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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-3
(MARK ONE)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
- ------ EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended: AUGUST 31, 1995
OR
- ------ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from to .
---------- ----------------
Commission file number: 0-10824
GENOME THERAPEUTICS CORP.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2297484
(State or other jurisdiction of incorporation (I.R.S. employer
or organization) identification number)
100 BEAVER STREET, WALTHAM, MASSACHUSETTS 02154
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (617) 893-5007
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
COMMON STOCK, $.10 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of
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registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K / /
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of November 27, 1995 was approximately $86,753,315.
The number of shares outstanding of the registrant's common stock as
of November 27, 1995 was 13,695,085.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's proxy statement for use at its Special
Meeting of Shareholders in lieu of an Annual Meeting to be held on February 16,
1996 (the "Proxy Statement") are incorporated by reference into Part III of
this Report.
Exhibit Index appears on Page 49.
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PART 1
Item 1. BUSINESS
OVERVIEW
Genome Therapeutics Corp. ("GTC" or the "Company") is a leader in the field
of genomics -- the identification and characterization of genes. The Company has
over ten years of experience in positional cloning, having served as one of the
primary researchers under genome programs sponsored by the United States
government, and has developed numerous techniques and tools that are widely used
in this field. GTC's commercial gene discovery strategy capitalizes on its
pioneering work in genomics by applying its proprietary high-throughput
multiplex DNA sequencing technology and positional cloning and bioinformatics
capabilities in two principal areas, the discovery and characterization (i.e.,
determination of functionality) of (i) genes of infectious organisms
("pathogens") that are responsible for many serious diseases and (ii) human
disease genes. The Company believes that its genomic discoveries may lead to the
development of novel therapeutics, vaccines and diagnostic products by it and
its strategic partners. In 1995, the Company entered into two corporate
collaborations in connection with its pathogen gene discovery programs, an
agreement with Astra Hassle AB ("Astra") and an agreement with Schering
Corporation and Schering-Plough Ltd. (collectively, "Schering-Plough").
SCIENTIFIC BACKGROUND
Human disease is caused by a variety of factors, including genetic defects,
pathogens and environmental factors, with many of the most common
life-threatening and chronic diseases believed to have a genetic basis. Genes,
which define the inherited characteristics of an organism, are found in all
living cells (e.g., human, animal and pathogen cells). Each gene codes for a
specific protein that performs a specific function in the body, such as the
production of insulin. In humans, a defect in a gene, or the absence of a
critical gene, may lead to overproduction, underproduction, improper function or
absence of a protein resulting in the onset of disease or an undesirable
physical condition. Genetic defects can be inherited or can accumulate during
the lifetime of an individual. Human diseases caused by pathogens also have a
genetic foundation in that specific genes in the pathogen are required for that
organism to survive and infect its human host.
The genetic content of an organism consists of DNA, a chemically complex
material comprised of four different nucleotides (adenine, guanine, cytosine,
and thymine) which are the building blocks of DNA. The sequence in which these
nucleotides are linked together in a molecule of DNA determines the
informational content of genes. The entire genetic content of an organism,
including humans, is referred to as its genome.
The human genome consists of 23 pairs of DNA sequences or chromosomes.
These chromosomes contain approximately 100,000 human genes distributed over
approximately three billion nucleotides. Human genes are found in the
chromosomes as coding regions of DNA ("exons") interrupted by non-coding regions
of DNA ("introns"). The number of exons found in human genes can be quite large
as can be the distance between exons. The function of the majority of human DNA
is unknown. The DNA sequence of a human gene is transcribed into a messenger RNA
molecule ("mRNA") which is processed to contain only the exon sequences. The
information in the mRNA molecule is, in turn, translated into a protein product.
Genomes of pathogens are significantly less complex than the human genome
and generally consist of a single chromosome containing several thousand genes
distributed over millions of nucleotides. The majority of DNA in pathogens
typically is comprised of genes as uninterrupted DNA sequences.
Proteins expressed by genes are the targets of most current drugs. As a
result, the identification of human disease genes and the protein product of
these genes may lead to new therapeutics and diagnostic tests. In the case of
diseases caused by pathogens, the identification of the biologically important
genes of the pathogen may lead to the development of new drugs and vaccines to
combat the pathogen. Moreover, because of the simpler nature of the genomes of
pathogens relative to the human genome, efforts to identify and characterize
pathogen genes may lead to product development candidates more quickly than
human gene discovery efforts. The two principal technologies currently being
used to discover genes are sequencing and positional cloning.
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Sequencing
Sequencing is the process of identifying genes through the determination of
the order or sequence of nucleotides in DNA fragments. In recent years,
high-throughput procedures, such as those being employed by the Company, have
been developed which now enable sequencing to be performed on a larger scale and
with greater speed than was previously possible.
There are generally two ways of applying high-throughput sequencing to
discover genes: random discovery and targeted discovery. In random discovery,
high-throughput sequencing is used to identify the genes in a genome without
regard to the function of the genes. In targeted discovery, high-throughput
sequencing is used to identify the genes in a specific chromosomal region or
tissue after the region or the tissue has been implicated in or associated with
a specific disease.
High-throughput sequencing offers a practical way of randomly identifying
all of the genes in a pathogen because the genomes of pathogens consist of
relatively small numbers of uninterrupted gene sequences. In contrast, the human
genome is very large with only small portions of the DNA containing genes which
are present as interrupted DNA sequences. As a result, although high-throughput
sequencing of the DNA in a particular chromosomal region is used in human gene
discovery, sequencing of all of the DNA in the human genome is not a practical
means to identify large numbers of human genes. Instead, several groups are
randomly discovering large numbers of human genes by sequencing expressed copies
of genes, which contain only exons and are called cDNA, which they synthesize
from mRNA.
Although random discovery permits the rapid identification of pathogen and
human genes, it generally does not provide an understanding of the function of a
gene or of the gene's role in a particular disease. Any determination of
function, or "characterization," of randomly discovered genes is dependent on
the detection of structural similarities, or homology, existing between the
protein product of such sequenced genes and genes with a known function.
Targeted gene discovery by high-throughput sequencing of human DNA
typically is applied as part of positional cloning (described below) after a
specific chromosomal region has been identified which is believed to contain a
particular gene. In this targeted gene discovery procedure, the entire
chromosomal region is sequenced in an effort to identify, from all the genes
present in that region, the one gene located in that region which is responsible
for causing the specific disease.
Another type of targeted gene discovery involves the use of high-throughput
sequencing of cDNA to identify genes believed to cause or maintain a particular
disease. In this procedure, which is referred to as "comparative gene
expression," mRNA present in healthy and diseased tissues is converted into cDNA
and then sequenced to identify the genes whose protein product is present in
each. Candidate genes responsible for causing or maintaining the disease are
identified by comparing which genes are expressing or producing their protein
product and at what level this expression is occurring in both the healthy and
diseased tissue.
Positional Cloning
Positional cloning is the process of analyzing disease inheritance patterns
to identify the genes responsible for causing human disease. The first step in
positional cloning is the identification of individual families or genetically
homogeneous populations in which the occurrence of the disease in individuals
within such families or populations is substantially higher than in the general
population. Blood samples are collected from individuals within the family or
population to provide DNA to be used to identify the region on a particular
chromosome where the disease-causing gene is located. This process is referred
to as "genetic linkage mapping."
In genetic linkage mapping, DNA probes are used to detect genetic markers,
regions of DNA that vary in sequence content from person to person. The position
of these genetic markers on a chromosome, as detected by the DNA probes,
constitutes a genetic linkage map of the chromosome. The chromosomal regions
which are initially examined are those regions which have been identified as
containing genes that are likely candidates for causing or predisposing an
individual to the disease. Because very few human genes have been mapped to
date, most genetic mapping is done genome-wide with a set of DNA probes that
span the genome. By following the inheritance patterns of genetic markers and
looking for the coinheritance of the genetic markers and the disease, the gene
responsible for causing or predisposing an individual to that disease can be
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located within a specific chromosomal region. Using additional DNA probes, the
chromosomal region containing the targeted disease gene can be narrowed to a
region consisting of approximately 2,000,000 to 3,000,000 nucleotides in size
containing between approximately 60 and 100 genes.
Next, libraries comprised of large DNA fragments are examined to find those
fragments which contain pieces of DNA from the relevant chromosomal region. The
aligning of these DNA fragments so that their resulting order represents how
these DNA fragments are related to each other in the relevant chromosomal region
is called physical mapping. The physical map of the relevant chromosomal region
can then be used to identify the genes which are contained within the region.
These genes can be identified in two ways. First, "exon trapping" is used,
whereby individual exons within this chromosomal region can be isolated and then
used to obtain a complete copy of the gene from a cDNA library. Alternatively or
in combination with exon trapping, the DNA of the chromosomal region can be
sequenced using high-throughput procedures and, through the use of special
computer software, the exons which are contained within the chromosomal region
can be predicted. This sequencing information is then used to search cDNA
libraries for DNA fragments which contain these presumed exons.
Each gene identified through this process is a candidate for causing the
disease. By determining the sequence of these genes in individuals with the
disease and comparing it to the sequence of that gene from healthy individuals,
the gene involved in the disease can be identified. DNA sequence differences,
which are only found in individuals who have inherited the disease, identify the
gene which is believed to be responsible for causing the disease.
COMPANY TECHNOLOGY
The Company applies its proprietary technologies and know-how in
high-throughput multiplex sequencing and positional cloning in its gene
discovery programs. In its pathogen programs, the Company uses its
high-throughput sequencing capabilities to sequence the genomes of pathogens. In
its human gene discovery programs, the Company combines its proprietary
positional cloning capabilities, together with its high-throughput sequencing
capabilities, in its efforts to identify and characterize human genes associated
with disease. In support of these technologies, the Company has developed
sophisticated bioinformatics capabilities which utilize computer hardware and
proprietary software to track, process and analyze the data generated in the
gene discovery process.
Multiplex Sequencing
GTC uses its proprietary high-throughput DNA sequencing process, called
"multiplex sequencing," as its primary means to sequence DNA. The Company holds
exclusive worldwide commercial rights to this technology, which was originally
developed by Dr. George Church's laboratory at the Howard Hughes Medical
Institute ("HHMI"), pursuant to a license from Harvard College. See "Patents and
Proprietary Technology." Dr. Church is a scientific advisor to the Company. In
multiplex sequencing, individual DNA samples are mixed together and then
processed simultaneously. At the end of the process, the nucleotide sequence of
the individual DNA samples in the mixtures is determined by using DNA probes.
The Company has routinely combined up to 20 different DNA samples and used up to
40 different DNA probes to detect the sequence generated from each end of each
DNA fragment in the mixtures. By combining 20 different DNA samples into a
single mixture, the Company only has to perform a single series of preparatory
procedures to produce 40 different DNA sequences. Commercially available
automated DNA sequencers require 20 individual samples to be processed through
the preparatory procedures to produce the same number of DNA sequences.
The Company has used its multiplex sequencing technology to sequence
virtually the entire genome of Helicobacter pylori ("H. pylori") and portions of
the genomes of three other pathogens (Staphylococcus auereus ("Staph."),
Microbacterium tuberculosis ("M. tuberculosis"), and Myclobacterium leprae ("M.
leprae")). The Company has also used multiplex sequencing to sequence a 60,000
nucleotide region of human chromosome 4 thought to contain the gene responsible
for fascioscapeulohumeral muscular dystrophy ("FSHD") and to sequence a 40,000
nucleotide region on human chromosome 10 which was subsequently determined by a
third party to contain the gene responsible for a type of thyroid cancer.
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The Company's multiplex sequencing technology currently is semi-automated.
The Company is developing a fully-automated version of the process. The Company
has built prototype equipment to automate the use of DNA probes in multiplex
sequencing and expects to introduce this equipment into full-scale use in the
second half of 1996. This equipment will also automate the use of DNA probes in
the Company's multiplex genotyping technology. See "Company
Technology--Positional Cloning." The Company also plans to acquire robotic
laboratory equipment to automate the sample preparatory procedures required in
the sequencing process. The Company believes that automation will increase the
speed and lower the cost of sequencing DNA samples. The Company supplements its
proprietary multiplex sequencing technology with automated, commercially
available, DNA sequencers.
Positional Cloning
The Company has over 10 years of experience in various aspects of
positional cloning. GTC was one of the pioneers in the use of genetic linkage
mapping and developed numerous techniques and tools that are widely used in the
positional cloning field. In its positional cloning efforts, the Company applies
its proprietary multiplex genotyping technology. Genotyping is the process of
using DNA probes to determine the genetic composition of specific regions on
each chromosome of each family member. Using multiplex genotyping, the Company
has simultaneously processed up to 50 genetic markers for each family member in
a single sample mixture. By combining 50 different genetic markers, the Company
reduces the number of laboratory steps required to obtain the data needed to
localize a disease gene to a specific chromosomal region.
The Company has considerable experience in identifying genetic markers for
specific chromosomal regions. This ability is needed when additional genetic
markers are required to narrow the size of the chromosomal region believed to
contain the disease gene. The Company also has several libraries of large DNA
fragments arranged in a format which facilitates the isolation of DNA fragments
from a specific chromosomal region. These libraries are used to develop physical
maps of chromosomal regions thought to contain disease genes. In addition, the
Company uses specialized tools to trap the exons present in large DNA fragments.
These tools are used to isolate exons from the genes present in chromosomal
regions believed to contain disease genes.
<TABLE>
Examples of key accomplishments by GTC in positional cloning include:
<CAPTION>
Year(s) Accomplishment
------- --------------
<S> <C>
1985 Completion of genetic linkage mapping of the gene
responsible for cystic fibrosis to chromosome 7
1987 Completion of the first genetic linkage map of the entire
human genome
1987 to 1994 Completion of detailed genetic linkage maps of human
chromosomes 5, 7, 10, 16, 17 and 20
1995 Completion of genetic and physical maps for chromosome 10
and detailed physical maps for regions of chromosome 10
thought to contain tumor suppressor genes
</TABLE>
Bioinformatics
The process of identifying and characterizing genes generates vast amounts
of data which must be organized and managed. Such data result from genetic
linkage and physical mapping, DNA sequencing and biological experiments
performed on identified genes. The use of computers, software and databases to
track, process, store, retrieve and analyze data generated by genomic research
is referred to as "bioinformatics," which is an emerging subspecialty of
genomics and a key capability of any participant in the field. Because of its
early work in large-scale genetic linkage analysis, GTC was one of the first
companies to develop significant bioinformatics capabilities. The Company
expanded these capabilities several years ago when it began to use and further
develop its proprietary multiplex sequencing technology. The Company uses its
current bioinformatics systems to manage the production and interpretation of
multiplex sequence data and compare and screen these data against public and
proprietary sequence databases.
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The Company continually refines its bioinformatics systems. The Company
currently is focusing these efforts in four areas: upgrading and standardizing
its bioinformatics hardware and software; developing enhanced data management
systems; expanding its software engineering capabilities; and expanding its
resources in computational molecular biology. These enhancements are expected to
result in more effective data management by allowing for higher-throughput
sequencing, providing for smooth integration of laboratory automation,
supporting more rapid analyses and comparison of genomic data and facilitating
the identification of gene targets for the development of therapeutic, vaccine
and diagnostic products. As part of its enhancement of its bioinformatics
capabilities, the Company is in the process of significantly increasing the
number of its bioinformatics personnel.
GTC STRATEGY
The Company's objective is to use its proprietary multiplex sequencing and
positional cloning technologies and bioinformatics capabilities to identify gene
targets for the development of novel therapeutic, vaccine and diagnostic
products in collaboration with pharmaceutical and biotechnology company
partners. The Company is using the following strategies to achieve this
objective:
Sequencing of Pathogens
Over the past four years, the Company has devoted a significant portion of
its resources to, and obtained considerable experience in, sequencing the
genomes of pathogens. The Company has sequenced virtually the entire genome of
H. pylori and portions of the genomes of three other disease-causing pathogens.
The Company plans to continue to identify and characterize genes of these and
other pathogens for which the Company believes new or improved therapeutic,
vaccine or diagnostic products represent a significant commercial opportunity.
In particular, the Company plans to focus its efforts on pathogens where the
incidence of antibiotic resistance or other factors limit the use or efficacy
of currently available therapies, creating a need for novel antibiotics and
vaccines. The Company believes its pathogen gene discovery programs may lead to
product development candidates more quickly than human gene discovery efforts.
Discovery of Human Disease Genes
In the human gene discovery area, the Company plans to build on its decade
of experience and knowledge in positional cloning and its proprietary multiplex
genotyping and multiplex sequencing technologies and bioinformatics capabilities
by obtaining exclusive rights to collections of DNA samples from relevant family
resources in order to map, identify and characterize genes responsible for
selected human diseases. The Company is seeking collaborations with clinicians
and academic researchers to obtain these rights. The Company believes that
access to these family and other resources will bolster its existing human gene
discovery programs and enable it to initiate additional programs directed at
human genes associated with significant diseases.
Strategic Collaborations
The Company plans to continue to seek strategic collaborations with
pharmaceutical and biotechnology companies for the development and
commercialization of products based on the Company's genomic discoveries. This
strategy is designed to provide the Company access to the scientific and product
development expertise of its partners and permit the Company to benefit from the
commercialization of products based on the Company's gene discoveries without
incurring the substantial costs required for pharmaceutical product development
and commercialization. The Company generally expects to exclusively license to
its partners all rights to therapeutic products and vaccines (and, depending
upon the gene, diagnostic products) developed based on the particular genetic
database licensed by the Company. In exchange, the Company generally expects to
receive a combination of up-front license fees, research funding, milestone
payments and royalty payments on product sales. To date, the Company has entered
into two collaborations relating to pathogens, one with Astra for the
development of therapeutic, diagnostic and vaccine products effective against
gastrointestinal infections and other diseases caused by H. pylori, and one with
Schering-Plough providing for the use by Schering-Plough of the genomic
sequence of a specified pathogen that the Company is sequencing to identify
new gene targets for the development of antibiotics and vaccines effective
against drug resistant infectious organisms.
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Government Grants and Contracts
The Company has served as one of the primary researchers under genomic
programs sponsored by the United States government and actively seeks to
continue its participation in government sponsored genomics research programs.
These programs add to the Company's genomics technology base and increase the
number and enhance the expertise of its scientific personnel. From January 1991
through August 1995, the United States government awarded the Company grants and
contracts providing for aggregate payments over their terms of approximately $36
million. Moreover, subject to certain rights of the government, under most of
these programs the Company becomes the owner of any resulting discoveries or
inventions.
GENE DISCOVERY PROGRAMS
The Company is currently conducting gene discovery programs directed at
both pathogen genes and human disease genes. The factors the Company considers
in determining whether to initiate these programs include the projected
commercial potential, the effectiveness of current therapies, the likelihood of
attracting a pharmaceutical or biotechnology company as a collaborator, the
status of competitive programs and anticipated development costs.
Pathogen Programs
Antibiotics are the standard therapy for bacterial and fungal infections.
During the twelve month period ended November 1995, approximately 287 million
prescriptions for antibiotics were written in the United States for such
infections and approximately $7 billion was expended in the United States for
oral and injectable antibiotics. The approximately 100 antibiotics in use in the
United States today are primarily variations of a small number of original
antibiotic compounds. In the past decade, a growing number of infections have
been caused by pathogens which are becoming resistant to an increasing number of
currently available antibiotics. This problem of growing resistance to
antibiotics is particularly problematic in the approximately 6,500 acute care
hospitals in the United States in which approximately 2.1 million patients each
year develop infections. Examples of pathogens that have exhibited resistance to
a number of current antibiotics include Staph., M. tuberculosis, Streptococcus
pneumonia, and Enterococcus. To date, the primary response of pharmaceutical
companies to the resistance problem has been to modify existing antibiotics.
However, in many cases, the pathogens that are the targets of these antibiotics
have further mutated, often quite rapidly, and thereby developed resistance to
the modified antibiotics. The Company believes that the development of novel
antibiotics and vaccines based on new pathogen targets identified using genomic
information may be less prone to the rapid development of resistance than
antibiotics that are only modified versions of existing drugs.
Helicobacter pylori. H. pylori is the pathogen believed responsible for
causing 90% of duodenal peptic ulcers, the most common type of ulcer, and 70% of
gastric peptic ulcers. Peptic ulcer disease is a chronic inflammatory condition
of the stomach and duodenum. Although frequently asymptomatic, all persons
infected by H. pylori have chronic gastric inflammation (gastritis). It is
estimated that approximately 4.5 million people suffer from active peptic ulcers
each year, and approximately 500,000 new cases are diagnosed annually in the
United States. Approximately 600,000 patients are hospitalized each year in the
United States for peptic ulcer disease. Serious complications occur in
approximately one-third of these cases, including intestinal obstruction, upper
gastrointestinal hemorrhage and perforation. Further, each year over 6,000
deaths in the United States are directly caused by ulcer disease, and peptic
ulcers are a contributing factor in an additional 11,000 deaths. Approximately
10% of the population in the United States will develop peptic ulcer disease
during their lifetimes. Studies have also linked H. pylori with the development
of certain stomach cancers and coronary heart disease.
The most common medication for treating peptic ulcers are anti-secretory
drugs, such as H2 antagonists (e.g., Tagamet and Zantac), and proton pump
inhibitors (e.g., Prilosec). Although anti-secretory drugs reduce ulcer symptoms
by inhibiting gastric acid secretion, they do not eradicate the H. pylori which
is the primary cause of the disease. In 1994, the market for such drugs for the
treatment of ulcers totaled approximately $7 billion worldwide. An approach
being developed to treat recurrent peptic ulcer disease recognizes the role of
H. pylori and involves the administration of antibiotics, often in combination
with bismuth or anti-secretory drugs. The most effective antibiotic treatments
may be complicated by the need to
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treat for prolonged periods with multiple drugs, by side effects and problems
with patient compliance, by relapses if treatment is interrupted, and by the
development of antibiotic-resistant strains of the bacteria.
Using its proprietary high-throughput multiplex sequencing technology, the
Company completed sequencing virtually the entire genome of H. pylori in
December, 1994. Under its agreement with Astra, the Company is identifying the
genes critical to the survival of H. pylori and proteins on the surface of the
bacterium that are believed to be likely targets for therapeutic products and
vaccines, respectively. See "Collaborative Agreements -- Pharmaceutical Company
Collaborations."
Staphylococcus aureus. Staph. is the most common cause of skin, wound and
blood infections. Staph. infections are typically treated with antibiotics. The
percentage of Staph. isolates resistant to penicillin and certain other
antibiotics increased from 2.4% in 1975 to 29% by 1991. Moreover, clinical
isolates of Staph. exist which are resistant to all known antibiotics other
than vancomycin. Vancomycin resistance has appeared in Enterococcus, a
pathogen related to Staph., which has raised the possibility that untreatable
strains of Staph. could appear. Using its high-throughput sequencing
capabilities, the Company has sequenced a substantial portion of the genome of
Staph.
Mycobacterium tuberculosis. M. tuberculosis is the pathogen responsible
for causing tuberculosis. The clinical manifestations of tuberculosis include:
pulmonary tuberculosis, the most highly infectious form; tuberculous meningitis,
the major form causing mortality in children; and disseminated tuberculosis of
bone or other internal organs, forms increasingly found in AIDS patients where
it causes chronic wasting and debilitation. Approximately one-third of the
world's population is infected with M. tuberculosis, but harbors the pathogen in
an inactive form. Such individuals have a 10% lifetime risk of developing the
disease. The fatality rate of untreated tuberculosis is between 40% and 60%.
Each year, there are an estimated 8 million new cases of tuberculosis worldwide
and 2.9 million deaths from the disease, making tuberculosis the leading cause
of death in the world from a single pathogen. While the disease is primarily
associated with the developing world, tuberculosis is not uncommon in
immuno-compromised patients, including cancer and AIDS patients. In the United
States, outbreaks of infection have occurred in health care workers and
residents of homeless shelters and prisons.
The primary treatment for tuberculosis is the use of antibiotics. A problem
of effectively treating tuberculosis with antibiotics is compliance with the
long drug treatment regimens, often as long as six months. In addition, strains
of M. tuberculosis have become resistant to isoniazid and rifampicin, two
principal antibiotics used to treat tuberculosis. M. bovis vaccine, the most
widely used vaccine in the world, protects against disseminated tuberculosis and
tuberculosis meningitis in children. However, in clinical trials this vaccine
has been shown to be only partially effective against pulmonary tuberculosis in
adults.
Using its high-throughput multiplex sequencing technology, the Company has
sequenced over 800,000 bases of the genome of M. tuberculosis, which the Company
estimates represents approximately 20% of the total genome of this pathogen. See
"Collaborative Agreements--Government Collaborations."
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Human Gene Discovery Programs
GTC has initiated a variety of programs to identify human genes that are
responsible for various diseases. In some of these programs the Company is using
positional cloning strategies, while in others it is employing a multifaceted
approach incorporating both positional cloning and comparative gene expression.
The Company's current primary human gene discovery programs are directed at
FSHD, prostate cancer, BPH, and manic depressive illness. Most of the Company's
current human gene discovery programs target common diseases that are most
likely due to defects in more than a single gene. The following table summarizes
the current status of the Company's human gene discovery programs. This table is
qualified in its entirety by the more detailed descriptions contained elsewhere
in this 10-K.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------
POSITIONAL CLONING ACTIVITIES
<CAPTION>
APPROPRIATE FAMILY IDENTIFICATION
RESOURCES GENETIC CHROMOSOMAL OF DISEASE
------------------------ LINKAGE REGION PHYSICAL MAP CANDIDATE GENE
DISEASE EVALUATION COLLECTION MAPPING IDENTIFICATION CONSTRUCTION GENES IDENTIFICATION
-------- ---------- ---------- ------- -------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
FSHD
---------------------------------------------------------------------------
Prostate Cancer
Tumor/Blood Samples
----------------------------------------------------------------------
Family Studies
---------
Manic Depressive Illness
------------------------------------------
Schizophrenia
------------------
Osteoporosis
---------
Asthma
---------
</TABLE>
<TABLE>
SEQUENCING ACTIVITIES
<CAPTION>
CANDIDATE DISEASE
TISSUES cDNA LIBRARIES cDNA COMPARATIVE GENE GENE
COLLECTED PREPARED SEQUENCING ANALYSIS IDENTIFICATION IDENTIFICATION
----------- --------------- ----------- ------------ --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Prostate Cancer
---------------------------------------
BPH
---------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FSHD. FSHD is a form of muscular dystrophy characterized by muscular
weakness and atrophy initially concentrated in the face and shoulder. FSHD is
believed to affect approximately one in 20,000 people worldwide. Steroids are
administered to patients with FSHD to decrease inflammation associated with
muscle wasting caused by the disease, but no therapies are available to reverse
or halt progression of the disease. Using detailed genetic linkage mapping,
physical mapping, and high-throughput multiplex sequencing, GTC has narrowed the
suspected location of the gene responsible for FSHD to an approximately 60,000
nucleotide region on the tip of the long arm of chromosome 4. The Company has
identified several candidate genes based on the sequence of this region and is
evaluating these candidates in affected individuals and normal controls. See
"Collaborative Agreements--Government Collaborations."
Prostate Cancer. In the United States, prostate cancer is the most
commonly diagnosed cancer in males and the second most common cause of death
from cancer in males. The American Cancer Society predicted that there would be
approximately 244,000 new cases of prostate cancer and approximately 40,000
deaths from prostate cancer in the United States in 1995. The treatment for
early stage prostate cancer is surgery to remove the prostate gland or
radiation. Removal of the prostate results in incontinence or impotence in a
substantial number of patients. Radiation is often not fully effective in
stopping the progression of the cancer. The treatment for later stage prostate
cancer is therapy to reduce testosterone levels. While testosterone reduction is
successful in slowing disease progression in 80% of patients, it is typically
effective for only 12 to 18 months.
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GTC is conducting a multifaceted program to identify the genes
responsible for prostate cancer. First, based on academic research that used
genetic data obtained by comparing DNA isolated from tumors and blood samples
to localize a candidate tumor suppressor gene to a region on the long arm of
chromosome 10, the Company continues to refine its detailed physical map of the
region and is sequencing a set of DNA fragments which cover a portion of the
region. The Company, working with the National Institutes of Health (the
"NIH"), also has identified several candidate genes in the region using exon
trapping techniques. In addition, the Company has initiated gene expression
profiles for prostate cancer by constructing cDNA libraries from normal
prostate and prostatic tumors and is sequencing the resulting cDNAs. GTC is
supplementing its gene expression studies with technologies which are used to
determine the differences in genes which are expressed in different samples.
To further this program, the Company is also seeking to identify appropriate
families exhibiting early onset (under 55 years of age) of prostate cancer for
genetic linkage mapping efforts.
GTC is collaborating with the NIH's National Center for Human Genome
Research ("NCHGR") in this program to identify and begin to evaluate candidate
prostate cancer genes on the long arm of chromosome 10. Pursuant to the terms
of the Company's Cooperative Research and Development Agreement ("CRADA") with
NCHGR, any inventions or discoveries developed in the course of the research
plan solely by the Company remain the property of the Company. Any inventions
or discoveries developed by NCHGR researchers remain the property of the NIH
and any inventions or discoveries developed jointly will be jointly owned.
Under the terms of the CRADA, the Company has the right to negotiate with the
NIH to obtain an exclusive license to any inventions or discoveries not made
solely by the Company. The terms of any such license may include field of use
restrictions and a royalty obligation on the part of the Company. The NIH
retains a nonexclusive, nontransferable license to practice any such invention
or discovery by or on behalf of the United States government. The NIH is also
entitled to a license, including the right to grant sublicenses, to use for
research purposes any such inventions or discoveries developed solely by the
Company.
Benign Prostate Hypertrophy ("BPH"). BPH is a common disease in males that
results from enlargement of the prostate. Although BPH is non-life threatening,
it can have a significant effect on the quality of life. The peak age of onset
of symptoms of BPH is between 50 and 55. BPH affects approximately 40% of men in
the United States by the time they reach the age of 74. The current treatments
for BPH include transurethral resection of the prostate and drugs such as
Proscar. Resection of the prostate results in incontinence or impotence in a
substantial number of patients. Drugs such as Proscar are effective in treating
the early symptoms of BPH but are not effective as the prostate becomes
enlarged. GTC has initiated gene expression profiles for BPH by constructing
cDNA libraries from tissue exhibiting BPH, normal prostate tissue and prostate
tumors.
Manic Depressive Illness. Manic depressive illness is a serious
neuropsychiatric disorder characterized by alternating mood swings of mania and
depression. Manic depressive illness affects approximately one percent of the
United States population. The most common treatment for manic depressive illness
is lithium carbonate, which has both therapeutic and prophylactic effects but is
toxic at levels that are very close to therapeutic levels. Alternatives are
anticonvulsant agents such as carbamazepine, valproate, and clonazepam.
Treatments with either lithium carbonate or anticonvulsant agents result in
diminished intellectual and emotional capacity.
GTC has been collaborating with the National Institute of Mental Health
(the "NIMH") in a search for DNA markers associated with this disorder in
several Old Order Amish pedigrees. This population represents a relatively
genetically isolated community with a small number of founders in the 1800's.
Strict pressures against substance abuse also facilitate accurate disease
diagnoses. The Company has completed a genome wide scan and has identified three
candidate chromosomal regions.
Although NIMH funding for this program ends in March 1996, the Company
plans to continue this program with its own funds. Any gene discovered in the
course of research funded by the NIMH would be the property of the NIMH.
However, the NIMH has no rights to genes discovered by the Company after
expiration of the contract term. Based on the current status of the research in
this program, the Company believes that it is very unlikely that a gene will be
identified during the current term of the research contract.
Other Programs. The Company is also conducting preliminary research on
osteoporosis, asthma and schizophrenia. These diseases affect large numbers of
people in the United States and throughout the world and are believed to have a
genetic basis. The Company is currently evaluating various family resources for
research on these diseases and may expand its research on one or all of these
diseases.
COLLABORATIVE AGREEMENTS
An important part of the Company's strategy is to pursue strategic
collaborations with pharmaceutical and biotechnology companies for the
development and commercialization of products based on the Company's genomic
discoveries. The Company also plans to continue to seek government grants and
research contracts related to the Company's technology and research programs.
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Pharmaceutical Company Collaborations
Astra. In August 1995, the Company entered into a collaboration agreement
with Astra to develop pharmaceutical, vaccine and diagnostic products effective
against gastrointestinal infections or any other disease caused by H. pylori.
The Company granted Astra exclusive access to the Company's H. pylori genomic
sequence database and exclusive worldwide rights to make, use and sell products
based on the Company's H. pylori technology. The agreement also provides for a
four-year research collaboration to further develop and annotate the Company's
H. pylori genomic sequence database, identify therapeutic and vaccine targets
and develop appropriate biological assays. This research is being directed by a
Joint Management Committee and a Joint Research Committee, each consisting of
representatives from both parties.
Under this agreement, Astra agreed to pay the Company a minimum of
approximately $11 million and, subject to the achievement of certain product
development milestones, up to approximately $22 million (and possibly a greater
amount if more than one product is developed under the agreement) in license
fees, expense allowances, research funding and milestone payments. $500,000 of
such fees is creditable against any future royalties payable to GTC by Astra
under the agreement. The Company received approximately $5 million in license
fees, expense allowances and research funding under the Astra agreement through
December 1995. For the Company's fiscal year ended August 31, 1995, revenue
recognized the Company under its agreement with Astra accounted for
approximately 31% of the Company's total revenue. Astra is obligated to provide
funding for the research program for a minimum of two and one-half years; Astra
may terminate the research collaboration at any time after the second year on
six months' notice.
The Company will also be entitled to receive royalties on Astra's sale of
any products (i) protected by the claims of patents licensed exclusively to
Astra by the Company pursuant to the agreement, or (ii) the discovery of which
was enabled in a significant manner by the genomic database licensed to Astra by
the Company. GTC has the right under certain circumstances to convert Astra's
license to a nonexclusive license in the event Astra is not actively pursuing
commercialization of the licensed technology.
Schering-Plough. In December 1995, the Company entered into a
collaboration and license agreement with Schering-Plough providing for the use
by Schering-Plough of the genomic sequence of a specified pathogen that the
Company is sequencing to identify new gene targets for development of
antibiotics effective against drug-resistant infectious organisms. As part
of this agreement, the Company granted Schering-Plough exclusive access to
certain of the Company's genomic sequence databases. The Company also granted
Schering-Plough a non-exclusive license to use the Company's bioinformatics
systems for Schering-Plough's internal use in connection with the genomic
databases licensed to Schering-Plough under the agreement and other genomic
databases Schering-Plough develops or acquires. The Company also agreed to
undertake certain research efforts to identify bacteria-specific genes
essential to microbial survival and to develop biological assays to be used by
Schering-Plough in screening natural product and compound libraries to identify
antibiotics with new mechanisms of action.
Under the agreement, Schering-Plough made an up-front payment to the
Company of $3 million. In addition, upon completion of certain development
milestones, Schering-Plough has agreed to pay the Company a minimum of an
additional $10.3 million in research funding and milestone payments. Subject
to the achievement of additional product development milestones and
Schering-Plough's election to extend the research collaboration,
Schering-Plough has agreed to pay the Company up to an additional
approximately $40.5 million (inclusive of the $10.3 million referred to in the
previous sentence) in research funding and milestone payments. The Company
expects that in fiscal 1996 it will complete the milestones that will entitle
it over the next several years to receive the minimum additional payments of
$10.3 million.
The agreement grants Schering-Plough exclusive worldwide rights to make,
use and sell pharmaceutical and vaccine products based on the genomic sequence
databases licensed to Schering-Plough by the Company and on the technology
developed in the course of the research program. GTC has also granted
Schering-Plough a right of first negotiation if during the term of the research
plan GTC desires to enter into a collaboration with a third party with respect
to the development or sale of any compounds which are targeted against, as their
primary indication, the pathogen that is the principal subject of the Company's
agreement with Schering-Plough. The Company will be entitled to receive
royalties on Schering-Plough's sale of therapeutic products and vaccines
developed using the technology licensed from the Company. Subject to certain
limitations, GTC retained the rights to make, use,
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and sell diagnostic products developed based on the Company's genomic database
licensed to Schering-Plough or the technology developed in the course of the
research program.
Government Collaborations
Since 1989, the Company has been awarded a number of grants and contracts
by various agencies of the United States government pursuant to the government's
genomics programs. The scope of the research covered by the grants and contracts
encompasses technology development, sequencing production, technology automation
projects and positional cloning projects. Among other things, these grants and
contracts have provided significant funds for the Company's M. tuberculosis,
FSHD and manic depressive illness gene discovery programs. These grants and
contracts represent an important aspect of the Company's strategy because they
add to the Company's genomics technology and enable the Company to increase the
number and enhance the expertise of its scientific personnel.
Under the Company's government grants, the Company has, subject to
certain rights of the government described below, exclusive ownership rights to
any commercial applications of inventions first reduced to practice under the
grants, including all gene discoveries and technology improvements created or
discovered. The Company is strongly encouraged under certain of the government
grants to make data and materials resulting from the research public within 180
days from the date such data and materials are developed. Under the Company's
government research contracts, the government has ownership rights in the data,
clones, genes and other material derived from the material furnished to the
Company by the government, and the Company has ownership rights in other
inventions developed solely by the Company under the contracts. The government
also retains certain rights described below under the caption "Patents and
Proprietary Technology," to the inventions first reduced to practice by the
Company under the government grants and contracts. The Company currently has
two principal government research contracts, one with the National Institute of
Neurological Disorders and Stroke relating to the preparation of DNA samples
for sequencing, the isolation of DNA fragments and genotyping, and one with the
NIMH relating to the identification of genes responsible for manic depressive
illness. See "Patent and Proprietary Technology" and "Human Gene Discovery
Programs - Manic Depressive Illness."
The Company's government grants and research contracts include both
cost-plus-fixed-fee arrangements and fixed price contracts. Under cost plus
fixed fee arrangements, the Company receives reimbursement of its direct costs
associated with the research, a portion of its indirect or overhead costs as
well as fees in excess of such costs. The amount of overhead reimbursement
varies with each contract. Under fixed price contracts, the Company agrees to
perform a particular research plan for an agreed upon payment.
From January 1991 through August 1995, the United States government awarded
the Company grants and contracts providing for aggregate payments over their
terms of approximately $36 million. Listed below are the major government grants
and contracts under which the Company is currently performing services:
<TABLE>
<CAPTION>
TOTAL AWARD
TERM OF OVER
PROJECT AWARD DATE PROJECT PROJECT TERM
------- ---------- ------- ------------
<S> <C> <C> <C>
Genome Sequencing Center........................ August 1994 3 yrs. $10.4 million
Microbial Genome Sequencing..................... December 1994 3 yrs. $ 3.0 million
Physical Map of Chromosome 10................... May 1994 3 yrs. $ 1.9 million
Gene Expression................................. December 1993 3 yrs. $ 1.5 million
FSHD............................................ September 1994 3 yrs. $ 1.0 million
</TABLE>
These grants and research contracts are typically funded annually and
subject to the appropriation by the United States Congress of funding in each
year. In addition, funding under these grants and contracts may be discontinued
or reduced at any time by the United States Congress.
PATENTS AND PROPRIETARY TECHNOLOGY
The Company's commercial success will be dependent in part on its ability
to obtain patent protection on genes, or products based on genes, discovered by
it. The current criteria for obtaining patent protection for partially sequenced
genes and for genes whose biological functions have not been characterized are
unclear. The Company's current strategy is to apply for patent protection upon
the identification of a novel gene or novel gene fragment and pursue claims to
these gene sequences as well as equivalent sequences, such as substantially
homologous sequences. Where the biological function of a gene or gene fragment
has not been characterized at the time of filing a patent application, the
Company intends to supplement such patent filing as soon as additional
information with respect to the biological function of such gene or gene
fragment is available. However, there can be no assurance that the Company will
be able to obtain patent protection on such genes or gene fragments, and even if
such patents are issued, the scope of the coverage or protection
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provided by any such patents is uncertain. In addition, there can be no
assurance that any patents, if issued, will provide protection against any
competitors, will provide the Company with competitive advantages, will provide
protection for any therapeutic, vaccine or diagnostic products based on the
Company's gene discoveries or will not be successfully challenged by others.
Furthermore, others have filed and are likely to file in the future patent
applications which have not yet been published covering genes or protein
sequences similar or identical to the Company's. No assurance can be given that
any such patent application will not have priority over patent applications
filed by the Company or that any patent applications filed by the Company will
result in issued patents.
There have been, and continue to be, intensive discussions on the scope of
patent protection for both gene fragments and full-length genes. In November
1995, the United States Patent and Trademark Office (the "PTO") scheduled a
hearing and requested public comment on the patenting of a complete genome of an
organism as well as the patenting of human gene fragments. Although the PTO
canceled the hearings and request for comments, they may be rescheduled at a
future date. There can be no assurance that these or other proposals will not
result in changes in, or interpretations of, the patent laws which will
adversely affect the Company's patent position.
The PTO issued new Utility Guidelines in July 1995 that address the
requirements for demonstrating utility, particularly in inventions relating to
human therapeutics. While the guidelines do not require clinical efficacy data
for issuance of patents for human therapeutics, the guidelines have been issued
only recently and there can be no assurance that the PTO's interpretations of
such guidelines, and any changes to such interpretations will not delay or
adversely affect the Company's or its collaborators' ability to obtain patent
protection. The biotechnology patent situation outside the United States is even
more uncertain and is currently undergoing review and revision in many
countries.
The Company has filed patent applications with respect to a number of
full length genes and corresponding proteins and partial genes of H. pylori and
of M. leprae. The Company plans to file foreign counterparts of these U.S.
applications within the appropriate time frames. These applications seek to
protect these full length and partial gene sequences and corresponding
proteins, as well as equivalent sequences, such as substantially homologous
sequences, and products derived therefrom and uses therefor. These applications
also identify possible biological functions for the genes and gene fragments
based in part on a comparison to genes or gene fragments included in public
databases but do not contain any laboratory or clinical data with respect to
such biological functions. There are certain court decisions indicating that
disclosure of a partial sequence may not be sufficient to support the
patentability of a full-length sequence. The PTO initially rejected a patent
application by the NIH seeking protection for a substantial number of genes
based upon partial gene sequences, and the rejection was not appealed by the
NIH. In addition, the Company is aware of published patent applications owned
by third parties relating to nucleic acids encoding several H. pylori proteins.
Patents may issue thereon that have priority over the patent applications filed
by the Company, which may limit the scope of coverage or protection afforded by
any patent, if any, that may issue to the Company with respect to the genes of
H. pylori, or may preclude the issuance of any such patents.
A number of groups are attempting to rapidly identify and patent gene
fragments and full length genes whose functions have not been characterized, as
well as fully characterized genes. To the extent any patents issue on such
partial or full length genes, the risk increases that the potential products of
the Company or its strategic partners may give rise to claims that such products
infringe the patents of others. Such groups could bring legal actions against
the Company or its collaborators claiming damages and seeking to enjoin drug
development efforts or the manufacturing or marketing of the affected products.
If any such actions are successful, in addition to any potential liability for
damages, the Company or its collaborators could be required to obtain a license
in order to continue to manufacture or market the affected products. There can
be
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no assurance that the Company or its collaborators would prevail in any such
action or that any license required under any such patent would be made
available upon commercially acceptable terms, if at all. The Company believes
that there may be significant litigation in the industry regarding patent and
other intellectual property rights. If the Company becomes involved in such
litigation, it could consume a substantial portion of the Company's management
and financial resources.
In addition, publication of information concerning genes or genetic
sequences prior to the time the Company applies for patent protection based on
the full-length gene could adversely affect the Company's ability to obtain
patent protection with respect to genes identified by it. Washington University
is currently identifying genes through partial sequencing pursuant to funding
provided by Merck & Co., Inc. and depositing the partial gene sequences
identified in a public database. In addition, Human Genome Sciences, Inc.
recently provided non-commercial research organizations access to human genetic
sequence data relating to between 30,000 and 50,000 genes from The Institute for
Genomic Research's Human cDNA Database.
Under the Company's government grants and contracts, the government has a
statutory right to practice or have practiced, and, under certain circumstances
(including inaction on the part of the Company or its licensees to achieve
practical application of the invention or a need to alleviate public health or
safety concerns not reasonably satisfied by the Company or its licensees), to
grant to other parties licenses under, any inventions first reduced to practice
under the government grants and contracts. In addition, under the Company's
government research contracts, the government has ownership rights in the data,
clones, genes and other material derived from the material furnished to the
Company by the government, and the Company has ownership rights in other
technology developed solely by the Company under the contracts. Under the
Company's CRADA with NIH, any inventions or discoveries made in whole or in
part by NIH researchers are the property, either solely or jointly with the
Company, of NIH, and the Company has the right to negotiate with the NIH to
obtain an exclusive license to such inventions and discoveries. The Company
is also strongly encouraged under certain government grants to make data and
materials resulting from the research public within 180 days from the date such
data and materials are developed. If this requirement results in premature
publication of the Company's discoveries and inventions, the Company's ability
to obtain patent protection for such discoveries and inventions may be
adversely affected.
