clients. Such visits shall be scheduled to
occur between 09.00hrs and 1700hrs and UCL shall not unreasonably refuse
such a request provided that:
3.1.1 in the case of Primary Demonstration Visits, Argonaut shall give at
least one (1) week's prior notice to WIBR staff, the visit shall not
occupy more than 30 (thirty) minutes of the Dedicated Employee's
time and there shall be no more than eight (8) such visits in any
calendar month;
3.1.2 in the case of Secondary Demonstration Visits, Argonaut shall give
at least two (2) weeks' prior notice to WIBR staff, the visit shall
not occupy more
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than one half of a working day on the machine or for the
Dedicated Employee and there shall be no more than two (2) such
visits during any calendar month; and
3.1.3 Secondary Demonstration Visits, shall not be arranged when the
Dedicated Employee plans to be absent from work. In the case of
an unplanned absence, WIBR retains the right to cancel such a
Demonstration Visit without liability.
4. OWNERSHIP OF INTELLECTUAL PROPERTY
4.1 All intellectual property, whether patentable or not, that arises out of
Method Development funded by Argonaut shall be the exclusive property of
Argonaut and Argonaut grants UCL a royalty-free non-exclusive license to
use such intellectual property.
4.1.1 UCL shall notify at Argonaut as soon as practicable of any such
intellectual property that arises whilst performing Method
Development; and
4.1.2 UCL shall, at Argonaut's expense, execute such documents. Powers
of Attorney, grants of authority, assignments and licenses as
Argonaut may request to give full force and effect to the provisions
of this Clause and to enable Argonaut to record its interests in
such property at the appropriate registries (worldwide).
4.1.3 Should Argonaut elect not to seek protection of any such
intellectual property but where UCL believes protection would be
beneficial for UCL's business, UCL may, at its own expense and with
the prior written approval of Argonaut, seek protection of any such
intellectual property. Argonaut shall, at UCL's expense, execute
all such documents, Powers of Attorney, grants of authority,
assignments and licenses as Argonaut may request to give full force
and effect to the provisions of this Clause and to enable UCL to
record its interests in such property at the appropriate registries
(worldwide).
4.1.4 Where UCL proceeds to seek protection of intellectual property
pursuant to Clause 4.1.3, UCL shall grant Argonaut a worldwide,
royalty free license, without the right to sub-license, to use such
technology for the purpose of conduction its own business.
4.2 All intellectual property arising from use of the Trident in WIBR's
research programmes shall be the exclusive property of UCL, subject to the
terms of any agreement governing sponsorship of that research programme.
Argonaut waives
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all right and future claim to any such intellectual property under the
terms of this Agreement.
4. RESTRICTIONS
5.1 During the term of this Agreement, WIBR shall not to enter into any other
research collaboration within the field of development of enabling
technology for parallel organic synthesis without the prior written
permission of Argonaut.
6. CONFIDENTIALITY
6.1 Except as otherwise permitted hereunder, each Party undertakes and agrees
not at any time for any reason whatsoever to disclose or permit to be
disclosed to any third party or otherwise make use of or permit to be made
use of, any trade secrets or confidential information relating to the other
Party's technology or the business affairs or finances of the other Party
or of any affiliates, suppliers, agents, distributors, or customers of the
Party which come into its possession pursuant to this Agreement. Such
information should be clearly marked as "Confidential" and, if disclosed
orally, subsequently reduced to writing within thirty (30) days and marked
"Confidential".
6.2 Each Party shall ensure that all of its agents, employees who have access
to the information referred to in Clause 6.1 are:
6.2.1 made aware that such information is secret and confidential; and
6.2.2 bound by undertakings of confidentiality (whether in their contracts
of employment or otherwise) not to make any disclosure or use of
such information but to keep the same confidential.
6.3 The obligations of confidence set out in this Clause 6 shall not extend to
any information which:
6.3.1 is, or shall become, generally available to the public otherwise
than by reason of a breach of the recipient Party of the provisions
of this Clause 8; or
6.3.2 is known to the recipient Party and is at its free disposal prior to
its receipt from the other Party, as can be shown by written record;
or
6.3.3 is subsequently disclosed to the recipient Party without obligations
of confidence by a third party owing no such obligations in respect
thereof; or
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6.3.4 is required to be disclosed by any applicable law or any
regulatory authority to which a Party is from time to time
subject to; or
6.3.5 is independently developed by a person or person with no access
to the confidential information disclosed by a Party, as
demonstrated by written records; or
6.3.6 disclosed to a third party for whom you have had written
permission from the discloser to pass the information to,
subject to the third party undertaking obligations of
confidence equivalent to those contained in this Agreement.