Amendments to Title 35 of the U.S. Code pursuant to the General
Agreement on Tariffs and Trade, implementing the Uruguay Round Agreement Act of
1994 have affected the period of enforceability of United States patents.
United States patents that issue from applications filed before June 8, 1995
will be enforceable for the longer of 17 years from the date of issue or 20
years from the earliest claimed priority date. United States patents that
issue from applications filed on or after June 8, 1995 will be enforceable for
20 years from the earliest filing date or the earliest claimed priority date.
While the Company cannot predict the effect that such laws will have on its
business, the adoption of such laws could effectively reduce the term during
which a marketed product is protected by patents.
The multiplex sequencing technology used by the Company was developed
by researchers at Harvard College and HHMI, Dr. George Church, a scientific
advisor to the Company. The multiplex sequencing technology is the subject of
two issued United States patents and foreign counterpart applications in
certain countries, but this technology is not covered by patents or patent
applications in all countries of the world. The Company has obtained an
exclusive worldwide license from Harvard College to use the multiplex
sequencing technology for commercial applications. In situations where the
Company is unable to provide a third party with multiplex sequencing services,
it is obligated under the license to use reasonable efforts to sublicense the
multiplex sequencing technology to such third parties on commercially
reasonable terms except where doing so would place the Company at a materially
competitive disadvantage. This provision may require the Company to make the
multiplex sequencing technology licensed by it from Harvard College available
to third parties. Harvard College has retained the right to use and license
others to use the technology for research purposes. Under this license, the
Company paid Harvard College a nonrefundable license fee of $100,000 and must
pay Harvard College sublicensing fees, as well as royalties on products sold
that include the multiplex sequencing technology, services performed that
utilize the multiplex sequencing technology, income attributable to sublicenses
of the multiplex sequencing technology and certain other amounts. Under the
license, the Company must pay Harvard College minimum annual royalties ranging
from $15,000 in 1996 to $35,000 beginning in 1998. Under certain circumstances,
Harvard College has the right to convert the license to a nonexclusive license
if the Company has not put the technology into commercial use and is not
keeping the technology reasonably available to the public. In addition, the
HHMI, through Harvard College, has the right under certain circumstances, to
require the Company to license the technology to others if, in the judgment of
HHMI, the Company has not taken reasonable steps to achieve a practical
application of the technology or if required in response to public health or
safety needs. The Company continues to make improvements to the multiplex
sequencing technology with its own funds and funding provided under the
Company's $10.4 million Genome Sequencing Center grant from the NIH. Subject
to the rights of the government described above in inventions developed by the
Company under government grants and the rights of Harvard College described
below, the Company owns any such improvements. The Company has granted
Harvard College a license to use the improvements the Company makes to the
software component of the multiplex sequencing technology for Harvard College's
internal academic purposes. In the event Harvard College desires to grant a
sublicense to any such improvements, the Company has agreed to negotiate with
Harvard College concerning the terms of any such sublicense.
The Company also relies on trade secret protection for its confidential
and proprietary information. There can be no assurance that the Company can
maintain adequate protection for its trade secrets or other proprietary
information. In addition, while the Company has entered into proprietary
information agreements with its employees, consultants and advisors, there can
be no assurance that these agreements will provide meaningful protection for
the Company's proprietary information in the event of unauthorized use or
disclosure of such information. Moreover, there can be no assurance that others
will not independently develop
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substantially equivalent proprietary information and techniques or otherwise
gain access to the Company's trade secrets or disclose such technology, or that
the Company can meaningfully protect its trade secrets.
COMPETITION
The Company faces intense competition both with respect to its human gene
and pathogen gene discovery programs. There is a finite number of genes in the
human genome and the Company believes virtually all of such genes will be
identified within two to three years albeit largely without known function. The
Company also believes that the primary genes that cause or predispose
individuals to most common diseases will be identified and characterized within
five to eight years. In addition, the Company believes that the genomes of many
commercially important pathogens will be sequenced within two to three years.
Competitors of the Company include pharmaceutical and biotechnology
companies both in the United States and abroad. In addition, significant
research to identify and sequence genes is being conducted by universities,
other non-profit research institutions and United States and foreign
government-sponsored entities. A number of commercial, scientific and
governmental entities are attempting to sequence human genes and the genomes of
other organisms. Other entities are utilizing positional cloning to identify and
characterize human disease genes. Certain of the Company's competitors' human
gene programs are more advanced than the Company's and any one of these
companies or other entities may discover and establish a competitive advantage
in one or more pathogen development programs which the Company has commenced.
The Company also faces competition in its human gene discovery programs in
gaining access to family DNA samples for use in positional cloning.
The Company believes that its ability to compete is dependent, in part,
upon its ability to create and maintain advanced technology, the speed with
which it can identify and characterize the genes involved in human diseases, the
Company's ability to rapidly sequence the genomes of selected pathogens, its
collaborators' ability to develop and commercialize therapeutic, vaccine and
diagnostic products based upon the Company's gene discoveries, as well as its
ability to attract and retain qualified personnel, obtain patent protection or
otherwise develop proprietary technology or processes and secure sufficient
capital resources for the expected substantial time period between technological
conception and commercial sales of products based upon the Company's gene
discoveries.
Many of the Company's competitors have substantially greater research and
product development capabilities and financial, scientific, marketing and human
resources than the Company. These competitors may succeed in identifying or
sequencing genes or developing products earlier than the Company or its
collaborators, obtaining authorization from the FDA for such products more
rapidly than the Company or its collaborators or developing products that are
more effective than those proposed to be developed by the Company or its
collaborators. Any potential products based on genes identified by the Company
will face competition both from companies developing gene-based products and
from companies developing other forms of diagnosis or treatment for the
particular diseases targeted by the Company. There can be no assurance that
products developed by others will not render the products which the Company or
its collaborators may seek to develop obsolete or uneconomical or result in
diagnoses, treatments or cures superior to any products developed by the
Company or its collaborators, or that any product developed by the Company or
its strategic collaboration partners will be preferred to any existing or
newly developed technologies.
GOVERNMENT REGULATION
Regulation by governmental entities in the United States and other
countries will be a significant factor in the development, manufacturing and
marketing of any products which may be developed by the Company or its
collaborators. The nature and the extent to which such regulation may apply to
the Company or its collaborators will vary depending on the nature of any such
products. Virtually all of the Company's or its collaborators' pharmaceutical
products will require regulatory approval by governmental agencies prior to
commercialization. In particular, human therapeutic and vaccine products are
subject to rigorous preclinical and clinical testing and other approval
procedures by the United States Food and Drug Administration (the "FDA") in
the United States and similar health authorities in foreign countries. Various
federal and, in some cases, state statutes and regulations also govern or
influence the manufacturing, safety, labeling, storage, record keeping and
marketing of such products. The
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process of obtaining these approvals and the subsequent compliance with
appropriate federal and foreign statutes and regulations are time consuming and
require the expenditure of substantial resources.
The FDA regulates human therapeutic products in one of three broad
categories: drugs, biologics, or medical devices. Products based on the
Company's technologies could potentially fall into all three categories.
Generally, in order to gain FDA pre-market approval of a new drug or biological
product, a company first must conduct pre-clinical studies in the laboratory and
in animal model systems to gain preliminary information on an agent's efficacy
and to identify any safety problems. The results of these studies are submitted
as a part of an investigational new drug application ("IND"), which the FDA must
review before human clinical trials of a drug or biologic can commence. In order
to commercialize any products, the Company or its collaborators will be required
to sponsor and file an IND and will be responsible for initiating and overseeing
the clinical studies to demonstrate the safety, efficacy and potency that are
necessary to obtain FDA approval of any such products. Clinical trials are
normally done in three phases and are likely to take a number of years to
complete. After completion of clinical trials of a new product, FDA marketing
approval must be obtained. If the product is classified as a new drug, the
Company or its collaborators will be required to file a New Drug Application
("NDA") and receive approval before commercial marketing of the drug. If the
product is classified as a biologic (e.g., a vaccine), the Company or its
collaborator will be required to file a product license application and an
establishment license application ("ELA") and receive approval of both before
commercial marketing of the product can take place. The testing and approval
processes require substantial time and effort and there can be no assurance that
any approvals will be granted on a timely basis, if at all.
Even if FDA regulatory clearances are obtained, a marketed product is
subject to continual review, and later discovery of previously unknown problems
or failure to comply with the applicable regulatory requirements may result in
restrictions on the marketing of a product or withdrawal of the product from the
market as well as possible civil or criminal sanctions. In addition, biologic
products may be subject to batch certification and lot release requirements. To
the extent that any of the Company's products involve recombinant DNA
technology, additional layers of government regulation and review are possible.
For marketing outside the United States, the Company will also be subject to FDA
export regulations and foreign regulatory requirements governing human clinical
trials and marketing approval for pharmaceutical products. The requirements
governing the conduct of clinical trials, product licensing, pricing and
reimbursement vary widely from country to country.
The Company or its collaborators may also develop diagnostic products based
upon the human or pathogen genes that the Company identifies. The Company
believes that the diagnostic products to be developed by the Company or its
collaborators are likely to be regulated by the FDA as devices rather than drugs
or biologics. The nature of the FDA requirements applicable to such diagnostic
devices depends on their classification by the FDA. A diagnostic device
developed by the Company or a collaborator would most likely be classified as a
Class III device, requiring pre-market approval. Obtaining pre-market approval
involves the costly and time-consuming process, comparable to that for new drugs
or biologics, of conducting pre-clinical studies, obtaining an investigational
device exemption to conduct clinical tests, filing a pre-market approval
application, and obtaining FDA approval. Again, there can be no assurance that
any approval will be granted on a timely basis, if at all.
The Company's research and development activities involve the controlled
use of hazardous materials, chemicals and various radioactive materials. The
Company is subject to federal, state and local laws and regulations governing
the use, storage, handling and disposal of such materials and certain waste
products. Although the Company believes that its safety procedures for handling
and disposing of such materials comply with the standards prescribed by state,
federal and local laws and regulations, the risk of accidental contamination or
injury from these materials cannot be completely eliminated. In the event of
such an accident, the Company could be held liable for any damages that result
and any liability could exceed the resources of the Company.
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MANUFACTURING AND MARKETING
The Company does not generally expect to directly manufacture or market
products in the near term. However, the Company may, in the future, consider
taking such actions if it believes they are appropriate under the circumstances.
The Company has no recent experience in developing pharmaceutical products or in
manufacturing or marketing products. The Company may not have the resources to
develop or to manufacture or market by itself any products based on genes
identified by it. In the event the Company decides to establish a manufacturing
facility, the Company will require substantial additional funds and will be
required to hire and train significant additional personnel and comply with the
extensive "good manufacturing practice" regulations applicable to such a
facility. In addition, if any products produced at the Company's facilities were
regulated as biologics, the Company would be required to file and obtain
approval of an ELA for its facilities.
HUMAN RESOURCES
As of December 31, 1995, the Company had 125 full-time employees, of whom
110 were engaged in research and development activities, and 15 in general and
administrative functions. Twenty of the Company's employees hold Ph.D. degrees
and 38 others hold other advanced degrees.
None of the Company's employees are covered by a collective bargaining
agreement, and the Company considers its relations with its employees to be
good.
SCIENTIFIC ADVISORS AND CONSULTANTS
The Company's principal scientific advisors and consultants are individuals
with recognized expertise in fields related to the Company's technology and
development programs who advise the Company on an as-needed basis on scientific
matters that arise in the course of the Company's business. They are all
employed by academic institutions and may have commitments to, or consulting or
similar agreements with other entities, including in some cases competitors of
the Company, that may limit their availability to the Company. These individuals
include:
PHILIP J. LEDER, M.D., John Emory Andrus Professor of Genetics, Chairman of
the Department of Genetics, Harvard Medical School and Senior Investigator of
the Howard Hughes Medical Institute, Boston, MA. Dr. Leder, a director of the
Company and Chairman of GTC's Scientific Advisory Committee, was the recipient
in 1987 of the Albert Lasker Award for research on the genetics of the human
immune system, including fundamental discoveries of how human genes rearrange
themselves to produce antibodies against disease. He is a developer of a
transgenic mouse model for human cancer and received the National Medal of
Science in 1989.
MARTIN J. BLASER, M.D., The Addison B. Scoville Professor of Medicine,
Director, Division of Infectious Diseases, Professor of Microbiology and
Immunology, Vanderbilt University School of Medicine, Nashville, TN. Dr.
Blaser's research is focused on the epidemiology, pathogenesis, and molecular
biology of gastrointestinal and extraintestinal disease caused by exogenous
enteric pathogens, such as H. pylori.
MICHAEL BOEHNKE, PH.D., Professor, Department of Biostatistics, University
of Michigan, Ann Arbor, MI. Dr. Boehnke is a statistical geneticist whose
research is focused on appropriate study design for the mapping and cloning of
genes responsible for complex human diseases.
GEORGE M. CHURCH, PH.D., Associate Professor, Department of Genetics,
Harvard Medical School and Associate Investigator of the Howard Hughes Medical
Institute, Boston, MA. Dr. Church co-invented the multiplex sequencing
technology licensed to the Company, and software for automatically identifying
nucleotides in DNA sequencing.
17
<PAGE> 19
PHILIP P. GREEN, PH.D., Associate Professor, Department of Molecular
Biotechnology, University of Washington, Seattle, WA. Dr. Green developed novel
algorithms for rapid construction of genetic maps. He has more recently
developed new statistical methodologies for nucleotide identification in DNA
sequencing and for assembling individual DNA sequences into large contiguous
stretches of DNA sequences.
GREGORY A. PETSKO, D.PHIL., Lucille P. Markey Professor, Department of
Biochemistry and Department of Chemistry, and Director, Rosenstiel Basic Medical
Sciences Research Center, Brandeis University, Waltham, MA. Dr. Petsko, a member
of the National Academy of Sciences, focuses his research on protein structure
determination by X-ray crystallography. His research includes analyzing the
mechanisms of enzyme catalysis by structural methods.
DAVID M. SHLAES, M.D., PH.D., Professor of Medicine, Case Western Reserve
University School of Medicine, and Chief, Infectious Diseases Section, VA
Medical Center, Cleveland, OH. Dr. Shlaes' research centers on the molecular
mechanisms of bacterial resistance to antibiotics and the mode of transmission
of resistance between bacteria.
JEFFREY L. SKLAR, M.D., PH.D., Professor of Pathology, Harvard Medical
School, Director, Division of Diagnostic Molecular Biology and Director,
Division of Molecular Oncology, Department of Pathology, Brigham and Women's
Hospital, Boston, MA. Dr. Sklar's research is focused on understanding the
origins of cancer at the molecular level.
18
<PAGE> 20
Item 2. PROPERTIES
The Company's executive office and research and development laboratories
are located in two leased facilities in Waltham, Massachusetts. One lease covers
approximately 23,000 square feet of space and expires on July 31, 1999. The
other lease covers approximately 14,000 square feet of space and expires on
December 31, 1997, subject to the right of the Company to extend its lease for
an additional five-year period.
19
<PAGE> 21
PART II
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data set forth below as of August 31,
1994 and 1995 and for the three years in the period ended August 31, 1995 are
derived from the Company's consolidated financial statements which have been
audited by Arthur Andersen LLP, independent public accountants, which are
included elsewhere in this 10-K. The selected consolidated financial data set
forth below as of August 31, 1991, 1992 and 1993 and for the years ended August
31, 1991 and 1992 are derived from the Company's consolidated financial
statements which have been audited by Arthur Andersen LLP, which are not
included herein. The data set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements and related Notes included
elsewhere in this 10-K.
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------------------------------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Revenues:
Government research............. $ 1,988 $ 4,171 $ 5,022 $ 6,077 $ 7,014
Collaborative research, license
fees and royalties............ 228 160 361 314 3,924
Interest income................. 140 385 174 142 232
Product and service............. 6,764 792 893 86 37
------- ------- ------- ------- -------
Total revenues.................. 9,120 5,508 6,450 6,619 11,207
Costs and expenses:
Cost of government research..... 1,915 3,575 4,527 5,144 6,414
Research and development........ 2,480 387 423 365 1,475
Selling, general and
administrative................ 4,265 2,493 2,802 2,176 2,730
Cost of product and service..... 4,251 1,132 1,543 13 3
(Gain) loss on sale of
businesses.................... (2,104) -- 637 -- --
------- ------- ------- ------- -------
Total costs and expenses........ 10,807 7,587 9,932 7,698 10,622
------- ------- ------- ------- -------
Net income (loss)................... $(1,687) $(2,079) $(3,482) $(1,079) $ 585
======= ======= ======= ======= =======
Primary net income (loss) per common
and common equivalent share....... $ (0.16) $ (0.19) $ (0.33) $ (0.10) $ 0.05
======= ======= ======= ======= =======
Weighted average common and common
equivalent shares outstanding..... 10,659 10,663 10,669 11,097 12,962
</TABLE>
<TABLE>
<CAPTION>
AUGUST 31,
---------------------------------------------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS)
BALANCE SHEET DATA:
Cash, cash equivalents and
marketable securities............. $ 9,041 $ 7,144 $ 3,915 $ 4,123 $ 8,227
Working capital..................... 8,780 5,768 3,264 3,244 5,499
Total assets........................ 10,790 9,355 5,289 5,911 11,529
Capital lease obligations, net of
current maturities................ -- 275 111 165 892
Shareholders' equity................ 9,109 7,081 3,676 4,225 7,239
</TABLE>
20
<PAGE> 22
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company is engaged in the field of genomics -- the discovery and
characterization of genes. Currently, the Company's primary activity is genomic
research and development. For the past several years, the Company's primary
source of revenues have been government research grants and contracts and
collaborative agreements with pharmaceutical company partners. The Company
entered into corporate collaborations with Astra relating to H. pylori in August
1995 and with Schering-Plough in December 1995 providing for the use by
Schering-Plough of the genomic sequence of a specified pathogen that the Company
is sequencing to identify new gene targets for the development of novel
antibiotics.
The Company will not receive significant product revenues on a sustained
basis until such time, if any, at which products based on the Company's research
efforts are commercialized. The Company's product development strategy is to
enter into collaborations with pharmaceutical and biotechnology companies
whereby these corporate partners will provide most or all of the financial and
other resources required to complete the development and to commercialize
products based on the Company's genomics research in exchange for a variety of
license and milestone payments, research support and royalties. In order for a
product to be commercialized based on the Company's research, it will be
necessary for the collaborators to conduct preclinical tests and clinical
trials, obtain regulatory clearances and make manufacturing, distribution and
marketing arrangements. Accordingly, the Company does not expect to receive
royalties based on product revenues for many years.
For fiscal 1993, 1994, and 1995, the Company expended $4,950,000,
$5,509,000 and $7,889,000, respectively on research and development, of which
$4,527,000, $5,144,000 and $6,414,000, respectively, was sponsored by the
United States government. As of August 31, 1995, the Company had outstanding
approximately $13,446,000 of government grants and research contracts
under which services were yet to be performed. These grants and contracts call
for these services to be performed over approximately the next 18 to 24 months.
The Company's government grants and contracts are typically funded annually
and are subject to appropriation by the United States Congress each year.
Funding may be discontinued or reduced at any time by the Congress. As of
August 31, 1995, the funded portion of these grants and contracts was
$5,351,000. For fiscal 1993, 1994 and 1995 revenue recognized pursuant to United
States government grants and research contracts accounted for approximately
78%, 92% and 63%, respectively of the Company's total revenues. The Company
plans to continue to seek government grants and contracts in the genomics
field and to enter into additional corporate partnering arrangements with the
goal of advancing the Company's genomic technologies and gene discovery
programs and of obtaining revenues sufficient to cover a portion of the
Company's cash requirements. There can be no assurance that the Company will
be able successfully to pursue this strategy.
The Company has incurred significant losses since inception, with an
accumulated deficit of approximately $35,174,000 at August 31, 1995. The
Company's results of operations have fluctuated from period to period and may
continue to fluctuate in the future based upon the timing and composition of
funding under existing and new government grants and contracts and
collaborative agreements. The Company is subject to risks common to companies
in its industry including, unproven technology and business strategy,
availability of, and competition for, family resources, reliance upon
collaborative partners and others, reliance on United States government
funding, history of operating losses, need for future capital, competition,
patent and proprietary rights, dependence on key personnel, uncertainty of
regulatory approval, uncertainty of pharmaceutical pricing, health care reform
and related matters, product liability exposure and the volatility of the
Company's stock price.
RESULTS OF OPERATION
21
<PAGE> 23
FISCAL YEARS ENDED AUGUST 31, 1995, 1994 AND 1993
Revenue
Total revenues increased 69% from $6,619,000 in fiscal 1994 to $11,207,000
in fiscal 1995 and increased 3% from $6,450,000 in fiscal 1993 to $6,619,000 in
fiscal 1994. Government research revenues increased 15% from $6,077,000 in
fiscal 1994 to $7,014,000 in fiscal 1995 and increased 21% from $5,022,000 in
fiscal 1993 to $6,077,000 in fiscal 1994. These increases in government research
revenues were primarily attributable to the commencement of payments under the
Company's 3-year, $10 million Genome Sequencing Center grant from the NIH,
which was awarded in August 1994, as well as increased levels of funding under
existing government grants and contracts. Revenue derived from government
research grants and contracts is generally based upon direct costs such as
labor and laboratory supplies as well as an allocation for reimbursement of a
portion of overhead.
22
<PAGE> 24
Collaborative research, license fees and royalties increased from $314,000
in fiscal 1994 to $3,924,000 in fiscal 1995 primarily due to a $3,500,000
payment received from Astra in August 1995. Collaborative research, license fees
and royalties remained relatively unchanged in fiscal 1994 as compared to fiscal
1993. Product and service revenue significantly decreased after fiscal 1993 due
to the sale by the Company of its diagnostic testing business in June 1993.
Interest income increased 64% from $142,000 in fiscal 1994 to $232,000 in
fiscal 1995, and decreased 19% from $174,000 in fiscal 1993 to $142,000 in
fiscal 1994. The changes in interest income reflect fluctuations in interest
rates as well as the increase in funds available for investment in fiscal 1995
as a result of the Company's sale of Common Stock in a private placement in
March 1995.
Costs and Expenses
Total costs and expenses increased 38% from $7,698,000 in fiscal 1994 to
$10,622,000 in fiscal 1995 and decreased 22% from $9,932,000 in fiscal 1993 to
$7,698,000 in fiscal 1994. The cost of government research increased 25% from
$5,144,000 in fiscal 1994 to $6,414,000 in fiscal 1995 and increased 14% from
$4,528,000 in fiscal 1993 to $5,144,000 in fiscal 1994. The increase in cost of
government research in both fiscal 1995 and fiscal 1994 was due primarily to
increases in payroll and related costs associated with the increase in
government research revenue as well as an increase in overhead expenses
associated with the expansion of the Company's facilities. Cost of government
research, as a percentage of government research revenue, was 91% in fiscal
1995, 85% in fiscal 1994 and 90% in fiscal 1993.
Research and development expenses increased 304% from $365,000 in fiscal
1994 to $1,476,000 in fiscal 1995 and decreased 14% from $423,000 in fiscal 1993
to $365,000 in fiscal 1994. The increase in research and development expenses in
fiscal 1995 was primarily related to expenses incurred in connection with the
Company's H. pylori sequencing activities prior to entering into a collaborative
agreement with Astra in August 1995. The increase consisted primarily of
increases in payroll and related expenses, laboratory supplies and overhead
expenses. The decrease in research and development expenses in fiscal 1994 was
primarily related to the completion of certain research agreements and the
termination of research related to the Company's diagnostic testing business,
partially offset by increases in the Company's pathogen sequencing activities.
Selling, general and administrative expenses increased 25% from $2,176,000
in fiscal 1994 to $2,730,000 in fiscal 1995 and decreased 22% from $2,802,000 in
fiscal 1993 to $2,176,000 in fiscal 1994. The increase in selling, general and
administrative expenses in fiscal 1995 was primarily due to approximately
$495,000 of severance and relocation expenses as well as increases in payroll
and related expenses and facilities expenses. The decrease in selling, general
and administrative expenses in fiscal 1994 was due primarily to the sale of the
diagnostics business in fiscal 1993 and cost cutting actions taken by the
Company in fiscal 1994.
Cost of product and service significantly decreased after fiscal 1993 due
to the sale of the Company's diagnostic testing business in June 1993. The
Company sold substantially all of the assets used in this business in fiscal
1993 for $1,000,000, resulting in a loss of $637,000 in fiscal 1993.
LIQUIDITY AND CAPITAL RESOURCES
Since September 1, 1992, the Company's primary sources of cash have been
revenue from government grants and contracts, revenue from collaborative
research agreements, borrowing under capital leases and proceeds from the sale
of equity securities. In fiscal 1995, the Company received net proceeds of
approximately $2,403,000 from the private sale of Common Stock and warrants and
the exercise of stock options. In fiscal 1994, the Company received net proceeds
of approximately $1,601,000 from the sale of Common Stock and the exercise of
certain stock options. In August and December 1995, the Company entered into
collaborative arrangements under which it received $3,500,000 from Astra and
$3,000,000 from Schering-Plough, respectively.
As of August 31, 1995, the Company had cash, cash equivalents and
marketable securities of approximately $9,011,000 (of which approximately
$784,000 is restricted in connection with certain capital lease obligations) and
working capital of approximately $5,499,000. The Company has various
arrangements under which it can finance up to $2,500,000 of certain office and
laboratory equipment and leasehold
23
<PAGE> 25
improvements. Under these arrangements, the Company is required to maintain
certain financial ratios, including minimum levels of tangible net worth, total
indebtedness to tangible net worth, maximum loss, and minimum restricted cash
balances. At August 31, 1995, the Company had approximately $494,000
available under these arrangements and had an outstanding balance of
approximately $1,370,000, which is repayable over the three year period ending
August 1998.
The Company's operating activities provided cash of approximately
$2,693,000 in fiscal 1995, including the utilization of approximately $1,100,000
of net operating loss carryforwards, and used cash of approximately $639,000 and
$3,252,000 in fiscal 1994 and 1993, respectively. Net cash provided in fiscal
1995 was composed primarily of deferred contract revenue, accrued expenses,
and operating income. Cash was utilized in fiscal 1994 and 1993 primarily to
fund the Company's operating loss.
The Company's investing activities provided cash of approximately $6,000 in
fiscal 1995. The Company's investing activities used cash of approximately
$1,550,000 and $1,548,000 in fiscal 1994 and 1993, respectively. The Company
used cash primarily for purchases of marketable securities and equipment and
leasehold improvements.
Financing activities provided cash of approximately $2,074,000 and
$1,410,000 in fiscal 1995 and 1994 respectively, primarily from the sale of
equity securities and warrants and the exercise of stock options, net of
payments of capital lease obligations. Financing activities used cash of
approximately $451,000 in fiscal 1993 primarily for the payment of capital lease
obligations.
Capital expenditures totaled $1,438,000 during fiscal 1995. The Company
currently estimates that it will acquire $1,500,000 of capital equipment during
fiscal 1996, consisting primarily of computer systems, laboratory equipment and
office equipment. The Company plans to utilize its capital lease arrangements
to finance the acquisition of this equipment.
The Company believes that its existing capital resources are adequate to
meet its cash requirements for at least the next 24 months. There can be no
assurance, however, that changes in the Company's plans or other events
affecting the Company's operations will not result in accelerated or unexpected
expenditures.
The Company may seek additional funding through public or private financing
and expects to seek additional funding through collaborative or other
arrangements with corporate partners. There can be no assurance, however, that
additional financing will be available from any of these sources or will be
available on terms acceptable to the Company.
24
<PAGE> 26
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements and supplementary data required by Item 8 are set
forth at the pages indicated in Item 14 (a) below.
25
<PAGE> 27
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS REPORTS ON FORM
8-K
(a) (1) (2) Financial Statements and Financial Statement Schedule
See "Index to Consolidated Financial Statements and Financial
Statement Schedule" appearing on page F-1.
(3) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
3 Restated Articles of Organization and By-laws (1)
3.1 Amendment dated January 5, 1982 to Restated Articles of
Organization (2)
</TABLE>
26
<PAGE> 28
<TABLE>
<S> <C>
3.2 Amendment dated January 24, 1983 to Restated Articles of
Organization (3)
3.3 Amendment dated January 17, 1984 to Restated Articles of
Organization (4)
3.4 Amendment dated October 20, 1987 to the By-laws (8)
3.5 Amendment dated December 9, 1987 to Restated Articles of
Organization (9)
3.6 Amendment dated October 16, 1989 to the By-laws (11)
3.7 Amendment dated January 24, 1994 to Restated Articles of
Organization (15)
3.8 Amendment dated August 31, 1994 to Restated Articles of
Organization (15)
4 Series B Restricted Stock Purchase Plan (3)
10.1 Research Agreement with The Dow Chemical Company dated May 21,
1980 (1)
10.2 Research Agreement with The Dow Chemical Company dated August
19, 1981 (1)
10.3 1981 Amended Stock Option Plan and Form of Stock Option
Certificate (1)
10.4 Incentive Stock Option Plan and Form of Stock Option
Certificate (1)
10.5 1984 Stock Option Plan and Form of Stock Option Certificate
(5)
10.6 Collaborative Research Incentive Savings Plan (6)
10.7 Amendment dated November 4, 1986 to the Collaborative Research
Incentive Savings Plan dated March 1, 1985 (7)
10.8 Stock Option Agreement with Mr. Lawrence Levy (8)
10.9 Form of Amendment to the 1981 Incentive Stock Option Plan (8)
10.10 Stock Option Agreement with Mr. Mark Friedman (10)
10.11 1988 Stock Option Plan and Form of Stock Option Certificate
(10)
10.12 Stock Option Agreement with Dr. Rothchild (11)
</TABLE>
27
<PAGE> 29
<TABLE>
<S> <C>
10.13 Agreement with Health Sciences Research Institute (Hoken
Kagaku Kenkyojyo) (12)
10.14 1991 Stock Option Plan and Form of Stock Option Certificate
(13)
10.15 Lease dated November 17, 1992 relating to certain property in
Waltham, Massachusetts (14)
10.16 Lease dated June 3, 1993 relating to certain property in
Waltham, Massachusetts (14)
10.17 License Agreement with President and Fellows of Harvard
College (14)
10.18 Agreement with Becton Dickinson and Company (14)
10.19 Employment Agreement with Robert J. Hennessey (14)
10.20 Agreement with Immuno-Cor Inc. dated September 13, 1993 (14)
10.21 Agreement with DIANON Systems, Inc. (14)
10.22 Lease Amendment dated August 1, 1994 relating to certain
property in Waltham, MA (15)
10.23 Consulting Agreement with Dr. Philip Leder (15)
10.24 1993 Stock Option Plan and Form of Stock Option Certificate
(15)
10.25 Stock and Warrant Purchase Agreement among the Company and
certain purchasers named therein dated March 20, 1995 (16)
10.26 Registration Rights Agreement among the Company and certain
purchasers named therein dated March 20, 1995 (16)
10.27 Form of Warrant Certificate issued pursuant to the Stock and
Warrant Purchase Agreement (16)
10.28 Agreement between the Company and Astra Hassle AB dated August
31, 1995. (17)*
10.29 Collaboration and License Agreement between the Company,
Schering Corporation and Schering-Plough Ltd., dated as of
December 6, 1995.(20)*
10.30 Form of director Stock Option Agreement and schedule of
director options granted (18)
10.31 United States government grant from the National Institutes
of Health, National Institute of Arthritis and
Musculoskeletal and Skin Diseases for Cloning the Gene
Responsible for FSH Muscular Dystrophy dated September 30,
1994, as amended. (17)
10.32 United States government grant from the National Center for
Human Genome Research for Genome Sequencing Center dated
August 16, 1994, as amended. (17)
10.33 United States government grant from the National Center for
Human Genome Research for High Resolution Physical Map of
Chromosome 10 dated April 13, 1995, as amended. (17)
10.34 United States government contract from the National
Institute of Neurological Disorders and Stroke, NIH for
Large Scale Automated DNA Sequencing of Human Genes
Involved in Neurological Disorders dated November 30,
1993, as amended. (17)
10.35 Cooperative agreement from the United States Department of
Energy for Microbial Genome Sequencing dated December 21,
1994, as amended. (17)
10.36 Credit Agreement between the Company and Silicon Valley Bank
dated June 1, 1995, as amended. (17)
11.1 Calculation of Shares Used in Determining Net Income (Loss)
Per Share (19)
23. Consent of Arthur Andersen LLP Independent Public Accounts (17)
<FN>
* Confidential treatment requested with respect to a portion of this Exhibit.
</TABLE>
28
<PAGE> 30
FOOTNOTES
(1) Filed as exhibits to the Company's Registration Statement on Form S-1
(No. 2-75230) and incorporated herein by reference.
(2) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ended February 27, 1982 and incorporated herein by reference.
(3) Filed as exhibits to the Company's Quarterly Report on Form 10-Q for
the quarter ended February 26, 1983 and incorporated herein by reference.
(4) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ended February 25, 1984 and incorporated herein by reference.
(5) Filed as exhibits to the Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1984 and incorporated herein by reference.
(6) Filed as exhibits to the Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1985 and incorporated herein by reference.
(7) Filed as exhibits to the Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1986 and incorporated herein by reference.
(8) Filed as exhibits to the Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1987 and incorporated herein by reference.
(9) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ended November 28, 1987 and incorporated herein by reference.
(10) Filed as an exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1988 and incorporated herein by reference.
(11) Filed as an exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1989 and incorporated herein by reference.
(12) Filed as an exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1990 and incorporated herein by reference.
(13) Filed as an exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1992 and incorporated herein by reference.
(14) Filed as an exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1993 and incorporated herein by reference.
29
<PAGE> 31
(15) Filed as an Exhibit of the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1994 and incorporated herein by reference.
(16) Filed as an Exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1995 and incorporated herein by reference.
(17) Filed herewith.
(18) Filed as an Exhibit to the Company Registration Statement on Forms S-8
(File No. 33-61191) and incorporated herein by reference.
(19) Filed as an Exhibit to the Company's amended Annual Report on Form
10-K/A for the fiscal year ended August 31, 1995 and incorporated herein by
reference.
(20) Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ended November 25, 1995 and incorporated herein by reference.
30
<PAGE> 32
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, Genome Therapeutics Corp. has duly caused this amended report
to be signed on its behalf by the undersigned, thereunto duly authorized, on
February 9, 1996.
GENOME THERAPEUTICS CORP.
By /s/ Fenel M. Eloi
-----------------------
Fenel M. Eloi
Vice President and
Chief Financial Officer
31
<PAGE> 33
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants........................................... F-2
Consolidated Balance Sheets as of August 31, 1994 and 1995......................... F-3
Consolidated Statements of Operations for the Year Ended August 31, 1993, 1994 and
1995............................................................................. F-4
Consolidated Statements of Shareholders' Equity for the Year Ended August 31, 1993,
1994 and 1995.................................................................... F-5
Consolidated Statements of Cash Flows for the Year Ended August 31, 1993, 1994 and
1995............................................................................. F-6
Notes to Consolidated Financial Statements......................................... F-7
</TABLE>
F-1
<PAGE> 34
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Genome Therapeutics Corp.:
We have audited the accompanying consolidated balance sheets of Genome
Therapeutics Corp. and subsidiaries (a Massachusetts corporation) as of August
31, 1994 and 1995, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the three years in the period
ended August 31, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the 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 financial statements referred to above present fairly,
in all material respects, the financial position of Genome Therapeutics Corp.
and subsidiaries as of August 31, 1994 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
August 31, 1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 4, 1995
(except with respect to
the matter discussed in
Note 10(b) as to which the
date is December 6, 1995)
F-2
<PAGE> 35
<TABLE>
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
AUGUST 31,
----------------------------
1994 1995
---- ----
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents..................... $ 1,114,162 $ 5,886,184
Marketable securities......................... 3,008,344 2,340,592
Accounts receivable (less allowances for
doubtful accounts of $229,000 in 1994)...... 391,151 360,793
Unbilled costs and fees....................... 229,045 259,005
Prepaid expenses and other current assets..... 22,386 50,140
----------- -----------
Total current assets..................... 4,765,088 8,896,714
----------- -----------
Equipment and Leasehold Improvements, at Cost:
Laboratory and scientific equipment........... 752,482 1,464,987
Leasehold improvements........................ 1,446,236 1,597,069
Office equipment and furniture................ 532,656 903,946
Construction-in-progress...................... 173,186 206,103
----------- -----------
2,904,560 4,172,105
Less accumulated depreciation................. 2,120,146 2,451,632
----------- -----------
784,414 1,720,473
Restricted Cash.................................... 94,674 784,471
Other Assets....................................... 266,506 127,016
----------- -----------
$ 5,910,682 $11,528,674
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable.............................. $ 450,854 $ 409,282
Accrued expenses.............................. 838,595 1,736,569
Deferred contract revenue..................... 37,991 774,048
Current maturities of capital lease
obligations................................. 193,388 478,033
----------- -----------
Total current liabilities................ 1,520,828 3,397,932
----------- -----------
Capital Lease Obligations, Net of Current
Maturities....................................... 165,299 892,239
----------- -----------
Commitments (Note 6)
Shareholders' Equity:
Common stock, $.10 par value--
Authorized--34,375,000 shares
Issued and outstanding--11,778,946 shares at
August 31, 1994, 13,476,135 shares at
August 31, 1995 and 13,703,085 shares at
November 25, 1995........................ 1,177,894 1,347,613
Series B restricted stock, $.10 par value--
Authorized--625,000 shares
Issued and outstanding--57,512 shares....... 5,751 5,751
Additional paid-in capital.................... 38,905,080 41,138,147
Accumulated deficit........................... (35,759,429) (35,174,225)
Deferred compensation......................... (27,775) (1,817)
Series B subscriptions receivable............. (76,966) (76,966)
----------- -----------
Total shareholders' equity............... 4,224,555 7,238,503
----------- -----------
$ 5,910,682 $11,528,674
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE> 36
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------
1993 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
Revenues:
Government research.................. $ 5,021,975 $ 6,077,346 $ 7,014,280
Collaborative research, license fees
and royalties...................... 361,494 314,428 3,923,944
Interest income...................... 173,788 141,584 231,662
Product and service.................. 893,083 85,559 37,217
----------- ----------- -----------
Total revenues..................... 6,450,340 6,618,917 11,207,103
----------- ----------- -----------
Costs and Expenses:
Cost of government research.......... 4,527,595 5,144,071 6,414,148
Research and development............. 422,535 365,208 1,475,601
Selling, general and
administrative..................... 2,801,633 2,175,910 2,729,504
Cost of product and service.......... 1,543,407 12,446 2,646
Loss on sale of diagnostics
business........................... 637,027 -- --
----------- ----------- -----------
Total costs and expenses........... 9,932,197 7,697,635 10,621,899
----------- ----------- -----------
Net income (loss).................. $(3,481,857) $(1,078,718) $ 585,204
=========== =========== ===========
Net Income (Loss) Per Common Share:
Primary.............................. $(0.33) $(0.10) $0.05
Fully diluted........................ $ -- $ -- $0.04
====== ====== =====
Weighted Average Number of Common and
Common Equivalent Shares Outstanding:
Primary.............................. 10,668,628 11,097,224 12,961,734
=========== =========== ===========
Fully diluted........................ -- -- 13,036,741
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE> 37
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
SERIES B
COMMON STOCK RESTRICTED STOCK ADDITIONAL
------------------------ ---------------- PAID-IN ACCUMULATED DEFERRED
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT COMPENSATION
---------- ---------- ------ ------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, August 31, 1992........... 10,664,166 $1,066,416 57,512 $5,751 $37,440,631 $(31,198,854) $ (155,667)
Exercise of stock options........ 29,000 2,900 -- -- 2,900 -- --
Amortization of deferred
compensation................... -- -- -- -- -- -- 71,079
Cancellation of stock options.... -- -- -- -- (30,469) -- 30,469
Net loss......................... -- -- -- -- -- (3,481,857) --
---------- ---------- ------ ------ ----------- ------------ ------------
Balance, August 31, 1993........... 10,693,166 1,069,316 57,512 5,751 37,413,062 (34,680,711) (54,119)
Exercise of stock options........ 84,276 8,428 -- -- 138,779 -- --
Amortization of deferred
compensation................... -- -- -- -- -- -- 26,344
Sale of common stock and
warrants....................... 1,001,504 100,150 -- -- 1,353,239 -- --
Net loss......................... -- -- -- -- -- (1,078,718) --
---------- ---------- ------ ------ ----------- ------------ ------------
Balance, August 31, 1994........... 11,778,946 1,177,894 57,512 5,751 38,905,080 (35,759,429) (27,775)
Exercise of stock options........ 244,166 24,417 -- -- 394,982 -- --
Amortization of deferred
compensation................... -- -- -- -- -- -- 25,958
Sale of common stock and
warrants....................... 1,453,023 145,302 -- -- 1,838,085 -- --
Net loss......................... -- -- -- -- -- 585,204 --
---------- ---------- ------ ------ ----------- ------------ ------------
Balance, August 31, 1995........... 13,476,135 1,347,613 57,512 5,751 41,138,147 (35,174,225) (1,817)
<CAPTION>
SERIES B TOTAL
SUBSCRIPTIONS SHAREHOLDERS'
RECEIVABLE EQUITY
------------- -------------
<S> <C> <C>
Balance, August 31, 1992........... $ (76,966) $ 7,081,311
Exercise of stock options........ -- 5,800
Amortization of deferred
compensation................... -- 71,079
Cancellation of stock options.... -- --
Net loss......................... -- (3,481,857)
------------- -------------
Balance, August 31, 1993........... (76,966) 3,676,333
Exercise of stock options........ -- 147,207
Amortization of deferred
compensation................... -- 26,344
Sale of common stock and
warrants....................... -- 1,453,389
Net loss......................... -- (1,078,718)
------------- -------------
Balance, August 31, 1994........... (76,966) 4,224,555
Exercise of stock options........ -- 419,399
Amortization of deferred
compensation................... -- 25,958
Sale of common stock and
warrants....................... -- 1,983,387
Net loss......................... -- 585,204
------------- -------------
Balance, August 31, 1995........... (76,966) 7,238,503
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE> 38
<TABLE>
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
YEAR ENDED AUGUST 31,
--------------------------------------
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income (loss).............................. $(3,481,857) $(1,078,718) $ 585,204
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities--
Loss on sale of assets....................... 637,027 -- --
Depreciation and amortization................ 325,591 205,889 350,230
Deferred compensation........................ 49,306 26,344 25,958
Changes in assets and liabilities--
Accounts receivable........................ (141,691) 223,233 30,358
Unbilled costs and fees.................... 25,284 (86,281) (29,960)
Prepaid expenses and other current
assets................................... (32,862) 70,727 (27,754)
Accounts payable........................... (127,331) 176,178 124,568
Accrued expenses........................... (197,305) (128,912) 897,974
Deferred contract revenue.................. (308,537) (47,289) 736,057
----------- ----------- ----------
Total adjustments........................ 229,482 439,889 2,107,431
----------- ----------- ----------
Net cash provided by (used in) operating
activities............................... (3,252,375) (638,829) 2,692,635
----------- ----------- ----------
Cash Flows from Investing Activities:
Purchases of marketable securities............. (5,422,374) (4,985,970) (5,332,248)
Proceeds from the sale of marketable
securities................................... 3,400,000 4,000,000 6,000,000
(Increase) decrease in restricted cash......... -- (94,674) (689,797)
Purchases of equipment and leasehold
improvements................................. (158,657) (191,907) (97,016)
(Increase) decrease in other assets............ -- (277,398) 124,687
Payments for net assets acquired............... (268,500) -- --
Proceeds from sale of assets................... 901,297 -- --
----------- ----------- ----------
Net cash provided by (used in) investing
activities............................... (1,548,234) (1,549,949) 5,626
----------- ----------- ----------
Cash Flows from Financing Activities:
Proceeds from sale of common stock and
warrants..................................... -- 1,453,389 1,983,387
Proceeds from exercise of stock options........ 5,800 147,207 419,399
Payments on capital lease obligations.......... (456,399) (190,588) (329,025)
----------- ----------- ----------
Net cash provided by (used in) financing
activities............................... (450,599) 1,410,008 2,073,761
----------- ----------- ----------
Net Increase (Decrease) in Cash and Cash
Equivalents...................................... (5,251,208) (778,770) 4,772,022
Cash and Cash Equivalents, Beginning of Period..... 7,144,140 1,892,932 1,114,162
----------- ----------- ----------
Cash and Cash Equivalents, End of Period........... $ 1,892,932 $ 1,114,162 $5,886,184
========== ========== =========
Supplemental Disclosure of Cash Flow Information:
Interest paid during period.................... $ 44,100 $ 19,482 $ 85,759
========== ========== =========
Supplemental Disclosure of Noncash Investing
Activities:
Property and equipment acquired under capital
leases....................................... $ 318,151 $ 264,379 $1,340,611
========== ========== =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
F-6
<PAGE> 39
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Genome Therapeutics Corp. and Subsidiaries (the Company), is engaged in the
field of genomics -- the discovery and characterization of genes. The Company's
primary activity is genomic research and development.
The accompanying consolidated financial statements reflect the application
of certain accounting policies described in this note and elsewhere in the
accompanying notes to the consolidated financial statements.
(a) Revenue Recognition
Research and contract revenues are derived from government grants and
contract arrangements as well as under collaborative agreements with
pharmaceutical companies. Research revenues are recognized as earned under
government grants, which consist of cost-plus-fixed-fee and fixed-price
contracts. Revenues are recognized under collaborative agreements as earned.
Milestone payments from collaborative research and development arrangements are
recognized when they are achieved. Unbilled costs and fees represent revenue
recognized prior to billing. Deferred contract revenue represents amounts
received prior to revenue recognition. Royalty revenue is recorded as earned.
(b) Equipment and Leasehold Improvements
Equipment and leasehold improvements are depreciated over their estimated
useful lives using the straight-line method. The estimated useful life for
leasehold improvements is the lesser of the term of the lease or the estimated
useful life of the assets. Equipment and all other depreciable assets useful
lives vary from three to ten years.
(c) Net Income (Loss) per Common and Common Equivalent Share
Net income per common and common equivalent share is computed by dividing
net income by the weighted average number of common and common equivalent shares
outstanding during the period using the treasury stock method. Net loss per
share is computed by dividing the net loss by the weighted average number of
common shares outstanding during the period.
(d) Concentration of Credit Risk
Statement of Financial Accounting Standards (SFAS) No. 105, Disclosure of
Information about Financial Instruments with Off-Balance-Sheet Risk and
Financial Instruments with Concentration of Credit Risk, requires disclosure of
any significant off-balance sheet and credit risk concentrations. The Company
has no significant off-balance sheet concentration of credit risk such as
foreign exchange contracts, options contracts or other foreign hedging
arrangements.
F-7
<PAGE> 40
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
The Company had revenues from the following significant customers:
<CAPTION>
NUMBER OF
SIGNIFICANT PERCENTAGE
CUSTOMERS OF TOTAL REVENUES
----------- ------------------
<S> <C> <C>
Year Ended August 31:
1993................................. 1 78%
1994................................. 1 92%
1995................................. 2 31% and 63%
</TABLE>
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make 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.
(f) Reclassifications
The Company has reclassified certain prior year information to conform with
the current year's presentation.
(2) CASH EQUIVALENTS AND MARKETABLE SECURITIES
The Company applies SFAS No. 115, Accounting for Certain Investments in
Debt and Equity Securities. The Company's cash equivalents and marketable
securities are classified as available-for-sale. Cash equivalents are
short-term, highly liquid investments with original maturities of less than
three months. Marketable securities are investment securities with original
maturities of greater than three months. Cash equivalents consist of money
market funds, repurchase agreements and debt securities. Marketable securities
are carried at fair market value which approximates amortized cost, accordingly
unrealized holding gains and losses were immaterial. The Company has not
recorded any realized gains or losses on its marketable securities. Marketable
securities consist of commercial paper with an average maturity of six months.
The Company has $94,674 and $784,471 in restricted cash at August 31, 1994 and
1995 in connection with certain capital lease obligations (see Note 7).
(3) INCOME TAXES
The Company applies SFAS No. 109, Accounting for Income Taxes which
requires the Company to recognize deferred tax assets and liabilities for
expected future tax consequences of events that have been recognized in the
financial statement or tax returns. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities using the enacted tax rates in
effect for the year in which the differences are expected to reverse. SFAS No.
109 requires deferred tax assets and liabilities to be adjusted when the tax
rates or other provisions of the income tax laws change.
At August 31, 1995, the Company had net operating loss and tax credit
carryforwards of approximately $35,007,000 and $1,120,000, respectively,
available to reduce federal taxable income and federal income taxes,
respectively, if any. Net operating loss carryforwards and credits are subject
to review and possible adjustments by the Internal Revenue Service and may be
limited in the event of certain cumulative changes in
F-8
<PAGE> 41
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
the ownership interest of significant shareholders over a three-year period in
excess of 50%. In the year ended August 31, 1995, the Company utilized
approximately $1,100,000 of net operating loss carryforwards to offset taxable
income.
<TABLE>
The net operating loss carryforwards and tax credits expire approximately
as follows:
<CAPTION>
NET RESEARCH INVESTMENT
OPERATING TAX TAX
LOSS CREDIT CREDIT
EXPIRATION DATE CARRYFORWARDS CARRYFORWARDS CARRYFORWARDS
--------------- ------------- ------------- -------------
<S> <C> <C> <C>
1997............................. $ -- $ 80,000 $103,000
1998............................. 6,108,000 208,000 90,000
1999............................. 5,039,000 273,000 143,000
2000............................. 3,829,000 84,000 75,000
2001............................. 4,812,000 24,000 3,000
2002 - 2010...................... 15,219,000 -- 37,000
----------- -------- --------
$35,007,000 $669,000 $451,000
=========== ======== ========
</TABLE>
<TABLE>
The components of the deferred tax assets at the respective balance sheet
dates are as follows:
<CAPTION>
AUGUST 31,
-------------------------------
1994 1995
---- ----
<S> <C> <C>
Net operating loss carryforwards.......... $ 12,878,000 $ 12,428,000
Research and development credits.......... 669,000 669,000
Investment tax credits.................... 414,000 451,000
Other, net................................ 998,000 1,167,000
------------ ------------
14,959,000 14,715,000
Valuation allowance....................... (14,959,000) (14,715,000)
------------ ------------
$ -- $ --
============ ============
</TABLE>
The valuation allowance has been provided due to the uncertainty
surrounding the realization of the deferred tax assets.
(4) OTHER ASSETS
<TABLE>
Other assets consist of the following:
<CAPTION>
AUGUST 31,
---------------------
1994 1995
-------- --------
<S> <C> <C>
Intangible assets, net of
accumulated amortization of
$10,892, $25,695 and $29,396,
respectively...................... $105,525 $ 48,110
Deposits............................ 60,981 78,906
Other............................... 100,000 --
-------- --------
$266,506 $127,016
======== ========
</TABLE>
Intangible assets consist of licenses and patents. Intangible assets are
recorded at cost and are amortized over their expected useful life of five years
using the straight-line method.
F-9
<PAGE> 42
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
(5) ACCRUED EXPENSES
Accrued expenses consist of the following:
<CAPTION>
AUGUST 31,
---------------------
1994 1995
-------- ----------
<S> <C> <C>
Payroll and related expenses........... $330,654 $ 630,290
Severance.............................. -- 326,723
Employee relocation.................... -- 230,468
License and other fees................. 227,391 283,971
All other.............................. 280,550 265,117
-------- ----------
$838,595 $1,736,569
======== =========
</TABLE>
(6) COMMITMENTS
(a) Lease Commitments
At August 31, 1995, the Company has operating leases for office and
laboratory facilities which expire on July 31, 1999. Minimum lease payments
under the leases at August 31, 1995 are as follows:
<TABLE>
<S> <C>
Year Ending August 31,
1996.............................................. $ 613,094
1997.............................................. 619,405
1998.............................................. 567,499
1999.............................................. 534,895
----------
$2,334,893
=========
</TABLE>
Rental expense was approximately $296,000, $208,000, and $411,000, in the
year ended August 31, 1993, 1994 and 1995. Rental expense for the year ended
August 31, 1994 was offset by approximately $100,000 of sublease rental income.
(b) Employment Agreements
The Company has employment agreements with certain executive officers which
provide for bonuses and severance benefits upon termination of employment, as
defined.
(7) CAPITAL LEASE OBLIGATIONS
The Company has various capital lease line arrangements under which it can
finance up to $2,500,000 of certain office and laboratory equipment. These
leases are payable in 36 monthly installments. The interest rate ranges from
prime (8.75% at August 31, 1995) plus 1% to 11.42%. The Company is required to
maintain certain restricted cash balances, as defined (see Note 2). In addition,
the Company is required to maintain certain financial ratios pertaining to
minimum cash balances, tangible net worth, debt to tangible net worth and
maximum loss. The Company has approximately $493,711 available under these
various capital lease agreements at August 31, 1995.
Additionally, in connection with its facilities lease, the Company issued a
$100,000 note payable in September 1994 to its lessor to finance leasehold
improvements. The note bears interest at 9% and is payable in 60 monthly
payments of $2,076.
F-10
<PAGE> 43
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
Capital lease obligations at August 31, 1995 are as follows:
<S> <C>
Year Ending August 31,
1996.................................................... $ 589,644
1997.................................................... 587,276
1998.................................................... 354,272
1999.................................................... 40,135
----------
Total minimum lease payments............................ 1,571,327
Less -- Amount representing interest.................... 201,055
----------
Present value of total minimum lease payments........... 1,370,272
Less -- Current portion................................. 478,033
----------
$ 892,239
=========
</TABLE>
(8) SHAREHOLDERS EQUITY
(a) Private Placement
On March 20, 1995, the Company completed a private placement of 850,000
shares of common stock at $2.43 per share resulting in proceeds of approximately
$2,000,000, net of issuance costs. In connection with the private placement, the
Company issued warrants to purchase 1,020,000 shares of common stock at an
exercise price of $2.43 per share. These warrants were exercised on July 18,
1995 through a cashless exercise and resulted in the net issuance of 603,023
shares of common stock. The net issuance represents the excess fair market value
of the shares purchasable pursuant to the warrants on the date of exercise over
the total exercise price of such warrants.
(b) Series B Restricted Stock
The Company has designated 625,000 shares of common stock as Series B
restricted stock (Series B Stock) and issued 57,512 shares of Series B Stock in
exchange for a subscription receivable. In the event of liquidation, holders of
common stock are entitled to receive, prior to and in preference to any
distribution of the Company's assets to the holders of Series B Stock, the
greater of (a) $5.00 per share or (b) an amount per share equal to 10 times the
amount which, after such distribution, would remain available for distribution
to holders of the Series B Stock. After such preferential distribution, the
remaining assets, if any, of the Company would be distributed ratably to the
holders of common stock and Series B Stock.
(c) Stock Options and Warrants
The Company has granted stock options to key employees and consultants
under its 1988, 1991, and 1993 Stock Option Plans. The purchase price and
vesting schedule applicable to each option grant are determined by the stock
option and compensation committee of the Board of Directors. Under separate
agreements not covered by any plan, the Company has granted a key employee, and
certain directors of the Company options to purchase common stock.
The Company records deferred compensation when stock options are granted at
an exercise price per share which is less than the fair market value on the date
of the grant. Deferred compensation is recorded in an amount equal to the excess
of the fair market value per share over the exercise price times the number of
options granted. Deferred compensation will be recognized as an expense over the
vesting period of the underlying options. Compensation expense included in the
statement of operations was approximately
F-11
<PAGE> 44
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
$71,000, $26,000, and $26,000 for the year ended August 31, 1993, 1994 and
1995, respectively.
<TABLE>
There were 139,650 common shares available for future grants at August 31,
1995. The following is asummary of all stock option activity:
<CAPTION>
YEARS ENDED AUGUST 31,
---------------------------------------------
1993 1994 1995
------------- ------------ ------------
<S> <C> <C> <C>
Options shares--
Granted............................. 1,791,350 970,100 355,275
Exercised........................... (29,000) (84,276) (244,166)
Canceled............................ (157,798) (108,288) (70,624)
------------- ------------ ------------
Outstanding......................... 2,722,166 3,499,702 3,540,187
============ =========== ===========
Price range of outstanding options,
end of period....................... $.20 - $11.94 $.20 - $8.00 $.20 - $8.00
============ =========== ===========
Price range of exercised options
during the period................... $.20 $.88 - $2.94 $.81 - $4.00
============ =========== ===========
</TABLE>
In connection with the sale of common stock in fiscal 1994, the Company
issued three year warrants for the purchase of 30,075 shares of common stock at
$3.09 per share.
(9) INCENTIVE SAVINGS PLAN 401(K)
The Company maintains an incentive savings plan (the Plan) for the benefit
of all employees, as defined. Matching contributions are made to the Plan by the
Company at a rate of 50% for the first 2% of salary and 25% for the next 4% of
salary, limited to the first $50,000 of annual salary. The Company contributed
$36,315, $43,233, and $43,533 to the Plan for the years ended August 31, 1993,
1994 and 1995, respectively.
F-12
<PAGE> 45
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(10) COLLABORATION AGREEMENTS
(a) Astra AB
In August 1995, the Company entered into a collaboration agreement with
Astra Hassle AB (Astra) to develop pharmaceutical, vaccine and diagnostic
products effective against gastrointestinal infections or any other disease
caused by H. pylori. The Company granted Astra exclusive access to the Company's
H. pylori genomic sequence database and exclusive worldwide rights to make, use
and sell products based on the Company's H. pylori technology. The agreement
also provides for a four-year research collaboration to further develop and
annotate the Company's H. pylori genomic sequence database, identify therapeutic
and vaccine targets and develop appropriate biological assays. This research is
being directed by a Joint Management Committee and a Joint Research Committee,
each consisting of representatives from both parties.
Under this agreement, Astra agreed to pay the Company a minimum of
approximately $11 million and, subject to the achievement of certain product
development milestones, up to approximately $22 million (and possibly a greater
amount if more than one product is developed under the agreement) in license
fees, expense allowances, research funding and milestone payments. $500,000 of
such fees is creditable against any future royalties payable to the Company by
Astra under the agreement. Astra is obligated to provide funding for the
research program for a minimum of two and one-half years; Astra may terminate
the research collaboration at any time after the second year on six-months'
notice.
The Company will also be entitled to receive royalties on Astra's sale of
any products (i) protected by the claims of patents licensed exclusively to
Astra by the Company pursuant to the agreement, or (ii) the discovery of which
were enabled in a significant manner by the genomic database licensed to Astra
by the Company. The Company has the right, under certain circumstances, to
convert Astra's license to a nonexclusive license in the event Astra is not
actively pursuing commercialization of the license technology.
In August 1995, the Company received $4,269,000, of which $3,500,000 was
recorded as a nonrefundable license fee and capital allowance which is included
in collaborative research, license fees and royalties on the accompanying
consolidated statement of operations, and $769,000 was recorded as deferred
revenue on the accompanying consolidated balance sheet.
(b) Schering-Plough
In December 1995, the Company entered into a collaboration and license
agreement with Schering Corporation and Schering-Plough Ltd. (collectively
"Schering-Plough") providing for the use by Schering-Plough of the genomic
sequence of a specified pathogen the Company is sequencing to identify new gene
targets for development of antibiotics effective against drug-resistant
infectious organisms. As part of this agreement, the Company granted
Schering-Plough exclusive access to certain of the Company's genomic sequence
databases. The Company also granted Schering-Plough a non-exclusive license to
use the Company's bioinformatics systems for Schering-Plough's internal use in
connection with the genomic databases licensed to Schering-Plough under the
agreement and other genomic databases Schering-Plough develops or acquires. The
Company also agreed to undertake certain research efforts to identify
bacteria-specific genes essential to microbial survival and to develop
biological assays to be used by Schering-Plough in screening natural product and
compound libraries to identify antibiotics with new mechanisms of action.
Under the agreement, Schering-Plough made an up-front payment to the
Company of $3 million. In addition, upon completion of certain development
milestones, Schering-Plough has agreed to pay the Company a minimum of an
additional $10.3 million in research funding and milestone payments. Subject to
the achievement of additional product development milestones and
Schering-Plough's election to extend the research collaboration, Schering-Plough
has agreed to pay the Company up to an additional approximately $40.5 million
(inclusive of the $10.3 million referred to above) in research funding and
milestone payments.
The agreement grants Schering-Plough exclusive worldwide rights to make,
use and sell pharmaceutical and vaccine products based on the genomic sequence
databases licensed to Schering-Plough by the Company and on the technology
developed in the course of the research program. The Company has also granted
Schering-Plough a right of first negotiation if during the term of the
research plan the Company desires to enter into a collaboration with a third
party with respect to the development or sale of any compounds which are
targeted against, as their primary indication, the pathegon that is the
principal subject of the Company's agreement with Schering-Plough. The Company
will be entitled to receive royalties on Schering-Plough's sale of therapeutic
products and vaccines developed using the technology licensed from the Company.
Subject to certain limitations, the Company retained the rights to make, use,
and sell diagnostic products developed based on the Company's genomic database
licensed to Schering-Plough or the technology developed in the course of the
research program.
F-13
<PAGE> 46
GENOME THERAPEUTICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS --(Continued)
(11) LOSS ON SALE OF DIAGNOSTIC TESTING BUSINESS
On June 27, 1993, the Company sold all of the assets of its diagnostic
testing business for $1,000,000. The transaction resulted in a nonrecurring loss
of approximately $637,000.
(12) HARVARD LICENSE AGREEMENT
On November 12, 1993, the Company entered into an agreement with Harvard
College for an exclusive worldwide license for commercial applications of their
patented multiplex sequencing technology. Under this agreement, the Company has
paid a nonrefundable license fee of $100,000, of which $50,000 can be credited
against future royalties. In addition, the Company must pay minimum royalties
ranging from $5,000 in 1995 to $35,000 in 1998. The Company may terminate this
agreement upon 90 day's notice.
F-14
<PAGE> 47
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SCHEDULE
To Genome Therapeutics Corp.:
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statement of Genome Therapeutics Corp.
and subsidiaries as of August 31, 1994 and 1995 and for each of the three years
in the period ended August 31, 1995 included in this Registration Statement and
have issued our report thereon dated October 4, 1995 (except with respect to
the matter discussed in Note 10(b) as to which the date is December 6, 1995).
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in Item 14 is the
responsibility of the Company's management and is presented for the purposes of
complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, fairly states, in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 4, 1995
(except with respect to
the matter discussed in Note 10(b)
as to which the date is December 6, 1995)
S-1
<PAGE> 48
Schedule II
<TABLE>
Genome Therapeutics Corp. and Subsidiaries
Valuation and Qualifying Accounts
For the Year Ended August 31, 1995, 1994 and 1993
Reserves for Doubtful Accounts
<S> <C>
Balance, August 31, 1992 $ 74,390
Additions charged to expense 124,992
Write-off of uncollecticible accounts, net (20,800)
---------
Balance, August 31, 1993 $ 178,582
=========
Additions charged to expense 59,102
Write-off of uncollecticible accounts, net (8,418)
---------
Balance, August 31, 1994 $ 229,266
=========
Additions charged to expense 0
Write-off of uncollecticible accounts, net (229,266)
---------
Balance, August 31, 1995 $ 0
=========
</TABLE>
S-2
<PAGE> 49
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
- ----------- ----------- --------
<S> <C> <C>
10.28 Agreement between the Company and Astra Hassle AB dated August
31, 1995.
10.31 United States government grant from the National Institutes of
Health, National Institute of Arthritis and Musculoskeletal and
Skin Diseases for Cloning the Gene Responsible for FSH Muscular
Dystrophy dated September 30, 1994, as amended.
10.32 United States government grant from the National Center for Human
Genome Research for Genome Sequencing Center dated August 16, 1994,
as amended.
10.33 United States government grant from the National Center for Human
Genome Research for High Resolution Physical Map of Chromosome 10
dated April 13, 1995, as amended.
10.34 United States government contract from the National Institute of
Neurological Disorders and Stroke, NIH for Large Scale Automated
DNA Sequencing of Human Genes Involved in Neurological Disorders
dated November 30, 1993, as amended.
10.35 Cooperative agreement from the United States Department of Energy
for Microbial Genome Sequencing dated December 21, 1994, as
amended.
10.36 Credit Agreement between the Company and Silicon Valley Bank
dated June 1, 1995, as amended.
23 Consent of Arthur Anderson LLP
</TABLE>
<PAGE> 1
* Confidential Treatment Requested
EXHIBIT 10.28
AGREEMENT
Agreement dated as of August 31, 1995 by and between
ASTRA HASSLE AB, Karragatan 5, S-431 83 Molndal, Sweden (hereinafter
referred to as "ASTRA")
and
GENOME THERAPEUTICS CORPORATION, 100 Beaver Street, Waltham, MA 02154 USA
(hereinafter referred to as "GTC").
1. BACKGROUND
1.1 ASTRA is the inventor of, and possesses, patents and other
rights referable to a pharmaceutical speciality with the non
proprietary name OMEPRAZOLE for the treatment of acid related
diseases, such as ulcer. Observations have been made that
there is a connection between ulcer disease and Helicobacter
Spp. ASTRA is engaged in research seeking development of
eradication therapies for Helicobacter spp and is in
possession of certain genomic sequence information related to
Helicobacter SPP.
1.2 GTC is involved in Helicobacter spp research, and has
developed a Helicobacter Data Base and GTC Helicobacter
Technology (as those terms are defined below).
1.3 ASTRA and GTC desire to enter into a collaboration based on
the Helicobacter Data Base of GTC and on GTC Helicobacter
Technology to develop a pharmaceutical product and/or Vaccine
and/or diagnostic product effective against gastrointestinal
infection or any other disease caused by Helicobacter spp. For
the purpose of this collaboration ASTRA and GTC have jointly
agreed upon a research plan, attached hereto as Exhibit 1.
2. DEFINITIONS
2.1 The terms "ASTRA" and "GTC" as used in this Agreement shall
include any corporation or other entity worldwide directly or
indirectly controlled by, controlling, or under common control
with, ASTRA and GTC, respectively, and for such purpose
control shall mean the direct or indirect ownership of at
least fifty percent (50%) of the voting interest in such
corporation or other entity or the power to direct the
management of such corporation or other entity.
<PAGE> 2
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2.2 The term "CPI" as used in this Agreement shall mean the
Consumer Price Index for all Urban Consumers (1982-1984=100)
issued by the Bureau of Labor Statistics of the United States
Department of Labor or its successor index.
2.3 The term "Effective Date" as used in this Agreement shall mean
the date first above written.
2.4 The term "GTC Helicobacter Technology" as used in this
Agreement shall have the meaning set forth in Article 5.
2.5 The term "Helicobacter Data Base" as used in this Agreement
shall mean GTC's Helicobacter Spp DNA sequence data base and
any and all electronic and hard copy data related thereto.
2.6 The terms "Pharmaceutical Product", "Vaccine Product" and
"Diagnostic Product", as used in this Agreement shall have the
meanings set forth in Article 4.5.
2.7 The term "Product" as used in this Agreement shall mean
collectively Pharmaceutical Product, Vaccine Product and
Diagnostic Product or any one or more of them and
Pharmaceutical Product, Vaccine Product and Diagnostic Product
shall each be a "Product Category".
2.8 The term "Research Collaboration" as used in this Agreement
shall mean the collaboration to be performed under the
Research Plan.
2.9 The term "Research Plan" as used in this Agreement shall mean
the research plan attached hereto as Exhibit 1, hereto, as
subsequently amended, improved or modified from time to time.
2.10 The term * as used in this Agreement
shall have the meaning set forth in Article 6.
2.11 The term "Resulting Technology" as used in this Agreement
shall have the meaning set forth in Article 6.
2.12 The term "Software Technology" as used in this Agreement shall
have the meaning set forth in Article 7.
2.13 The term "Vaccine" as used in this Agreement shall mean an
infectious agent or component(s) thereof administered to a
human being or other mammals in order to elicit a protective
or therapeutic specific immune response against an infectious
agent; such agent or component(s) does also include synthetic
or recombinantly produced antigens or epitopes or genetic
material encoding corresponding antigens or epitopes.
2.14 The grant of a license on an exclusive basis means that the
licensor may not use or exploit the licensed technology itself
nor grant a third party such rights.
2
<PAGE> 3
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3. RESEARCH COLLABORATION
3.1 GTC undertakes to use all reasonable efforts to perform the
tasks assigned to it according to the Research Plan.
3.2 For the purpose of the Research Collaboration , the parties
shall establish:
a A JOINT MANAGEMENT COMMITTEE responsible for the
management and coordination of the Research
Collaboration consisting of two representatives of
senior management from each party. The chairman will be
designated by ASTRA from among the four representatives.
Decisions will be taken by majority vote except that in
the case of a deadlock the Chairman shall cast the
deciding vote. Material changes in the Research Plan
shall be subject to the approval of the Joint Management
Committee. In the event the Joint Management Committee
shall approve a change of direction and/or scope of the
Research Collaboration and such change would in the
absence of additional funding have an adverse economic
impact upon GTC, the parties agree to negotiate in good
faith an increase in the funding to be provided
hereunder by ASTRA so as to avoid such adverse economic
impact upon GTC and GTC shall not be required to incur
any additional expense until such agreement is in place.
b A JOINT RESEARCH COMMITTEE responsible for the day to
day activities consisting of three representatives from
each party with the possibility to call in additional
members on an ad hoc basis. In case it is not possible
to reach consensus, the issue will be decided by the
Joint Management Committee.
3.3 During the term of this Agreement, GTC shall not, *
, without ASTRA's prior written
consent given at its own discretion. However, GTC may search
and otherwise access all its databases including Helicobacter
spp and utilize information with respect thereto in its other
research programs provided (i) GTC *
and (ii) *
.
3.4 ASTRA has disclosed to GTC prior to the execution of this
Agreement certain ongoing research collaborations with third
parties involving Helicobacter spp. ASTRA may enter into
further collaborations related to Helicobacter spp with other
parties and GTC is prepared to collaborate with such parties,
reasonably acceptable to GTC, on behalf of ASTRA.
3
<PAGE> 4
* Confidential Treatment Requested
4. REMUNERATION
4.1 As the entire consideration of all services rendered and
rights granted under this Agreement, ASTRA shall pay to GTC
the compensation specified in this Article 4.
4.2 a) A non-refundable license fee of * to be paid
upon the Effective Date of this Agreement in same day
federal funds of which USD$500,000, subject to
indexation as set forth in Artical 4.6 (a), shall be
fully creditable against the royalties payable to GTC
hereunder.
b) A non-accountable non-refundable allowance of *
in reimbursement of capital and other
expenditures incurred, or to be incurred, by GTC in
connection with the Research Collaboration payable upon
the Effective Date of this Agreement in same day federal
funds.
c) A research incentive fee of * to be paid
within thirty (30) days after GTC shall have notified
ASTRA that scientists of GTC engaged in the Research
Collaboration have devoted not less than * man-years to
such research but in no event earlier than *
.
4.3 a) Research support of * per man-year in
reimbursement of scientists of GTC actually engaged in
the Research Collaboration payable in advance of each
quarter to which the same is attributable based upon
reasonable estimates (but after giving effect to any
debit or credit balance at the end of the prior period).
Within thirty (30) days following the end of each
quarter, GTC shall provide ASTRA with a written
statement specifying the scientists performing Research
Collaboration and the time devoted thereto by each of
them during the preceding quarter and a calculation of
the amount due for such quarter and the debit or credit
balance at the end of such quarter. GTC will provide,
and ASTRA will support, a minimum of * scientist man-
years for the first twelve (12) month period following
the Effective Date, a minimum of * scientist man-years
for the ensuing twelve (12) month period and a minimum
of * scientist man-years for the subsequent six (6)
month period. The number of scientist man-years in
excess of the minimum shall be subject to the approval
of ASTRA. The scientific man-years for any period
specified above or subsequently agreed upon, if any,
shall be spread during the period in such manner as may
be reasonably required by the normal course of the
Research Collaboration. It is the expectation of the
parties that approximately * of the scientist
man-years for any such period shall be in relation to
* .
b) ASTRA shall reimburse GTC for each scientist engaged in
the Research Collaboration terminated by GTC for
customary out of pocket severance expense for a period
not exceeding six (6) months incurred by GTC as a result
of any reduction requested by ASTRA in
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<PAGE> 5
* Confidential Treatment Requested
the number of man-years required under this Agreement
provided that ASTRA's responsibility for severance for
each twelve (12) month period following the Effective
Date shall not exceed a number of scientists equal to
the aggregate decrease in the number of scientist
man-years for such year and further provided that ASTRA
shall have no responsibility for the first three
scientists terminated during such year. In order to
avoid scientist being terminated by GTC as aforesaid GTC
shall use all reasonable efforts to find other tasks for
scientists detached from the Research Collaboration.
c) In order to make possible the control of the
calculations and payments provided for in this 4.3, the
records of the scientist performing Research
Collaboration are open to inspection within two (2)
years after the end of each calendar year by an
independent certified public accountant engaged and paid
by ASTRA and to whom GTC shall have no reasonable
objection. Such accountant shall either confirm the
accuracy of the statement by GTC or provide the
necessary correction thereto but he shall not otherwise
disclose any records or other information. In the event
that any such inspection shows an over- reporting and
overpayment GTC shall repay any additional sum that
would not have been payable had GTC reported correctly,
plus interest at the rate of 1.5% per month and, if such
overpayment is in excess of five percent (5%) for any
twelve (12) month period, GTC shall pay the cost of such
examination as well.
4.4 MILESTONE PAYMENTS if and when the following events occur
payable within thirty (30) days after occurrence of the
respective event. However in relation to items a) (i)-(ii)
below ASTRA shall pay the respective amount thirty (30) days
following the receipt by ASTRA of a written statement from GTC
confirming the occurrence of the event, supported by adequate
documents reflecting the results of such events in reasonable
detail.
<TABLE>
<CAPTION>
a) Pharmaceutical Vaccine
Product Product
<S> <C> <C>
*
</TABLE>
5
<PAGE> 6
* Confidential Treatment Requested
<TABLE>
<S> <C> <C>
*
b) Diagnostic Product
*
</TABLE>
6
<PAGE> 7
* Confidential Treatment Requested
<TABLE>
<S> <C> <C>
*
</TABLE>
For the purpose of 4.4 b) *
.
4.5 (a) "PHARMACEUTICAL PRODUCT" shall mean only such
pharmaceutical product (whether related to Helicobacter
Spp or not) as (i) *
described under Article 4.4 a) (i) above or
(ii) satisfies the definition set forth in (d) below.
(b) "VACCINE PRODUCT" shall mean only such Vaccine (whether
related to Helicobacter Spp or not) as (i) *
under Article 4.4 a) (ii)
above or (ii) satisfies the definition set forth in (d)
below. "Therapeutic Vaccine Product" shall mean a
Vaccine Product documented for therapeutic use.
"Prophylactic Vaccine Product" shall mean a Vaccine
Product documented for prophylactic use.
(c) "DIAGNOSTIC PRODUCT" shall mean only such diagnostic
product (whether related to Helicobacter Spp or not) as
(i) * specified in Article
4.4 b) (i)-(iii) or (ii) satisfies the definition set
forth in (d) below.
(d) In addition to the above items (a) - (c) the terms
Pharmaceutical Product, Vaccine Product and Diagnostic
Product shall comprise any product (whether related to
Helicobacter Spp or not) (i) protected by the claims of
(x) a valid product patent of GTC *
where such patent has
been licensed to ASTRA under this Agreement on an
exclusive basis or (y) other patent of GTC covering any
technology licensed to ASTRA under this Agreement *
or (ii) containing
* in the case of a Pharmaceutical
Product or * in the case of a Vaccine Product or
Diagnostic Product *
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<PAGE> 8
* Confidential Treatment Requested
*
The milestone payments set forth in 4.4 a) (i) through (v)
shall be payable only once in each Product Category. The
milestone payments set forth in 4.4 b) (i) through (iii),
shall be payable * . All other milestone payments shall
be payable *
A Product shall be different from another Product if
its mechanism of action is different and/or it is covered by a
different product patent.
4.6 (a) ASTRA shall pay to GTC a royalty on Net Sales of:
(i) each Pharmaceutical Product and each Therapeutic
Vaccine Product sold in the amount of * for
cumulative Net Sales of less than *
and * of cumulative
Net Sales of * or
more, and *
(ii) each Diagnostic Product and Prophylactic Vaccine
Product sold in the amount of * for cumulative
Net Sales of less than *
and * of
cumulative Net Sales of *
* or more.
The above Net Sales amounts shall be cumulative so long
as a royalty is payable hereunder with respect to each
Product. Commencing on the first anniversary of the
Effective Date the above amounts of *
and *
and all amounts payable to GTC
hereunder after the first anniversary of the Effective
Date shall be adjusted annually by multiplying such
amounts by the fraction CPI current / CPI 1995 where CPI
current equals the CPI most recently published prior to
anniversary of the Effective Date in the applicable
year, and CPI 1995 equals the CPI for the month in which
the Effective Date shall occur.
(b) In the event that ASTRA is (i) paying a royalty to a
third party with respect to the sale of a Product *
(ii) *
then Net
Sales of such Product for the purpose of computing
royalties shall be reduced by * provided
that reduction of Net Sales because of payment of a
royalty shall not result in a reduction of the royalty
otherwise payable
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<PAGE> 9
* Confidential Treatment Requested
to GTC in an amount in excess of the royalty to the
third party and further provided that any such reduction
shall continue only so long as such royalty is being
paid.
(c) In the event ASTRA should grant a sublicense for a
Product to a third party, ASTRA shall pay to GTC *
(i) * of payments from such sublicensee
(net of withholding taxes to the extent ASTRA receives
no credit therefor) in the nature of license fees,
milestone payments, royalties or otherwise in
consideration of the sublicense which can be in cash as
well as property (tangible or intangible) and/or
services to the extent it represents the excess over the
then fair market value of the property (tangible or
intangible) and/or services exchanged therefore.
In the event that ASTRA is (x) paying a royalty
to a third party with respect to the sale of a
Product * (y)
* then the
payment to GTC under (i) shall be *
of the payment from such sublicense;
provided that reduction of the amount payable to
GTC because of payment of a royalty shall not
exceed the royalty actually paid to the third
party and further provided that any such
reduction shall continue only so long as such
royalty is being paid.
*
(ii) the royalty amount that would have been
payable hereunder on the Net Sales of such
sublicensee if its sales of the Product had been
sold by ASTRA.
For the purpose of (ii) the Net Sales of a
licensee shall be cumulative with the Net Sales
of ASTRA for the same Product and the royalty
reduction provisions of 4.6(b) shall apply.
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<PAGE> 10
* Confidential Treatment Requested
Payment to GTC shall be made within forty-five (45) days
after receipt by ASTRA of the payment from the
sublicensee to which the same is attributable and
adjustments, if necessary, shall be made when the Net
Sales of the sublicensee have been determined. ASTRA
shall furnish GTC with a complete and accurate copy of
each sublicense-contract regarding technology licensed
hereunder by GTC to ASTRA not less than ten (10) days
after the execution thereof. With respect to each such
sublicense, ASTRA shall furnish to GTC the same reports
that ASTRA receives from such sublicensee regarding any
payment from such sublicensee to ASTRA with respect to
which GTC is entitled to a payment from ASTRA hereunder.
GTC agrees to keep each sublicense-contract and the
related reports confidential and use the same only for
the purpose of verifying the accuracy of payments made
by ASTRA to GTC hereunder. If a sublicensee is
compensating ASTRA in other than cash then the payment
to GTC shall be based upon the then fair market value
thereof.
(d) The term "Net Sales" as used herein shall mean the
actual gross selling prices charged by ASTRA for the
Products in bona fide sales to third parties as per
invoices covering the sales of such Products less only
the deductions taken by ASTRA to determine its net sales
for purposes of the Group Consolidated Statement of
Earnings of Astra AB disseminated to its shareholders
and the public generally.
(e) ASTRA shall for each calendar quarter following the
launch of a Product, no later than sixty (60) days
following each quarter prepare and mail a statement
showing the total Net Sales in respect of which
royalties according to this Article 4. are payable.
Payments of such royalties shall be effected
simultaneously with mailing the statement.
Such statements shall contain at least the following
information: (i) the number of packages of each Product
sold by ASTRA in each country; (ii) the Net Sales and
(iii) the amount of royalty due. Such statement shall be
certified as by an officer of ASTRA. If no royalties are
due to GTC for any reporting period, the written report
shall so state.
(f) Upon GTC's request ASTRA shall for each Product furnish
GTC with a supplement to the statement required in (e)
above with respect to the U.S. and one other country to
be specified by GTC in its notice of request to ASTRA
setting forth each category (eg. freight, insurance,
etc.) of the deductions taken by ASTRA from the actual
gross selling prices charged by ASTRA for the Products
to determine Net Sales to the extent consistent with the
then existing bookkeeping for such country and stating
the total amount of deductions for each such category.
GTC may only make such request once in any twelve month
period. Specification by GTC of a particular country in
one twelve month period shall not preclude the
specification of the same or a different country in
another twelve month period.
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(g) ASTRA's obligation to pay royalty and other
remunerations set out above in this Article 4.6 shall
for each country and each separate Product remain in
force for so long as ASTRA is the holder of a valid
product patent protecting the respective Product or in
case of a Product not protected by a valid product
patent of ASTRA until * following the commercial
launch of the Product in each country.
(h) All payments due hereunder shall be payable in United
States dollars. Conversion of foreign currency to U.S.
dollars shall be made at the conversion rate existing in
the United States (as reported by the Wall Street
Journal) on the last working day of each royalty period.
Such payments shall be without deduction of exchange,
collection or other charges except charges of receiving
bank *
Late payments shall be subject to an
interest charge of one and one half percent (1.5%) per
month.
(i) If transfer to U.S. dollars is subject to administrative
authorization, ASTRA undertakes to file the transfer
application with the competent authorities supported by
all requisite documentation, and to apply its reasonable
efforts to obtain such authorization and effect the
remittance within the period laid down above. ASTRA
further agrees to effect the transfer within thirty (30)
days following the date on which authorization shall
have been granted, provided that ASTRA shall not be
obligated to pay before the date stipulated above.
(j) If for any reason beyond the control of ASTRA the
transfer of payments under this Section 4 are not
effected within the period hereinabove provided or
within such further period of time that GTC may allow,
ASTRA shall settle such payments as soon as the
impediment has ceased to exist.
(k) In order to make possible the control of the
calculations and payments provided for in this 4.6, the
records of sales of Products entitling GTC to royalty
and other payments under this 4.6 are open to inspection
within two (2) years after the end of each calendar
year by an independent certified public accountant
engaged and paid by GTC and to whom ASTRA shall have no
reasonable objection. Such accountant shall either
confirm the accuracy of the statement by ASTRA or
provide the necessary correction thereto but he shall
not otherwise disclose any records or other information.
In the event that any such inspection shows an
under-reporting and underpayment ASTRA shall pay any
additional sum that would have been payable to GTC had
ASTRA reported correctly, plus interest at the rate of
1.5% per month and, if such underpayment is in excess of
five percent (5%) for any twelve (12) month period,
ASTRA shall pay the cost of such examination as well
4.7 ASTRA shall pay to GTC within thirty (30) days following the
* and each subsequent anniversary of the Effective Date
the sum of * as LICENSE MAINTENANCE FEE for the year
of the term of this Agreement except that no such payment shall
be required for any such year in which (a)
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* Confidential Treatment Requested
a milestone payment of at least * is also payable (if
a lesser or no milestone is payable, ASTRA may satisfy this
condition by paying the difference) or (b) ASTRA is supporting
at least * man-years at GTC engaged in the research
under this Agreement. In case termination of this Agreement
shall become effective on a date not being the anniversary of
the Effective Date the above sum of * shall be
pro-rated.
4.8 Except as otherwise specifically provided herein, ASTRA shall
not be obligated to pay any remuneration to, or to absorb any
cost or expenses of, GTC.
5. GTC HELICOBACTER TECHNOLOGY
5.1 GTC hereby grants to ASTRA, and ASTRA accepts, subject to the
terms and conditions hereof, under GTC's patents and other
intellectual property rights from time to time an exclusive
worldwide perpetual, sublicensable license to use and exploit
GTC's existing and future (to the extent not included in the
Resulting Technology with respect to which ASTRA will *
) Helicobacter spp inventions (patentable or
not), products, formulae, processes, techniques, discoveries,
improvement, information, data and knowledge, as amended,
improved or modified from time to time (herein collectively
referred to as "GTC Helicobacter Technology") to develop,
research, manufacture, use, sell and distribute pharmaceutical
products, Vaccines and diagnostic products (whether related to
Helicobacter Spp or not) including, without limitation,
Pharmaceutical Products, Vaccine Products and Diagnostic
Products. The term GTC Helicobacter Technology shall include,
but not be limited to, the Helicobacter Data Base and the
elements described in Exhibit 2 hereto.
6. RESULTING TECHNOLOGY
6.1 * any and all
inventions (patentable or not), products, formulae; processes,
techniques, discoveries, improvements, information, data and
knowledge and any other results conceived, developed or
generated under the Research Collaboration, as exemplified in
Exhibit 3 hereto, (whether related to Helicobacter Spp or not),
and all intellectual property and other rights related thereto
hereinafter collectively referred to as "Resulting Technology".
Although * is "whether related to Helicobacter Spp
or not", the parties acknowledge that GTC's obligations with
respect to the Research Collaboration are limited to *
Helicobacter Spp. Without affecting * to the
Resulting Technology the inventorship of all inventions
included in Resulting Technology shall be determined in
accordance with the patent laws of the United States. *
GTC shall be the owner of * and ASTRA shall
have under GTC's patents and other intellectual property rights
from time to time a non-exclusive * license
(but without the right to grant sublicenses *
) to use and exploit the *
conceived, developed or generated by GTC as a result of the
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research to be performed under this Agreement to develop,
research, manufacture, use, sell and distribute pharmaceutical
products, Vaccines and diagnostic products (whether related to
Helicobacter Spp or not) including, without limitation,
Pharmaceutical Products, Vaccine Products and Diagnostic
Products. *
7. ACCESS TO RESULTING TECHNOLOGY AND GTC HELICOBACTER TECHNOLOGY
7.1 Software and components thereof, either existing or developed,
needed to pursue searches in the Helicobacter Data Base and to
process, interpret or analyze the data therefrom including
reconstruction of gene components is herein collectively
referred to as "Software Technology". Software Technology does
not include any software used in the creation of, as opposed to
access to or analysis, processing and interpretation of the
Helicobacter Data Base. To the extent Software Technology is
proprietary to GTC, ASTRA shall have a non-exclusive,
perpetual, worldwide license (but without the right to grant
sublicenses * ) to use the same
for access to, and analysis, processing and interpretion of,
the Helicobacter Data Base and for no other purpose. The
Software Technology which is not proprietary to GTC and the
Software Technology which is in the public domain is listed in
Exhibit 5 hereto. GTC has *
ASTRA shall
obtain licenses to Software Technology which is not proprietary
to GTC at no expense to GTC.
7.2 Promptly following the Effective Date, GTC shall deliver to
ASTRA electronic and hard copies of the annotated Helicobacter
Data Base as well as an outline of the methodologies and
procedures used to obtain data and for sequence analysis.
Current updates will be furnished to ASTRA periodically not
less than on a monthly basis provided there is information that
requires updating.
7.3 ASTRA will also have direct access to raw sequence data via GTC
and to other work resulting from the collaboration under this
Agreement including, but not limited to, targeted sequencing
data, comparative sequence data, gene mapping data,
representational difference analysis data, structural modelling
data, gene expression and protein expression data, gene
mutation data, molecular genetic methodologies and
technologies, protein purification procedures, and biochemical
and screening assay methodologies.
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7.4 Upon request and from time to time, ASTRA will also have access
to the * conceived, developed or generated
by GTC as a result of the research to be performed under this
Agreement, the GTC Helicobacter Technology and the Resulting
Technology, including, without limitation, (i) samples of all
plasmids/E. coli strains carrying these plasmids which have
been sequenced and used to construct the Helicobacter Data
Base, (ii) provisions of strain which has been sequenced, and
access to other Helicobacter strains in GTC collection and
(iii) all gene libraries, mutants and vectors constructed,
genes subcloned, amplified PCR products, proteins purified
under work described in Exhibit 1 "Research Plan" or other work
resulting from the collaboration.
7.5 To the extent practicable, ASTRA's access as contemplated by
this Article 7 will at all times be via computer network with
24 hours accessibility except for downtime required to maintain
or otherwise service the database. Except for access via
computer network, ASTRA's access will be during normal business
hours and upon reasonable notice granting ASTRA treatment and
priority not less favorable than granted to GTC's other
collaborators.
8. INTELLECTUAL PROPERTY RIGHTS
8.1 Each party agrees to use all reasonable efforts to see to it
that all its employees and other persons engaged by it, are
committed in such a way that the rights to the GTC Helicobacter
Technology, * Software Technology, to the
extent proprietary to GTC, and the Resulting Technology are
secured to the effect described in Articles 5.1 and 6.1.
8.2 The procurement, maintenance, defense and actions for
infringement of patents and other intellectual property rights
related to Resulting Technology and (for so long as ASTRA's
license according to Article 5 is on an exclusive basis) GTC
Helicobacter Technology, excluding * (the
"IP-Rights") are the concern of ASTRA. ASTRA shall handle such
matters at its own cost and discretion subject to Articles 8.3
- 8.4:
8.3 GTC shall at ASTRA's expense cooperate fully in the
preparation, filing, prosecution, maintenance, defense and
actions for infringement of the IP-Rights, executing all
papers and instruments and taking other reasonable measures or
requiring members of GTC to execute such papers and instruments
or to take other reasonable measures so as to enable ASTRA to
accomplish the foregoing, Article 8.2, in its own name in any
country. Each party shall provide to the other prompt notice as
to all substantial matters which come to its attention and
which relates to the preparation, filing, prosecution
maintenance, defense or infringement of the IP-Rights.