6.4 The obligations of each Party under this Clause 6 shall survive the
expiration or termination of this Agreement for ten (10) years from the
date of expiry or termination, as the case may be.
7. PUBLICATION
7.1 Where UCL wishes to publish the results of Method Development performed
UCL will be free to do so provided that:
7.1.1 UCL have informed Argonaut in writing of the results to be
disclosed not less than thirty (30) days prior to disclosure in
order for Argonaut to evaluate whether any patent protection
should be sought. Argonaut must inform UCL in writing within
that thirty (30) day period if it wishes to seek such
protection. In the absence of written notification UCL shall be
free to publish;
7.1.2 If Argonaut, at its sole discretion, decides patent protection
is to be applied for, there shall be a further delay not to
exceed forty-five (45) days during which Argonaut, at its own
expense, may file appropriate patent application(s).
7.1.3 Where the Trident has been successfully utilised in a WIBR
research programme, Argonaut may, with the prior written
permission of UCL, disclose statements relating to the generic
use of the Trident in drug discovery for the purposes of
marketing and promoting the Trident.
7.2 On all published articles referring to results involving the use of the
Trident UCL agrees to acknowledge the use of the Trident in the research
programme and the collaborative support of Argonaut.
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8. TERM AND TERMINATION
8.1 This Agreement will commence on the first day of September 1999 and remain
in force for two (2) years from the Commencement Date unless terminated
pursuant to Clause 8, or extended pursuant to Clause 13.
8.2 Either Party (the "Terminating Party") shall have the right to terminate
this Agreement forthwith upon giving written notice of termination to the
other Party (the "Defaulting Party") upon the occurrence of any of the
following events at any time during this Agreement:
8.2.1 the Defaulting Party commits a material breach of this Agreement
which in the case of a breach capable of remedy shall not have
been remedied within sixty (60) days of the receipt by it of a
notice identifying the breach and requiring its remedy;
8.2.2 the Defaulting Party for a period of longer than sixty (60) days
suspends payment of its debts or otherwise ceases or threatens to
cease to carry on its business or becomes bankrupt or insolvent
(including without limitation being deemed to be unable to pay
its debts);
8.2.3 a proposal is made or a nominee or supervisor is appointed for a
composition in satisfaction of the debts of the Defaulting Party
or a scheme or arrangement of its affairs, or the Defaulting
Party enters into any composition or arrangement for the benefit
of its creditors, or proceedings are commenced in relation to the
Defaulting Party under any law, regulation or procedure relating
to the re-construction or re-adjustment of debts (including where
a petition is filed or proceeding commenced seeking any
reorganisation, arrangement, composition, or re-adjustment under
any applicable bankruptcy, insolvency, moratorium, reorganisation
or other similar law affecting creditors rights or where the
Defaulting Party consents to, or acquiesces in, the filing of
such a petition);
8.2.4 the Defaulting Party takes, without the consent of the
Terminating Party (such consent not be unreasonably withheld),
any action, or legal proceedings are started or other steps taken
by a third party, with a view to:
(a) the winding up or dissolution of the Defaulting Party (other
than for the reconstruction of a solvent company for any
purpose, including the inclusion of any part of the share
capital of the Defaulting Party in any official stock
exchange listing or an application by the Defaulting Party
for registration as a public
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company in accordance with the requirements of the Companies
Act 1985); or
(b) the appointment of a liquidator, trustee, receiver,
administrative receiver, receiver manager, interim receiver
custodian, sequestrator or similar officer of the Defaulting
Party against the Defaulting Party or a substantial part of the
assets of the Defaulting Party, or anything analogous to any of
the foregoing occurs under the laws of any country.
8.3 Upon termination or expiry of this Agreement, UCL will have the
option to purchase the Trident at a depreciated value, such
depreciation deemed to be a linear depreciation over a four (4) year
period commencing on the date of delivery of the Trident to WIBR in
the Cruciform Building, thereafter the value of the Trident being
written off.