8.4 If ASTRA or its sublicensee elects to commence an action for
infringement and GTC is a legally indispensable party to such
action, GTC shall have the right to assign to ASTRA all of
GTC's right, title and interest in each patent which is the
subject of such action. In the event that GTC makes such an
assignment, such assignment shall be irrevocable, and such
action by
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ASTRA on that patent or patents shall thereafter be brought or
continued without GTC as a party. Notwithstanding any such
assignment to ASTRA by GTC and regardless of whether GTC is or
is not an indispensable party, GTC shall cooperate fully with
ASTRA in connection with any such action. In the event that
any patent is assigned to ASTRA by GTC, pursuant to this
paragraph, such assignment shall require ASTRA to continue to
meet its obligations under this Agreement as if the assigned
patent or patent application were still licensed to ASTRA.
8.5 No settlement, or consent judgment of any suit to which GTC is
a party may be entered into without the consent of GTC, which
consent shall not be unreasonably withheld. No consent shall
be required if the relief against GTC is solely monetary and
ASTRA agrees to hold GTC harmless therefrom.
8.6 Recoveries or reimbursements from actions for infringement as
contemplated by this Article 8 shall first be applied to
reimburse ASTRA and GTC for litigation costs. Recoveries or
reimbursements representing lost sales or profits of a Product
shall be shared by ASTRA * and GTC * . Any remaining
recoveries or reimbursements representing infringement of GTC
Helicobacter Technology shall be shared by ASTRA * and GTC
* . Any remaining recoveries or reimbursements representing
infringement of Resulting Technology shall be retained by
ASTRA.
8.7 In the event that a declaratory judgment action alleging
invalidity of any of the GTC Helicobacter Technology shall be
brought against ASTRA or GTC, GTC at its sole option, shall
have the right to intervene at its own expense subject to
ASTRA's right to control the process.
8.8 ASTRA may, at its own discretion, renounce its claims to
certain rights included in the IP-Rights, whereupon ASTRA
shall have no responsibilities or liabilities in relation to
such IP-Rights. ASTRA shall promptly notify GTC of any such
renouncement and GTC shall have the option of acquiring such
IP-Rights without paying any compensation to ASTRA.
9 CONFIDENTIALITY
9.1 Each party hereby agrees and undertakes to hold and maintain
in strict confidence and not disclose to any third party for
any reason any information of a confidential nature about the
other party's or its collaborators research, development, use
manufacture, sale or distribution of products which a party
may learn in connection with the activities contemplated by
this Agreement and not to use such information for other
purposes than performing the Research Collaboration and
pursuing to the terms and conditions of this Agreement.
Furthermore, ASTRA agrees and undertakes (except with regard
to bona fide collaborators bound by obligations of
confidentiality similar to those contained herein) to hold and
maintain in strict confidence and not disclose to any third
party for any reason any information about * .
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The restrictions of confidentiality and use set forth above in
this Article 9.1 shall not apply to information:
a) which at the time of disclosure is in the public
domain;
b) which after disclosure becomes part of the public
domain by publication or otherwise except by breach of
the undertakings hereunder by the receiving party;
c) which the receiving party can establish by competent
proof was in its possession at the time of disclosure
and was not acquired, directly or indirectly, from the
disclosing party;
d) which the receiving party can establish by competent
proof was subsequently developed by the receiving party
without access to information of the disclosing party;
or
e) which the receiving party can establish by competent
proof was lawfully received from a third party without
restriction on confidentiality.
9.2 * GTC agrees and undertakes to
*
pursuing to the terms and
conditions of this Agreement.
9.3 It is understood that ASTRA shall *
if
and when GTC should terminate this Agreement pursuant to
Article 10.2, 10.3 or 10.7 then ASTRA shall *
in accordance with the
rules set out in Article 9.1.
9.4 In order to secure the obligations set forth in Article 9 the
parties agree to exercise every reasonable precaution to
prevent and restrain the unauthorized disclosure and use of
information subject to confidentiality, including restricting
access to such information to such of its employees as are
bound to keep such information confidential and need to have
such access for the purpose of this Agreement.
9.5 The undertakings set forth in this Article 9 shall be valid
during the term of this Agreement and * years
thereafter.
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10. TERM
10.1 (a) This Agreement shall become effective as of the date
first above written and shall, remain in force until
terminated as herein provided. This Agreement shall
terminate automatically when ASTRA cease to be under an
obligation to effect the royalty payments specified in
Article 4.6.
(b) The Research Collaboration shall become effective as of
the date first above written and shall remain in force
for a period of four (4) years, provided that ASTRA
shall have the right to terminate the Research
Collaboration by six (6) months prior written notice to
GTC given at any time after the second anniversary of
the date hereof. Termination of the Research
Collaboration contemplated by this Agreement shall have
no effect on the term of this Agreement.
10.2 In the event ASTRA fails to make payments due hereunder, GTC
shall have the right to terminate this Agreement upon sixty
(60) days written notice specifying such failure and its claim
of right to terminate, unless ASTRA makes such payments plus
interest within the sixty (60) days notice period. If
payments are not so made GTC may immediately terminate this
Agreement.
10.3 In the event that either party shall be in default in the
performance of any of its material obligations under this
Agreement (other than as provided in 10.2 above which shall
take precedence over any other default), and if the default
has not been remedied within ninety (90) days after the date
of notice in writing specifying such default and its claim of
right to terminate, the other may terminate this Agreement by
written notice in addition to any other remedies available to
it by law or equity.
10.4 Notwithstanding Articles 10.2 and 10.3 a party shall not have
the right to terminate this Agreement in the event the other
party has initiated a procedure pursuant to Article 12 to
resolve the dispute for which termination is being sought.
10.5 (a) In the event ASTRA any time following the *
anniversary of the Effective Date upon request by GTC
is unable to reasonably demonstrate that it or its
collaborators are [actively] engaged in research,
development or commercialization of the GTC Helicobacter
Technology or the Resulting Technology, GTC may
terminate this Agreement by written notice with the
consequences elaborated under Article 11.1 . In making
this determination there shall be taken into account the
normal course of such programs conducted with sound and
reasonable business practices and judgment which have
had commercial success.
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(b) Notwithstanding, the diligence required by 10.5 (a)
shall not apply for any year of the term of this
Agreement in which a milestone payment of at least
* is also payable (if a lesser or no milestone is
payable, ASTRA may satisfy this condition by paying the
difference or all, as the case may be) or ASTRA is
supporting at least * man-years at GTC engaged
in the research under this Agreement.
(c) In the event ASTRA any time following the *
anniversary of the Effective Date upon request by GTC
is unable to reasonably demonstrate that it or its
collaborators are actively engaged in research,
development or commercialization of the GTC
Helicobacter Technology or the Resulting Technology in
Pharmaceutical Products or Vaccine Products, GTC may
terminate this Agreement by written notice, with the
consequences elaborated under Article 11.1. In making
this determination there shall be taken into account
the normal course of such programs conducted with sound
and reasonable business practices and judgment which
have had commercial success.
(d) In the event ASTRA any time following the *
anniversary of the Effective Date upon request by GTC
is unable to reasonably demonstrate that it or its
collaborators are actively engaged in research,
development or commercialization of the GTC
Helicobacter Technology or the Resulting Technology in
Diagnostic Products, GTC may convert the licenses
granted to ASTRA under this Agreement into
non-exclusive licenses with respect to diagnostic
products by written notice, with the consequences
elaborated under Article 11.2. In making this
determination there shall be taken into account the
normal course of such programs conducted with sound and
reasonable business practices and judgment which have
had commercial success.
(e) Notwithstanding, the diligence required by Article 10.5
(c) shall not apply for any year of the term of this
Agreement in which milestone payments of at least
* are also payable (if a lesser or no
milestone is payable, ASTRA may satisfy this condition
by paying the difference or all, as the case may be).
(f) Notwithstanding, the diligence required by 10.5 (d)
shall not apply for any year of the term of this
Agreement in which a milestone payment of at least
* is also payable (if a lesser or no
milestone is payable, ASTRA may satisfy this condition
by paying the difference or all, as the case may be) or
ASTRA is supporting at least * man-years at GTC
engaged in the research under this Agreement.
10.6 ASTRA may, at its own discretion, terminate this Agreement by
* prior written notice to GTC given at any time
after the sixth anniversary of the Effective Date.
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10.7 In the event that either party shall become insolvent, shall
make an assignment for the benefit of creditors, or shall have
a petition in bankruptcy filed for or against it, the other
shall have the right to terminate this entire Agreement
immediately upon giving such party written notice of such
termination.
11. CONSEQUENCES OF TERMINATION
11.1 In the event this Agreement is terminated pursuant to Article
10.1 (a), 10.5 (a) or (c) or 10.6
(a) ASTRA s exclusive license of the GTC Helicobacter
Technology contemplated by Article 5 will be converted
into a non-exclusive license all other term and
conditions remaining unchanged.
(b) With respect to IP-Rights included in the Resulting
Technology, (i) ownership of all patents invented
solely by GTC shall be assigned to GTC and GTC shall be
deemed to have granted ASTRA a non-exclusive license
thereto on the same terms and conditions as with regard
to the GTC Helicobacter Technology, and (ii) ownership
of all patents invented solely by ASTRA or jointly with
GTC shall * and, except for IP-Rights
representing ASTRA's proprietary interest in a Product,
*
. Invented solely by a party means not
invented jointly with the other party or a collaborator
of the other party.
(c) ASTRA's non-exclusive license of the *
conceived, developed or generated by GTC
as a result of the research to be performed under this
Agreement contemplated by Article 6 will remain
unchanged.
(d) ASTRA's non-exclusive license of the Software
Technology which is proprietary to GTC contemplated by
Article 7 will remain unchanged.
(e) Notwithstanding the above, in the event this Agreement
is terminated pursuant to Article 10.5 (c) and ASTRA or
its collaborators are engaged in research, development
or commercialization of the GTC Helicobacter Technology
or Resulting Technology in Diagnostic Product, ASTRA's
exclusive license of the GTC Helicobacter Technology,
* and Software Technology shall
remain unchanged as far as concerns diagnostic products
and IP-Rights included in the Resulting Technology
relating to diagnostic products shall remain with ASTRA
and being subject to no right of GTC.
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11.2 In the event GTC should convert ASTRA's exclusive license
under this Agreement with respect to diagnostic products into
a non-exclusive license pursuant to Article 10.5 (d) by reason
of ASTRA being unable to reasonably demonstrate that it or its
collaborators are actively engaged in research, development or
commercialization of the GTC Helicobacter Technology or the
Resulting Technology with respect to Diagnostic Products, then
this Agreement shall nevertheless remain in effect in
accordance with the terms hereof except that ASTRA shall no
longer have an exclusive license under the GTC Helicobacter
Technology, Software Technology which is proprietary to GTC or
the * conceived, developed or generated by
GTC as a result of the research to be performed under this
Agreement with respect to diagnostic products and *
under the Resulting Technology.
11.3 The * under 11.1 (b)(ii) and 11.2
above shall not apply to Resulting Technology arising out of
BONA FIDE collaborations by * with third parties if and to
the extent * by
undertakings to third parties resulting from such
collaboration and not primarily for the purpose of *
.
11.4 If this Agreement is terminated by GTC pursuant to Articles
10.2 , 10.3 or 10.7 and without limiting any remedies which
GTC may have at law or in equity by reason of such
termination:
(a) the license of the GTC Helicobacter Technology, the
* conceived, developed or generated
by GTC as a result of the research to be performed
under this Agreement and the Software Technology which
is proprietary to GTC will terminate and ASTRA will
have no license with respect thereto
(b) GTC will be the owner of all patents and IP-Rights
included in the Resulting Technology whether or not
invented by GTC and ASTRA will have no license with
respect thereto, and
(c) except for the technology covered by such patents and
IP-Rights with respect to which GTC will thereupon have
exclusive rights, *
.
11.5 In the event this Agreement is terminated by ASTRA pursuant to
Article 10.3 or 10.7 and without limiting any remedies which
ASTRA may have at law or in equity by reason of such
termination:
a) GTC shall be deemed to have assigned to ASTRA all its
rights, titles and interest in and to the GTC
Helicobacter Technology, and
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b) ASTRA will * the
Resulting Technology.
c) GTC shall be deemed to have granted to ASTRA in
perpetuity, a non-exclusive worldwide, sublicensable,
royalty free, license under the *
conceived, developed or generated by GTC as a result of
the research to be performed under this Agreement and
Software Technology proprietary to GTC.
11.6 Upon termination, each party undertakes to execute all
documents and to take all reasonable actions necessary or
advisable to carry out the foregoing and to procure its
employees and other persons engaged by it to do so.
11.7 The obligation of ASTRA to pay royalties and milestones
hereunder shall survive termination except for termination by
ASTRA pursuant to Articles 10.1, 10.3 and 10.7. Termination
shall not affect financial obligations hereunder accruing
prior thereto.
12. GOVERNING LAW AND ARBITRATION
12.1 This Agreement shall be governed and interpreted in accordance
with the law of the Commonwealth of Massachusetts applicable
to agreements executed and to be performed therein.
12.2 Subject to the limitation stated in the final sentence of this
section, any dispute, controversy or claim arising out of or
in connection with this Agreement, or the breach, termination
or invalidity thereof, shall be exclusively settled under the
then rules of Conciliation and Arbitration of the
International Chamber of Commerce by three arbitrators
appointed in accordance with the said Rules. The demand for
arbitration shall be filed within 180 days after the
controversy or claim has arisen. Such arbitration shall be
held in London, England. The award through arbitration shall
be final and binding. Each party may enter any such award in
a court having jurisdiction or may make application to such
court for judicial acceptance of the award and an order of
enforcement, as the case may be. Notwithstanding the
foregoing, either party may, without recourse to arbitration,
assert against the other party a third-party claim or
cross-claim in any action brought by a third party, to which
the subject matter of this Agreement may be relevant.
13 WARRANTIES AND REPRESENTATIONS
13.1 Each party hereby represents and warrants to the other as
follows:
(a) It is a corporation duly organized, validity existing
and is in good standing under the laws of the
jurisdiction of its incorporation, is qualified to do
business and is in good standing as a foreign
corporation in each jurisdiction in which the conduct
of its business or the ownership of its properties
requires such qualification and has all
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requisite power and authority, corporate or otherwise,
to conduct its business as now being conducted, to own,
lease and operate its properties and to execute,
deliver and perform this Agreement.
(b) The execution, delivery and performance by it of this
Agreement (including the grant of the rights and
licenses referable to GTC Helicobacter Technology and
* conceived, developed or generated
by GTC as a result of the research to be performed
under this Agreement and Software Technology which is
proprietary to GTC ) has been duly authorized by all
necessary corporate action and do not and will not
(i) require any consent or approval of its
stockholders,
(ii) violate any provision of any law, rule,
regulation, order, writ, judgment, injunction,
decree, determination or award presently in
effect having applicability to it or any
provision of its charter or by-laws, or
(iii) result in a breach or constitute a default
under any agreement, mortgage, lease, license,
permit, patent or other instrument or obligation
to which it is a party or by which it or its
assets may be bound or affected.
(c) No authorization, consent, approval, license, exemption
of, or filing or registration with, any court or
governmental authority or regulatory body is required
for the due execution, delivery or performance by it of
this Agreement (including the grant of the rights and
licenses by GTC referable to GTC Helicobacter
Technology and * conceived,
developed or generated by GTC as a result of the
research to be performed under this Agreement and
Software Technology which is proprietary to GTC)
(d) This Agreement is a legal, valid and binding obligation
of such party, enforceable against it in accordance
with its terms and conditions. It is not under any
obligation to any person, contractual or otherwise,
that is conflicting or inconsistent in any respect with
the terms of this Agreement (including the grant of the
rights and licenses by GTC referable to GTC
Helicobacter Technology and * and
Software Technology which is proprietary to GTC) or
that would impede the diligent and complete fulfillment
of its obligations hereunder.
(e) It is not debarred or suspended from receiving
contracts from the United States, or Swedish government
or other governmental authority or agency.
(f) Each party has disclosed to the other in good faith any
and all material information relevant to the subject
matter of this Agreement to such party's ability to
observe and perform its obligations hereunder, and each
party convenants on and after the Effective Date to
provide to the
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other such additional material information which
affects the subject matter of this Agreement or the
ability of such party to observe and perform its
obligations hereunder.
13.2 GTC represents and warrants to ASTRA that, to the best of the
information, knowledge and belief of GTC's officers:
(a) the GTC Helicobacter Technology is free of any liens,
encumbrances, restrictions and other legal or
equitable claims of any kind or nature,
(b) GTC has the right to grant the license of GTC
Helicobacter Technology and, to the extent proprietary
to GTC, Software Technology,
(c) GTC has not granted any license or sublicense or other
rights to the GTC Helicobacter Technology and has not
disclosed such technology or any part thereof to any
third parties except as listed in EXHIBIT 6 hereto
under obligations of confidentiality,
(d) Without prejudice to the generality of the forgoing,
* has been used for the development of
the GTC Helicobacter Technology and GTC is under no
obligation to share or disclose this technology or any
part thereof with any third party nor will ASTRA be
under any such obligation and,
(e) EXHIBIT 5 hereto contains a complete and correct
specification of all Software Technology which is not
proprietary to GTC and, when ASTRA has *
ASTRA will, subject to the terms and conditions of *
be in a position to utilize the software * to the
same extent that GTC utilizes such software to fully
enjoy all rights conferred upon it under this Agreement
including but not limited to, accessing analyzing,
processing and interpretion of the Helicobacter Data
Base * the software currently being used by GTC
except * and except that GTC
shall have no liability to ASTRA by reason of the
breach of this representation except to the extent
that ASTRA's damage by reason thereof shall exceed
* in the aggregate, and
(f) Subject only to ASTRA * Exhibit 5
hereto, there exists no circumstances relating to any
claim, right or demand which in the reasonable
judgment of GTC could adversely affect the enjoyment,
use or exploitation of the rights and licenses granted
to ASTRA under this Agreement in accordance with the
terms and provisions set forth herein excluding
circumstances which are generally known and excluding
circumstance which are known by either Astra Hassle
AB's officers or Astra Research Center
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* Inc' officers, including *
or which should be known by the officers of a major
pharmaceutical company and excluding circumstances the
effect of which is immaterial to ASTRA. GTC undertakes
not to knowingly contribute in any respect to the
creation of any such claim, right or demand excluding
any such contribution the effect of which is
immaterial to ASTRA.
The foregoing representations in 13.2 shall not survive
termination of this Agreement if terminated by GTC
pursuant to 10.2, 10.3 and 10.7.
14. MISCELLANEOUS
14.1 The parties agree to comply with all applicable laws and
regulations. In particular, it is understood and acknowledged
that the transfer of certain commodities and technical data is
subject to United States laws and regulations controlling the
export of such commodities and technical data, including all
Export Administration Regulations of the United States
Department of Commerce. These laws and regulations, among
other things, prohibit or require a license for the export of
certain types of technical data to certain specified
countries. ASTRA hereby agrees and gives written assurance
that it will comply with all United States laws and
regulations controlling the export of commodities and
technical data, that it will be solely responsible for any
violation of such by ASTRA or sublicensees, and that it will
defend and hold GTC harmless in the event of any legal action
of any nature occasioned by such violation.
14.2 EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT GTC EXPRESSLY
DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES
NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE OF THE GTC HELICOBACTER TECHNOLOGY,
RESULTING TECHNOLOGY, * OR SOFTWARE
TECHNOLOGY.
14.3 GTC acknowledges that ASTRA, in addition to the Research
Collaboration, has, and will continue individually, and
together with third parties, the research, development,
manufacture, and sale of pharmaceutical products, vaccine
products, and diagnostic products against i.a.
gastrointestinal infection or other disease caused by
Helicobacter Spp which
(i) may *
(ii) may * and
(iii) for which *
pursuant to this Agreement.
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GTC further acknowledges and agrees that GTC will be entitled
to milestone payments and Net Sales royalty only with respect
to such Products as are defined as Pharmaceutical Products,
Vaccine Products and Diagnostic Products hereunder.
Neither party makes any representation or warranty to the
other as to whether or not a Product will be developed under
this Agreement.
14.4 (a) ASTRA shall indemnify, defend and hold harmless GTC and
its current or former directors, governing board
members, trustees, officers, faculty, medical and
professional staff, employees, students and agents and
their respective successors, heirs and assigns (the
"Indemnities"), against any liability, damage, loss or
expenses (including reasonable attorneys' fees and
expenses of litigation) incurred by or imposed upon the
Indemnities or any one of them in connection with any
claims, suits, actions, demands or judgments arising
out of any theory of product liability (including, but
not limited to actions in the form of tort, warranty,
or strict liability) concerning any product, process or
service made, used or sold pursuant to any right or
license granted under this Agreement provided, however
that the Indemnitee gives reasonable notice to ASTRA of
any such claim or action, tender the defense of such
claim or action to ASTRA and assists ASTRA, at ASTRA s
expense, in defending such claim or action and does not
compromise or settle such claim or action without ASTRA
s prior written consent, provided, however, that ASTRA
s indemnification of the Indemnitee hereunder shall not
extend to any cost, claim, suit, expense or damage
which arises or results from negligence or intentional
misconduct of the Indemnitee, or any third party for
whom GTC is responsible.
(b) ASTRA agrees, at its own expense, to provide attorneys
reasonably acceptable to GTC to defend against any
actions brought or filed against any party indemnified
hereunder with respect to the subject of indemnity
contained herein, whether or not such actions are
rightfully brought.
14.5 This Agreement is nonassignable and any purported assignment
hereof will be null and void without the prior written consent
of the other except that either party may assign this
Agreement to a transferee of all or substantially all of the
business to which this Agreement relates.
14.6 Written notices required to be given under this Agreement
shall be addressed as follows:
If to GTC:
GENOME THERAPEUTICS CORPORATION
100 Beaver Street
Waltham, MA 02154
Attention: Vice President, Business Development
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If to ASTRA:
ASTRA RESEARCH CENTER BOSTON INC
------------------------------
------------------------------
------------------------------
Attention: Hans G. Nilsson, Ph.D.
or such other address as either party may request in writing.
14.7 Should a court of competent jurisdiction later consider any
provision of this Agreement to be invalid, illegal, or
unenforceable, it shall be considered severed from this
Agreement. All other provisions, rights and obligations shall
continue without regard to the severed provision, provided
that the remaining provisions of this Agreement are in
accordance with the intention of the parties.
14.8 During the term of the research collaboration contemplated by
this Agreement and for a period of * thereafter
ASTRA HASSLE AB, including its Massachusetts research group,
and GTC will not, directly or indirectly solicit or encourage
any employee of the other party involved in the Research
Collaboration to leave the employment of the other party.
14.9 GTC acknowledges that it is GTC's responsibility to attract
and retain personnel qualified to perform its obligations
under this Agreement and that such obligation is an essential
part of this Agreement. In particular, during the term of the
Research Collaboration GTC will use all reasonable efforts to
*
14.10 All press or other announcements which may be made or sent out
by ASTRA or GTC in respect of this Agreement or the
collaboration contemplated thereby shall *
. Exempted from the above are
announcements which one party is required to make under the
rules of the relevant stock exchanges or applicable laws and
regulations in which case the one party shall consult with the
other party if time permits and reasonably observe the
comments of the other party given as soon as possible. The
obligation to consult shall not apply to disclosures in
respect of this Agreement or the collaboration contemplated
thereby required in reports required to be filed with
governmental authorities or submitted to shareholders provided
that such disclosure substantially is in relation to
information which have previously been announced after
consultation with the other party.
26
<PAGE> 27
* Confidential Treatment Requested
14.11 Nothing in this Agreement is intended or shall be deemed to
constitute a partnership, agency, employer, employee or joint
venture relationship between the parties. Neither party shall
incur any debts or make any commitments for the other.
14.12 No right, express or implied, is granted by this Agreement to
use in any manner any trade name or trademark of GTC or ASTRA
in connection with the performance of this Agreement or the
exploitation of any license granted hereunder or otherwise;
each party may make any legally required reference to the
other in connection with such manufacture or sale of Product.
14.13 This Agreement, including the Exhibits attached hereto (which
shall form an integral part of this Agreement), constitutes
and contains the entire understanding and agreement of the
parties, and cancels and supersedes any and all prior
negotiations, correspondence and understandings and
agreements, whether verbal or written, between the parties
respecting the subject matter hereof. No waiver, modification
or amendment of any provision of this Agreement shall be
valid or effective unless made in writing and signed by a duly
authorized officer of each of the parties.
--------------------------------------
In witness whereof, the parties hereto have executed this Agreement in two (2)
copies on the date first above written.
ASTRA HASSLE AB GENOME THERAPEUTICS
CORPORATION
By: /s/ Hakan Mogren By: /s/ Robert J. Hennessey
----------------------- ---------------------------
Name: Hakan Mogren Name: Robert J. Hennessey
Title: Group Chief Title: Chairman,
Executive Officer Chief Executive Officer
27
<PAGE> 28
* Confidential Treatment Requested
EXHIBIT 1
"RESEARCH PLAN"
I. DATABASE DEVELOPMENT AND ANNOTATION
*
II. IDENTIFICATION OF THERAPEUTIC AND VACCINE TARGETS
*
<PAGE> 29
* Confidential Treatment Requested
*
<PAGE> 30
* Confidential Treatment Requested
*
<PAGE> 31
* Confidential Treatment Requested
*
III. ANALYSIS OF GENETIC DIVERSITY
*
<PAGE> 32
* Confidential Treatment Requested
*
IV. DEVELOPMENT OF BIOASSAYS
*
<PAGE> 33
* Confidential Treatment Requested
*
<PAGE> 34
* Confidential Treatment Requested
EXHIBIT 2
GTC Helicobacter Technology
*
<PAGE> 35
* Confidential Treatment Requested
*
<PAGE> 36
* Confidential Treatment Requested
*
<PAGE> 37
* Confidential Treatment Requested
*
<PAGE> 38
* Confidential Treatment Requested
EXHIBIT 3
Resulting Technology
Resulting Technology includes:
*
<PAGE> 39
* Confidential Treatment Requested
EXHIBIT 4
*
includes: *
1) *
2) *
<PAGE> 40
* Confidential Treatment Requested
EXHIBIT 5
Software Technology
NON-PROPRIETARY
*
*
*
*
PUBLIC DOMAIN:
* homology searching; part of
*
* database searching
* hypertext browser
* finding
<PAGE> 41
* Confidential Treatment Requested
EXHIBIT 5 -cont-
Software Technology
Copies of Agreements
[ * ]
<PAGE> 42
* Confidential Treatment Requested
EXHIBIT 6
Third Party Disclosures under Confidential Disclosure Agreements
GTC Consultants
*
*
Disclosure related to patent applications
U.S. Patent and Trademark Office
*
Third Party Due Diligence*
*
*
*Persons retained by ASTRA to assist in scientific due diligence
<PAGE> 1
EXHIBIT 10.31
<PAGE> 2
Exhibit 10.31
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
National Institutes of Health
Natl. Inst. of Arthritis and Musculoskeletal
and Skin Diseases
NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation/Regulation)
42 USC 241 42 CFR 52
RESEARCH
1. DATE ISSUED (Mo./Day/Yr.): 09/30/94
2. CFDA NO.: 93.846
3. SUPERSEDES AWARD NOTICE dated __________ except that any additions or
restrictions previously imposed remain in effect unless specifically
rescinded.
4. GRANT NO.: 1 R01 AR41450-01A2
Formerly:
5. ADMINISTRATIVE CODES: 2
6. PROJECT PERIOD Mo./Day/Yr.: From 09/30/94 Through 08/31/97
7. BUDGET PERIOD Mo./Day/Yr.: From 09/30/94 Through 08/31/95
8. TITLE OF PROJECT (OR PROGRAM) (Limit to 56 spaces): Cloning the gene
responsible for FSH Muscular Dystrophy MEDB
9. GRANTEE NAME AND ADDRESS:
Collaborative Research, Inc.
1365 Main Street
Waltham, MA 02154
10. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR) (LAST NAME
FIRST AND ADDRESS):
WEIFFENBACH, BARBARA PHD
Collaborative Research Inc.
1365 Main Street
Waltham, MA 02154
<PAGE> 3
11. APPROVED BUDGET (Excludes PHS Direct Assistance)
I PHS Grant Funds Only
_____
I
_____
<TABLE>
<CAPTION>
II Total project costs including grant funds and all
other financial participation
(SELECT ONE AND PLACE NUMERAL IN BOX.)
<S> <C> <C>
a. Salaries and Wages . . . . . . . . . . . . . . . . . . . . . . . $103,470
b. Fringe Benefits. . . . . . . . . . . . . . . . . . . . . . . . . $ 35,181
c. Total Personnel Costs . . . . . . . . . . . . . . . . . . . $138,651
d. Consultant Costs . . . . . . . . . . . . . . . . . . . . . . . . 0
e. Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
f. Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
g. Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
h. Patient Care--Inpatient. . . . . . . . . . . . . . . . . . . . . 0
i. --Outpatient. . . . . . . . . . . . . . . . . . . . 0
j. Alterations and Renovations. . . . . . . . . . . . . . . . . . . 0
k. Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,750
l. Consortium/Contractual Costs . . . . . . . . . . . . . . . . . . 0
m. Trainee Related Expenses . . . . . . . . . . . . . . . . . . . .
n. Trainee Stipends . . . . . . . . . . . . . . . . . . . . . . . . 0
o. Trainee Tuition and Fees . . . . . . . . . . . . . . . . . . . . 0
p. Trainee Travel . . . . . . . . . . . . . . . . . . . . . . . . . 0
q. TOTAL DIRECT COSTS [ARROW] . . . . . . . . . . . . . . . . $171,601
r. INDIRECT COSTS (Rate* % of S&W/TADC) . . . . . . . . . . . . . $154,441
s. TOTAL APPROVED BUDGET. . . . . . . . . . . . . . . . . . . . . . $326,042
t. SBIR Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0
u. Federal Share. . . . . . . . . . . . . . . . . . . . . . . . . . $326,042
v. Non-Federal Share. . . . . . . . . . . . . . . . . . . . . . . . $
</TABLE>
<TABLE>
<CAPTION>
12. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
<S> <C> <C>
a. Amount of PHS Financial Assistance (from Item 11.u.) . . . . . . $326,042
b. Less Unobligated Balance From Prior Budge Periods. . . . . . . . $0
c. Less Cumulative Prior Award(s) This Budget Period. . . . . . . . $0
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION . . . . . . . . . . . $326,042
</TABLE>
<TABLE>
13. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT):
<CAPTION>
- -----------------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
a. 02 178,465 d.
- -----------------------------------------------------------------------------------
b. 03 185,604 e.
- -----------------------------------------------------------------------------------
c. f.
- -----------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 4
14. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH):
a. Amount of PHS Direct Assistance. . . . . . . . . . . . $
b. Less Unobligated Balance From Prior Budget Periods . . $
c. Less Cumulative Prior Award(s) This Budget Period. . . $
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION. . . . . . . . $
15. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F, OR 45 CFR 92.25,
SHALL BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES: (Select
One and Place LETTER in box.)
a. DEDUCTION
b. ADDITIONAL COSTS ---
c. MATCHING B
d. OTHER RESEARCH (Add/Deduct Option) ---
e. OTHER (See REMARKS)
16. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO, AND AS APPROVED BY,
THE PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND
CONDITIONS INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE FOLLOWING:
a. The grant program legislation cited above.
b. The grant program regulation cited above.
c. This award notice including terms and conditions, if any,
noted below under REMARKS.
d. PHS Grants Policy Statement including addenda in effect
as of the beginning date of the budget period.
e. 45 CFR part 74 or 45 CFR Part 92 as applicable.
IN THE EVENT THERE ARE CONFLICTING OR OTHERWISE INCONSISTENT POLICIES
APPLICABLE TO THE GRANT, THE ABOVE ORDER OF PRECEDENCE SHALL PREVAIL.
ACCEPTANCE OF THE GRANT TERMS AND CONDITIONS IS ACKNOWLEDGED BY THE
GRANTEE WHEN FUNDS ARE DRAWN OR OTHERWISE OBTAINED FROM THE GRANT PAYMENT
SYSTEM.
- --------------------------------------------------------------------------------
REMARKS: (Other Terms and Conditions Attached -- /X/ Yes / / No)
Grant Specialist: G. Carol Fitzpatrick (301) 594-9973
Program Official: Richard W. Lymn, Ph.D. (301) 594-9959
* Base X Rate ($171,601 x 90.00)
This Grant is included under expanded authorities.
- --------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)
/S/ Mara H. DeKemper
(Name-Typed/Print) (Title)
Mrs. Mara H. Dekemper Grants Management Officer
17. OBJ. CLASS: 41.4A
18. CRS - EIN: 1042297484A1
3
<PAGE> 5
<TABLE>
19. LIST NO.:
<CAPTION>
- --------------------------------------------------------------------------------------------
FY-CAN DOCUMENT NO. ADMINISTRATIVE AMT. ACTION FIN. AMT. ACTION DIR.
CODE ASST. ASST.
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
20.a. 94 8425014 b. R1AR41450A c. d. e.
21.a. b. c. d. e.
22.a. b. c. d. e.
- -------------------------------------------------------------------------------------------
PHS-5152-5 (Rev. 7/92): 940927 1409 (Note: See reverse for payment information.) KC
</TABLE>
4
<PAGE> 6
FOOTNOTES
PAGE 2
1 RO1 AR41450-01A2
TERMS AND CONDITIONS
o PURSUANT TO THE NIH REVITALIZATION ACT (P.L. 103-43, JUNE 10, 1993),
SECTION 2004, WHEN PURCHASING EQUIPMENT OR PRODUCTS UNDER THIS ASSISTANCE
AWARD, THE RECIPIENT SHOULD, WHENEVER POSSIBLE, PURCHASE ONLY
AMERICAN-MADE ITEMS.
-5-
<PAGE> 7
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
National Institutes of Health
Natl. Inst. of Arthritis and Musculoskeletal
and Skin Diseases
NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation/Regulation)
42 USC 241 42 CFR 52
RESEARCH
REVISED
1. DATE ISSUED (Mo./Day/Yr.): 01/24/95
2. CFDA NO.: 93.846
3. SUPERSEDES AWARD NOTICE dated 09/30/94 except that any additions or
restrictions previously imposed remain in effect unless specifically
rescinded.
4. GRANT NO.: 1 R01 AR41450-01A2
Formerly:
5. ADMINISTRATIVE CODES: 2
6. PROJECT PERIOD Mo./Day/Yr.: From 09/30/94 Through 08/31/97
7. BUDGET PERIOD Mo./Day/Yr.: From 09/30/94 Through 08/31/95
8. TITLE OF PROJECT (OR PROGRAM) (Limit to 56 spaces): Cloning the gene
responsible for FSH Muscular Dystrophy MEDB
9. GRANTEE NAME AND ADDRESS:
Genome Therapeutics Corp.
100 Beaver Street
Waltham, MA 02154
10. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR) (LAST NAME
FIRST AND ADDRESS):
WEIFFENBACH, BARBARA PHD
Genome Therapeutics Corp.,
1365 Main Street
Waltham, MA 02154
<PAGE> 8
11. APPROVED BUDGET (Excludes PHS Direct Assistance)
I PHS Grant Funds Only ---
I
<TABLE> ---
<CAPTION>
II Total project costs including grant funds and all
other financial participation
(SELECT ONE AND PLACE NUMERAL IN BOX.)
<S> <C> <C>
a. Salaries and Wages . . . . . . . . . . . . . . . . . . . . . . . $103,470
b. Fringe Benefits. . . . . . . . . . . . . . . . . . . . . . . . . $ 35,181
c. Total Personnel Costs . . . . . . . . . . . . . . . . . . . $138,651
d. Consultant Costs . . . . . . . . . . . . . . . . . . . . . . . . 0
e. Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
f. Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
g. Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
h. Patient Care--Inpatient. . . . . . . . . . . . . . . . . . . . . 0
i. --Outpatient . . . . . . . . . . . . . . . . . . . . 0
j. Alterations and Renovations. . . . . . . . . . . . . . . . . . . 0
k. Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,750
l. Consortium/Contractual Costs . . . . . . . . . . . . . . . . . . 0
m. Trainee Related Expenses . . . . . . . . . . . . . . . . . . . .
n. Trainee Stipends . . . . . . . . . . . . . . . . . . . . . . . . 0
o. Trainee Tuition and Fees . . . . . . . . . . . . . . . . . . . . 0
p. Trainee Travel . . . . . . . . . . . . . . . . . . . . . . . . . 0
q. TOTAL DIRECT COSTS [ARROW] . . . . . . . . . . . . . . . . $171,601
r. INDIRECT COSTS (Rate* % of S&W/TADC) . . . . . . . . . . . . $154,441
s. TOTAL APPROVED BUDGET. . . . . . . . . . . . . . . . . . . . . . $326,042
t. SBIR Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0
u. Federal Share. . . . . . . . . . . . . . . . . . . . . . . . . . $326,042
v. Non-Federal Share. . . . . . . . . . . . . . . . . . . . . . . . $
</TABLE>
12. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
<TABLE>
<S> <C> <C>
a. Amount of PHS Financial Assistance (from Item 11.u.) . . . . . . $326,042
b. Less Unobligated Balance From Prior Budge Periods. . . . . . . . $0
c. Less Cumulative Prior Award(s) This Budget Period. . . . . . . . $326,042
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION . . . . . . . . . . . $0
</TABLE>
13. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT):
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
a. 02 178,465 d.
- -----------------------------------------------------------------------------------
b. 03 185,604 e.
- -----------------------------------------------------------------------------------
c. f.
- -----------------------------------------------------------------------------------
</TABLE>
-2-
<PAGE> 9
14. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH):
a. Amount of PHS Direct Assistance. . . . . . . . . . . . $
b. Less Unobligated Balance From Prior Budget Periods . . $
c. Less Cumulative Prior Award(s) This Budget Period. . . $
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION. . . . . . . . $
15. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F, OR 45 CFR 92.25,
SHALL BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES: (Select
One and Place LETTER in box.)
a. DEDUCTION
b. ADDITIONAL COSTS ---
c. MATCHING B
d. OTHER RESEARCH (Add/Deduct Option) ---
e. OTHER (See REMARKS)
16. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO, AND AS APPROVED BY,
THE PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND
CONDITIONS INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE FOLLOWING:
a. The grant program legislation cited above.
b. The grant program regulation cited above.
c. This award notice including terms and conditions, if any,
noted below under REMARKS.
d. PHS Grants Policy Statement including addenda in effect
as of the beginning date of the budget period.
e. 45 CFR part 74 or 45 CFR Part 92 as applicable.
IN THE EVENT THERE ARE CONFLICTING OR OTHERWISE INCONSISTENT POLICIES
APPLICABLE TO THE GRANT, THE ABOVE ORDER OF PRECEDENCE SHALL PREVAIL.
ACCEPTANCE OF THE GRANT TERMS AND CONDITIONS IS ACKNOWLEDGED BY THE
GRANTEE WHEN FUNDS ARE DRAWN OR OTHERWISE OBTAINED FROM THE GRANT PAYMENT
SYSTEM.
- --------------------------------------------------------------------------------
REMARKS: (Other Terms and Conditions Attached -- /X/ Yes / / No)
Grant Specialist: G. Carol Fitzpatrick (301) 594-3506
Program Official: Richard W. Lymn, Ph.D. (301) 594-5128
* Base X Rate ($171,601 x 90.00)
This Grant is included under expanded authorities.
- --------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)
/S/ Mary L. Graham
(Name-Typed/Print) (Title)
Mrs. Mary L. Graham Grants Management Officer
17. OBJ. CLASS: 41.4A
18. CRS - EIN: 1042297484A1
-3-
<PAGE> 10
<TABLE>
19. LIST NO.:
<CAPTION>
- --------------------------------------------------------------------------------------------
FY-CAN DOCUMENT NO. ADMINISTRATIVE AMT. ACTION FIN. AMT. ACTION DIR.
CODE ASST. ASST.
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
20.a. 94 8425014 b. R1AR41450A c. d. e.
21.a. b. c. d. e.
22.a. b. c. d. e.
- --------------------------------------------------------------------------------------------
</TABLE>
PHS-5152-5 (Rev. 7/92): 950119 1027 (Note: See reverse for payment
information.) KC 01
-4-
<PAGE> 11
FOOTNOTES
PAGE 2
1 ROI AR41450-01A2
TERMS AND CONDITIONS
o AWARD ISSUED IN ACCORDANCE WITH SUCCESSOR IN INTEREST AGREEMENT DATED
JANUARY 1, 1995.
-5-
<PAGE> 12
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
National Institutes of Health
Natl. Inst. of Arthritis and Musculoskeletal
and Skin Diseases
NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation/Regulation)
42 USC 241 42 CFR 52
RESEARCH
20. DATE ISSUED (Mo./Day/Yr.): 08/08/95
21. CFDA NO.: 93.846
22. SUPERSEDES AWARD NOTICE dated __________________ except that any additions
or restrictions previously imposed remain in effect unless specifically
rescinded.
23. GRANT NO.: 5 R01 AR41450-02
Formerly:
24. ADMINISTRATIVE CODES: 2
25. PROJECT PERIOD Mo./Day/Yr.: From 09/30/94 Through 08/31/97
26. BUDGET PERIOD Mo./Day/Yr.: From 09/01/95 Through 08/31/96
27. TITLE OF PROJECT (OR PROGRAM) (Limit to 56 spaces): Cloning the Gene
responsible for FSH Muscular Dystrophy MEDB
28. GRANTEE NAME AND ADDRESS:
Genome Therapeutics Corp.
100 Beaver Street
Waltham, MA 02154
29. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR) (LAST NAME
FIRST AND ADDRESS):
Weiffenbach, Barbara PHD
Genome Therapeutics Corp.
1365 Main Street
Waltham, MA 02154
<PAGE> 13
30. APPROVED BUDGET (Excludes PHS Direct Assistance)
I PHS Grant Funds Only ---
I
<TABLE> ---
<CAPTION>
II Total project costs including grant funds and all
other financial participation
(Select one and place NUMERAL in box.)
<S> <C> <C>
a. Salaries and Wages . . . . . . . . . . . . . . . . . . . $144,197
b. Fringe Benefits. . . . . . . . . . . . . . . . . . . . . $0
c. Total Personnel Costs . . . . . . . . . . . . . . . $144,197
d. Consultant Costs . . . . . . . . . . . . . . . . . . . . 0
e. Equipment. . . . . . . . . . . . . . . . . . . . . . . . 0
f. Supplies . . . . . . . . . . . . . . . . . . . . . . . . 31,200
g. Travel . . . . . . . . . . . . . . . . . . . . . . . . . 1,248
h. Patient Care--Inpatient. . . . . . . . . . . . . . . . . 0
i. --Outpatient . . . . . . . . . . . . . . . . 0
j. Alterations and Renovations. . . . . . . . . . . . . . . 0
k. Other. . . . . . . . . . . . . . . . . . . . . . . . . . 1,820
l. Consortium/Contractual Costs . . . . . . . . . . . . . . 0
m. Trainee Related Expenses . . . . . . . . . . . . . . . .
n. Trainee Stipends . . . . . . . . . . . . . . . . . . . . 0
o. Trainee Tuition and Fees . . . . . . . . . . . . . . . . 0
p. Trainee Travel . . . . . . . . . . . . . . . . . . . . . 0
q. TOTAL DIRECT COSTS [ARROW]. . . . . . . . . . . . . $178,465
r. INDIRECT COSTS (Rate* % of S&W/TADC) . . . . . . . . $160,619
s. TOTAL APPROVED BUDGET. . . . . . . . . . . . . . . . . . $339,084
t. SBIR Fee . . . . . . . . . . . . . . . . . . . . . . . . $ 0
u. Federal Share. . . . . . . . . . . . . . . . . . . . . . $339,084
v. Non-Federal Share. . . . . . . . . . . . . . . . . . . . $
</TABLE>
31. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
a. Amount of PHS Financial Assistance (from Item 11.u.). . . $339,084
b. Less Unobligated Balance From Prior Budge Periods . . . . $0
c. Less Cumulative Prior Award(s) This Budget Period . . . . $0
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION . . . . . . . $339,084
32. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT):
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
a. 03 185,604 d.
- -----------------------------------------------------------------------------------
b. e.
- -----------------------------------------------------------------------------------
c. f.
- -----------------------------------------------------------------------------------
</TABLE>
-2-
<PAGE> 14
33. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH):
a. Amount of PHS Direct Assistance. . . . . . . . . . . . . $
b. Less Unobligated Balance From Prior Budget Periods . . . $
c. Less Cumulative Prior Award(s) This Budget Period. . . . $
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION. . . . . . . . . $
34. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F, OR 45 CFR 92.25,
SHALL BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES: (Select
One and Place LETTER in box.)
a. DEDUCTION
b. ADDITIONAL COSTS
c. MATCHING ---
d. OTHER RESEARCH (Add/Deduct Option) B
e. OTHER (See REMARKS) ---
35. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO, AND AS APPROVED BY,
THE PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND
CONDITIONS INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE FOLLOWING:
a. The grant program legislation cited above.
b. The grant program regulation cited above.
c. This award notice including terms and conditions, if any,
noted below under REMARKS.
d. PHS Grants Policy Statement including addenda in effect
as of the beginning date of the budget period.
e. 45 CFR part 74 or 45 CFR Part 92 as applicable.
IN THE EVENT THERE ARE CONFLICTING OR OTHERWISE INCONSISTENT POLICIES
APPLICABLE TO THE GRANT, THE ABOVE ORDER OF PRECEDENCE SHALL PREVAIL.
ACCEPTANCE OF THE GRANT TERMS AND CONDITIONS IS ACKNOWLEDGED BY THE
GRANTEE WHEN FUNDS ARE DRAWN OR OTHERWISE OBTAINED FROM THE GRANT PAYMENT
SYSTEM.
- --------------------------------------------------------------------------------
REMARKS: (Other Terms and Conditions Attached -- /X/ Yes / / No)
Grant Specialist: G. Carol
Fitzpatrick (301) 594-3506 Program Official:
Richard W. Lymn, Ph.D. (301) 594-5128
* Base X Rate ($178,465 x 90.00)
This Grant is included under expanded authorities.
- --------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)
/S/ G. Carol Fitzpatrick
(Name-Typed/Print) (Title)
G. Carol Fitzpatrick Grants Management Officer
36. OBJ. CLASS: 41.4E
-3-
<PAGE> 15
37. CRS-EIN: 1042297484A1
<TABLE>
38. lIST NO.:
<CAPTION>
- --------------------------------------------------------------------------------------------
FY-CAN DOCUMENT NO. ADMINISTRATIVE AMT. ACTION FIN. AMT. ACTION DIR.
CODE ASST. ASST.
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
20.a. 95 8425014 b. R1AR41450A c. d. e.
21.a. b. c. d. e.
22.a. b. c. d. e.
- --------------------------------------------------------------------------------------------
PHS-5152-5 (Rev. 7/94) 950804 1433 (Note: See reverse for payment information.) WBG
</TABLE>
-4-
<PAGE> 16
FOOTNOTES
PAGE 2
5 R01 AR41450-02
TERMS AND CONDITIONS
o PURSUANT TO THE NIH REVITALIZATION ACT (P.L. 103-43, JUNE 10, 1993),
SECTION 2004, WHEN PURCHASING EQUIPMENT OR PRODUCTS UNDER THIS ASSISTANCE
AWARD, THE RECIPIENT SHOULD, WHENEVER POSSIBLE, PURCHASE ONLY
AMERICAN-MADE ITEMS.
-5-
<PAGE> 1
EXHIBIT 10.32
<PAGE> 2
EXHIBIT 10.32
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
NATIONAL CENTER FOR HUMAN GENOME RESEARCH
NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation/Regulation)
42 USC 241 42 CFR 52
RESEARCH PROGRAM PROJECT
1. DATE ISSUED (Mo./Day/Yr.): August 16, 1994
2. CFDA NO.: 93.172
3. SUPERSEDES AWARD NOTICE dated __________________ except that any additions
or restrictions previously imposed remain in effect unless specifically
rescinded.
4. GRANT NO.: 1 PO1 HG01106-01
Formerly:
5. ADMINISTRATIVE CODES: S3RS
6. PROJECT PERIOD Mo./Day/Yr.: 8/22/94 through 06/30/97
7. BUDGET PERIOD Mo./Day/Yr.: 8/22/94 through 06/30/95
8. TITLE OF PROJECT (OR PROGRAM) (Limit to 56 spaces): GENOME SEQUENCING
CENTER GRRC
9. GRANTEE NAME AND ADDRESS:
Collaborative Research, Inc.
1365 Main Street
Waltham, MA 02154
10. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR) (LAST NAME
FIRST AND ADDRESS):
MAO, JEN-I PHD
Collaborative Research Inc.
1365 Main Street
Waltham, MA 02154
11. APPROVED BUDGET (Excludes PHS Direct Assistance)
I PHS Grant Funds Only
<PAGE> 3
/ I /
-2-
<PAGE> 4
<TABLE>
II Total project costs including grant funds and all other financial
participation
(SELECT ONE AND PLACE NUMERAL IN BOX.)
<C> <S> <C>
a. Salaries and Wages . . . . . . . . . . . . $1,002,234
b. Fringe Benefits. . . . . . . . . . . . . . 340,760
c. Total Personnel Costs . . . . . . . . $1,342,994
d. Consultant Costs . . . . . . . . . . . . . 9,000
e. Equipment. . . . . . . . . . . . . . . . . 25,000
f. Supplies . . . . . . . . . . . . . . . . . 273,309
g. Travel . . . . . . . . . . . . . . . . . . 24,000
h. Patient Care--Inpatient. . . . . . . . . . 0
i. --Outpatient . . . . . . . . . 0
j. Alterations and Renovations. . . . . . . . 0
k. Other. . . . . . . . . . . . . . . . . . . 93,900
l. Consortium/Contractual Costs . . . . . . . 0
m. Trainee Related Expenses . . . . . . . . . 0
n. Trainee Stipends . . . . . . . . . . . . . 0
o. Trainee Tuition and Fees . . . . . . . . . 0
p. Trainee Travel . . . . . . . . . . . . . . 0
q. TOTAL DIRECT COSTS . . . . . . . . . 1,768,203
r. INDIRECT COSTS (Rate* % of S&W/TADC) . . . 1,568,882
s. TOTAL APPROVED BUDGET. . . . . . . . . . . 3,337,085
t. SBIR Fee . . . . . . . . . . . . . . . . . 0
u. Federal Share. . . . . . . . . . . . . . . 3,337,085
v. Non-Federal Share. . . . . . . . . . . . . $
</TABLE>
<TABLE>
12. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
<C> <S> <C>
a. Amount of PHS Financial Assistance (from Item 11.u.) . . . $3,337,085
b. Less Unobligated Balance From Prior Budge Periods. . . . . 0
c. Less Cumulative Prior Award(s) This Budget Period. . . . . 0
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION . . . . . . . . $3,337,085
</TABLE>
<TABLE>
13. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT):
<CAPTION>
- ----------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
a. 02 1,837,931 d.
- ----------------------------------------------------------------------------
b. 03 1,910,450 e.
- ----------------------------------------------------------------------------
c. f.
- ----------------------------------------------------------------------------
</TABLE>
-3-
<PAGE> 5
<TABLE>
14. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH):
<S> <C> <C>
a. Amount of PHS Direct Assistance. . . . . . . . . . . . . . . . . $
b. Less Unobligated Balance From Prior Budget Periods . . . . . . . $
c. Less Cumulative Prior Award(s) This Budget Period. . . . . . . . $
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION. . . . . . . . . . . . . $
</TABLE>
15. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F, OR 45 CFR 92.25,
SHALL BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES: (Select One
and Place LETTER in box.)
/ D /
a. DEDUCTION
b. ADDITIONAL COSTS
c. MATCHING
d. OTHER RESEARCH (Add/Deduct Option)
e. OTHER (See REMARKS)
16. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO, AND AS APPROVED BY,
THE PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND CONDITIONS
INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE FOLLOWING:
a. The grant program legislation cited above.
b. The grant program regulation cited above.
c. This award notice including terms and conditions, if any,
noted below under REMARKS.
d. PHS Grants Policy Statement including addenda in effect as of the
beginning date of the budget period.
e. 45 CFR part 74 or 45 CFR Part 92 as applicable.
IN THE EVENT THERE ARE CONFLICTING OR OTHERWISE INCONSISTENT POLICIES
APPLICABLE TO THE GRANT, THE ABOVE ORDER OF PRECEDENCE SHALL PREVAIL.
ACCEPTANCE OF THE GRANT TERMS AND CONDITIONS IS ACKNOWLEDGED BY THE
GRANTEE WHEN FUNDS ARE DRAWN OR OTHERWISE OBTAINED FROM THE GRANT PAYMENT
SYSTEM.
- ------------------------------------------------------------------------------
REMARKS: (Other Terms and Conditions Attached -- / x / Yes / / No)
Grant Specialist: Linda Hall (301) 402-0733
Program Official: Dr. R. Strausberg 301-496-7531
* Base X Rate ($1,743,203 x 90.00)
This Grant is included under expanded authorities.
- ------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)
(Name-Typed/Print) (Title)
Jean M. Cahill Grants Management Officer
17. OBJ. CLASS: 41.4A
18. CRS - EIN: 1042297484A1
-4-
<PAGE> 6
<TABLE>
<CAPTION>
19. LIST NO.:
- ---------------------------------------------------------------------------------------------------------------------------
FY-CAN DOCUMENT NO. ADMINISTRATIVE AMT. ACTION FIN. AMT. ACTION DIR.
CODE ASST. ASST.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
20.a. 94 8427202 b. P1HG01106A c. d. e.
21.a. b. c. d. e.
22.a. b. c. d. e.
- ---------------------------------------------------------------------------------------------------------------------------
PHS-5152-5 (Rev. 7/94): 940810 1641 (Note: See reverse for payment information) LHJ HG/PC
</TABLE>
-5-
<PAGE> 7
NOTICE OF GRANT AWARD
Page 6
1 PO1 HG01106-01
MAO, JEN-I, PH.D.
1. The Fiscal 1994 Appropriations Act prohibits reimbursement of
direct salary for individuals at a rate greater than $125,000 per year as
determined in the original award. The language contained in the Appropriate
Act follows:
"None of the funds appropriated in this title for the National Institutes
of Health and the Substance Abuse and Mental Health Services
Administration shall be used to pay the salary of an individual through a
grant or other extramural mechanism at a rate in excess of $125,000 per
year."
2. Pursuant to the NIH Revitalization Act (P.L. 103-43, June 10, 1993),
Section 2004, when purchasing equipment or products under this assistance
award, the recipient should whenever possible, purchase only American-made
items.
3. The following budget reductions/deletions were made by the Initial Review
Group:
Project 1
---------
Personnel
a. Jing-xiang Tian ($41,422)
b. Kristin Gundersen ($35,818)
c. Hong-mei Lee ($54,164)
d. Qin-xue Xu ($45,939)
e. Maria Atkinson ($35,659)
f. Mark Zheng ($55,101)
g. Haiying Yu ($44,743)
h. Elizabeth Borsody ($35,659)
i. Jonathan Norcross ($57,676)
j. Rose Wang ($44,574)
k. Richa Saxena ($40,777)
l. Carole Butler ($55,101)
Equipment
a. 2 computer upgrade, model 60 to 90, plus 32 Mb RAM ($18,000)
b. 2 X-terminals with software license ($14,000)
-6-
<PAGE> 8
NOTICE OF GRANT AWARD
Page 7
1 PO1 HG01106-01
MAO, JEN-I, PH.D.
c. Reduce funds awarded for the Computer for sequence analysis ($40,000)
d. 1 Molecular Dynamics Scanner ($60,000)
e. 1 Perkin Elmer 9600 PCR Machine ($12,000)
f. 1 ABI DNA Synthesizer ($41,000)
g. 2 DTE Boxes ($19,000)
h. 4 6000V Power Supplies ($12,000)
i. 1 UV Crosslinker ($1,000)
j. 2 Vortex Mixer ($1,800)
k. 1 Vacuum Oven ($1,600)
l. 1 Beckman Tabletop Ultracentrifuge ($35,000)
m. 2 Semiautomated Blot Washing Devices ($4,000)
n. 3 G2 Incubator Shakers ($3,900)
o. Reduce funds awarded for Milli-Q plus Water Filtration System
($3,000)
p. Miscellaneous Small Equipment ($30,000)
2nd Year
a. Delete all requested equipment except freezer (-80) and $20,000 for
miscellaneous small equipment. Deletions and reductions are
$178,800.
3rd Year
a. Delete all requested equipment except for $15,000 for computer
supplies and $20,000 for small equipment. Deletions and reductions
are $453,500.
Supplies
a. Reduce requested supplies ($277,963)
2nd Year
a. Reduce requested supplies ($389,148)
3rd Year
a. Reduce requested supplies ($544,809)
-7-
<PAGE> 9
NOTICE OF GRANT AWARD
Page 8
1 PO1 HG01106-01
MAO, JEN-I, PH.D.
Travel
a. Reduce ($11,000)
Other Expenses
a. Software licenses ($15,000)
b. Reduce funds requested for GCG Software License (UNIX) ($12,000)
c. Reduce funds requested for Backup Tapes for Sequence Data ($856)
d. Monthly Backup Tapes ($2,000)
e. Reduce funds requested for General Service Contracts ($10,000)
03 Year
a. Software for new Alpha Computers ($25,000)
Project 2
Personnel
a. Kari Abendschan ($33,768)
b. Wendy Caubet ($42,934)
c. Marc Watkins ($36,777)
Equipment
a. Reduce funds requested for LI-COR Sequencer, Model 4000L ($35,000)
b. Additional microscope ($12,000)
c. Detector Optimization: Components for Phase Resolved Detection
($18,000)
d. Data Integrator for HLPC System ($2,200)
e. 1 DTE Machine ($9,500)
f. 1 Power Supply, 6000V ($3,500)
g. Reduce funds requested for Quadra 840 for Dta Analysis ($4,000)
Year 2
-8-
<PAGE> 10
NOTICE OF GRANT AWARD
Page 9
1 PO1 HG01106-01
MAO, JEN-I, PH.D.
a. Delete all equipment requested, except for $50,000 for the detector
components and $10,000 for miscellaneous equipment. Equipment
reduced ($430,300)
Year 3
a. Delete all equipment requested, except for $50,000 for the detector
components and $10,000 for miscellaneous equipment. Equipment
reduced ($294,600)
Supplies
a. Reduced ($45,350)
Travel
a. Reduced ($2,100)
Other Expenses
a. Software Licensing ($8,000)
Year 2
a. Software Licensing ($8,320)
b. Reduce funds for LI-COR Maintenance ($900)
c. General service contracts ($5,000)
Year 3
a. Software Licensing ($8,653)
b. IAS Maintenance Contracts ($11,000)
c. LI-COR Maintenance ($556)
d. General Service Contracts ($5,200)
CORE 1 - Informatics Core
Personnel
-9-
<PAGE> 11
NOTICE OF GRANT AWARD
Page 10
1 PO1 HG01106-01
MAO, JEN-I, PH.D.
a. Reduce to-be-named senior system administrator 45% ($41,939)
b. Steve Connelly ($67,536)
c. Craig Tulig ($60,782)
d. To-be-named Programmer ($66,330)
Equipment
a. 1 SparcStation 10 ($15,000)
b. Tape Backup ($4,000)
c. Laser Printer ($3,000)
d. Mac quadra 800 ($8,000)
e. Miscellaneous ($15,000)
Year 2
a. Spar ELC upgrade ($10,000)
b. Miscellaneous
Year 3
a. Sparc LX upgrades, 3X ($30,000)
b. Disk Drive ($5,000)
c. Reduce funds for Miscellaneous ($25,000)
Travel
a. Reduced ($2,400)
Other Expenses
a. Centerline Programming Tools ($18,000)
b. Mac Software ($2,000)
c. Cenetralized Mac and PC Backup ($13,000)
d. Reduce funds for Hardware Maintenance ($5,700)
e. Reduce funds for Miscellaneous Software ($10,000)
-10-
<PAGE> 12
NOTICE OF GRANT AWARD
Page 11
1 PO1 HG01106-01
MAO, JEN-I, PH.D.
Year 2
a. Reduce Hardware Maintenance to $4,992
Year 3
a. Reduce Hardware Maintenance to $5,192
CORE 2 - Administrative Core
Personnel
a. Reduce Dana Torrey's effort 65% ($52,483)
Consultant Costs
a. Speaker Fees for the proposed seminar series ($3,600)
Equipment
a. Reduce funds for the Macintosh Quadra 800 ($4,000)
b. Reduce funds for the fax machine ($500)
Year 2 and Year 3
a. Delete miscellaneous office equipment ($3,000)
Travel
a. Two trips by the administrator ($1,600)
b. One trip per month for a seminar speaker ($9,600)
Alterations and Renovations (A&R)
a. Reduce A&R funds for Laboratory space ($310,000)
b. Reduce A&R funds for Office space ($15,000)
-11-
<PAGE> 13
NOTICE OF GRANT AWARD
Page 12
1 PO1 HG01106-01
MAO, JEN-I, PH.D.
Other Expenses
a. Reduce funds for Office Supplies ($3,000)
b. Reduce funds for Copying ($5,900)
c. Reduce funds for Publication Costs ($8,000)
d. Reduce funds for Software ($1,000)
e. Outreach Program ($10,000)
f. Reduce funds for Federal Express ($1,500)
Project period reduced to three years.
4. NCHGR staff have determined that critical program objectives can be met
with the funding of this grant at a reduction of $1,505,270 from the
recommended level of $3,273,473. Each future year budget period includes no
more than a 4% cost-of-living escalation factor over the current 01 direct
costs base {excluding equipment}.
5. Applicant organization must comply with the Public Health Service (PHS)
policy relating to distribution of unique research resources produced with PHS
funding (NIH Guide for Grants and Contracts, Vol. 20, No. 5, February, 1991).
Grantee should also comply with the NIH-DOE guidelines for access to mapping
and sequencing data and material resources, adopted by the NIH-DOE joint
subcommittee on December 7, 1992 (see attached).
6. In order to redistribute awards more evenly throughout the year, grant
budget periods are being adjusted. This award is issued for 10 months; future
continuation awards will cycle each year on July 1. Non-competing continuation
applications are due two months prior to this date. Allowable preaward costs
may be charged to this award, in accordance with the conditions outlined in the
PHS Grants Policy Statement, revised April 1, 1994, and with institutional
requirements for prior approval.
7. Allowable costs of activities conducted by for-profit organizations will
be determined by applying the costs principles of Contracts with Commercial
Organizations set forth in 48 CFR 31.2. However, independent research and
development costs (including the indirect costs allocable to them) are
unallowable.
-12-
<PAGE> 14
NOTICE OF GRANT AWARD
Page 13
1 PO1 HG01106-01
MAO, JEN-I, PH.D.
8. Title to property acquired under this grant shall vest upon acquisition
with the Federal government and be accounted for as outlined in the publication
entitled "Contractor's Guide for Control of Government Property." The property
administrator for the grant is:
Chief, Property Accountability Section
Personal Property Branch
National Institutes of Health
Building 13, Room 2E65
Bethesda, MD 20892
Phone (301) 496-6467
9. Any invention developed under this award should be reported to the Patent
Branch, DHHS, NIH, Room 2B62, Building 31, Bethesda, Maryland 20892. Phone
(301) 496-7735, for disposition of patent rights in accordance with 45 CFR,
Parts 6 and 8. Disposition rights on inventions made by small businesses are
subject to Chapter 18 of Title 35 U.S. Code.
10. Prior approval to implement budgetary and programmatic changes, where
required by PHS Policy, must be obtained in writing from the Grants Management
contact shown on this Notice of Grant Award.
11. Future year funding levels will be contingent upon satisfactory progress
and evaluation by NCHGR staff and its advisors and recommended by NCHGR's
Advisory Council.
12. In Core 1, office supplies ($2,000) were moved from "Other Expenses" to
the "Supplies" category.
13. It is the current practice of the NCHGR to mail the original Notice of
Grant Award (NGA) and Terms and Conditions to the Business Official of the
grantee organization. Since this is the ONLY notification which will be
provided to your institution it is the responsibility of the grantee Business
Office to make distribution of the NGA and Terms and Conditions to the
Principal Investigator and other staff.
-13-
<PAGE> 15
NOTICE OF GRANT AWARD
(ADDITIONAL REMARKS)
PAGE 4
If you need assistance from the National Center for Human Genome Research
during the course of this grant, please contact the grants management and
program staff whose telephone numbers are shown on the Notice of Grant Award.
These individuals work closely with one another through all phases of each
project to facilitate the award and the administration of the grant. Their
functions are defined as follows:
GRANTS MANAGEMENT CONTRACT: The Grants Management Specialist, whose name and
telephone number are indicated in the "Remarks" section of the Notice of Grant
Award, is responsible for all business management matters associated with the
review, negotiation, award and administration grants. The Grants Management
Specialist serves as the focal point for receiving and responding to all
questions and correspondence related to business management and policy matters,
such as correspondence giving or denying any prior approval required by Public
Health Service policy or special Terms of Award, transfer of the grant to
another institution, a change in the period of support, or any actions which
commit, or may result in committing the NCHGR to a change in the amount of
funding.
PROGRAM CONTACT: The Health Scientist Administrator, or program official,
whose name and telephone number also are indicated in the "Remarks" section of
the Notice of Grant Award, is responsible for all scientific and technical
matters dealing with the administration of the grant. The Health Scientist
Administrator reviews and monitors scientific progress of the project and
provides advice and assistance scientific objectives of the research program
can be pursued effectively and successfully. All questions or correspondence
dealing with research progress, changes in research direction, unique
scientific opportunities, or any other scientific need should be addressed to
the Health Scientist Administrator.
PRIOR APPROVAL: Requests which require the prior approval of the NCHGR must be
submitted in writing to the Grants Management Officer. All requests should
reference the complete grant number, e.g., 1 R01 HG 12345-01, and must be
signed by the authorized official of the business office of the grantee
institution and by the principal investigator.
-14-
<PAGE> 16
NIH-DOE GUIDELINES FOR ACCESS TO MAPPING AND
SEQUENCING DATA AND MATERIAL RESOURCES(1)
The information and resources generated by the Human Genome Project have become
substantial, and the interest in having access to them is widespread. It is
therefore desirable to have a statement of philosophy concerning the sharing of
these resources that can guide investigators who generate the resources as well
as those who wish to use them.
A key issue for the Human Genome Project is how to promote and encourage the
rapid sharing of material and data that are produced, especially information
that has not yet been published or may never be published in its entirety.
Such sharing is essential for progress toward the goals of the program and to
avoid unnecessary duplication. It is also desirable to make the fruits of
genome research available to the scientific community as a whole as soon as
possible to expedite research in other areas.
Although it is the policy of the Human Genome Project to maximize outreach to
the scientific community, it is also necessary to give investigators time to
verify the accuracy of their data and to gain some scientific advantage from
the effort they have invested. Furthermore, in order to assure that novel
ideas and inventions are rapidly developed to the benefit of the public,
intellectual property protection may be needed for some of the data and
materials.
After extensive discussion with the community of genome researchers, the
advisors of the NIH and DOE genome programs have determined that consensus is
developing around the concept that a 6 month period from the time the data or
materials are generated to the time they are made available publicly is a
reasonable maximum in almost all cases. More rapid sharing is encouraged.
Whenever possible, data should be deposited in public databases and materials
in public repositories. Where appropriate repositories do not exist or are
unable to accept the data or materials, investigators should accommodate
requests to the extent possible.
The NIH and DOE genome programs have decided to require all applicants
expecting to generate significant amounts of genome data or materials to
describe in their application how and when they plan to make such data and
materials available to the community. Grant solicitations will specify this
requirement. These plans in each application will be reviewed in the course of
peer review and by staff to assure they are reasonable and in conformity with
program philosophy. If a grant is made, the applicant's sharing plans will
become a condition of the award and compliance will be reviewed before
continuation is provided. Progress reports will be asked to address the issue.
- -------------------------
(1) Adopted by the NIH-DOE Joint Subcommittee, December 7, 1992.
-15-
<PAGE> 17
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
National Institutes of Health
National Center for Human Genome Research
NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation/Regulation)
42 USC 241 42 CFR 52
RESEARCH PROGRAM PROJECT REVISED
1. DATE ISSUED (Mo./Day/Yr.): 09/30/94
2. CFDA NO.: 93.172
3. SUPERSEDES AWARD NOTICE dated 08/16/94 except that any additions or
restrictions previously imposed remain in effect unless specifically rescinded.
4. GRANT NO.: 1 PO1 HG01106-01
Formerly:
5. ADMINISTRATIVE CODES: S3RS
6. PROJECT PERIOD Mo./Day/Yr.: From 08/22/94 Through 06/30/97
7. BUDGET PERIOD Mo./Day/Yr.: From 08/22/94 Through 06/30/95
8. TITLE OF PROJECT (OR PROGRAM) (Limit to 56 spaces): Genome Sequencing
Center GRRC
9. GRANTEE NAME AND ADDRESS:
Genome Therapeutics Corp.
100 Beaver Street
Waltham, MA 02154
10. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR) (LAST NAME
FIRST AND ADDRESS):
Mao, Jen-I
Collaborative Research Inc.
1365 Main Street
Waltham, MA 02154
<PAGE> 18
11. APPROVED BUDGET (Excludes PHS Direct Assistance)
I PHS Grant Funds Only
/ I /
<TABLE>
II Total project costs including grant funds and all other financial
participation
<CAPTION>
(SELECT ONE AND PLACE NUMERAL IN BOX.)
<S> <C> <C>
a. Salaries and Wages . . . . . . . . . . . . $1,002,234
b. Fringe Benefits. . . . . . . . . . . . . . $ 340,760
c. Total Personnel Costs . . . . . . . . $1,342,994
d. Consultant Costs . . . . . . . . . . . . . 9,000
e. Equipment. . . . . . . . . . . . . . . . . 25,000
f. Supplies . . . . . . . . . . . . . . . . . 273,309
g. Travel . . . . . . . . . . . . . . . . . . 24,000
h. Patient Care--Inpatient. . . . . . . . . . 0
i. --Outpatient. . . . . . . 0
j. Alterations and Renovations. . . . . . . . 0
k. Other. . . . . . . . . . . . . . . . . . . 93,900
l. Consortium/Contractual Costs . . . . . . . 0
m. Trainee Related Expenses . . . . . . . . .
n. Trainee Stipends . . . . . . . . . . . . . 0
o. Trainee Tuition and Fees . . . . . . . . . 0
p. Trainee Travel . . . . . . . . . . . . . . 0
q. TOTAL DIRECT COSTS . . . . . . . . . $1,768,203
r. INDIRECT COSTS (Rate* % of S&W/TADC) . . $1,568,882
s. TOTAL APPROVED BUDGET. . . . . . . . . . . $3,337,085
t. SBIR Fee . . . . . . . . . . . . . . . . . $ 0
u. Federal Share. . . . . . . . . . . . . . . $3,337,085
v. Non-Federal Share. . . . . . . . . . . . . $
</TABLE>
<TABLE>
12. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
<S> <C> <C>
a. Amount of PHS Financial Assistance (from Item 11.u.) . . . . . . $3,337,085
b. Less Unobligated Balance From Prior Budge Periods. . . . . . . . $ 0
c. Less Cumulative Prior Award(s) This Budget Period. . . . . . . . $3,337,085
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION . . . . . . . . . . . $ 0
</TABLE>
<TABLE>
13. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT):
<CAPTION>
- -------------------------------------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
a. 02 1,837,931 d.
- -------------------------------------------------------------------------------------------------------
b. 03 1,910,450 e.
- -------------------------------------------------------------------------------------------------------
c. f.
- -------------------------------------------------------------------------------------------------------
</TABLE>
-2-
<PAGE> 19
<TABLE>
14. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH):
<C> <S> <C>
a. Amount of PHS Direct Assistance. . . . . . . . . . . . . . . . . $
b. Less Unobligated Balance From Prior Budget Periods . . . . . . . $
c. Less Cumulative Prior Award(s) This Budget Period. . . . . . . . $
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION. . . . . . . . . . . . . $
</TABLE>
15. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F, OR 45 CFR 92.25,
SHALL BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES: (Select One
and Place LETTER in box.)
/ D /
a. DEDUCTION
b. ADDITIONAL COSTS
c. MATCHING
d. OTHER RESEARCH (Add/Deduct Option)
e. OTHER (See REMARKS)
16. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO, AND AS APPROVED BY,
THE PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND CONDITIONS
INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE FOLLOWING:
a. The grant program legislation cited above.
b. The grant program regulation cited above.
c. This award notice including terms and conditions, if any,
noted below under REMARKS.
d. PHS Grants Policy Statement including addenda in effect as of the
beginning date of the budget period.
e. 45 CFR part 74 or 45 CFR Part 92 as applicable.
IN THE EVENT THERE ARE CONFLICTING OR OTHERWISE INCONSISTENT POLICIES
APPLICABLE TO THE GRANT, THE ABOVE ORDER OF PRECEDENCE SHALL PREVAIL.
ACCEPTANCE OF THE GRANT TERMS AND CONDITIONS IS ACKNOWLEDGED BY THE GRANTEE
WHEN FUNDS ARE DRAWN OR OTHERWISE OBTAINED FROM THE GRANT PAYMENT SYSTEM.
- --------------------------------------------------------------------------------
REMARKS: (OTHER Terms and Conditions Attached -- / x / Yes / / No)
Grant Specialist: Linda Hall (301) 402-0733
Program Official: Dr. R. Strausberg (301) 496-7531
* Base X Rate ($1,743,203 x 90.00)
This Grant is included under expanded authorities.
- --------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)
(Name-Typed/Print) (Title)
Jean M. Cahill, Grants Management Officer
17. OBJ. CLASS: 41.4A
18. CRS - EIN: 1042297484A1
19. LIST NO.:
-3-
<PAGE> 20
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
FY-CAN DOCUMENT NO. ADMINISTRATIVE AMT. ACTION FIN. AMT. ACTION DIR.
CODE ASST. ASST.
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
20.a. 94 8427202 b. P1HG01106A c. d. e.
21.a. b. c. d. e.
22.a. b. c. d. e.
- ---------------------------------------------------------------------------------------------------------------------------------
PHS-5152-5 (Rev. 7/94): 940928 0936 (Note: See reverse for payment information) JP 01
</TABLE>
-4-
<PAGE> 21
NOTICE OF GRANT AWARD
Page 2
1 P01 HG01106-01
MAO, JEN-I, PH.D.
1. This award is revised to reflect the grantee's name change. The grantee's
name is changed from Collaborative Research, Inc. to Genome Therapeutics
Corporation as requested in letter dated September 12, 1994.
2. It is the current practice of the NCHGR to mail the original Notice of
Grant Award (NGA) and Terms and Conditions to the Business Official of the
grantee organization. Since this is the ONLY notification which will be
provided to your institution it is the responsibility of the grantee Business
Office to make distribution of the NGA and Terms and Conditions to the
Principal Investigator and other staff.
3. All previous terms and conditions remain in effect.
-5-
<PAGE> 22
NOTICE OF GRANT AWARD
(ADDITIONAL REMARKS)
PAGE 3
If you need assistance from the National Center for Human Genome Research
during the course of this grant, please contact the grants management and
program staff whose telephone numbers are shown on the Notice of Grant Award.
These individuals work closely with one another through all phases of each
project to another through all phases of each project to facilitate the award
and the administration of the grant. Their functions are defined as follows:
GRANTS MANAGEMENT CONTRACT: The Grants Management Specialist, whose name and
telephone number are indicated in the "Remarks" section of the Notice of Grant
Award, is responsible for all business management matters associated with the
review, negotiation, award and administration grants. The Grants Management
Specialist serves as the focal point for receiving and responding to all
questions and correspondence related to business management and policy matters,
such as correspondence giving or denying any prior approval required by Public
Health Service policy or special Terms of Award, transfer of the grant to
another institution, a change in the period of support, or any actions which
commit, or may result in committing the NCHGR to a change in the amount of
funding.
PROGRAM CONTACT: The Health Scientist Administrator, or program official,
whose name and telephone number also are indicated in the "Remarks" section of
the Notice of Grant Award, is responsible for all scientific and technical
matters dealing with the administration of the grant. The Health Scientist
Administrator reviews and monitors scientific progress of the project and
provides advice and assistance scientific objectives of the research program
can be pursued effectively and successfully. All questions or correspondence
dealing with research progress, changes in research direction, unique
scientific opportunities, or any other scientific need should be addressed to
the Health Scientist Administrator.
PRIOR APPROVAL: Requests which require the prior approval of the NCHGR must be
submitted in writing to the Grants Management Officer. All requests should
reference the complete grant number, e.g., 1 R01 HG 12345-01, and must be
signed by the authorized official of the business office of the grantee
institution and by the principal investigator.
-6-
<PAGE> 23
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
National Center for Human Genome Research
NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation/Regulation)
42 USC 241 42 CFR 52
RESEARCH PROGRAM PROJECT
1. DATE ISSUED (Mo./Day/Yr.): 06/22/95
2. CFDA NO.: 93.172
3. SUPERSEDES AWARD NOTICE dated __________ except that any additions or
restrictions previously imposed remain in effect unless specifically rescinded.
4. GRANT NO.: 5 PO1 HG01106-02
Formerly:
5. ADMINISTRATIVE CODES: S3RS
6. PROJECT PERIOD Mo./Day/Yr.: From 08/22/94 Through 06/30/97
7. BUDGET PERIOD Mo./Day/Yr.: From 07/01/95 Through 06/30/95
8. TITLE OF PROJECT (OR PROGRAM) (Limit to 56 spaces): Genome Sequencing
Center GRRC
9. GRANTEE NAME AND ADDRESS:
Genome Therapeutics Corp.
100 Beaver Street
Waltham, MA 02154
10. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR) (LAST NAME
FIRST AND ADDRESS):
Mao, Jen-I PHD
Collaborative Research Division,
Genome Therapeutics Corporation
100 Beaver Street
Waltham, MA 02154
<PAGE> 24
11. APPROVED BUDGET (Excludes PHS Direct Assistance)
I. PHS Grant Funds Only
/ I /
<TABLE>
II. Total project costs including grant funds and all
other financial participation
(SELECT ONE AND PLACE NUMERAL IN BOX.)
<C> <S> <C>
a. Salaries and Wages . . . . . . . . . . . . $1,042,326
b. Fringe Benefits. . . . . . . . . . . . . . $ 354,388
c. Total Personnel Costs . . . . . . . . $1,396,714
d. Consultant Costs . . . . . . . . . . . . . 9,360
e. Equipment. . . . . . . . . . . . . . . . . 25,000
f. Supplies . . . . . . . . . . . . . . . . . 282,161
g. Travel . . . . . . . . . . . . . . . . . . 24,960
h. Patient Care--Inpatient. . . . . . . . . . 0
i. --Outpatient. . . . . . . 0
j. Alterations and Renovations. . . . . . . . 0
k. Other. . . . . . . . . . . . . . . . . . . 99,736
l. Consortium/Contractual Costs . . . . . . . 0
m. Trainee Related Expenses . . . . . . . . .
n. Trainee Stipends . . . . . . . . . . . . . 0
o. Trainee Tuition and Fees . . . . . . . . . 0
p. Trainee Travel . . . . . . . . . . . . . . 0
q. TOTAL DIRECT COSTS [arrow]. . . . . . $1,837,931
r. INDIRECT COSTS (Rate* % of S&W/TADC). . . $1,631,638
s. TOTAL APPROVED BUDGET. . . . . . . . . . . $3,469,569
t. SBIR Fee . . . . . . . . . . . . . . . . . $ 0
u. Federal Share. . . . . . . . . . . . . . . $3,469,569
v. Non-Federal Share. . . . . . . . . . . . . $
</TABLE>
<TABLE>
12. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
<C> <S> <C>
a. Amount of PHS Financial Assistance (from Item 11.u.) . . . . . . $3,469,569
b. Less Unobligated Balance From Prior Budge Periods. . . . . . . . $ 0
c. Less Cumulative Prior Award(s) This Budget Period. . . . . . . . $ 0
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION . . . . . . . . . . . $3,469,569
</TABLE>
<TABLE>
13. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT):
<CAPTION>
- ----------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
a. 03 1,910,450 d.
- ----------------------------------------------------------------------------
b. e.
- ----------------------------------------------------------------------------
c. f.
- ----------------------------------------------------------------------------
</TABLE>
-2-
<PAGE> 25
<TABLE>
14. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH):
<C> <S> <C>
a. Amount of PHS Direct Assistance. . . . . . . . . . . . . . . . . $
b. Less Unobligated Balance From Prior Budget Periods . . . . . . . $
c. Less Cumulative Prior Award(s) This Budget Period. . . . . . . . $
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION. . . . . . . . . . . . . $
</TABLE>
15. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F, OR 45 CFR 92.25,
SHALL BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES: (Select One
and Place LETTER in box.)
/ A /
a. DEDUCTION
b. ADDITIONAL COSTS
c. MATCHING
d. OTHER RESEARCH (Add/Deduct Option)
e. OTHER (See REMARKS)
16. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO, AND AS APPROVED BY,
THE PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND CONDITIONS
INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE FOLLOWING:
a. The grant program legislation cited above.
b. The grant program regulation cited above.
c. This award notice including terms and conditions, if any,
noted below under REMARKS.
d. PHS Grants Policy Statement including addenda in effect
as of the beginning date of the budget period.
e. 45 CFR part 74 or 45 CFR Part 92 as applicable.
IN THE EVENT THERE ARE CONFLICTING OR OTHERWISE INCONSISTENT POLICIES
APPLICABLE TO THE GRANT, THE ABOVE ORDER OF PRECEDENCE SHALL PREVAIL.
ACCEPTANCE OF THE GRANT TERMS AND CONDITIONS IS ACKNOWLEDGED BY THE
GRANTEE WHEN FUNDS ARE DRAWN OR OTHERWISE OBTAINED FROM THE GRANT PAYMENT
SYSTEM.
- --------------------------------------------------------------------------------
REMARKS: (Other Terms and Conditions Attached -- / x / Yes / / No)
Grant Specialist: Linda Hall (301) 402-0733
Program Official: Dr. R. Strausberg (301) 496-7531
* Base X Rate ($1,812,931 x 90.00)
This Grant is included under expanded authorities.
- --------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)
(Name-Typed/Print) (Title)
Jean M. Cahill, Grants Management Officer
17. OBJ. CLASS: 41.4E
18. CRS - EIN: 1042297484A1
19. LIST NO.:
-3-
<PAGE> 26
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FY-CAN DOCUMENT NO. ADMINISTRATIVE AMT. ACTION FIN. AMT. ACTION DIR.
CODE ASST. ASST.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
20.a. 95 8427202 b. P1HG01106A c. d. e.
21.a. b. c. d. e.
22.a. b. c. d. e.
- ---------------------------------------------------------------------------------------------------------------------------
PHS-5152-5 (Rev. 7/94): 950615 1706 (Note: See reverse for payment information) LHJ HG/PC
</TABLE>
-4-
<PAGE> 27
NOTICE OF GRANT AWARD
Page 2
5 P01 HG01106-02
MAO, JEN-I, PH.D.
1. The Fiscal 1995 Appropriations Act prohibits reimbursement of direct
salary for individuals at a rate greater than $125,000 per year as determined
in the original award. The language contained in the Appropriations Act
follows:
"None of the funds appropriated in this title for the National
Institutes of Health and the Substance Abuse and Mental Health
Services Administration shall be used to pay the salary of an
individual through a grant or other extramural mechanism at a rate in
excess of $125,000 per year."
2. It is the current practice of the NCHGR to mail the original Notice of
Grant Award (NGA) and Terms and Conditions to the Business Official of the
grantee organization. Since this is the ONLY notification which will be
provided to your institution it is the responsibility of the grantee Business
Office to make distribution of the NGA and Terms and Conditions to the
Principal Investigator and other staff.
3. Pursuant to the NIH Revitalization Act (P.L. 103-43, June 10, 1993),
Section 2004, when purchasing equipment or products under this assistance
award, the recipient should whenever possible, purchase only American-made
items.
4. Applicant organization must comply with the Public Health Service (PHS)
policy relating to distribution of unique research resources produced with PHS
funding (NIH Guide for Grants and Contracts, Vol. 20, No. 5, February, 1991).
Grantee should also comply with the NIH-DOE guidelines for access to mapping
and sequencing data and materials resources, adopted by the NIH-DOE joint
subcommittee on December 7, 1992 (see attached).
5. Allowable costs of activities conducted by for-profit organizations will
be determined by applying the costs principles of Contracts with Commercial
Organizations set forth in 48 CFR 31.2. However, independent research and
development costs (including the indirect costs allocable to them) are
unallowable.
6. Any invention developed under this award should be reported to the Patent
Branch, DHHS, NIH, Office of Technology Transfer, 6011 Executive Boulevard,
Room 325, Rockville, Maryland 20892-3804. Phone (301) 496-7056, for
disposition of patent rights in accordance with 45 CFR, Parts 6 and 8.
Disposition rights on inventions made by small businesses are subject to
Chapter 18 of Title 35 U.S. Code.
-5-
<PAGE> 28
NOTICE OF GRANT AWARD
Page 3
5 P01 HG 01106-02
MAO, JEN-I, PH.D.
7. Prior approval to implement budgetary and programmatic changes, where
required by PHS Policy, must be obtained in writing from the Grants Management
contact shown on this Notice of Grant Award.
8. The future year funding level will be contingent upon satisfactory
progress and evaluation by NCHGR staff and its advisors and recommended by
NCHGR's Advisory Council.
9. Effective with the August 25, 1994 issuance of 45 CFR Part 74, certain
expanded authorities were extended to all research grants and cooperative
agreements. Under this grant award, the no-cost extension authority and the
additional cost alternative for program income authority are not authorized.
-6-
<PAGE> 29
NOTICE OF GRANT AWARD
(ADDITIONAL REMARKS)
PAGE 4
If you need assistance from the National Center for Human Genome Research
during the course of this grant, please contact the grants management and
program staff whose telephone numbers are shown on the Notice of Grant Award.
These individuals work closely with one another through all phases of each
project to another through all phases of each project to facilitate the award
and the administration of the grant. Their functions are defined as follows:
GRANTS MANAGEMENT CONTRACT: The Grants Management Specialist, whose name and
telephone number are indicated in the "Remarks" section of the Notice of Grant
Award, is responsible for all business management matters associated with the
review, negotiation, award and administration grants. The Grants Management
Specialist serves as the focal point for receiving and responding to all
questions and correspondence related to business management and policy matters,
such as correspondence giving or denying any prior approval required by Public
Health Service policy or special Terms of Award, transfer of the grant to
another institution, a change in the period of support, or any actions which
commit, or may result in committing the NCHGR to a change in the amount of
funding.
PROGRAM CONTACT: The Health Scientist Administrator, or program official,
whose name and telephone number also are indicated in the "Remarks" section of
the Notice of Grant Award, is responsible for all scientific and technical
matters dealing with the administration of the grant. The Health Scientist
Administrator reviews and monitors scientific progress of the project and
provides advice and assistance scientific objectives of the research program
can be pursued effectively and successfully. All questions or correspondence
dealing with research progress, changes in research direction, unique
scientific opportunities, or any other scientific need should be addressed to
the Health Scientist Administrator.
PRIOR APPROVAL: Requests which require the prior approval of the NCHGR must be
submitted in writing to the Grants Management Officer. All requests should
reference the complete grant number, e.g., 1 R01 HG 12345-01, and must be
signed by the authorized official of the business office of the grantee
institution and by the principal investigator.
-7-
<PAGE> 1
EXHIBIT 10.33
<PAGE> 2
EXHIBIT 10.33
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
NOTICE OF GRANT AWARD
TYPE OF AWARD: RESEARCH
AUTHORIZED BY: 42 USC 241 42 CFR 52
DATE ISSUED: 04/26/91
GRANT NUMBER: GNM 1 R01 HG00122-O1A1
TOTAL PROJECT PERIOD: From 05/01/91 Through /4/30/94
AWARDED BY: NATIONAL CENTER FOR HUMAN GENOME RESEARCH
Title of Project or Area of Training: A PHYSICAL & REFINED GENETIC MAP OF HUMAN
CHROMOSOME 10
Grantee Organization
Collaborative Research, Inc.
Two Oak Park
Bedford, MA 01730
Principal Investigator/Program Director/ Awardee
MAO, JEN-I PHD
Collaborative Research, Inc.
Human Genetics & Molecular Bio
Two Oak Park
Bedford, MA 01730
<TABLE>
APPROVED BUDGET
FOR BUDGET PERIOD 05/01/91 Through 04/30/92
<S> <C> <C>
Salaries and Wages................................ $136,650
Fringe Benefits ................................... 40,995
Total Personnel Costs................................. $177,645
Consultant Costs...........................................
Equipment.................................................. 41,000
Supplies................................................... 86,000
Travel-Domestic............................................ 1,500
-Foreign.......................................... 4,000
Patient Care--Inpatient....................................
--Outpatient.....................................
Alterations and Renovations................................
Consortium/Contractual Costs...............................
Other......................................................
.........................................
Trainee Stipends...........................................
Trainee Tuition and Fees...................................
Trainee Travel ............................................
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
TOTAL DIRECT COSTS ->.................................. $310,145
When PHS Prior Approval is required for rebudgeting, submit requests to Grants
Management Official below.