8.4 Upon termination or expiry of this Agreement, Argonaut will pay to
UCL, within sixty (60) days, all sums owing which have accrued prior
to the date of termination.
8.5 Termination or expiry of this Agreement for whatever reason shall not
affect the accrued rights of the Paries arising in any way out of
this Agreement as at the date of termination and in particular the
right to recover damages and interest, and the provisions of Clauses
4, 6, 8, 11, 14 and 16 shall survive this Agreement and shall remain
in full force and effect.
9. FORCE MAJEURE
9.1 If UCL is unable to carry out any of its obligations under this
Agreement due to Force Majeure this Agreement shall remain in effect
but UCL's obligations under this Agreement and the obligations of
Argonaut under this Agreement shall be suspended for a period equal
to the duration of the circumstance of Force Majeure provided that:
9.1.1 the suspension of UCL's performance is of not greater scope
or duration than is required by Force Majeure:
9.1.2 UCL gives Argonaut as soon as practicable notice describing
the circumstance of the Force Majeure, including the nature
of the occurrence and its expected duration, and continues
to furnish regular reports to Argonaut during the period of
the Force Majeure;
9.1.3 UCL uses all reasonable efforts to remedy its inability to
perform and to mitigate the effects of the circumstances of
Force Majeure; and
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9.1.4 as soon as practicable after the event which constitutes Force
Majeure the Parties shall discuss how best to progress the
collaboration between them, as far as possible in accordance
with this Agreement.
9.2 If Force Majeure continues for more than three (3) months from the
first occurrence of the Force Majeure, either Party may give sixty (60)
days written notice to the other Party to terminate this Agreement and
termination shall occur if Force Majeure is still continuing at the end
of that sixty (60) day notice period.
10. GOVERNING LAW AND JURISDICTION
10.1 The validity, construction and performance of this Agreement shall be
governed by the laws of England and be subject to the exclusive
jurisdiction of the English courts.
11. WAIVER
11.1 Neither Party shall be deemed to have waived any of its rights or
remedies whatsoever unless the waiver is made in writing and signed by
a duly authorised representative of that Party. In particular, no delay
or failure of a Party in exercising or enforcing any of its rights or
remedies whatsoever shall operate as a waiver of those rights or
remedies so as to preclude or impair the exercise or enforcement of
those rights or remedies nor shall any partial exercise or enforcement
of that right or remedy by that Party.
12. SEVERANCE OF TERMS
12.1 If the whole or any part of this Agreement is or becomes or is declared
illegal, invalid or unenforceable in any jurisdiction for any reason
(including both by reason of the provisions of any legislation and also
by reason of any court which either has jurisdiction over this
Agreement or has jurisdiction over any of the Parties):
12.1.1 In the case of illegality, invalidity or un-enforceability of
the whole of this Agreement it shall terminate only in
relation to the jurisdiction in question; or
12.1.2 in the case of the illegality, invalidity or un-enforceability
of part of this Agreement that part shall be severed from this
Agreement in the jurisdiction in question and that illegality,
invalidity or un-enforceability
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shall not in any way whatsoever prejudice or affect the remaining
parts of this Agreement which shall continue in full force and effect.
12.2 If in the reasonable opinion of either Party any severance under this
Clause 12 materially affects the commercial basis of this Agreement, the
Parties shall discuss, in good faith, ways to eliminate the material
effect.
13. ENTIRE AGREEMENT AND VARIATIONS
13.1 This Agreement embodies and sets forth the entire agreement and
understanding of the Parties and supersedes all prior oral or written
agreements, understandings or arrangements relating to the specific
subject matter of this Agreement. Neither Party shall be entitled to rely
on any agreement, understanding or arrangement, which is not expressly set
forth in this Agreement.
13.2 No director, officer, employee or agent of either Party is authorised to
make any representation or warranty to the other Party not contained in
this Agreement, and each party acknowledges that it has not relied on any
such oral or written representation or warranties.
13.3 No variation, amendment, modification or supplement to this Agreement shall
be valid unless made in writing in the English language and signed by a
duly authorised representative of each Party.