AWARD COMPUTATION
DIRECT COSTS................................................ $310,145
INDIRECT COSTS.............................................. $242,231
--------
TOTAL .................................................... $552,376
Less Unobligated Balance [Prior Period(s)].................. $ 0
AMOUNT OF THIS AWARD ->..................................... $552,376
</TABLE>
Base dollars x Rate Percentage = Indirect Costs $
269,145 90.00 242,231
SUPPORT RECOMMENDED FOR REMAINDER OF PROJECT PERIOD**
Budget Total Direct Costs Stipends
Period (Includes Stipends)
02 294,143
03 305,787
04 NONE
**Subject to availiability of funds and satisfactory progress.
- --------------------------------------------------------------------------------
REMARKS
This Grant is included under Expanded Authorities (PHS Circular 89.02) - See
NIH Guide for Grants and Contracts, Vol. 18, No. 36, 10/13/89.
Grants Management Contact: Cheryl L. Holleran (301) 402-0733
Program Administrator: Dr. Bettie J. Graham (301) 496-7531
See page 2 for Additional Remarks.
- --------------------------------------------------------------------------------
Terms of Acceptance: By acceptance of funds awarded under this grant, the
grantee acknowledges that it will comply with terms and conditions in the
following: (1) Legislation cited above; (2) Regulations cited above; (3) Special
provisions noted above under remarks or attached to this notice; (4) CFR Part 74
or 92, as applicable; (5) PHS Grants Administration Manual; (6) PHS Grants
Policy Statement. The above order of precedence shall prevail.
FY- Common Accounting Number: 1-8427201
CRS/ Entity Identifaction No.: 1042297484A1
PHS List No./Object Class Code: /41.4A
Document Number: (08)R1HG00122A
-2-
<PAGE> 4
PROGRAM OFFICIAL
/S/ Bettie J. Graham
BETTIE J. GRAHAM, PH.D.
CHIEF, RESEARCH GRANTS BRANCH
NATIONAL CENTER FOR HUMAN
GENOME RESEARCH
PHS GRANTS MANAGEMENT OFFICIAL
/s/ Alice H. Thomas
ALICE H. THOMAS
GRANTS MANAGEMENT OFFICER
NATIONAL CENTER FOR HUMAN
GENOME RESEARCH
-3-
<PAGE> 5
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
NOTICE OF GRANT AWARD
TYPE OF AWARD: REASEARCH
AUTHORIZED BY: 42 USC 241 42 CFR 52
DATE ISSUED: 05/29/92
GRANT NUMBER: GNM 5 R01 HG00122-02
TOTAL PROJECT PERIOD: From 05/01/91 Through 04/30/94
AWARDED BY: NATIONAL CENTER FOR HUMAN GENOME RESEARCH
Title of Project or Area of Training: PHYSICAL & REFINED GENETIC MAP OF
HUMAN CHROMOSOME 10
Grantee Organization
Collaborative Research, Inc.
1365 Main Street
Waltham, MA 02154
Principal Investigator/Program Director/ Awardee
MAO, JEN-I PHD
Collaborative Research, Inc.
Human Genetics & Molecular Bio
1365 Main Street
Waltham, MA 02154
<TABLE>
APPROVED BUDGET
FOR BUDGET PERIOD 05/01/92 Through 04/30/93
<S> <C> <C>
Salaries and Wages...................................................$150,756
Fringe Benefits .......................................................45,227
Total Personnel Costs................................................... $195,983
Consultant Costs.............................................................
Equipment ........................................................... 3,000
Supplies ........................................................... 89,440
Travel-Domestic.............................................................. 1,560
-Foreign............................................................
Patient Care--Inpatient......................................................
--Outpatient.......................................................
Alterations and Renovations..................................................
Consortium/Contractual Costs................................................. 4,160
Other ...........................................................
...........................................................
Trainee Stipends.............................................................
Trainee Tuition and Fees.....................................................
Trainee Travel...............................................................
</TABLE>
-4-
<PAGE> 6
<TABLE>
<S> <C>
TOTAL DIRECT COSTS ->.................................................. $294,143
When PHS Prior Approval is required for rebudgeting, submit requests to Grants
Management Offical below.
AWARD COMPUTATION
DIRECT COSTS................................................................ $294,143
INDIRECT COSTS.............................................................. $262,029
--------
TOTAL ...................................................................... $556,172
Less Unobligated Balance [Prior Period(s)].................................. $ 0
AMOUNT OF THIS AWARD ->..................................................... $556,172
</TABLE>
Base dollars x Rate Percentage = Indirect Costs $
269,143 90.00 262,029
SUPPORT RECOMMENDED FOR REMAINDER OF PROJECT PERIOD**
Budget Total Direct Costs Stipends
Period (Includes Stipends)
03 305,787
04 NONE
**Subject to availiability of funds and satisfactory progress.
- --------------------------------------------------------------------------------
REMARKS
This Grant is included under Expanded Authorities (PHS Grants Policy Statement
Revised 10/01/90)
Grants Management Contact: Linda Hall (301) 402-0733
Program Administrator: Dr. Bettie Graham (301) 496-7531
See attached for terms of acceptance and any additional terms and conditions.
- --------------------------------------------------------------------------------
FY- Common Accounting Number: 2-8427201
CRS/ Entity Identification No.: 1042297484A1
PHS List No./Object Class Code: /41.4E
Document Number: (08)R1HG00122A
PROGRAM OFFICIAL
/S/ Bettie J. Graham
BETTIE J. GRAHAM, PH.D.
CHIEF, RESEARCH GRANTS BRANCH
-5-
<PAGE> 7
NATIONAL CENTER FOR HUMAN
GENOME RESEARCH
PHS GRANTS MANAGEMENT OFFICIAL
/S/ Alice H. Thomas
ALICE H. THOMAS
GRANTS MANAGEMENT OFFICER
NATIONAL CENTER FOR HUMAN
GENOME RESEARCH
PHS 1533 920521 1337 Copies distributed to Principal Investigator, Program
Director or Awardee, and Business Office DKP
-6-
<PAGE> 8
NOTICE OF GRANT AWARD
Page 2
5 R01 HG00122-03
MAO, JEN-I Ph.D.
TERMS AND CONDITIONS
Terms of acceptance: This grant is subject to the terms and conditions
incorporated either directly or by reference in the following: (1) The grant
program legislation cited on the first page; (2) The grant program regulations
cited on the first page; (3) This award notice including terms and conditions,
if any, noted below or attached to this notice; (4) PHS Grants Policy Statement
including addenda in effect as of the beginning date of the budget period; and
(5) 45 CFR Part 74 or 92 as applicable. In the event there are conflicting or
otherwise inconsistent policies applicable to the grant, the above order of
precedence shall prevail. Acceptance of the grant terms and conditions is
acknowledged by the grantee when funds are drawn or otherwise obtained from the
grant payment system.
1. Unobligated funds from the 01 year may be carried over to the 02 year,
however, no additional funds over those originally recommended for the 02 year
are approved. Any expenses covered by carry-over funds are considered one-time
costs only and will not affect the out years.
2. General Program Income is to be treated under the Additional Costs
Alternative, per the PHS GRANTS POLICY STATEMENT.
-7-
<PAGE> 9
NOTICE OF GRANT AWARD
(Additional Remarks)
Page 3
If you need assistance from the ICD during the course of this grant, please
contact the grants management and program staff whose telephone numbers are
shown on the Notice of Grant Award. These individuals work closely with one
another through all phases of each project to facilitate the award and the
administration of the grant. Their functions are defined as follows:
GRANTS MANAGEMENT CONTACT: The Grants Management Specialist, whose name and
telephone number are indicated in the "Remarks" section of the Notice of Grant
Award, is responsible for all business management matters associated with the
review, negotiation, award, and administration of grants. Grants Management
Specialists serve as the focal point for receiving and responding to all
questions and correspondence related to business management and policy matters,
such as correspondence giving or denying any prior approval required by Public
Health Service policy or special Terms of Award, transfer of the grant to
another institution, a change in the period of support, or any actions which
commit, or may result in committing the ICD to a change in the amount of
funding.
PROGRAM CONTACT: The Health Science Administrator, or program official, whose
name and telephone number also are indicated in the "Remarks" section of the
Notice of Grants Award, is responsible for all scientific and technical matters
dealing with the administration of grants. The Health Science Administrator
reviews and monitors scientific progress of the project and provides advice and
assistance relative to all technical problems to ensure that the scientific
objectives of the research program can be pursued effectively and successfully.
All questions or correspondence dealing with research progress, changes in
research direction, unique scientific opportunities, or any other scientific
needs should be addressed to the Health Science Administrator.
PRIOR APPROVAL: Requests which require the approval of the ICD must be submitted
in writing to the Grants Management Officer. All requests should reference the
complete grant number, e.g. 1 R01 HG-12345-01, and must be signed by the
authorized official of the business office of the grantee institution and by the
principal investigator.
-8-
<PAGE> 10
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
National Institutes of Health
National Center for Human Genome Research
NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation/Regulation)
42 USC 241 42 CFR 52
RESEARCH
1. DATE ISSUED (Mo./Day/Yr.): 04/07/93
2. CFDA NO.: 93.172
3. SUPERSEDES AWARD NOTICE dated __________________ except that any
additions or restrictions previously imposed remain in effect unless
specifically rescinded.
4. GRANT NO.: 5 R01 HG00122-03
Formerly:
5. ADMINISTRATIVE CODES: B2G
6. PROJECT PERIOD Mo./Day/Yr.: From 05/01/91 Through 04/30/94
7. BUDGET PERIOD Mo./Day/Yr.: From 05/01/93 Through 04/30/94
8. TITLE OF PROJECT (OR PROGRAM) (Limit to 56 spaces): Physical & Refined
Genetic Map of Human Chromosome 10 GNM
9. GRANTEE NAME AND ADDRESS:
Collaborative Research, Inc.
1365 Main Street
Waltham, MA 02154
10. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR) (LAST NAME
FIRST AND ADDRESS):
MAO, JEN-I PHD
Collaborative Research, Inc.
Human Genetics & Molecular BIO
1365 Main Street
Waltham, MA 02154
-9-
<PAGE> 11
11. APPROVED BUDGET (Excludes PHS Direct Assistance)
I PHS Grant Funds Only
/ I /
<TABLE>
II Total project costs including grant funds and all
other financial participation
(SELECT ONE AND PLACE NUMERAL IN BOX.)
<C> <S> <C> <C>
a. Salaries and Wages.................................$156,787
b. Fringe Benefits.....................................$47,035
c. Total Personnel Costs................................. $203,822
d. Consultant Costs........................................... 0
e. Equipment.................................................. 3,000
f. Supplies................................................... 93,017
g. Travel..................................................... 1,560
h. Patient Care--Inpatient.................................... 0
i. --Outpatient................................... 0
j. Alterations and Renovations................................ 0
k. Other...................................................... 4,388
l. Consortium/Contractual Costs............................... 0
m. Trainee Related Expenses...................................
n. Trainee Stipends........................................... 0
o. Trainee Tuition and Fees................................... 0
p. Trainee Travel............................................. 0
q. TOTAL DIRECT COSTS ->................................. $205,787
r. INDIRECT COSTS (Rate* % of S&W/TADC)................. $272,568
s. TOTAL APPROVED BUDGET...................................... $578,295
t. SBIR Fee................................................... $ 0
u. Federal Share.............................................. $578,295
v. Non-Federal Share..........................................
</TABLE>
<TABLE>
12. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
<C> <S> <C>
a. Amount of PHS Financial Assistance (from Item 11.u.).......... $578,295
b. Less Unobligated Balance From Prior Budge Periods............. $ 0
c. Less Cumulative Prior Award(s) This Budget Period............. $ 0
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION.................... $578,295
</TABLE>
<TABLE>
13. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT):
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
a. d.
- -------------------------------------------------------------------------------------------------------------------
b. e.
- -------------------------------------------------------------------------------------------------------------------
c. f.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
-10-
<PAGE> 12
<TABLE>
14. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH):
<C> <S> <C>
a. Amount of PHS Direct Assistance................................. $
b. Less Unobligated Balance From Prior Budget Periods.............. $
c. Less Cumulative Prior Award(s) This Budget Period............... $
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION......................... $
</TABLE>
15. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F, OR 45 CFR 92.25,
SHALL BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES:
(Select One and Place LETTER in box.)
/ A /
a. DEDUCTION
b. ADDITIONAL COSTS
c. MATCHING
d. OTHER RESEARCH (Add/Deduct Option)
e. OTHER (See REMARKS)
16. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO, AND AS APPROVED BY,
THE PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND
CONDITIONS INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE
FOLLOWING:
a. The grant program legislation cited above.
b. The grant program regulation cited above.
c. This award notice including terms and conditions, if any,
noted below under REMARKS.
d. PHS Grants Policy Statement including addenda in effect
as of the beginning date of the budget period.
e. 45 CFR part 74 or 45 CFR Part 92 as applicable.
IN THE EVENT THERE ARE CONFLICTING OR OTHERWISE INCONSISTENT POLICIES
APPLICABLE TO THE GRANT, THE ABOVE ORDER OF PRECEDENCE SHALL PREVAIL.
ACCEPTANCE OF THE GRANT TERMS AND CONDITIONS IS ACKNOWLEDGED BY THE
GRANTEE WHEN FUNDS ARE DRAWN OR OTHERWISE OBTAINED FROM THE GRANT
PAYMENT SYSTEM.
- --------------------------------------------------------------------------------
REMARKS: (Other Terms and Conditions Attached -- / / Yes / / No)
Grant Specialist: Linda Hall (301) 402-0733
Program Official: Dr. Bettie J. Graham (301) 496-7531
* Base X Rate ($302,787 X 90.00)
This Grant is included under expanded authorities.
- --------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)
/s/ Jean M. Cahill
(Name-Typed/Print) (Title)
Jean M. Cahill Grants Management Officer
17. OBJ. CLASS: 41.4E
18. CRS - EIN: 1042297484A1
-11-
<PAGE> 13
<TABLE>
<CAPTION>
19. LIST NO.:
- ---------------------------------------------------------------------------------------------------------------------------
FY-CAN DOCUMENT NO. ADMINISTRATIVE AMT. ACTION FIN. AMT. ACTION DIR.
CODE ASST. ASST.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
20.a. 93 8427201 b. R1HG00122A c. d. e.
21.a. b. c. d. e.
22.a. b. c. d. e.
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
-12-
<PAGE> 14
NOTICE OF GRANT AWARD
Page 2
5 R01 HG00122-03
MAO, JEN-I Ph.D.
1. The Appropriations Act prohibits reimbursement of direct salary for
individuals at a rate greater than $125,000 a year as determined in the original
award. The language contained in the Appropriations Act follows:
"None of the funds appropriated in this title for the National Institutes
of Health and the Alcohol, Drug Abuse, and Mental Health Administration
shall be used to pay the salary of an individual, through a grant or other
extramural mechanism, at a rate in excess of $125,000 per year."
2. Allowable activities conducted by for-profit organizations will be determined
by applying the cost principles of contracts with Commercial Organizations set
forth in 48 CFR Subpart 31.2. Independent research and development costs are
unallowable.
3. All prior approvals, where required, remain with the awarding unit.
4. This grant is in the final budget period. Unless an application for
competitive renewal is funded, grant closeout documents must be submitted within
90 days of the end of the current budget period. Documents required are a
Financial Status Report (FSR), Final Invention Statement and Final Progress
Report. The Final Progress Report may be typed on plain white paper and should
include, at a minimum, a summarization of progress toward the achievement of the
originally stated aims, a list of results (positive or negative) considered
significant, and a list of publications resulting from the project as well as a
plan for future publications. An original and one copy are required. Please send
the Final Progress Report and Invention Statement to the following address:
National Center for Human Genome Research
Grants & Contracts Management Section
9000 Rockville Pike
Building 38A, Room 613
Bethesda, MD 20892
The Final FSR should be sent to:
National Institutes of Health
Division of Financial Management
9000 Rockville Pike
Building 31, Room B1B-11
Bethesda, MD 20892
-13-
<PAGE> 15
NOTICE OF GRANT AWARD
Page 3
5 R01 HG00122-03
MAO, JEN-I Ph.D.
5. Title to equipment acquired under this grant shall vest upon acquisition in
the Federal Government and be accounted for as outlined in the publication
entitled, "Control of Property in the Possession of Contractors." The property
administrator for the grant is:
Research Contracts Property Administrator
Personal Property Branch
National Institutes of Health
Building 13, Room 2E65D
Bethesda, MD 20892
Phone (301) 496-6467
-14-
<PAGE> 16
NOTICE OF GRANT AWARD
(Additional Remarks)
Page 4
If you need assistance from the ICD during the course of this grant, please
contact the grants management and program staff whose telephone numbers are
shown on the Notice of Grant Award. These individuals work closely with one
another through all phases of each project to facilitate the award and the
administration of the grant. Their functions are defined as follows:
GRANTS MANAGEMENT CONTACT: The Grants Management Specialist, whose name and
telephone number are indicated in the "Remarks" section of the Notice of Grant
Award, is responsible for all business management matters associated with the
review, negotiation, award, and administration of grants. Grants Management
Specialists serve as the focal point for receiving and responding to all
questions and correspondence related to business management and policy matters,
such as correspondence giving or denying any prior approval required by Public
Health Service policy or special Terms of Award, transfer of the grant to
another institution, a change in the period of support, or any actions which
commit, or may result in committing the ICD to a change in the amount of
funding.
PROGRAM CONTACT: The Health Science Administrator, or program official, whose
name and telephone number also are indicated in the "Remarks" section of the
Notice of Grants Award, is responsible for all scientific and technical matters
dealing with the administration of grants. The Health Science Administrator
reviews and monitors scientific progress of the project and provides advice and
assistance relative to all technical problems to ensure that the scientific
objectives of the research program can be pursued effectively and successfully.
All questions or correspondence dealing with research progress, changes in
research direction, unique scientific opportunities, or any other scientific
needs should be addressed to the Health Science Administrator.
PRIOR APPROVAL: Requests which require the approval of the ICD must be submitted
in writing to the Grants Management Officer. All requests should reference the
complete grant number, e.g. 1 R01 HG-12345-01, and must be signed by the
authorized official of the business office of the grantee institution and by the
principal investigator.
-15-
<PAGE> 17
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
National Instititutes of Health
National Center for Human Genome Research
NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation/Regulation)
42 USC 241 42 CFR 52
RESEARCH
1. DATE ISSUED (Mo./Day/Yr.): 04/22/94
2. CFDA NO.: 93.172
3. SUPERSEDES AWARD NOTICE dated __________________ except that any
additions or restrictions previously imposed remain in effect unless
specifically rescinded.
4. GRANT NO.: 2 R01 HG00122-04
Formerly:
5. ADMINISTRATIVE CODES: M2BG
6. PROJECT PERIOD Mo./Day/Yr.: From 05/01/91 Through 04/30/97
7. BUDGET PERIOD Mo./Day/Yr.: From 05/01/94 Through 04/30/95
8. TITLE OF PROJECT (OR PROGRAM) (Limit to 56 spaces): A High Resolution
Physical Map of Human Chromosome 10 MGN
9. GRANTEE NAME AND ADDRESS:
Collaborative Research, Inc.
1365 Main Street
Waltham, MA 02154
10. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR) (LAST
NAME FIRST AND ADDRESS):
Mao, Jen-I PHD
Collaborative Research, Inc.
1365 Main Street
Waltham, MA 02154
-16-
<PAGE> 18
11. APPROVED BUDGET (Excludes PHS Direct Assistance)
I PHS Grant Funds Only
/ I /
<TABLE>
II Total project costs including grant funds and all
other financial participation
(SELECT ONE AND PLACE NUMERAL IN BOX.)
<C> <S> <C> <C>
a. Salaries and Wages.................................$150,352
b. Fringe Benefits.....................................$51,118
c. Total Personnel Costs................................. $201,470
d. Consultant Costs........................................... 0
e. Equipment.................................................. 8,000
f. Supplies................................................... 105,000
g. Travel..................................................... 1,600
h. Patient Care--Inpatient.................................... 0
i. --Outpatient................................... 0
j. Alterations and Renovations................................ 0
k. Other...................................................... 7,150
l. Consortium/Contractual Costs............................... 0
m. Trainee Related Expenses...................................
n. Trainee Stipends........................................... 0
o. Trainee Tuition and Fees................................... 0
p. Trainee Travel............................................. 0
q. TOTAL DIRECT COSTS ->................................. $323,220
r. INDIRECT COSTS (Rate* % of S&W/TADC)................. $283,698
s. TOTAL APPROVED BUDGET...................................... $606,918
t. SBIR Fee................................................... $ 0
u. Federal Share.............................................. $606,918
v. Non-Federal Share.......................................... $
</TABLE>
<TABLE>
12. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
<C> <S> <C>
a. Amount of PHS Financial Assistance (from Item 11.u.)........... $606,918
b. Less Unobligated Balance From Prior Budge Periods.............. $ 0
c. Less Cumulative Prior Award(s) This Budget Period.............. $ 0
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION..................... $606,918
</TABLE>
<TABLE>
13. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT):
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
a. 05 330,629 d.
- -------------------------------------------------------------------------------------------------------------------
b. 06 373,378 e.
- -------------------------------------------------------------------------------------------------------------------
c. f.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
-17-
<PAGE> 19
<TABLE>
14. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH):
<C> <S> <C>
a. Amount of PHS Direct Assistance................................. $
b. Less Unobligated Balance From Prior Budget Periods.............. $
c. Less Cumulative Prior Award(s) This Budget Period............... $
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION......................... $
</TABLE>
15. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F, OR 45 CFR 92.25,
SHALL BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES:
(Select One and Place LETTER in box.)
/ B /
a. DEDUCTION
b. ADDITIONAL COSTS
c. MATCHING
d. OTHER RESEARCH (Add/Deduct Option)
e. OTHER (See REMARKS)
16. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO, AND AS APPROVED BY,
THE PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND
CONDITIONS INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE
FOLLOWING:
a. The grant program legislation cited above.
b. The grant program regulation cited above.
c. This award notice including terms and conditions, if any,
noted below under REMARKS.
d. PHS Grants Policy Statement including addenda in effect
as of the beginning date of the budget period.
e. 45 CFR part 74 or 45 CFR Part 92 as applicable.
IN THE EVENT THERE ARE CONFLICTING OR OTHERWISE INCONSISTENT POLICIES
APPLICABLE TO THE GRANT, THE ABOVE ORDER OF PRECEDENCE SHALL PREVAIL.
ACCEPTANCE OF THE GRANT TERMS AND CONDITIONS IS ACKNOWLEDGED BY THE
GRANTEE WHEN FUNDS ARE DRAWN OR OTHERWISE OBTAINED FROM THE GRANT
PAYMENT SYSTEM.
- --------------------------------------------------------------------------------
REMARKS: (Other Terms and Conditions Attached -- / X / Yes / / No)
Grant Specialist: Linda Hall (301) 402-0733
Program Official: Dr. Bettie J. Graham 301- 496-7531
* Base X Rate ($315,220 X 90.00)
This Grant is included under expanded authorities.
- --------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)
/s/ Jean M. Cahill
(Name-Typed/Print) (Title)
Jean M.Cahill Grants Management Officer
17. OBJ. CLASS: 41.4B
18. CRS - EIN: 1042297484A1
-18-
<PAGE> 20
<TABLE>
<CAPTION>
19. LIST NO.:
- ---------------------------------------------------------------------------------------------------------------------------
FY-CAN DOCUMENT NO. ADMINISTRATIVE AMT. ACTION FIN. AMT. ACTION DIR.
CODE ASST. ASST.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
20.a. 94 8427201 b. R1HG00122B c. d. e.
21.a. b. c. d. e.
22.a. b. c. d. e.
- ---------------------------------------------------------------------------------------------------------------------------
PHS-5152-5 (Rev. 7/92): 940418 1149 (Note: See reverse for payment information) DC
</TABLE>
-19-
<PAGE> 21
NOTICE OF GRANT AWARD
Page 3
2 R01 HG00122-04
MAO, JEN-I, Ph.D.
Control of Government Property." The property administrator for the grant is:
Chief, Property Accountability Section
Personal Property Branch
National Institutes of Health
Building 13, Room 2E65
Bethesda, MD 20892
Phone: 301-496-6467
-20-
<PAGE> 22
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
National Institutes of Health
National Center for Human Genome Research
NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation/Regulation)
42 USC 241 42 CFR 52
RESEARCH
REVISED
1. DATE ISSUED (Mo./Day/Yr.): 09/30/94
2. CFDA NO.: 93.172
3. SUPERSEDES AWARD NOTICE dated 04/22/94 except that any additions or
restrictions previously imposed remain in effect unless specifically
rescinded.
4. GRANT NO.: 2 R01 HG00122-04
Formerly:
5. ADMINISTRATIVE CODES: M2BG
6. PROJECT PERIOD Mo./Day/Yr.: From 05/01/91 Through 04/30/97
7. BUDGET PERIOD Mo./Day/Yr.: From 05/01/94 Through 04/30/95
8. TITLE OF PROJECT (OR PROGRAM) (Limit to 56 spaces): High resolution
physical MAP of chromosome 10 MGN
9. GRANTEE NAME AND ADDRESS:
Genome Therapeutics Corp.
100 Beaver Street
Waltham, MA 02154
10. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR) (LAST
NAME FIRST AND ADDRESS):
MAO, JEN-I PHD
Collaborative Research Inc.
1365 Main Street
Waltham, MA 02154
-21-
<PAGE> 23
11. APPROVED BUDGET (Excludes PHS Direct Assistance)
I PHS Grant Funds Only
/ I /
<TABLE>
II Total project costs including grant funds and all
other financial participation
(SELECT ONE AND PLACE NUMERAL IN BOX.)
<C> <S> <C>
a. Salaries and Wages......................................... $150,352
b. Fringe Benefits............................................ $ 51,118
c. Total Personnel Costs................................. $201,470
d. Consultant Costs........................................... 0
e. Equipment.................................................. 8,000
f. Supplies................................................... 105,000
g. Travel..................................................... 1,600
h. Patient Care--Inpatient.................................... 0
i. --Outpatient.............................. 0
j. Alterations and Renovations................................ 0
k. Other...................................................... 7,150
l. Consortium/Contractual Costs............................... 0
m. Trainee Related Expenses...................................
n. Trainee Stipends........................................... 0
o. Trainee Tuition and Fees................................... 0
p. Trainee Travel............................................. 0
q. TOTAL DIRECT COSTS ->................................. $323,220
r. INDIRECT COSTS (Rate* % of S&W/TADC).................... $283,698
s. TOTAL APPROVED BUDGET...................................... $606,918
t. SBIR Fee................................................... $ 0
u. Federal Share.............................................. $606,918
v. Non-Federal Share.......................................... $
</TABLE>
<TABLE>
12. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
<C> <S> <C>
a. Amount of PHS Financial Assistance (from Item 11.u.) $606,918
b. Less Unobligated Balance From Prior Budge Periods $ 0
c. Less Cumulative Prior Award(s) This Budget Period $606,918
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION $ 0
</TABLE>
<TABLE>
13. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT):
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
a. 05 330,629 d.
- ---------------------------------------------------------------------------------------------------------------------------
b. 06 373,378 e.
- ---------------------------------------------------------------------------------------------------------------------------
c. f.
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
-22-
<PAGE> 24
<TABLE>
14. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH):
<C> <S> <C>
a. Amount of PHS Direct Assistance........................... $
b. Less Unobligated Balance From Prior Budget Periods........ $
c. Less Cumulative Prior Award(s) This Budget Period......... $
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION................... $
</TABLE>
15. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F, OR 45 CFR 92.25, SHALL
BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES: (Select One and
Place LETTER in box.)
a. DEDUCTION
b. ADDITIONAL COSTS
c. MATCHING
d. OTHER RESEARCH (Add/Deduct Option) / B /
e. OTHER (See REMARKS)
16. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO, AND AS APPROVED BY, THE
PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND CONDITIONS
INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE FOLLOWING:
a. The grant program legislation cited above.
b. The grant program regulation cited above.
c. This award notice including terms and conditions, if any,
noted below under REMARKS.
d. PHS Grants Policy Statement including addenda in effect
as of the beginning date of the budget period.
e. 45 CFR part 74 or 45 CFR Part 92 as applicable.
IN THE EVENT THERE ARE CONFLICTING OR OTHERWISE INCONSISTENT POLICIES
APPLICABLE TO THE GRANT, THE ABOVE ORDER OF PRECEDENCE SHALL PREVAIL.
ACCEPTANCE OF THE GRANT TERMS AND CONDITIONS IS ACKNOWLEDGED BY THE
GRANTEE WHEN FUNDS ARE DRAWN OR OTHERWISE OBTAINED FROM THE GRANT
PAYMENT SYSTEM.
- --------------------------------------------------------------------------------
REMARKS: (Other Terms and Conditions Attached -- / X / Yes / / No)
Grant Specialist: Linda Hall 301- 402-0733
Program Official: Dr. B. Graham 301- 496-7531
* Base X Rate ($315,220 x 90.00)
This Grant is included under expanded authorities.
- --------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)
/s/ Jean M. Cahill
(Name-Typed/Print) (Title)
Jean M. Cahill Grants Management Officer
17. OBJ. CLASS: 41.4B
18. CRS - EIN: 1042297484A1
-23-
<PAGE> 25
<TABLE>
<CAPTION>
19. LIST NO.:
- ---------------------------------------------------------------------------------------------------------------------------
FY-CAN DOCUMENT NO. ADMINISTRATIVE AMT. ACTION FIN. AMT. ACTION DIR.
CODE ASST. ASST.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
20.a. 94 8427201 b. R1HG00122B c. d. e.
21.a. b. c. d. e.
22.a. b. c. d. e.
- ---------------------------------------------------------------------------------------------------------------------------
PHS-5152-5 (Rev. 7/92): 940928 0940 (Note: See reverse for payment information.) JP 01
</TABLE>
-24-
<PAGE> 26
NOTICE OF GRANT AWARD
Page 2
2 ROI HG00122-04
MAO, JEN-I, PH.D.
1. This award is revised to reflect the grantee's name change. The grantee's
name is changed from Collaborative Research, Inc. to Genome Therapeutics
Corporation as requested in letter dated September 12, 1994.
2. It is the current practice of the NCHGR to mail the original Notice of Grant
Award (NGA) and Terms and Conditions to the Business Official of the grantee
organization. Since this is the ONLY notification which will be provided to your
institution it is the responsibility of the grantee Business Office to make
distribution of the NGA and Terms and Conditions to the Principal Investigator
and other staff.
3. All previous terms and conditions remain in effect.
-25-
<PAGE> 27
NOTICE OF GRANT AWARD
(ADDITIONAL REMARKS)
PAGE 3
If you need assistance form the National Center for Human Genome Research during
the course of this grant, please contact the grants management and program staff
whose telephone numbers are shown on the Notice of Grant Award. These
individuals work closely with one another through all phases and each project to
facilitate the award and the administration of the grant. Their functions are
defined as follows:
GRANTS MANAGEMENT CONTACT: The Grants Management Specialist, whose name and
telephone number are indicated in the "Remarks" section of the Notice of Grant
Award, is responsible for all business management matters associated with the
review, negotiation, award and administration of grants. The Grants Management
Specialist serves as the focal point for receiving and responding to all
questions and correspondence related to business management and policy matters,
such as correspondence giving or denying any prior approval required by Public
Health Service policy or special Terms of Award, transfer of the grant to
another institution, a change in the period of support, or any actions which
commit, or may result in committing the NCHGR to a change in the amount of
funding.
PROGRAM CONTACT: The Health Scientist Administrator, or program official, whose
name and telephone number also are indicated in the "Remarks" section of the
Notice of Grant Award, is responsible for all scientific and technical matters
dealing with the administration of the grant. The Health Scientist Administrator
reviews and monitors scientific progress of the project and provides advice and
assistance relative to all technical problems to ensure that the scientific
objectives of the research program can be pursued effectively and successfully.
All questions or correspondence dealing with research progress, changes in
research direction, unique scientific opportunities, or any other scientific
need should be addressed to the Health Scientist Administrator.
PRIOR APPROVAL: Requests which require the prior approval of the NCHGR must be
submitted in writing to the Grants Management Officer. All requests should
reference the complete grant number, e.g., 1 RO1 HG 12345-01, and must be signed
by the authorized official of the business office of the grantee institution and
by the principal investigator.
-26-
<PAGE> 28
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE
National Institutes of Health
National Center for Human Genome Research
NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation/Regulation)
42 USC 241 42 CFR 52
RESEARCH
1. DATE ISSUED (Mo./Day/Yr.): April 13, 1995
2. CFDA NO.: 93-172
3. SUPERSEDES AWARD NOTICE dated __________________ except that any
additions or restrictions previously imposed remain in effect unless
specifically rescinded.
4. GRANT NO.: 5 R01 HG00122-05
Formerly:
5. ADMINISTRATIVE CODES: M2BG
6. PROJECT PERIOD Mo./Day/Yr.: From 05/01/91 Through 04/30/97
7. BUDGET PERIOD Mo./Day/Yr.: From 05/01/95 Through 04/30/96
8. TITLE OF PROJECT (OR PROGRAM) (Limit to 56 spaces): High Resolution
Physical Map of Chromosome 10 MGN
9. GRANTEE NAME AND ADDRESS:
Genome Therapeutics Corporation
100 Beaver Street
Waltham, MA 02154
10. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR)
(LAST NAME FIRST AND ADDRESS):
MAO, JEN-I PHD
Collaborative Research Division
Genome Therapeutics Corporation
100 Beaver Street
Waltham, MA 02154
<PAGE> 29
11. APPROVED BUDGET (Excludes PHS Direct Assistance)
I PHS Grant Funds Only
<TABLE>
/ I /
II Total project costs including grant funds and all
other financial participation
(SELECT ONE AND PLACE NUMERAL IN BOX.)
<C> <S> <C> <C>
a. Salaries and Wages.............................$156,366
b. Fringe Benefits.................................$53,163
c. Total Personnel Costs............................ $209,529
d. Consultant Costs...................................... 0
e. Equipment............................................. 5,000
f. Supplies.............................................. 109,200
g. Travel................................................ 1,600
h. Patient Care--Inpatient............................... 0
i. --Outpatient.............................. 0
j. Alterations and Renovations........................... 0
k. Other................................................. 5,300
l. Consortium/Contractual Costs.......................... 0
m. Trainee Related Expenses..............................
n. Trainee Stipends...................................... 0
o. Trainee Tuition and Fees.............................. 0
p. Trainee Travel........................................ 0
q. TOTAL DIRECT COSTS ->............................ $330,629
r. INDIRECT COSTS (Rate* % of S&W/TADC)............ $293,066
s. TOTAL APPROVED BUDGET................................. $623,695
t. SBIR Fee.............................................. $ 0
u. Federal Share......................................... $623,695
v. Non-Federal Share..................................... $
</TABLE>
<TABLE>
12. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
<C> <S> <C>
a. Amount of PHS Financial Assistance (from Item 11.u.).... $623,695
b. Less Unobligated Balance From Prior Budge Periods....... $ 0
c. Less Cumulative Prior Award(s) This Budget Period....... $ 0
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION.............. $623,695
</TABLE>
<TABLE>
13. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT):
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <S> <C>
a. 06 373,378 d.
- ---------------------------------------------------------------------------------------------------------------------------
b. e.
- ---------------------------------------------------------------------------------------------------------------------------
c. f.
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
-2-
<PAGE> 30
<TABLE>
14. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH):
<C> <S> <C>
a. Amount of PHS Direct Assistance....................... $
b. Less Unobligated Balance From Prior Budget Periods.... $
c. Less Cumulative Prior Award(s) This Budget Period..... $
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION............... $
</TABLE>
15. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F, OR 45 CFR 92.25,
SHALL BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES: (Select
One and Place LETTER in box.)
/ B /
a. DEDUCTION
b. ADDITIONAL COSTS
c. MATCHING
d. OTHER RESEARCH (Add/Deduct Option)
e. OTHER (See REMARKS)
16. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO, AND AS APPROVED BY,
THE PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND
CONDITIONS INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE
FOLLOWING:
a. The grant program legislation cited above.
b. The grant program regulation cited above.
c. This award notice including terms and conditions, if any,
noted below under REMARKS.
d. PHS Grants Policy Statement including addenda in effect
as of the beginning date of the budget period.
e. 45 CFR part 74 or 45 CFR Part 92 as applicable.
IN THE EVENT THERE ARE CONFLICTING OR OTHERWISE INCONSISTENT POLICIES
APPLICABLE TO THE GRANT, THE ABOVE ORDER OF PRECEDENCE SHALL PREVAIL.
ACCEPTANCE OF THE GRANT TERMS AND CONDITIONS IS ACKNOWLEDGED BY THE
GRANTEE WHEN FUNDS ARE DRAWN OR OTHERWISE OBTAINED FROM THE GRANT
PAYMENT SYSTEM.
- --------------------------------------------------------------------------------
REMARKS: (Other Terms and Conditions Attached -- / X / Yes / / No)
Grant Specialist: Linda Hall (301) 402-0733
Program Official: Dr. B. Graham 301- 496-7531
* Base X Rate ($325,629 X 90.00)
This Grant is included under expanded authorities.
- --------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)
/s/ Jean M. Cahill
(Name-Typed/Print) (Title)
Jean M. Cahill Grants Management Officer
17. OBJ. CLASS: 41.4E
18. CRS - EIN: 1042297484A1
-3-
<PAGE> 31
<TABLE>
<CAPTION>
19. LIST NO.:
- ---------------------------------------------------------------------------------------------------------------------------
FY-CAN DOCUMENT NO. ADMINISTRATIVE AMT. ACTION FIN. AMT. ACTION DIR.
CODE ASST. ASST.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
20.a. 95 8427201 b. R1HG00122B c. d. e.
21.a. b. c. d. e.
22.a. b. c. d. e.
- ---------------------------------------------------------------------------------------------------------------------------
PHS-5152-5 (Rev. 7/92): 950406 1705 (Note: See reverse for payment information) LHJ HG/PC
</TABLE>
-4-
<PAGE> 32
NOTICE OF GRANT AWARD
Page 2
5 R01 HG00122-05
MAO, JEN-I, PH.D.
1. The Fiscal 1995 Appropriations Act prohibits reimbursement of direct salary
for individuals at a rate greater than $125,000 per year as determined in the
original award. The language contained in the Appropriations Act follows:
"None of the funds appropriated in this title for the National Institutes
of Health and the Substance Abuse and Mental Health Services Administration
shall be used to pay the salary of an individual through a grant or other
extramural mechanism at a rate in excess of $125,000 per year."
2. It is the current practice of the NCHGR to mail the original Notice of Grant
Award (NGA) and Terms and Conditions to the Business Official of the grantee
organization. Since this is the ONLY notification which will be provided to your
institution it is the responsibility of the grantee Business Office to make
distribution of the NGA and Terms and Conditions to the Principal Investigator
and other staff.
3. Pursuant to the NIH Revitalization Act (P.L. 103-43, June 10, 1993), Section
2004, when purchasing equipment or products under this assistance award, the
recipient should whenever possible, purchase only American-made items.
4. Allowable costs of activities conducted by for-profit organizations will be
determined by applying the costs principles of Contracts with Commercial
Organizations set forth in 48 CFR 31.2. However, independent research and
development costs (including the indirect costs allocable to them) are
unallowable.
5. Normally, the awardee organization retains the principal worldwide patent
rights to any invention developed with United States government support. Under
Title 37 Code of Federal Regulations Part 401, the Government receives a
royalty-free license for its use, reserves the right to require the patent
holder to license others in certain circumstances, and requires that anyone
exclusively licensed to sell the invention in the United States must normally
manufacture it substantially in the United States. To the extent authorized by
Title 35 United States Code Section 205, the Government will not make public any
information disclosing a Government-supported invention for a 4-year period to
allow the awardee organization a reasonable time to file a patent application,
nor will the Government release any information that is part of that
application.
-5-
<PAGE> 33
NOTICE OF GRANT AWARD
Page 3
5 R01 HG00122-05
MAO, JEN-I, PH.D.
6. Any invention, developed under this award should be reported to the Patent
Branch, DHHS, NIH, Office of Technology Transfer, 6011 Executive Blvd., Room
325, Rockville, Maryland 20892- 3804. Phone (301) 496-7056, for disposition of
patent rights in accordance with 45 CFR, Parts 6 and 8. Disposition rights on
inventions made by small businesses are subject to Chapter 18 of Title 35 U.S.
Code.
7. Prior approval to implement budgetary and programmatic changes, where
required by PHS Policy, must be obtained in writing from the Grants Management
contact shown on this Notice of Grant Award.
8. Applicant organization must comply with the Public Health Service (PHS)
policy relating to distribution of unique research resources produced with PHS
funding (NIH Guide for Grants and Contracts, Vol 20, No. 5, February, 1991).
Grantee should also comply with the NIH-DOE guidelines for access to mapping and
sequencing data and materials resources, adopted by the NIH- DOE joint
subcommittee on December 7, 1992 (see attached).
-6-
<PAGE> 34
NOTICE OF GRANT AWARD
(ADDITIONAL REMARKS)
Page 4
If you need assistance from the National Center for Human Genome Research during
the course of this grant, please contact the grants managementr and program
staff whose telephone numbers are shown on the Notice of Grant Award. These
individuals work closely with one another through all phases of each project to
facilitate the award and the administration of the grant. Their functions are
defined as follows:
GRANT MANAGEMENT CONTACT: The Grants Management Specialist, whose name and
telephone numnber are indicated in the "Remarks" sectionof the Notice of Grant
Award, is responsible for all business management matters associated with the
review, negotiation, award, and administration of grants. The Grants Management
Specialist serves as the focal point for receiving and responding to all
questions and correspondence related to business management and policy matters,
such as correspondence giving or denying any prior approval required by Public
Health Service policy or special Terms of Award, transfer of the grant to
another institution, a change in the period of support, or any actions which
commit, or may result in committing the NCHGR to a change in the amount of
funding.
PROGRAM CONTACT: The Health Scientist Administrator, or program official, whose
name and telephone number also are indicated in the "Remarks" section of the
Notice of Grant Award, is responsible for all scientific and technical matters
dealing with the administration of the grant. The Health Scientist Administrator
reviews and monitors scientific progress of the project and provides advice and
assistance relative to all technical problems to ensure that the scientific
objectives of the research program can be pursued effectively and successfully.
All questions or correspondence dealing with research progress, changes in
research direction, unique scientific opportunities, or any other scientific
need should be addressed to the Health Scientist Administrator.
PRIOR APPROVAL: Requests which require the prior approval of the NCHGR must be
submitted in writing to the Grants Management Officer. All requests should
reference the complete grant number, e.g., 1 R01 HG12345-01, and must be signed
by the authorized official of the business office of the grantee institution and
by the principal investigator.
-7-
<PAGE> 35
NIH-DOE GUIDELINES FOR ACCESS TO MAPPING AND
SEQUENCING DATA AND MATERIAL RESOURCES(1)
The information and resources generated by the Human Gemone Project have become
substantial, and the interest in having access to them is widespread. It is
therefore desirable to have a statement of philosophy concerning the sharing of
these resources that can guide investigators who generate the resources as well
as those who wish to use them.
A key issue for the Human Genome Project is how to promote and encourage the
rapid sharing of material and data that are produced, especially information
that has not yet been published or may never be published or may never be
published in its entirety. Such sharing is essential for progress toward the
goals of the program and to avoid unnecessary duplication. It is also desirable
to make the fruits of genome research available to the scientific community as a
whole as soon as possible to expedite research in other areas.
Although it is the policy of the Human Genome Project to maximize outreach to
the scientific community, it is also necessary to give investigators time to
verify the accuracy of their data and to gain some scientific advantage from the
effort they have invested. Furthermore, in orderto assure that novel ideas and
inventions are rapidly developed to the benefit of the public, intellectual
property protection may be needed for some of the data and materials.
After extensive discussion with the community of genome researchers, the
advisors of the NIH and DOE genome programs have determined that consensus is
developing around the concept that a 6 month period from the time the data or
materials are generated to the time they are made available publicly is a
reasonable maximum in almost all cases. More rapid sharing is encouraged.
Whenever possible, data should be deposited in public databases and materials in
public repositories. Where appropriate repositories do not exist or are unable
to accept the data or materials, investigators should accomodate requests to the
extent possible.
The NIH and DOE genome programs have decided to require all applicants expecting
to generate significant amounts of genome data or materials to describe in their
application how and when they plan to make such data and materials available to
the community. Grant solicitations will specify this requirement. These plans in
each application will be reviewed in the course of peer review and by staff to
assure they are reasonable and in conformity with program philosophy. If a grant
is made, the applicant's sharing plans will become a condition of the award and
compliance will be reviewed before continuation is provided. Progress reports
will be asked to address the issue.
- -------------------------
(1) Adopted by the NIH-DOE Joint Subcommittee, December 7, 1992.
-8-
<PAGE> 1
EXHIBIT 10.34
<PAGE> 2
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
DHHS 265942305 OMB No. 099-0115 TN-07
- -----------------------------------------------------------------------------------------------------------------------------------
AWARD/CONTRACT 1. This contract is a rated order under DPAS (15 Rating Page of Pages
CFR 350)
1 30
- -----------------------------------------------------------------------------------------------------------------------------------
2. CONTRACT (Proc. Inst. Indent.) NO. 3. EFFECTIVE DATE 4. REQUISITION/PURCHASE REQUEST/PROJECT NO.
N01-NS-2305 12/1/93 N/A
- -----------------------------------------------------------------------------------------------------------------------------------
5. ISSUED BY Code ______ 6. ADMINISTERED BY (if other than Item 5)
Contracts Management Branch
National Institute of Neurological
Disorders and Storke, NIH
Federal Building, Room 901
Bethesda, Maryland 20892
- -----------------------------------------------------------------------------------------------------------------------------------
7. NAME AND ADDRESS OF CONTRACTOR (No., Street, County, State and Zip) 8. DELIVERY
FOB Destination
Collaborative Research, Inc. [] FOB ORIGIN [] OTHER (See below)
1365 Main Street ----------------------------------------------------------
Waltham, Massachusetts 02154 9. DISCOUNT FOR PROMPT PAYMENT
N/A
----------------------------------------------------------
10. SUBMIT INVOICES ITEM
(4 Copies unless otherwise
specified) TO THE ADDRESS Article G.3
SHOWN IN
- -----------------------------------------------------------------------------------------------------------------------------------
11. SHIP TO/MARK FOR 12. PAYMENT WILL BE MADE BY
See Article D.1. See Article G.3
- -----------------------------------------------------------------------------------------------------------------------------------
13. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION 14. ACCOUNTING AND APPROPRIATION DATA
[] 10 U.S.C. 2304(C)( ) [] 41 U.S.C. 253(c)( ) CAN: 4-8426315 O.C. 25.3K
DOC, NO.: NINS42305A EIN: 1-042297484-A1
- -----------------------------------------------------------------------------------------------------------------------------------
15A. ITEM NO. 15B. SUPPLIES/SERVICES 15C. QUANTITY 15D. UNIT 15E. UNIT PRICE 15F. AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------------
Title: Large Scale Automated DNA Sequencing of Human Genes INCREMENTALLY FUNDED
Involved in Neurological Disorders FY 94 $490,973
PRINCIPAL INVESTIGATOR: Lynn Doucette-Stamm, Ph.D. FY 95 $496,606
CONTRACT TERM: 12/1/93 - 11/30/96 FY 96 $520,858
CONTRACT TYPE: Cost-Plus-A-Fixed-Fee
RFP-NIH-NINDS-93-11
- -----------------------------------------------------------------------------------------------------------------------------------
15G. TOTAL AMOUNT OF CONTRACT $1,508,437
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
16. TABLE OF CONTENTS
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
() SEC DESCRIPTION PAGE(S) () SEC DESCRIPTION PAGE(S)
<S> <C> <C> <C> <C><C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
x A Solicitation/Contract Form 1 X 1 Contract Clauses 20
- -----------------------------------------------------------------------------------------------------------------------------------
X B Supplies or Services and Prices/Costs 3 Part III - List of Documents, Exhibits and Other Attach.
- -----------------------------------------------------------------------------------------------------------------------------------
X C Description/Specs.Work Statement 6 X J List of Attachments 27
- -----------------------------------------------------------------------------------------------------------------------------------
X D Packaging and Marking 10 Part IV - Representations and Instructions
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
X E Inspection and Acceptance 11 K Representations, Certifications and
Other Statements of Offerors
- -----------------------------------------------------------------------------------------------------------------------------------
X F Deliveries or Performance 12 L Instrs., Cond., and Notices to Offerors
- -----------------------------------------------------------------------------------------------------------------------------------
X G Contract Administration Data 14 M Evaluation Factors for Award
- -----------------------------------------------------------------------------------------------------------------------------------
X H Special Contract Requirements 28
- -----------------------------------------------------------------------------------------------------------------------------------
CONTACTING OFFICER WILL COMPLETE ITEM 17 OR 18 AS APPLICABLE
- -----------------------------------------------------------------------------------------------------------------------------------
17. [] CONTRACTOR'S NEGOTIATED AGREEMENT (Contractor is required 18. [] AWARD (Contractor is not required to sign this
to sign this document and return TWO copies to issuing office.) document.) Your officer on Solicitation Number
Contractor agrees to furnish and deliver all items or perform all _______________________________________, including the
the services set forth or otherwise identified above and on any additions or changes made by you which additions or
continuation sheets for the consideration stated herein. The changes are set forth in full above, is hereby
rigths and obligations of the parties to this contract shall be accepted as to the items listed above and on any
subject to and governed by the following documents: (a) this continuation sheets. This award consummates the
award/contract, (b) the solicitation, if any and (c) such contract which consists of the following documents.
provisions, representations, certifications, and specifications, (a) the Government's solication and your offer, and
as are attached or incorporated by reference herein. (Attachments (b) this award/contract. No further contractual
are listed herein.) document is necessary.
- -----------------------------------------------------------------------------------------------------------------------------------
19A. Name and Title of Signer (Type or print) 20A. Name of Contracting Officer
Gerald F. Vovis, Ph.D. Kirkland L. Davis
Senior Vice President, R&D
- -----------------------------------------------------------------------------------------------------------------------------------
19B. Name of 19C. Date Signed 20B UNITED 20D. DATE SIGNED
Contractor STATES OF
AMERICA
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-2-
<PAGE> 4
<TABLE>
<S> <C> <C>
Section B - SUPPLIES OR SERVICES AND PRICES/COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE B.1 BRIEF DESCRIPTION OF SUPPLIES OR SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE B.2 ESTIMATED COST AND FIXED-FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE B.3 PROVISIONS APPLICABLE TO DIRECT COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section C - DESCRIPTION/SPECIFICATION/WORK STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE C.1 WORK STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section D - PACKAGING AND MARKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section E - INSPECTION AND ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE E.1 INSPECTION AND ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section F - DELIVERIES AND PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE F.1 PERIOD OF PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE F.2 TECHNICAL REPORTING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE F.3 DELIVERY OF REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE F.4 STOP WORK ORDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section G - CONTRACT ADMINISTRATION DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE G.1 KEY PERSONNEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE G.2 PROJECT OFFICER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE G.3 INVOICE SUBMISSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE G.4 CONTRACT FINANCIAL REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE G.5 GOVERNMENT PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section H - SPECIAL CONTRACT REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE H.1 REFERENCES TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE H.2 REIMBURSEMENT OF COSTS FOR INDEPENDENT RESEARCH AND DEVELOPMENT PROJECT . . . . . . . . . . . . . . . . . 19
ARTICLE H.3 REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFEROR . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE H.4 SALARY RATE LIMITATION LEGISLATION PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE H.5 HUMAN SUBJECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
-3-
<PAGE> 5
<TABLE>
<S> <C> <C>
Section I - CONTRACT CLAUSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE I.1 CLAUSES INCORPORATED BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE I.3 ADDITIONAL CONTRACT CLAUSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE I.4 CLAUSES INCLUDED IN FULL TEXT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section J - LIST OF ATTACHMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
-4-
<PAGE> 6
Contract No. NO1-NS-4-2305
SECTION B
---------
SUPPLIES OR SERVICES AND PRICES/COSTS
-------------------------------------
ARTICLE B.1 BRIEF DESCRIPTION OF SUPPLIES OR SERVICES
- -----------------------------------------------------
The contract involves research and development to improve and provide large
scale DNA template production applicable to large scale DNA sequencing
analysis. In addition, performance under the contract will require screening
and amplification of clones from lambda, cosmid, or YAC libraries and
biological samples, and gentic typing with highly informative PCR-based
markers.
ARTICLE B.2 ESTIMATED COST AND FIXED-FEE
- ----------------------------------------
(a) The estimated cost for performance of work under this
contract, including all direct and indirect costs is
$1,373,414.00.
(b) The fixed-fee for this contract is $135,023.000. The fee
shall be paid in direct ratio to the level of effort
expended; that is, the percent of fee paid shall be equal
to the percent of effort actually expended. Payment shall
be subject to the withholding provisions of the clauses
Allowable Cost and Payment, and Fixed Fee incorporated
herein and made a part of this contract. Payment of
fixed-fee shall not be made in less than monthly increments.
(c) The Government's obligation, represented by the sum of the
estimated cost plus fixed-fee, is $1,508,437.00.
(d) Total funds currently available for payment and allotted
to this contract are $490,973.00, of which $447,026.00
represents the estimated reimbursable costs, and $43,947.00
the fixed fee. For further provisions on funding, refer to
the LIMITATION OF FUNDS clause.
(e) It is estimated that the amount currently allotted will
cover performance of work under the contract through
November 30, 1994.
(f) The Contracting Officer may allot additional funds to the
contract without the concurrence of the Contractor.
-5-
<PAGE> 7
<TABLE>
(g) It is estimated that future allotments will be awarded as
follows:
<CAPTION>
Period Est. Cost Fee Total
<S> <C> <C> <C>
12/1/94-11/30/95 $452,155 $44,451 $496,606
12/1/95 - 11/30/96 $474,233 $46,625 $520,858
</TABLE>
ARTICLE ARTICLE B.3 PROVISIONS APPLICABLE TO DIRECT COSTS
- ---------------------------------------------------------
(a) Items Unallowable Unless Otherwise Provided
-------------------------------------------
Notwithstanding the clauses Allowable Cost and Payment and
Subcontracts (Cost-Reimbursement and Letter Contracts)
incorporated in this contract, unless authorized elsewhere in
this contract or in writing by the Contracting Officer, the
costs of the following items or activities shall be
unallowable as direct costs:
(1) Acquisition, by purchase or lease, of any interest in
real property;
(2) Special rearrangement or alteration of facilities;
(3) Purchase or lease of any item of general purpose
office furniture or office equipment regardless of
dollar value (general purpose equipment is defined as
any items of personal property which are usable for
purposes other than research, such as office equipment
and furnishings, pocket calculators, etc.);
(4) Travel to attend general scientific meetings;
(5) Foreign travel - see b.2. below;
(6) Patient care costs; and
(7) Accountable Government property (defined as both real
and personal property with an acquisition cost of
$1,000 or more and a life expectancy of more than two
years) and "sensitive items" (defined and listed in the
CONTRACTOR'S GUIDE FOR CONTROL OF GOVERNMENT PROPERTY,
1990), regardless of acquisition value.
(b) Travel Costs
------------
(1) Domestic Travel
---------------
-6-
<PAGE> 8
a. Total expenditures for domestic travel (including
transportation, lodging, subsistence, and incidental
expenses) incurred in direct performance of this
contract shall not exceed $3,200 without the prior
written approval of the Contracting Officers.
b. Reimbursement of travel costs directly attributable
to contract performance and any other travel approved
by the Contracting Officer shall be made in
accordance with the provisions set forth below:
1. This contract is subject to the provisions of
Section 24 of Public Law 99-234 which amends
the Office of Federal Procurement Policy Act
to provide that contractor costs for travel,
including lodging, other subsistence, and
incidental expenses, shall be allowable only
to the extent that they do not exceed the
amount allowed for Federal employees.
2. The contractor, therefore, shall invoice and
be reimbursed for all travel costs in
accordance with FAR 31.205-46.
(2) Foreign Travel
--------------
Requests for foreign travel must be submitted at
least six weeks in advance, and shall contain the
following: (a) meeting(s) and place(s) to be
visited, with costs and dates; (b) name(s) and
title(s) of Contractor personnel to travel, their
functions in the contract project; (c) contract
purposes to be served by the travel; (d) how travel
of Contractor personnel will benefit and contribute
to accomplishing the contract project, or will
otherwise justify the expenditure of NIH contract
funds; (e) how such advantages justify the costs for
travel and absence from the project of more than one
person, if such is suggested; and (f) what additional
functions may be performed by the traveler(s) to
accomplish other purposes of the contract and thus
further benefit the contract.
ARTICLE ARTICLE B.4 ADVANCE UNDERSTANDINGS
(a) Other provisions of this Contract notwithstanding, approval of
the following items within the limits set forth is hereby
granted without further authorization from the Government:
(1) Purchase a computer software package (Fourth Dimension),
including Compiler, and Runtime License, in an amount
of $1,052.
(2) Travel costs (including air fair, registration fees,
ground transportation, and incidental expenses) for the
Principal Investigator to attend the annual "Genome
Sequencing and Analysis Conference" held each summer in
Hilton Heal, South Carolina. Travel to this conference is
authorized for 1994, 1995, and 1996. The total amount
authorized for this travel, during the period of this
contract, is $3,200.
-7-
<PAGE> 9
(b) In no event shall the final amount reimbursable for overhead
costs exceed a ceiling rate of 80% of total costs, excluding
equipment. The Contractor shall complete all work in accordance
with the STATEMENT OF WORK, terms, and conditions of this
contract. Any overhead costs over and above this cost ceiling
shall not be reimbursed under this contract or by any other
Government contract, grant or cooperative agreement.
SECTION C
---------
DESCRIPTION/SPECIFICATION/WORK STATEMENT
----------------------------------------
ARTICLE C.1 WORK STATEMENT
- ---------------------------
(a) Introduction:
------------
The key objectives of the requested research effort are to
speed up ongoing genetic research to obtain data critical for
diagnosis, treatment and prevention of genetic neurological
disorders. The contractors will perform genetic research at
the most labor-intensive, space- and time- consuming
preparatory level. This will enable the NINDS Sequencing
facility, using highly efficient automated analysis, to extend
these preliminary results. Investigators could then be
supplied with analyzed sequences, candidate disease gene loci
from genetic typing, candidate exons from physical maps or
candidate disease-specific mutations.
The NINDS DNA sequencing facility is currently equipped with
four ABI 373A DNA sequencers and ABI Catalyst robotic station
for performing sequencing reactions. Thirty six templates a
day can be sequenced per sequencer. The same sequencers can
be used for automatic genetic typing and identification of
unknown mutations using single-strand conformational
polymorphism (SSCP) protocols. The capacity of this Facility
is very substantial and that places pressure on the other
steps of the overall process, in particular the production of
sequencing templates, carrying out sequencing reactions,
marker selection for genetic typing, preparing and initial
testing of genomic libraries, storage and analysis of data.
This research is to improve and provide large scale DNA
template production applicable to automated DNA sequence
analysis.
(b) Technical Specifications:
------------------------
Independently, and not as an agent of the Government, the
contractor shall exert its best efforts to continue
development of new and highly reproducible rapid DNA template
production and purification procedures which provide DNA of
sufficient purity for highly accurate automated DNA sequence
analysis. It is estimated that the Contractor will be
required to provide approximately 10,000 purified DNA template
preparations/year; genetic
-8-
<PAGE> 10
typing in the amount of approximately 70 to 100 markers per
100 samples/year; and screening approximately 10 to 20
libraries/year. The sources of DNA shall be provided to the
Contractor by the NINDS.
Specifically, the Contractor shall:
(1) Carry out procedures for the creation of ordered
deletions in large DNA fragments, develop new procedures
to facilitate the generation of such deletions in DNA
fragments of interest to the Government. The goal is to
make in a given fragment overlapping deletions suitable
for sequencing by the use of the Applied Biosystems 373A
DNA Sequencer. This shall require sets of deleted
clones with each clone delete for about 300 bases
relativeto the next larger clone and about 100 base
overlap with the adjacent deletion clone.
(2) Develop procedures to facilitate the preparation of
large numbers of DNA templates in order to provide
DNA sequence analysis of sufficient purity to permit
automated DNA sequence analysis of greater than 99%
accuracy over 400 bases/template.
(3) Templates shall be prepared from a variety of
substrates, including single strand phage DNA, double
strand plasmid DNA, phagemid DNA, and genomic DNA as
necessary for a particular gene. Sources of DNA may be
clonal bacterial cell-lines or phage supernants,
plasmids or bacteriophage, bacteriophage libraries, or
plasmid libraries. In the case of phage libraries, the
library will be converted by the contractor to plasmid
form by in vivo excision. Clones for template
preparation will be selected at random or after
screening with probes supplied by NIH that are designed
to eliminate undesirable clones.
(4) The goals outlined in 1 and 2 (above) shall be
accomplished by utilizing a variety of procedures
depending upon the particular substrate being used.
These procedures would include, but not be limited to,
polymerase chain reaction, PEG precipitation, cesium
chloride gradients, column chromatography and continuous
eluction gel electrophoresis, in an attempt to establish
the most rapid/cost effective and high quality procedure
for DNA template isolation and purification.
(5) The contractor shall be required to produce
approximately 10,000 DNA templates of sufficient
purity per year for automated DNA sequence analysis.
(6) The contractor shall provide at least 20 micrograms of
each DNA template.
(7) As a part of the evaluation process the NINDS Project
Officer will provide frequent feed-back information to
the Contractor concerning the template quality and
quantity, and the actual size of deletions. The
Contractor shall provide the Project Officer with
information concerning the enzymes being used for
ongoing subcloning to determine
-9-
<PAGE> 11
the absolute orientation and position of subclones
and deletions with respect to the original clone.
This information sent back to the contractor will
aid in procedure modification pursuant to the above
goals.
(8) The contractor shall select highly polymorphic markers
appropriate for genetic typing of a disease affected
pedigre and conduct genetic typing using DNA source
provided by the Government to exclude genetic linkage to
the disease gene in certain areas of the genome as
determined by the Project officer.
(9) The contract shall perform initial screening of YAC or
cosmid libraries using hybridization and PCR with
probes or primers that will be identified by the Project
Officer. The YAC or cosmid clones containing the
fragment of interest shall be subclined into plasmids.
The subclines should contained each fragment in both
orientations and ordered deletions generated if
requested by the Project Officer.
(c) Special Requirements
--------------------
(1) Performance of work under this contract shall not
support or include any activity or studies indirectly
involving either human subjects or live vertebrate
animals.
(2) To facilitate the establishment of communications for
the data in both locations, the Contractor shall
provide the NINDS with the documentation for the design
of their data base as well as the scripts and source
codes.
(3) The Contractor understands that all clones furnished by
the Government are the property of the Government. The
Contractor shall use the clones for the purpose of
performing the contract. The clones and any subsequent
materials derived from them shall not be used for any
other purpose, specifically, but not limited to their
use as probes for mapping or any other purpose or
distributed to any other partners. The Contractor also
understands that all data, subclones or other material
derived from the Government furnished material are
solely the property of the Government. All information
concerning the Government provided samples shall be
considered privileged information and shall not be
disseminated to any parties not directly involved in the
execution of the contract. The Contractor understands
that it has no rights, commercial or otherwise, to data
derived from the sequence of the Government supplied
material or derivatives of that material nor data
derived from the use of subclones provided by the
Government and used by the Government or their
collaborators for any purpose. The Contractor shall
have rights to any procedures or materials developed
solely by them under the contract for the preparation of
templates, automation of procedures, construction of new
vectors, and other processes or constructions that are
generated in performance of this contract. The
Contractor understands that the Government retains the
right of a royalty free license to use such inventions
as may be developed by the Contractor under this
Contract. The Contractor
-10-
<PAGE> 12
shall provide the NINDS with a copy of any manuscript
they propose to publish to insure that they have only
included information concerning procedures that the
Contractor has developed, and is not revealing
privileged information about Government supplied
materials.
(4) The Contractor shall store all clones it derives until
notified by the NINDS. Upon receiving written
instructions from the NINDS, the Contractor will send
such clones to the NINDS or destroy them.
(d) Government Furnished Materials
------------------------------
(1) The Government shall provide the source of DNA to the
Contractor for clone preparation and purification.
The source of DNA will be plasmid transfected or
phage infected cells, genomic DNA, plasmid DNA, phage
supernatants as deemed appropriate by the NINDS
Project Officer, based on the particular scientific
needs of the Government. The source of DNA will
usually be one of three classes which shall require
somewhat different processing by the Contractor.
Class one shall be human total genomic DNA which the
contractor shall use for genetic mapping. Class two
shall be YAC, cosmid or lambda clones containing
genomic DNA or plasmid clones containing cDNA which
the contractor shall use to subclone into a vector
suitable for ordered deletion generation, generate
ordered deletions and prepare templates for automated
sequencing. Class three shall be plasmid or phage
clones containing small inserts which the Contractor
shall amplify and purify and prepare for automated
sequencing. NINDS will provide instructions on the
procedure needed.
(2) Government property acquired under contract
NO1-NS-0-2387 is hereby transferred for use in direct
performance of work hereunder and is made available
on an "as is" basis. A list of this property is
provided as Attachment #1 under Section J. FAR clause
52.245-19, Government Property Furnished "As Is," is
hereby made part of this contract. This clause is in
addition to FAR clause 52.245-5, Government Property
(Cost Reimbursement, Time-and-Material, or Labor-Hour
Contract), also made a part of this contract.
ARTICLE C.2 LEVEL OF EFFORT
- ----------------------------
(a) In accomplishing the work set forth herein, the Contractor
shall provide the labor hours per labor category as specified
below during the period set forth in Section F, Article F.1.
The labor hours exclude absences for vacation, sick leave, and
holidays. It is estimated that the labor hours will be
expended approximately as follows:
<TABLE>
<CAPTION>
Labor Category Year 1 Year 2 Year 3
-------------- ------ ------ ------
<S> <C> <C> <C>
Principal Investigator 520 520 520
</TABLE>
-11-
<PAGE> 13
<TABLE>
<S> <C> <C> <C>
Prog. Analyst 208 208 208
Laboratory Technicians 6,240 6,240 6,240
----- ----- -----
Total Hours 6,968 6,968 6,968
</TABLE>
(b) The Contractor agrees to use its best efforts to accomplish
all the work outlined or referenced under Article C.1. above.
Performance of the requirements under this Article will be
considered acceptable if the work is performed in accordance
with high standards of scientific and professional skills and
the indicated level of effort has been substantially applied,
provided, however, that all other requirements are met,
including delivery of reports and other materials as may be
required under the contract. Substantially applied means
delivery of at least 90% of the total labor hours specified.
(c) In the event fewer hours than that above are used by the
Contractor in accomplishing the work prescribed in Article
C.!., and the Government has not invoked its rights under FAR
Clause 52.249-6, Termination (Cost-Reimbursement),
incorporated in this contract the parties agree that the fee
will be adjusted based solely upon the quantity of hours by
which the number of hours furnished is less than the number of
hours specified in this Article. The resulting adjustment
shall be evidenced by a contract modification.
SECTION D
---------
PACKAGING AND MARKING
---------------------
1. The Contractor shall be responsible for transfer of the
completed templates to the NINDS in a manner that assures the
biological and chemical stability of the samples. The samples
shall be shipped on wet/dry ice via overnight mail service to
the following address:
Project Officer
DNA Sequencing Facility
Section of Neurogenetics
Division of Intramural Research
National Institute of Neurological
Disorders and Stoke, NIH,
Park Building, Room 405
12420 Parklawn Drive
Rockville, Maryland 20857
2. The cover page of all report deliverables shall be marked
in accordance with the following identifiers:
(a) Title:
-12-
<PAGE> 14
(b) Contract Number:
(c) Name of Contractor:
(d) Name of Principal Investigator:
(e) Report deliverables shall be identified by type i.e.
(Progress Reports, Salient Result Report, and/or Final
Report), and indicate the period covered.
SECTION E
---------
INSPECTION AND ACCEPTANCE
-------------------------
ARTICLE E.1 INSPECTION AND ACCEPTANCE
(a) The Contracting Officer or a duly authorized representative
shall perform inspection and acceptance of all materials,
reports, and services to be provided.
(b) For the purposes of this ARTICLE, the Project Officer
designated in Article G.2. is the authorized representative
of the Contracting Officer.
(c) Inspection and acceptance of contract work and/or deliverables
shall be performed at the DNA Sequencing Facility, Section of
Neurogenetics, Division of Intramural Research, National
Institute of Neurological Disorders and Stroke, NIH, Park
Building, Room 405, 12420 Parklawn Drive, Rockville, Maryland
20857; or at the Contractor's facility. The Project Officer
may make regular visits to the Contractor's facility in order
to monitor progress of work. Acceptance of work may be
presumed unless otherwise indicated in writing by the
Contracting Officer within 30 days after performance or
delivery of specified items.
(d) This contract incorporates the following clause by reference,
with the same force and effect as if it were given in full
text. Upon request, the Contracting Officer will make its full
text available.
FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSE: 52.246-9,
INSPECTION OF RESEARCH-DEVELOPMENT (Short Form) (APRIL 1984).
-13-
<PAGE> 15
SECTION F
---------
DELIVERIES AND PERFORMANCE
--------------------------
ARTICLE F.1 PERIOD OF PERFORMANCE
- ---------------------------------
The period of performance of this contract shall be from December 1, 1993
through November 30, 1996. The period of performance encompasses submission,
review and acceptance of the final report, and any other deliverables as may be
required under the contract.
ARTICLE F.2 TECHNICAL REPORTING REQUIREMENTS
- --------------------------------------------
In addition to those reports required by SECTION I and other terms of this
contract, the Contractor shall prepare and deliver to the Project Officer, with
one additional copy to the Contracting Officer, the following reports in the
manner stated below:
(a) Progress Reports
----------------
One (1) copy of a quarterly progress report plus abstract
including a description of work performed during the period
reported upon, and the anticipated work plan for the coming
quarter, due 30 days after the last day of the quarter. A
quarterly report is not due for the quarterly period in which
the final report falls due.
(b) Salient Results Reports
-----------------------
One (1) copy of a yearly report, which discusses and
summarizes salient results achieved in the previous contract
year. These reports are required for only the first and second
contract years, and shall be delivered within ten days
following the close of the yearly period reported upon.
(c) Final Report
------------
Five (5) copies of a comprehensive final report plus abstract
shall be submitted on or before the expiration date of the
contract. All copies of publications supported by the contract
shall be included. The final report shall contain sufficient
detail to enable the sponsoring NINDS Division or other
competent parties to duplicate the results of the Contractor
in the complete processing of large insert clones to
sequenceable templates generated by ordered deletion as
described in the Statement of Work. The report shall contract
enabling detail of all new procedures or processes developed
by the Contractor under this contract, especially concerning
the use of robotics, other automated procedures, or any other
changes from the original starting point of the research. The
report shall contain sufficient detail to enable the NINDS
Project Officer to evaluate the effectiveness of the original
procedures in the hands of the Contractor as well as to
compare the effectiveness of the original procedures with the
-14-
<PAGE> 16
procedures developed by the Contractor. The final report shall
also include details concerning problems with the procedures
and strategies employed in carrying out the contract.
(d) Verbal Reports
--------------
The Contractor shall conduct weekly discussions with the NINDS
Project Officer on the current status of the project, status
of samples being processed, etc.
ARTICLE F.3 DELIVERY OF REPORTS
- --------------------------------
Copies of the reports specified in ARTICLE F.2. above shall be delivered
f.o.b. destination to the following addresses:
(1) Project Officer
DNA Sequencing Facility
Section of Neurogenetics, DIR
National Institute of Neurological Disorders
and Stroke, NIH,
Park Building, Room 405
12420 Parklawn Drive
Rockville, Maryland 20857
(2) Contracting Officer
Contracts Management Branch, DEA
National Institute of Neurological
Disorders and Stroke, NIH
Federal Building, Room 901
7550 Wisconsin Avenue
Bethesda, Maryland 20892
ARTICLE F.4 STOP WORK ORDER
- ----------------------------
This contract incorporates the following clause by reference, with the same
force and effect as if it were given in full text. Upon request, the Contracting
Officer will make its full text available.
FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER I) CLAUSE: 52.212-13, STOP WORK
ORDER, (AUGUST 1989) with ALTERNATE I (APRIL 1984).
SECTION G
---------
CONTRACT ADMINISTRATION DATA
----------------------------
ARTICLE G.1 KEY PERSONNEL
- --------------------------
-15-
<PAGE> 17
(a) Pursuant to the Key Personnel clause incorporated in this
contract, the following individual is considered to be
essential to the work being performed hereunder:
Name Title
---- -----
Lynn Doucette-Stamm, Ph.D. Principal Investigator
(b) The clause cited above contains a requirement for review and
approval by the Contracting Officer of written request for
change of Key Personnel reasonably in advance of diverting
this individual from the contract. Advance notice should not
be less than thirty (30) days prior to departure.
ARTICLE G.2 PROJECT OFFICER
- ----------------------------
(a) The following official will represent the Government for the
purpose of this contract:
Name Title
---- -----
Lev Goldfarb, Ph.D. Project Officer
(b) The Project Officer is responsible for (1) monitoring the
contractor's technical progress, including the surveillance
and assessment of performance, and recommending to the
Contracting Officer changes in requirements; (2) interpreting
the Statement of Work and any other technical performance
requirements; (3) performing technical evaluation as required;
(4) performing technical inspections and acceptances required
by this contract; and (5) assisting in the resolution of
technical problems encountered during performance.
(c) The Contracting Officer is the only person with the authority
to act as agent of the Government under this contract. Only
the Contracting Officer has authority to (1) direct or
negotiate any changes in the Statement of Work; (2) modify or
extend the period of performance; (3) change the delivery
schedule; (4) authorize reimbursement of costs incurred during
the performance of this contract; or (5) otherwise change any
terms and conditions of this contract.
(d) The Government may unilaterally change its Project Officer
designation.
ARTICLE G.3 INVOICE SUBMISSION
- -------------------------------
(a) Invoice/Financing Request Instructions for NIH
Cost-Reimbursement Type Contracts, NIH (RC)-1, are attached
and made part of this contract. These instructions and the
following directions for the submission of invoices/financing
requests must be followed to meet the requirements of a
"proper" payment request pursuant to FAR Subpart 32.9.
-16-
<PAGE> 18
(b) Invoices/financing requests shall be submitted concurrently
as follows:
(1) An original and two copies to the following
designated payment office:
Chief, Contracts Section, FAAB
Division of Financial Management
National Institutes of Health
Building 31, Room B1B05A
9000 Rockville Pike
Bethesda, Maryland 20892
(2) Three copies to the following approving officer:
Contracting Officer
Contracts Management Branch
National Institute of Neurological
Disorders and Stroke, NIH
Federal Building, Room 901
7550 Wisconsin Avenue
Bethesda, Maryland 20892
(c) Inquiries regarding payment of invoices/financing requests
should be directed to the designated payment office, attention
Chief, Contracts Section, FAAB, (301) 496-6452.
ARTICLE G.4 CONTRACT FINANCIAL REPORT
- --------------------------------------
(a) Financial reports on the attached Form NIH 2706, Financial
Report of Individual Project/Contract, shall be submitted by
the Contractor in accordance with the instructions, which
accompany the form, in an original and two copies, not later
than the thirtieth (30th) working day after the close of the
reporting period. The line entries for elements of cost
(expenditure categories) which shall be reported within the
total contract are listed in paragraph (e) below. Subsequent
changes and/or additions in the line entries shall be made in
writing.
(b) In accordance with that part of the NIH 2706 instructions
entitled "Preparation Instructions," all columns A through J
shall be completed for each report submitted.
(c) The first financial report shall cover the period consisting
of the first full three calendar months following the
effective date of the contract, in addition to any fractional
part of the initial month. Thereafter, reports shall be
submitted on a quarterly basis.
-17-
<PAGE> 19
(d) The Contracting Officer may require the Contractor to submit
detailed support for costs contained in one or more interim
financial reports. This clause does not supersede the record
retention requirements in FAR 4.7.
<TABLE>
(e) The following expenditure categories shall be reported:
<CAPTION>
Expenditure Categories Hours
---------------------- -----
<S> <C>
-Personnel - Key (PI) 1,560
-Personnel - Prog. Analyst 624
-Personnel - Lab. Technicians 18,720
Fringe Benefits
-Materials/Supplies
-Travel
-Equipment
-Other Direct Costs
-Overhead Costs
-Fixed Fee
-Total Cost to the Government
</TABLE>
ARTICLE G.5 GOVERNMENT PROPERTY
- --------------------------------
(a) Control of Government Property
------------------------------
In addition to the requirements of the clause, GOVERNMENT
PROPERTY, incorporated in this contract, the Contractor shall
comply with the provisions of DHHS Publication, CONTRACTOR'S
GUIDE FOR CONTROL OF PROPERTY, 1990, which is incorporated by
reference. Among other issues, this publication provides a
summary of the Contractor's responsibilities regarding
purchase authorizations and inventory and reporting
requirements under the contract. Copies of the publication may
be obtained from the Research Contracts Property
Administration, National Institutes of Health, Building 13,
Room 2E-65, 9000 Rockville Pike, Bethesda, Maryland 20892.
In the event of an inconsistency between this publication and
the terms and conditions of this contract, the terms and
conditions of the contract shall prevail.
(b) Contractor-Acquired Government Property - Schedule I-A
------------------------------------------------------
Pursuant to the clause, GOVERNMENT PROPERTY, incorporated in
this contract, the Contractor is hereby authorized to acquire
the property listed below for use in direct performance of
work under this contract. Title to this property shall vest in
the Government.
QUANTITY DESCRIPTION TOTAL COST
-18-
<PAGE> 20
<TABLE>
<S> <C> <C>
2 (Two) Power Supply (Computer Controlled) $4,990
Bio-Rad, @ $2,495 each
4 (Four) Poker-Face Gel Electrophoresis
Apparatus (Hofer) @ $925 each $3,700
2 (Two) 12 Channel Pipetting Syringe
(Hamilton) @ $650 each $1,300
1 (One) Macintosh Centris 650 Computer
with Radius Display, Keyboard, etc. $4,017
</TABLE>
Sales tax, transportation, and/or installation charges are allowable, but must
be listed and billed separately. The attached form HHS-565, Report of
Capitalized and Nonexpendable Equipment, must be completed pursuant to the NIH
Invoice/Financing Request Instructions and forwarded with the financing request
in which such charges are claimed. Equipment reported on the form HHS-565 must
be sent to the NIH Property Administrator, Building 13, Room 2E-65, Bethesda,
MD, 20892. No substitution of equipment shall be made without the prior
written approval of the Contracting Officers. Unit prices for the above
property may not exceed the authorized amounts by more than fifteen (15)
percent without written authorization of the Contracting Officer.
NIH decal numbers (attached) shall be affixed to the equipment
authorized above.
(c) Government Furnished Property - Schedule II-1
---------------------------------------------
Pursuant to the clause Government Property incorporated in
this contract, the Contractor is hereby authorized to retain
custody of the property listed in the attached Schedule II-A
(Attachment #1 under Section J) for use in direct performance
of this contract. Accountability for the items listed in
Schedule II-A is hereby transferred to this contract from
predecessor Contract No. NO1-NS-O-2387, under which these
items were provided by the Government. Title to this property
shall remain in the Government.
SECTION H
---------
SPECIAL CONTRACT REQUIREMENTS
-----------------------------
ARTICLE ARTICLE H.1 REFERENCES TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES
- -----------------------------------------------------------------------------
All references to the Secretary, Department of Health, Education and Welfare,
HEW, HEWPR, HEW forms, etc., shall be changed to Secretary, Department of
Health and Human Services, HHS, HHSAR, etc., as appropriate.
-19-
<PAGE> 21
ARTICLE H.2 REIMBURSEMENT OF COSTS FOR INDEPENDENT RESEARCH AND DEVELOPMENT
- ----------------------------------------------------------------------------
PROJECT
- -------
The primary purpose of the Public Health Service (PHS) is to support and
advance independent research within the scientific community. This support is
provided in the form of contracts and grants totaling approximately 7 billion
dollars annually. PHS has established effective, time tested and well
recognized procedures for stimulating and supporting this independent RESEARCH
by selecting from multitudes of applications those research projects most
worthy of support within the constraints of its appropriations. The
reimbursement through the indirect cost mechanism of independent research and
development costs not incidental to product improvement would circumvent this
competitive process.
To ensure that all research and development projects receive similar and equal
consideration, all organizations may compete for direct funding of independent
research and development projects they consider worthy of support by submitting
those projects to the appropriate Public Health Service grant office for
review. Since these projects may be submitted for direct funding, the
Contractor agrees that no costs for any independent research and development
project, including all applicable indirect costs, will be claimed under this
contract.
ARTICLE H.3 REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFEROR
- ---------------------------------------------------------------------------
The Contractor's Representations, Certifications and Other Statements of
Offeror dated July 26, 1993 are incorporated and made a part of this contract
by reference.
ARTICLE H.4 SALARY RATE LIMITATION LEGISLATION PROVISIONS
- ----------------------------------------------------------
(a) Pursuant to the Public Law(s) cited in paragraph (b) below,
no NIH Fiscal Year funds for the applicable fiscal year(s)
and periods cited in paragraph (b) may be used to pay
the direct salary of an individual through this contract
at a rate in excess of the applicable amount shown
for the fiscal year and period covered. Direct salary is
exclusive of overhead, fringe benefits and general and
administrative expenses. The per year salary rate limit also
applies to individuals proposed under subcontracts. If this
is a multi-year contract. It may be subject to unilateral
modifications by the Government if an individual's salary rate
exceeds any salary rate ceiling in future DHHS appropriation
acts.
<TABLE>
<CAPTION>
(b) Public Law No. Fiscal Year Period Salary Rate Limit
-------------- ----------- ------ -----------------
<S> <C> <C> <C>
103-112 1994 10/1/93-9/30/94 $125,000
</TABLE>
ARTICLE H.5 HUMAN SUBJECTS
- ---------------------------
It is hereby understood and agreed that research involving human subjects shall
not be conducted under this contract, and that no material developed, modified,
or delivered by or to the Government under this contract, or any subsequent
modification of such material, will be used by the Contractor or made available
by the Contractor for use by anyone other than the Government, for experimental
or therapeutic use involving
-20-
<PAGE> 22
humans without the prior written approval of the Contracting Officer.
SECTION I
---------
CONTRACT CLAUSES
----------------
ARTICLE I.1 CLAUSES INCORPORATED BY REFERENCE
- ----------------------------------------------
GENERAL CLAUSES FOR A COST-REIMBURSEMENT
----------------------------------------
RESEARCH AND DEVELOPMENT CONTRACT
---------------------------------
This contract incorporates the following clauses by reference, with the same
force and effect as if they were given in full text. Upon request, the
contracting officer will make their full text available.
-21-
<PAGE> 23
<TABLE>
(a) FEDERAL ACQUISITION REGULATION (FAR) (48 CFR CHAPTER 1) CLAUSES
<CAPTION>
FAR
CLAUSE NO. TITLE AND DATE
---------- --------------
<S> <C>
52.203-1 Officials Not to Benefit (APRIL 1984)
52.203-3 Gratuities (APRIL 1984)
52.203-5 Covenant Against Contingent Fees (APRIL 1984)
52.203-6 Restrictions on Subcontractor Sales to the Government (JULY 1985)
52.203-7 Anti-Kickback Procedures (OCTOBER 1988)
52.203-10 Price or Fee Adjustment for Illegal or Improper Activity (SEPTEMBER 1990)
52.203-12 Limitation on Payments to Influence Certain Federal Transactions (JANUARY 1990)
52.209-6 Protecting the Government's Interests when Subcontracting with Contractors Debarred, Suspended, or
Proposed for Debarment (NOVEMBER 1992)
52.215-1 Examination of Records by Comptroller General (FEBRUARY 1993)
52.215-2 Audit-Negotiation (FEBRUARY 1993)
52.215-22 Price Reduction for Defective Cost or Pricing Data (JANUARY 1991)
52.215-24 Subcontractor Cost or Pricing Data (DECEMBER 1991)
52.215-26 Integrity of Unit Prices (APRIL 1991)
52.215-27 Termination of Defined Benefit Pension Plans (SEPTEMBER 1989)
52.215-33 Order of Precedence (JANUARY 1986)
52.215-39 Reversion or Adjustment of Plans for Post Retirement Benefits Other Than Pensions (PRB) (JULY
1991)
52.216-7 Allowable Cost and Payment (JULY 1991)
52.216-8 Fixed-Fee (APRIL 1984)
</TABLE>
-22-
<PAGE> 24
<TABLE>
<CAPTION>
FAR
CLAUSE NO. TITLE AND DATE
---------- --------------
<S> <C>
52.219-8 Utilization of Small Business Concerns and Small Disadvantaged Business Concerns (FEBRUARY 1990)
52.219-13 Utilization of Women-Owned Small Businesses (AUGUST 1986)
52.220-1 Preference for Labor Surplus Area Concerns (APRIL 1984)
52.220-3 Utilization of Labor Surplus Area Concerns (APRIL 1984)
52.222-2 Payment for Overtime Premiums (JULY 1990) NOTE: The dollar amount in paragraph (a) is $1 unless
otherwise specified in the contract.
52.222-3 Convict Labor (APRIL 1984)
52.222-26 Equal Opportunity (APRIL 1984)
52.222-28 Equal Opportunity Preaward Clearance of Subcontracts (APRIL 1984)
52.222-35 Affirmative Action for Special Disabled and Vietnam Era Veterans (APRIL 1984)
52.222-36 Affirmative Action for Handicapped Workers (APRIL 1984)
52.222-37 Employment Reports on Special Disabled Veterans and Veterans of the Vietnam Era (JANUARY 1988)
52.223-2 Clean Air and Water (APRIL 1984)
52.223-6 Drug Free Workplace (JULY 1990)
52.225-11 Restrictions on Certain Foreign Purchases (MAY 1992)
52.227-1 Authorization and Consent (APRIL 1984)
Alternate I (APRIL 1984)
52.227-2 Notice and Assistance Regarding Patent and Copyright Infringement (APRIL 1984)
</TABLE>
-23-
<PAGE> 25
<TABLE>
<CAPTION>
FAR
CLAUSE NO. TITLE AND DATE
---------- --------------
<S> <C>
52-227-11 Patent Rights - Retention by the Contractor (Short Form) (JUNE 1989) Note: In accordance with FAR
27.303(a)(2), paragraph (f) is modified to include the requirements in FAR 27.303(a)(2)(i) through
(iv). The frequency of reporting in (i) is annual.
52.227-14 Rights in Data - General (JUNE 1987)
Alternates IV and V (JUNE 1987)
52.227-16 Additional Data Requirements (JUNE 1987)
52.232-9 Limitation on Withholding of Payments (APRIL 1984)
52.232-20 Limitation of Cost (APRIL 1984)
52.232-23 Assignment of Claims (JANUARY 1986)
52.232-25 Prompt Payment (SEPTEMBER 1992)
52.232-28 Electronic Funds Transfer Payment Methods (APRIL 1989)
52.233-1 Disputes (DECEMBER 1991)
52.233-3 Protest After Award (AUGUST 1989)
Alternate I (JUNE 1985)
52.242-1 Notice of Intent to Disallow Costs (APRIL 1984)
52.242-13 Bankruptcy (APRIL 1991)
52.243-2 Changes-Cost Reimbursement (AUGUST 1987)
Alternate V (APRIL 1984)
52.244-2 Subcontracts (Cost-Reimbursement and Letter Contracts) (JULY 1985)
52.244-5 Competition in Subcontracting (APRIL 1984)
52.245-5 Government Property (Cost-Reimbursement, Time-and-Material, or Labor-Hour Contract) (JANUARY 1986)
52.246-23 Limitation of Liability (April 1984)
</TABLE>
-24-
<PAGE> 26
<TABLE>
<CAPTION>
<S> <C>
52.249-6 Termination (Cost-Reimbursement) (MAY 1986)
52.249-14 Excusable Delays (APRIL 1984)
52.253-1 Computer Generated Forms (JANUARY 1991)
</TABLE>
<TABLE>
(b) DEPARTMENT OF HEALTH AND HUMAN SERVICES ACQUISITION
---------------------------------------------------
REGULATION (HHSAR) (48 CFR CHAPTER 3) CLAUSES
---------------------------------------------
<CAPTION>
HHSAR
CLAUSE NO. TITLE AND DATE
---------- --------------
<S> <C>
352.202-1 Definitions (APRIL 1984)
Alternate I (APRIL 1984)
352.228-70 Insurance - Liability to Third Persons (DECEMBER 1991)
352.232-9 Withholding of Contract Payments (APRIL 1984)
352.233-70 Litigation and Claims (APRIL 1984)
352.242-71 Final Decisions on Audit Findings (APRIL 1984)
352.270-5 Publication and Publicity (JULY 1991)
352.270-7 Paperwork Reduction Act (APRIL 1984)
</TABLE>
ARTICLE I.2 AUTHORIZED SUBSTITUTIONS AND MODIFICATIONS OF CLAUSES
- ------------------------------------------------------------------
ARTICLE I.1. of this SECTION is hereby modified as follows:
FAR Clause 52.216-7, ALLOWABLE COST AND PAYMENT, pursuant to paragraph
(d)(2), the cognizant Contracting Officer responsible for negotiating
provisional and/or final indirect cost rates is identified as follows:
Chief, Financial Advisory Services Branch
Division of Contracts and Grants, NIH
Building 31, Room 1B43
9000 Rockville Pike
Bethesda, Maryland 20892
Rates established by this office are hereby incorporated in the
contract without further action of the Contracting Officer.