14. NOTICES
14.1 Any notice or other document to be given under this Agreement shall be in
writing in the English language and shall be deemed to have been duly given
if sent by fax, recorded mail or registered mail to a Party at the fax
number or address set out below for such Party or such other address as the
Party may from time to time designate by written notice to the other Party.
Address of Argonaut
Argonaut Technologies
887 Industrial Road
Suite G
San Carlos
California 94070
USA
For the attention of the David Binkley Ph.D
Fax No. +1 650 598 1359
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Address of WIBR
Wolfson Institute for Biomedical Research
University College London
Gower Street
London
WC1E 6BT
UK
For the attention of Professor Ken Powell
Fax No. +44 (0) 171 209 0470
Any notices sent to WIBR shall be copied to UCLi, 2-16 Torrington Place,
London, WC1E 7HN, UK (Fax No. 0171 209 0681) and marked for the attention
of Mr I Chater.
14.2 Any notice given pursuant to this Clause 15 shall be deemed to have been
received:
14.2.1 in the case of sending by post, on the day five (5) days after the
day of posting; or
14.2.2 in the case of sending by fax at the time the sender's fax machine
receives a clear transmission report.
15. COSTS
15.1 Each Party shall bear its own legal costs, legal fees and other expenses
incurred in the preparation and execution of this Agreement.
16. PUBLIC STATEMENTS
16.1 Except as provided in Clause 16.2, neither Party shall, without the prior
written consent of the other Party:
16.1.1 use in advertising, publicly or otherwise, any trade name, personal
name, trademark, trade device, symbol, or any abbreviation, contraction or
simulation thereof, owned by that representing Party; or
16.1.2 represent, either directly or indirectly, that any product or
service of the other Party is a product or service of the representing
Party or that it is
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made in accordance with or utilises the information or documents
of the other Party.
16.2 The restrictions in Clause 16.1 shall not apply to the following:
16.2.1 a press release, in a form agreed to by the Parties, publicly
announcing this Agreement; or
16.2.2 use as required by any applicable law or governmental regulation.
17. PARTNERSHIP
17.1 Nothing in this Agreement shall be construed as creating a partnership or
joint venture between the Parties or constituting one Party as the agent
of the other Party for any purpose whatsoever and neither Party shall have
the authority or power to bind the other Party or to contract in the name
of or create a liability against the other Party in any way or for any
purpose.
18. FURTHER ASSURANCE
18.1 Each Party shall do and execute or procure to be done and executed all
necessary acts, deeds, documents and things that give full effect to this
Agreement. Except as otherwise provided herein, the cost and expense of
doing so shall be borne by the Party who is required to take such action.
IN WITNESS whereof this Agreement has been signed by duly authorised officers of
the Parties:
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Signed by: /s/ DAVID P. BINKLEY
--------------------------
For and on behalf of
ARGONAUT TECHNOLOGIES INC.
Name: David P. Binkley
Title: President and CEO
Date: September 1, 1999
Signed by: /s/ DRUSILLA KENNEY
--------------------------
For and on behalf of
UNIVERSITY COLLEGE LONDON
Name: Drusilla Kenney
Title: Contracts Manager, UCL
Date: 2 October 1999
Acknowledged by: /s/ KEN POWELL
--------------------
For and on behalf of
WOLFSON INSTITUTE FOR BIOMEDICAL RESEARCH
Name: Ken Powell
Title: Deputy Director
Date: 12/10/99
Wolfson-Argonaut
09/02/99 15
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ANNEX 1
RESEARCH PROJECT COSTINGS FOR 2 YEARS: (ALL FIGURES ARE POUNDS STERLING)
DEDICATED EMPLOYEE: (RA1A spine point 4-5)
<TABLE>
<CAPTION>
Year 1 Year 2
------ ------
<S> <C> <C> <C>
Basic Salary 15,735 16,655
London Weighting 2,134 2,134
N.I. 1,351 1,415
SA 2,502 2,630
Total 21,722 22,834
Prov. for pay award 1,086 2,340
Total 22,808 25,174
Consumables 16,000 16,000
Set-up Equipment 10,000
Overheads (120%) 27,370 30,209
TOTAL 76,178 71,384
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GRAND TOTAL 147,562
----------------------------------------------------------------
</TABLE>
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