-25-
<PAGE> 27
FAR Clause 52.232-20, LIMITATION OF COSTS, is deleted in its entirety
and LIMITATION OF FUNDS, FAR Clause 2.232-22, is substituted in lieu
thereof.
ARTICLE I.3 ADDITIONAL CONTRACT CLAUSES
- ----------------------------------------
This contract incorporates the following clauses by reference, with the same
force and effect, as if they were given in full text. Upon request, the
Contracting Officer will make their full text available.
(a) FEDERAL ACQUISITION REGULATION (FAR) (48 CFR CHAPTER I) CLAUSES
---------------------------------------------------------------
FAR 52.215-31 Waiver of Facilities Capital Cost of Money (SEPTEMBER
1987)
(b) DEPARTMENT OF HEALTH AND HUMAN SERVICES ACQUISITION
---------------------------------------------------
REGULATION/PUBLIC HEALTH SERVICE ACQUISITION REGULATION
-------------------------------------------------------
(HHSAR/PHSAR) 48 CFR CHAPTER 3) CLAUSES
---------------------------------------
(THERE ARE NO APPLICABLE CLAUSES IN THIS SECTION)
(c) NATIONAL INSTITUTES OF HEALTH (NIH) RESEARCH CONTRACTING (RC)
-------------------------------------------------------------
CLAUSES
-------
NIH(RC)-1 Invoice/Financing Request Instructions for NIH
Cost-Reimbursement Type Contracts (06/18/92)
NIH(RC)-7 Procurement of Certain Equipment (APRIL 1984) (OMB
Bulletin 81-16)
-26-
<PAGE> 28
ARTICLE I.4 CLAUSES INCLUDED IN FULL TEXT
- ------------------------------------------
FAR 52.203-9 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT
------------------------------------------
INTEGRITY-MODIFICATION (NOV 1990)
---------------------------------
(a) Definitions. The definitions set forth in FAR 3.104-4 are hereby
incorporated in this clause.
(b) The Contractor agrees that it will execute the certification set forth
in paragraph (c) of this clause when requested by the Contracting
Officer in connection with the execution of any modification of this
contract.
(c) Certification. As required in paragraph (b) of this clause, the
officer or employee responsible for the modification proposal shall
execute the following certification:
CERTIFICATION OF PROCUREMENT INTEGRITY - MODIFICATION (NOV 1990)
----------------------------------------------------------------
(1) I, [NAME OF CERTIFIER] am the officer or employee responsible for the
preparation of this modification proposal and hereby certify that, to the best
of my knowledge and belief, with the exception of any information described in
this certification, I have no information concerning a violation or possible
violation of subsection 27(a), (b), (d), or (f) of the Office of Federal
Procurement Policy Act, as amended* (41 U.S.C. 423), (hereinafter referred to
as "the Act"), as implemented in the FAR, occurring during the conduct of this
procurement (CONTRACT AND MODIFICATION NUMBER).
(2) As required by subsection 27(e)(1)(B) of the Act, I further certify
that to the best of my knowledge and belief, each officer, employee, agent,
representative, and consultant of [NAME OF OFFEROR] who has participated
personally and substantially in the preparation or submission of this proposal
has certified that he or she is familiar with, and will comply with, the
requirements of subsection 27(a) of the Act, as implemented in the FAR, and
will report immediately to me any information concerning a violation or
possible violation of subsections 27(a), (b), (d), or (f) of the Act, as
implemented in the FAR, pertaining to this procurement.
(3) Violations or possible violations: (Continue on plain bond paper if
necessary and label Certificate of Procurement Integrity -- Modification
(Continuation Sheet), ENTER "NONE" IF NONE EXISTS) _____________________________
________________________________________________________________________________
________________________________________________________________________________
_________________________________________
(Signature of the officer or employee responsible for the modification proposal
and date) _____________________________________________________________________
______________________________________________________________________
(Typed name of the officer or employee responsible for the modification
proposal) _____________________________________________________________________
_______________________________________________________________________________
*Subsections 27(a), (b), and (d) are effective on December 1, 1990. Subsection
27(f) is effective on June 1, 1991.
-27-
<PAGE> 29
THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN AGENCY OF
THE UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS, OR FRAUDULENT
CERTIFICATION MAY RENDER THE MAKER SUBJECT TO PROSECUTION UNDER TITLE 18,
UNITED STATES CODE, SECTION 1001.
(End of certification)
(d) In making the certification in paragraph (2) of the certificate, the
officer or employee of the competing Contractor responsible of the offer or
bid, may rely upon a one-time certification from each individual required to
submit a certification to the competing Contractor, supplemented by periodic
training. These certifications shall be obtained at the earliest possible date
after an individual required to certify begins employment or association with
the contractor. If a contractor decides to rely on a certification executed
prior to the suspension of section 27 (i.e., prior to December 1, 1989), the
Contractor shall ensure that an individual who has so certified is notified
that section 27 has been reinstated. These certifications shall be maintained
by the Contractor for a period of 6 years from the date a certifying employee's
employment with the company ends or, for an agency, representative, or
consultant, 6 years from the date such individual ceases to act on behalf of
the contractor.
(e) The certification required by paragraph (c) of this clause is a
material representation of fact upon which reliance will be placed in executing
this modification.
(End of clause)
-28-
<PAGE> 30
SECTION J
---------
LIST OF ATTACHMENTS
-------------------
The following documents are attached and incorporated in this contract:
1. Government Furnished Property-Schedule II-A, 1 page.
2. Form HHS-565, Report of Capitalized Nonexpendable Equipment, 2 pages
(with decal numbers).
3. NIH 2706, Financial Report of Individual/Project Contract with
Instructions, 3 pages.
4. NIH (RC)-1, Invoice/Financing Request Instructions for NIH
Cost-Reimbursement Type Contracts, (06/18/92), 6 pages.
5. NIH (RC)-7, Procurement of Certain Equipment, (4/84), (OMB Bulletin
81-16), 1 page.
-29-
<PAGE> 31
ATTACHMENT #1
GOVERNMENT FURNISHED PROPERTY - SCHEDULE II-A
---------------------------------------------
The Contractor is hereby authorized to retain custody of the Government
property listed below for use in direct performance of work under this
contract. Accountability for this equipment is transferred from predecessor
Contract No. NO1-NS-0-2387. This property is furnished in an "as is"
condition. The terms and conditions of FAR clauses 52.245-5 and 52.245-19
apply and are made a part of this contract.
<TABLE>
<CAPTION>
Quantity Description
- -------- -----------
<S> <C>
One (1) Biomek 1000 workstation with Genesis Software Model 373461 - Beckman Instruments)
One (1) Genesis Operating System (Model 357308 - Beckman)
One (1) Electronic Interface Unit (Model 373857 - Beckman)
One (1) IBM AT Computer (40Mb+monochrome monitor)
One (1) P20 Single-Tip Pipette Tool 1-20ml (Model 373092 - Beckman)
One (1) P200 Single-Tip Pipette Tool 20-200ml (Model 373090 - Beckman)
One (1) HCB 1000 Heater/Cooler Block Unit (Model 372815 - Beckman)
One (1) Multichannel pipette, eight-tip tool MP20
One (1) Multichannel pipette, eight-tip tool MP200
Seven (7) Model 2230M microcentrifuge with 24 place rotor (B. Hermle AG)
One (1) Model Z280 non-refrigerated microcentrifuge (Hermle)
One (1) Gene-Amp System 9600 thermocycler (Model N801-0001)
One (1) 486-33 Cache Personal Computer (includes computer, monitor and mouse)
One (1) High density replicating system (Model 372113 - Beckman)
One (1) Microtiter plate rotor (Hermle, C0360-59)
One (1) 24-place rotor (Hermle C0360-59)
</TABLE>
-30-
<PAGE> 32
PROCUREMENT OF CERTAIN EQUIPMENT
--------------------------------
Notwithstanding any other clause in this contract, the Contractor will not be
reimbursed for the purchase, lease, or rental of any item of equipment listed
in the following FEDERAL SUPPLY GROUPS, REGARDLESS OF THE DOLLAR VALUE, without
prior written approval of the Contracting Officer.
67 - Photographic Equipment;
69 - Training Aids and Devices;
70 - General Purpose ADP Equipment, Software, Supplies and
Support (excluding 7045-ADP Supplies and Support
Equipment);
71 - Furniture;
72 - Household and Commercial Furnishing and Appliances.
74 - Office Machines and Visible Record Equipment; 77 -
Musical Instruments, Phonographs, and Home-type Radios; and
78 - Recreational and Athletic Equipment.
When equipment in these FEDERAL SUPPLY GROUPS is requested by the Contractor
and determined essential by the Contracting Officer, the Government will
endeavor to fulfill the requirement with equipment available from its excess
personal property sources; PROVIDED, the request is made under a
cost-reimbursement contract. Extensions or renewals of approved existing
leases or rentals of equipment in these FEDERAL SUPPLY GROUPS are excluded from
the provisions of this article.
-31-
<PAGE> 33
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE
2. AMENDMENT/MODIFICATION NO. 1
3. EFFECTIVE DATE See 16C below
4. REQUISITION/PURCHASE REQ. NO.
5. PROJECT NO. (IF APPLICABLE)
6. ISSUED BY
Contracts Management Branch
National Institute of Neurological
Disorders and Stroke, NIH
Federal Building, Room 901
Bethesda, MD 20892
7. ADMINISTERED BY (IF OTHER THAN ITEM 6)
8. NAME AND ADDRESS OF CONTRACTOR (NO., STREET, COUNTY, STATE AND ZIP
CODE)
Collaborative Research, Inc.
1365 Main Street
Waltham, Massachusetts 02154
9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO. N01-NS-4-2305
10B. DATED (SEE ITEM 11) 12/1/93
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
__ The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers ___ is extended ___ is not
extended.
Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation or as amended, by one of the following methods:
(a) By completing Items 8 and 15, and returning ___ copies of the amendment,
(b) By acknowledging receipt of this amendment on each copy of the offer
submitted; or (c) By separate letter or telegram which includes a reference to
the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE
RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR
AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this
amendment you desire to change an offer already submitted, such change may be
made by telegram or letter, provided each telegram or letter makes reference to
the solicitation and this amendment, and is received prior to the opening hour
and date specified.
<PAGE> 34
12. ACCOUNTING AND APPROPRIATION DATE (IF REQUIRED)
EIN: 1-042297484-A1 DOCN1NS42305A
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACT/ORDERS, IT
MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority)
THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT
ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (SUCH AS CHANGES IN PAYING OFFICE,
APPROPRIATION DATE, ETC.) SET FORTH IN ITEM 14, PURSUANT TO
THE AUTHORITY OF FAR 43.103(b).
X C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF: FAR 1.602-1, and the mutual consent of the
parties
D. OTHER (SPECIFY TYPE OF MODIFICATION AND AUTHORITY)
E. IMPORTANT: CONTRACTOR ___ IS NOT / x / IS REQUIRED TO SIGN
THIS DOCUMENT AND RETURN TWO (2) COPIES TO THE ISSUING
OFFICE.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (ORGANIZED BY UCF SECTION
HEADINGS, INCLUDING SOLICITATION/CONTRACT SUBJECT MATTER WHERE
FEASIBLE.)
PURPOSE: To amend Article F.2., TECHNICAL REPORTING REQUIREMENTS, of the
contract.
CONTRACT
AMOUNT: Unchanged. The contract amount is neither increased nor decreased
by reason of this modification.
EXPIRATION
DATE: November 30, 1996 (Unchanged).
Except as provided herein, all terms and conditions of the document referenced
in Items 9A or 10A, as heretofore changed, remain unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or print)
Gerald F. Vovis
Senior Vice President, Research & Development
15B. CONTRACTOR/OFFEROR
_________________________
(Signature of person authorized to sign)
15C. DATE SIGNED
3/8/94
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
-2-
<PAGE> 35
Kirkland L. Davis
16B. UNITED STATES OF AMERICA
By____________________________________
(Signature of Contracting Officer)
16C. DATE SIGNED
-3-
<PAGE> 36
CONTRACT NO. NO1-NS-4-2305
MODIFICATION NO. 1
THE GOVERNMENT AND THE CONTRACTOR MUTUALLY AGREE AS FOLLOWS:
ARTICLE F.2. - TECHNICAL REPORTING REQUIREMENTS - beginning with the effective
date of this modification, paragraph (a)-PROGRESS REPORTS-is amended to add the
following:
<TABLE>
In an effort to standardized quarterly reporting periods and progress report
due dates, the following schedule should be followed for this contract:
<CAPTION>
Quarterly Reporting Periods Delivery Due Dates
--------------------------- ------------------
<S> <C>
January 1 - March 31 April 30
April 1 - June 30 July 31
July 1 - September 30 October 31
October 1 - December 31 January 31
</TABLE>
The first technical progress report required under this contract shall cover
the period DECEMBER 1, 1993 through MARCH 31, 1994, and shall be delivered by
APRIL 30, 1994. Thereafter reports shall be prepared and delivered in
accordance with the above schedule.
-4-
<PAGE> 37
TECHNICAL REPORT SCHEDULE
-------------------------
Collaborative Research, Inc.
Contract No. N01-NS-4-2305
SCHEDULE FOR DELIVERY AND DISTRIBUTION OF TECHNICAL REPORTS
-----------------------------------------------------------
<TABLE>
DELIVERY SCHEDULE
- -----------------
The reports required under Article F.2-TECHNICAL REPORTING REQUIREMENTS-shall
be submitted in accordance with the following schedule:
<CAPTION>
<S> <C> <C> <C>
Quarterly Progress
Reports 2 copies Reporting Period Due Date
------- ---------------- --------
12/01/93-03/31/94 04/30/94
04/01/94-06/30/94 07/31/94
07/01/94-09/30/94 10/31/94
10/01/94-12/31/94 01/31/95
01/01/95-03/31/95 04/30/95
04/01/95-06/30/95 07/31/95
07/01/95-09/30/95 10/31/95
10/01/95-12/31/95 01/31/96
01/01/96-03/31/96 04/30/96
04/01/96-06/30/96 07/31/96
07/01/96-09/30/96 10/31/96
Yearly Salient Results
Report 2 copies Reporting Period Due Date
------- ---------------- --------
12/01/93-11/30/94 12/10/94
12/01/94-11/30/95 12/10/95
Final Report 5 copies 12/01/93-11/30/96 11/30/96
-------
</TABLE>
-5-
<PAGE> 38
DISTRIBUTION OF REPORTS
- -----------------------
One copy of each report specified above shall be delivered prepaid to:
Contracts Management Branch
National Institute of Neurological Disorders and Stroke, NIH
Federal Building, Room 901
7550 Wisconsin Avenue Attention: Contracting Officer
Bethesda, Maryland 20892 Contract No. N01-NS-4-2305
All other report copies shall be delivered prepaid to:
Dr. Lev Goldfarb, Project Officer
National Institute of Neurological Disorders and Stroke, NIH
DNA Sequencing Facility, Section of Neurogenetics
Division of Intramural Research
Park Building, Room 405
12420 Parklawn Drive
Rockville, Maryland 20857
-6-
<PAGE> 39
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE:
2. AMENDMENT/MODIFICATION NO.: Two (2)
3. EFFECTIVE DATE: See 16C below
4. REQUISITION/PURCHASE REQ. NO.
5. PROJECT NO. (If applicable):
6. ISSUED BY:
CONTRACTS MANAGEMENT BRANCH
NATIONAL INSTITUTE OF NEUROLOGICAL
DISORDERS AND STROKE, NIH
FEDERAL BUILDING, ROOM 901
BETHESDA, MD 20892
7. ADMINISTERED BY (If other than item 6):
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and Zip
Code)
Collaborative Research, Inc.
1365 Main Street
Waltham, Massachusetts 02154
9A. AMENDMENT OF SOLICITATION NO.:
9B. DATED (SEE ITEM 11):
10A. MODIFICATION OF CONTRACT/ORDER NO. N01-NS-4-2305
10B. DATED (SEE ITEM 11): 12/1/93
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
/ / The above numbered solicitation is amended as set forth in
Item 14. The hour and date specified for receipt of Offers
/ / is extended / / is not extended.
Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation or as amended, by one of the following methods:
(a) By completing Items 8 and 15, and returning ___ copies of the
amendment. (b) By acknowledging receipt of this amendment on
each copy of the offer submitted; or (c) By separate letter or
telegram which includes a reference to the solicitation and
amendment numbers. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE
RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION
OF YOUR OFFER. If by virtue of this amendment you
<PAGE> 40
desire to change an offer already submitted, such change may
be made by telegram or letter, provided each telegram or
letter makes reference to the solicitation and this amendment,
and is received prior to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (If required)
EIN: 1-042297484-A1
DOC: NINSG2305A
CAN: 4-8426315
O.C.25.3R
FY'94 Obligation $642,000.00
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACT/ORDERS, IT
MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
(d) A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority)
THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT
ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office,
appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO
THE AUTHORITY OF FAR 43.01(b).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF:
X D. OTHER (Specifiy type of modification and authority)
Unilateral modification pursuant to Article B.2.f.
E. IMPORTANT: CONTRACTOR /x/is not / /is required to sign this
document and return ___ copies to the issuing office.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section
headings, including solicitation/contract matter where feasible.)
PURPOSE: To allot additional funds to the contract pursuant to
the Limitation of Funds clause and ARTICLE B.2.--
ESTIMATED COST, as reflected on pages 1 and 2 of this
modification.
<TABLE>
<CAPTION>
Est. Cost Fee Total
--------- --- -----
<S> <C> <C> <C>
CONTRACT
AMOUNT: Alloted prior to this modification $ 447,026 $ 43,947 $ 490,973
Alloted this modification 583,547 58,453 642,000
---------- -------- ----------
TOTAL FUNDS ALLOTTED $1,030,573 $102,400 $1,132,973
EXPIRATION DATE: November 30, 1996 (Unchanged).
</TABLE>
Except as provided herein, all terms and conditions of the document referenced
in Items 9A or 10A, as heretofore changed, remain unchanged and in full force
and effect.
-2-
<PAGE> 41
15A. NAME AND TITLE OF SIGNER (Type or print)
15B. CONTRACTOR/OFFEROR
_______________________________________
Signature of person authroized to sign)
15C. Date Signed
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
Kirkland L. Davis
16B. UNITED STATES OF AMERICA
By___________________________________
(Signature of Contracting Officer)
16C. DATE SIGNED
6/29/94
-3-
<PAGE> 42
CONTRACT NO.: N01-NS-4-2305
MODIFICATION NO. 2
THE ABOVE NUMBERED CONTRACT IS HEREBY AMENDED AS INDICATED BELOW:
ARTICLE B.2. - ESTIMATED COST AND FIXED-FEE -- Beginning with the effective
date of this modification modification, paragraphs (d), (e), and (g) are
amended to read as follows:
d. Total funds currently available for payment and allotted to this
contract are increased by $642,000, from $490,973 of which $1,030,573
represents the estimated riembursable costs and $102,400 the fixed
fee. For further provisions on funding, referen to the LIMITATION OF
FUNDS clause.
e. It is estimated that the amount currently alloted will cover
performance of work under the contract through February 28, 1996.
<TABLE>
g. It is estimated that future allotments will be awarded as follows:
<CAPTION>
Period Est. Cost Fee Total
------ --------- --- -----
<S> <C> <C> <C>
3/1/96-11/30/96 $342,841 $32,623 $375,464
</TABLE>
-4-
<PAGE> 43
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE:
2. AMENDMENT/MODIFICATION NO.: 3
3. EFFECTIVE DATE: See 16C below
4. REQUISITION/PURCHASE REQ. NO.
5. PROJECT NO. (If applicable):
6. ISSUED BY:
CONTRACTS MANAGEMENT BRANCH
NATIONAL INSTITUTE OF NEUROLOGICAL
DISORDERS AND STROKE, NIH
FEDERAL BUILDING, ROOM 901
BETHESDA, MD 20892
7. ADMINISTERED BY (If other than item 6):
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and Zip
Code)
Collaborative Research, Inc.
1365 Main Street
Waltham, Massachusetts 02154
9A. AMENDMENT OF SOLICITATION NO.:
9B. DATED (SEE ITEM 11):
10A. MODIFICATION OF CONTRACT/ORDER NO. N01-NS-4-2305
10B. DATED (SEE ITEM 11): 12/1/93
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
/ / The above numbered solicitation is amended as set forth in
Item 14. The hour and date specified for receipt of Offers
/ / is extended / / is not extended.
Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation or as amended, by one of the following methods:
(a) By completing Items 8 and 15, and returning ___ copies of the
amendment. (b) By acknowledging receipt of this amendment on
each copy of the offer submitted; or (c) By separate letter or
telegram which includes a reference to the solicitation and
amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE
RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE
<PAGE> 44
SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue
of this amendment you desire to change an offer already
submitted, such change may be made by telegram or letter,
provided each telegram or letter makes reference to the
solicitation and this amendment, and is received prior to the
opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (If required)
EIN: 1-042297484-A1
DOC: N1NSG2305A
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACT/ORDERS, IT
MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
(d) A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority)
THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT
ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office,
appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO
THE AUTHORITY OF FAR 43.01(b).
X C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF:
FAR Subpart 42.12 Novation and
Change-of-Name Agreements
D. OTHER (Specify type of modification and authority)
Unilateral modification pursuant to Article B.2.f.
E. IMPORTANT: CONTRACTOR / /is not /x/is required to sign this
document and return two (2) copies to the issuing office.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section
headings, including solicitation/contract matter where feasible.)
PURPOSE: To amend Article G.5., GOVERNMENT PROPERTY, to recognize an
authorized substitution of Contractor Acquired - Government
Property under the contract.
CONTRACT AMOUNT: Unchanged. The contract amount is neither increased
nor decreased by reason of this modification.
EXPIRATION DATE: (November 30, 1996) Unchanged .
Except as provided herein, all terms and conditions of the document referenced
in Items 9A or 10A, as heretofore changed, remain unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or print)
Gerald F. Vovis, Ph.D.
Senior Vice President, Research & Development
-2-
<PAGE> 45
15B. CONTRACTOR/OFFEROR
_______________________________________
Signature of person authorized to sign)
15C. Date Signed
11/30/94
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
Kirkland L. Davis
16B. UNITED STATES OF AMERICA
By___________________________________
(Signature of Contracting Officer)
16C. DATE SIGNED
12/6/94
-4-
<PAGE> 46
CONTRACT NO. NO1-NS-4-2305
MODIFICATION NO. 3
THE GOVERNMENT AND THE CONTRACTOR MUTUALLY AGREE AS FOLLOWS:
<TABLE>
ARTICLE G.5-GOVERNMENT PROPERTY-Paragraph (b), CONTRACTOR ACQUIRED GOVERNMENT
PROPERTY - SCHEDULE 1-A, is amended to authorize a substitution of property,
and Schedule 1-A is amended to read as follows:
SCHEDULE 1-A
------------
<CAPTION>
QUANTITY DESCRIPTION TOTAL COST
- -------- ----------- ----------
<S> <C> <C>
Two (2) Power Supply (Computer Controlled) $4,990
Bio-Rad, @ $2,495 each
Three (3) Poker-Face Gel Electrophoresis $2,775
Apparatus (Hofer) @ $925 each
Two (2) 12 Channel Pipetting Syringe $1,300
(Hamilton) @ $650 each
One (1) Macintosh Centris 650 Computer $4,017
w/Radius Display, Keyboard, etc.
One (1) Water Bath Heating Circulator $ 988
VWR 1130A, 120V, Model 13271-054
</TABLE>
EXCEPT AS AMENDED ABOVE, ALL OTHER TERMS AND CONDITIONS OF THE CONTRACT REMAIN
UNCHANGED AND IN FULL FORCE AND EFFECT.
-5-
<PAGE> 47
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE:
2. AMENDMENT/MODIFICATION NO.: 4
3. EFFECTIVE DATE: See 16C below
4. REQUISITION/PURCHASE REQ. NO.
5. PROJECT NO. (If applicable):
6. ISSUED BY:
CONTRACTS MANAGEMENT BRANCH
NATIONAL INSTITUTE OF NEUROLOGICAL
DISORDERS AND STROKE, NIH
FEDERAL BUILDING, ROOM 901
BETHESDA, MD 20892
7. ADMINISTERED BY (If other than item 6):
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and Zip
Code)
Genome Therapeutics Corporation
100 Beaver Street
Waltham, Massachusetts 02154
9A. AMENDMENT OF SOLICITATION NO.:
9B. DATED (SEE ITEM 11):
10A. MODIFICATION OF CONTRACT/ORDER NO. N01-NS-4-2305
10B. DATED (SEE ITEM 11): 12/1/93
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
/ / The above numbered solicitation is amended as set forth in
Item 14. The hour and date specified for receipt of Offers
/ / is extended / / is not extended.
Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation or as amended, by one of the following methods:
(a) By completing Items 8 and 15, and returning ___ copies of the
amendment. (b) By acknowledging receipt of this amendment on
each copy of the offer submitted; or (c) By separate letter or
telegram which includes a reference to the solicitation and
amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE
RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION
OF YOUR OFFER. If by virtue of this amendment you desire to
change an offer already submitted, such change may be made by
telegram or letter, provided each telegram or letter makes
reference to the solicitation and this amendment, and is
received prior to the opening hour and date specified.
<PAGE> 48
12. ACCOUNTING AND APPROPRIATION DATA (If required)
EIN: 1-042297484-A1
DOC: N1NSG2305A
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACT/ORDERS, IT
MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
(d) A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority)
THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT
ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office,
appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO
THE AUTHORITY OF FAR 43.01(b).
X C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF: FAR Subpart 42.12 Novation and
Change-of-Name Agreements
D. OTHER (Specifiy type of modification and authority)
Unilateral modification pursuant to Article B.2.f.
E. IMPORTANT: CONTRACTOR / /is not /x/is required to sign this
document and return two (2) copies to the issuing office.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section
headings, including solicitation/contract matter where feasible.)
PURPOSE: To formally recognize a change of the Contractor's
name from Collaborative Research, Inc., to Genome
Therapeutics Corporation pursuant to the attached
Change-of-name Agreement, Exhibit A, and the list of
affected contracts, Exhibit B, Exhibits A and B are
hereby incorporated and made a part of this
modification.
CONTRACT AMOUNT: Unchanged. the contract amount is neither
increased nor decreased by reason of this
modification.
EXPIRATION DATE: (November 30, 1996) Unchanged .
Except as provided herein, all terms and conditions of the document referenced
in Items 9A or 10A, as heretofore changed, remain unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or print)
Gerald F. Vovis, Ph.D.
Senior Vice President, Research & Development
15B. CONTRACTOR/OFFEROR
_______________________________________
Signature of person authorized to sign)
-2-
<PAGE> 49
15C. Date Signed
11/30/94
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
Kirkland L. Davis
16B. UNITED STATES OF AMERICA
By___________________________________
(Signature of Contracting Officer)
16C. DATE SIGNED
12/6/94
-3-
<PAGE> 50
EXHIBIT A
CHANGE OF NAME AGREEMENT
GENOME THERAPEUTICS CORPORATION, a corporation duly organized and existing
under the laws of Massachusetts and the UNITED STATES OF AMERICA, enter into
this Agreement as of September 6, 1994.
(a) THE PARTIES AGREE TO THE FOLLOWING FACTS:
(1) The Government, represented by various Contracting Officers of
the NINDS, NIEHS, and NIMH has entered into certain contracts and purchase
order with COLLABORATIVE RESEARCH INC., namely N01-NS-4-2305, 273-93-I-0011,
and 263-92-C-0099. The term "the contracts", as used in this Agreement, means
the above contracts and purchase orders and all other contracts and purchase
orders, including all modifications, made by the Government and the Contractor
before the effective date of this Agreement (whether or not performance and
payment have bene completed and releases executed if the Government, or the
Contractor has any remaining rights, duties, or obligations under these
contracts and purchase orders).
(2) COLLABORATIVE RESEARCH, INC., by an amendment to its certificate
of incorporation dated August 31, 1994, has changed its corporate name to
GENOME THERAPEUTICS CORPORATION.
(3) This amendment accomplishes a change of corporate name only and
all rights and obligations of the Government and of the Contractor under the
contracts are unaffected by this change.
(4) Documentary evidence of this change of corporate name has been
filed with the Government.
(b) IN CONSIDERATION OF THESE FACTS, THE PARTIES AGREE THAT.
(1) The contracts covered by this Agreement are amended by
substituting the name "GENOME THERAPEUTICS CORPORATION", for the name
"COLLABORATIVE RESEARCH, INC." wherever it appears in the contracts; and
(2) Each party has executed this Agreement as of the day and year
first above written.
UNITED STATES OF AMERICA
By_____________________________
Title__________________________
GENOME THERAPEUTICS CORPORATION
By_____________________________
Title Senior Vice President, Research and Development
I, FENEL M. ELOI, certify that I am the Treasurer of GENOME THERAPEUTICS
CORPORATION; that GERALD F. VOVIS, PH.D., who signed this Agreement for this
corporation, was then Sr. Vice President of this corporation; and that
Agreement was duly signed for and on behalf of this corporation by authority of
its governing body and within the scope of its corporate powers. Witness my
hand and the seal of this corporation this 7th day of November 1994.
By Fenel M. Eloi
-4-
<PAGE> 51
CONTRACT NO.: N01-NS-4-2305 EXHIBIT B
MODIFICATION NO. 4
FEDERAL CONTRACTS AFFECTED BY NAME CHANGE TO GENOME THERAPEUTICS CORPORATION
NIEHS Contract #263-92-C-0099, National Institute of Environmental Health
Sciences
Attn: James Patterson, Contracting Officer
Contracts and Procurement Branch, NIEHS
P.O. Box 12874
Research Triangle Park, North Carolina 27709
NIH Contract #273-93-1-0011, Division of Procurement, National Institute of
Health
Attn: Pamela L. Beverly, Contracting Officer
Division of Procurement, OA
Executive Plaza South, Room 818
6120 Executive Boulevard
Rockville, Maryland 20892
NINDS Contract #NO1-NS-4-2305, National Institute of Neurological Disorders and
Stroke
Attn: Kirkland L. Davis, Contracting Officer
Contracts Management Branch
Federal Building., Room 901
7550 Wisconsin Avenue
Bethesda, Maryland 20892
-5-
<PAGE> 52
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE
2. AMENDMENT/MODIFICATION NO. 5
3. EFFECTIVE DATE See 16C below
4. REQUISITION/PURCHASE REQ. NO.
5. PROJECT NO. (IF APPLICABLE)
6. ISSUED BY
Contracts Management Branch
National Institute of Neurological
Disorders and Stroke, NIH
Federal Building, Room 901
Bethesda, MD 20892
7. ADMINISTERED BY (IF OTHER THAN ITEM 6)
8. NAME AND ADDRESS OF CONTRACTOR (NO., STREET, COUNTY, STATE AND ZIP
CODE)
Genome Therapeutics Corporation
100 Beaver Street
Waltham, Massachusetts 02154
9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO. N01-NS-4-2305
10B. DATED (SEE ITEM 11) 12/1/93
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
__ The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers ___ is extended ___ is not
extended.
Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation or as amended, by one of the following methods:
(a) By completing Items 8 and 15, and returning ___ copies of the amendment,
(b) By acknowledging receipt of this amendment on each copy of the offer
submitted; or (c) By separate letter or telegram which includes a reference to
the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE
RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR
AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this
amendment you desire to change an offer already submitted, such change may be
made by telegram or letter, provided each telegram or letter makes reference to
the solicitation and this amendment, and is received prior to the opening hour
and date specified.
12. ACCOUNTING AND APPROPRIATION DATE (IF REQUIRED)
EIN: 1-042297484-A1 DOCN1NS42305A
<PAGE> 53
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACT/ORDERS, IT
MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority)
THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT
ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (SUCH AS CHANGES IN PAYING OFFICE,
APPROPRIATION DATE, ETC.) SET FORTH IN ITEM 14, PURSUANT TO
THE AUTHORITY OF FAR 43.103(b).
X C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF: FAR Subpart 42.12 Novation and Change-of- Name
Agreements
D. OTHER (SPECIFY TYPE OF MODIFICATION AND AUTHORITY)
E. IMPORTANT: CONTRACTOR / / IS NOT / x / IS REQUIRED TO SIGN
THIS DOCUMENT AND RETURN TWO (2) COPIES TO THE ISSUING
OFFICE.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (ORGANIZED BY UCF SECTION
HEADINGS, INCLUDING SOLICITATION/CONTRACT SUBJECT MATTER WHERE
FEASIBLE.)
PURPOSE: To amend "Exhibit B" made a part of the Change of Name
Agreement executed via Modification No. 4 to the contract.
The contract numbers affected by the name change and listed in
the original "Exhibit B" for both the NEIHS and the Division
of Procurement, NIH contracts were incorrect and are properly
cited in the attached revised "Exhibit B."
CONTRACT
AMOUNT: Unchanged. The contract amount is neither increased nor
decreased by reason of this modification.
EXPIRATION
DATE: November 30, 1996 (Unchanged).
Except as provided herein, all terms and conditions of the document referenced
in Items 9A or 10A, as heretofore changed, remain unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or print)
Gerald F. Vovis
Senior Vice President, Research & Development
15B. CONTRACTOR/OFFEROR
_________________________
(Signature of person authorized to sign)
15C. DATE SIGNED
12/14/94
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
Kirkland L. Davis
16B. UNITED STATES OF AMERICA
-2-
<PAGE> 54
By____________________________________
(Signature of Contracting Officer)
16C. DATE SIGNED
12/19/94
-3-
<PAGE> 55
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE
2. AMENDMENT/MODIFICATION NO. 6
3. EFFECTIVE DATE See 16C below
4. REQUISITION/PURCHASE REQ. NO.
5. PROJECT NO. (IF APPLICABLE)
6. ISSUED BY
Contracts Management Branch
National Institute of Neurological
Disorders and Stroke, NIH
Federal Building, Room 901
Bethesda, MD 20892
7. ADMINISTERED BY (IF OTHER THAN ITEM 6)
8. NAME AND ADDRESS OF CONTRACTOR (NO., STREET, COUNTY, STATE AND ZIP
CODE)
Genome Therapeutics Corporation
100 Beaver Street
Waltham, Massachusetts 02154
9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO. N01-NS-4-2305
10B. DATED (SEE ITEM 11) 12/1/93
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
__ The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers ___ is extended ___ is not
extended.
Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation or as amended, by one of the following methods:
(a) By completing Items 8 and 15, and returning ___ copies of the amendment,
(b) By acknowledging receipt of this amendment on each copy of the offer
submitted; or (c) By separate letter or telegram which includes a reference to
the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE
RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR
AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this
amendment you desire to change an offer already submitted, such change may be
made by telegram or letter, provided each telegram or letter makes reference to
the solicitation and this amendment, and is received prior to the opening hour
and date specified.
12. ACCOUNTING AND APPROPRIATION DATE (IF REQUIRED)
<PAGE> 56
EIN: 1-042297484-A1 DOCN1NS42305A
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACT/ORDERS, IT
MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority)
THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT
ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (SUCH AS CHANGES IN PAYING OFFICE,
APPROPRIATION DATE, ETC.) SET FORTH IN ITEM 14, PURSUANT TO
THE AUTHORITY OF FAR 43.103(b).
X C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF: FAR 1.602-1, and the mutual consent of the
parties
D. OTHER (SPECIFY TYPE OF MODIFICATION AND AUTHORITY)
E. IMPORTANT: CONTRACTOR / / IS NOT / x / IS REQUIRED TO
SIGN THIS DOCUMENT AND RETURN TWO (2) COPIES TO THE
ISSUING OFFICE.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (ORGANIZED BY UCF SECTION
HEADINGS, INCLUDING SOLICITATION/CONTRACT SUBJECT MATTER WHERE
FEASIBLE.)
PURPOSE: To amend Article G.5., GOVERNMENT PROPERTY, to recognize an
authorized substitution of Contractor Acquired - Government
Property under the contract.
CONTRACT
AMOUNT: Unchanged. The contract amount is neither increased nor
decreased by reason of this modification.
EXPIRATION
DATE: November 30, 1996 (Unchanged).
Except as provided herein, all terms and conditions of the document referenced
in Items 9A or 10A, as heretofore changed, remain unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or print)
Gerald F. Vovis, Ph.D.
Senior Vice President, Research & Development
-2-
<PAGE> 57
15C. DATE SIGNED
6/22/95
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
Kirkland L. Davis
16B. UNITED STATES OF AMERICA
By____________________________________
(Signature of Contracting Officer)
16C. DATE SIGNED
6/23/95
-4-
<PAGE> 58
CONTRACT NO. NO1-NS-4-2305
MODIFICATION NO. 6
THE GOVERNMENT AND THE CONTRACTOR MUTUALLY AGREE AS FOLLOWS:
<TABLE>
ARTICLE G.5-GOVERNMENT PROPERTY-Paragraph (b), CONTRACTOR ACQUIRED GOVERNMENT
PROPERTY - SCHEDULE 1-A, is amended to authorize a substitution of property,
and Schedule 1-A is amended to read as follows:
SCHEDULE 1-A
------------
<CAPTION>
QUANTITY DESCRIPTION TOTAL COST
- -------- ----------- ----------
<S> <C> <C>
Two (2) Power Supply (Computer Controlled) $4,990
Bio-Rad, @ $2,495 each
Two (2) Poker-Face Gel Electrophoresis $1,850
Apparatus (Hofer) @ $925 each
Two (2) 12 Channel Pipetting Syringe $1,300
(Hamilton) @ $650 each
One (1) Macintosh Centris 650 Computer $4,017
w/Radius Display, Keyboard, etc.
One (1) Water Bath Heating Circulator $ 988
VWR 1130A, 120V, Model 13271-054
One (1) VWR Scientific brand Table-Top Orbital $1,087
Shaker (gyrator shaker)
</TABLE>
EXCEPT AS AMENDED ABOVE, ALL OTHER TERMS AND CONDITIONS OF THE CONTRACT REMAIN
UNCHANGED AND IN FULL FORCE AND EFFECT.
-5-
<PAGE> 59
REPORT OF CAPITALIZED NONEXPENDABLE EQUIPMENT
1. DATE
2. PUBLIC VOUCHER NO.
3. CONTRACT NUMBER
4. REPORT NO.
PAGE NO.
NO. PAGES
5. NAME OF PERSON RESPONSIBLE FOR THIS REPORT
6. TYPE OF REPORT
ACQUISITION - GOV. TITLED
ACQUISITION - CONTR. TITLED
ANNUAL INVENTORY
FINAL INVENTORY
7. NAME AND ADDRESS OF CONTRACTOR
8. FOR GOV. USE ONLY
9. ITEM NO.
10. DESCRIPTION &NSN
11. GFP OR CAP
12. MFR.
13. MODEL OR TYPE
14. MFR. SERIAL NO.
15. UNIT ACQUISITION COST
16. GOV. ID NO.
17. ACQ. AUTH.
18. DATE REC'D MO/YR.
19. AUTHENTICATION BY CONTRACTOR'S SUPERVISORY ACCOUNTING OFFICIAL
SIGNATURE
NAME (TYPED)
TITLE
-6-
<PAGE> 60
DATE
20. ACCEPTED BY AUTHORIZED GOVERNMENT REPRESENTATIVE
VOUCHER NO.
SIGNATURE AND TITLE
DATE
-7-
<PAGE> 61
INSTRUCTIONS FOR PREPARATION OF HEW FORM 565
REPORT OF CAPITALIZED NONEXPENDABLE EQUIPMENT
The report shall be submitted in five copies by the contractor and included
with his Public Voucher (or invoice) under which reimbursement for the
acquisition of authorized Capitalized Nonexpendable Equipment is required.
When utilizing this form for inventory reporting, five copies shall be
forwarded to the cognizant Property Administrator. Final inventories must
include the Certification required by HHS Manual, Control of Property in
Possession of Contractors.
ITEM NO.
1. Enter date prepared.
2. Enter Public Voucher (or Invoice) Number.
3. Enter complete contract number.
4. Enter number of this report. (Reports will be numbered serially
beginning with No. 1 for each contract.) Enter page number and total
number of pages.
5. Enter name and telephone number of contractor's representative
responsible for report.
6. Indicate type of Report.
7. Enter name and address of contractor exactly as it appears on the
contract.
8. Leave blank. For Contracting Agency use only.
9. Enter line item number. Each report shall begin with number "1".
10-14. Identify the property being reported, including manufacturer, model,
type, capacity, size and serial number. When this form is used for
inventory reporting, include condition code in item 10 and indicate
GFP or CAP in item 11.
15. Enter unit acquisition cost of the item. (List all taxes, discounts,
shipping and installation costs as separate items immediately
following each item being reported.)
16. For Government-owned property, enter the Government identification
number (decal) affixed. For Contractor-owned property, enter
contractor's identification number affixed.
17. Enter authorization for acquisition e.g., contract schedule number,
contracting officer's authorization letter number, etc.
18. Enter month and year property was received by contractor as reflected
on receiving report.
19. Enter signature and title of person authorized to certify to the
accuracy of report.
20. Leave blank. For Contracting Agency use only.
This Form may be reproduced by Contractors in size 8" x 10 1/2" only.
-8-
<PAGE> 62
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE
2. AMENDMENT/MODIFICATION NO. 7
3. EFFECTIVE DATE See 16C below
4. REQUISITION/PURCHASE REQ. NO.
5. PROJECT NO. (IF APPLICABLE)
6. ISSUED BY
Contracts Management Branch
National Institute of Neurological
Disorders and Stroke, NIH
Federal Building, Room 901
Bethesda, MD 20892
7. ADMINISTERED BY (IF OTHER THAN ITEM 6)
8. NAME AND ADDRESS OF CONTRACTOR (NO., STREET, COUNTY, STATE AND ZIP
CODE)
Genome Therapeutics Corporation
100 Beaver Street
Waltham, Massachusetts 02154
9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO. N01-NS-4-2305
10B. DATED (SEE ITEM 11) 12/1/93
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
__ The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers ___ is extended ___ is not
extended.
Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation or as amended, by one of the following methods:
(a) By completing Items 8 and 15, and returning ___ copies of the amendment,
(b) By acknowledging receipt of this amendment on each copy of the offer
submitted; or (c) By separate letter or telegram which includes a reference to
the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE
RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR
AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this
amendment you desire to change an offer already submitted, such change may be
made by telegram or letter, provided each telegram or letter makes reference to
the solicitation and this amendment, and is received prior to the opening hour
and date specified.
12. ACCOUNTING AND APPROPRIATION DATE (IF REQUIRED)
<PAGE> 63
EIN: 1-042297484-A1 DOCN1NS42305A CAN 6-8426315 O.C.25.2E FY'96
Obligation $375,464
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACT/ORDERS, IT
MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority)
THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT
ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (SUCH AS CHANGES IN PAYING OFFICE,
APPROPRIATION DATE, ETC.) SET FORTH IN ITEM 14, PURSUANT TO
THE AUTHORITY OF FAR 43.103(b).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF:
X D. OTHER (SPECIFY TYPE OF MODIFICATION AND AUTHORITY) Unilateral
modification pursuant to Article B.2., paragraph (f), and P.L.
104-56 (continuing resolution for FY 1996)
E. IMPORTANT: CONTRACTOR / x / IS NOT / / IS REQUIRED TO SIGN
THIS DOCUMENT AND RETURN _______ COPIES TO THE ISSUING OFFICE.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (ORGANIZED BY UCF SECTION
HEADINGS, INCLUDING SOLICITATION/CONTRACT SUBJECT MATTER WHERE
FEASIBLE.)
PURPOSE: To allot additional funds to the contract pursuant to the
Limitation of Funds clause and Article B.2-ESTIMATED COST AND
FIXED FEE.
<TABLE>
<CAPTION>
Est. Cost Fee Total
--------- --- -----
<S> <C> <C> <C> <C>
CONTRACT
AMOUNT: Allotted prior to this modification $1,030,573 $102,400 $1,132,973
Allotted this modification No. 7 342,841 32,623 375,464
---------- -------- ----------
$1,373,414 $135,023 $1,508,437
</TABLE>
EXPIRATION
DATE: November 30, 1996 (Unchanged).
Except as provided herein, all terms and conditions of the document referenced
in Items 9A or 10A, as heretofore changed, remain unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or print)
Genome Therapeutics Corporation
15B. CONTRACTOR/OFFEROR
_________________________
(Signature of person authorized to sign)
15C. DATE SIGNED
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
Kirkland L. Davis
-2-
<PAGE> 64
16B. UNITED STATES OF AMERICA
By____________________________________
(Signature of Contracting Officer)
16C. DATE SIGNED
11/27/95
-3-
<PAGE> 65
CONTRACT NO. NO1-NS-4-2305
MODIFICATION NO. 7
THE ABOVE NUMBERED CONTRACT IS HEREBY AMENDED AS INDICATED BELOW:
ARTICLE B.2.-ESTIMATED COST AND FIXED-FEE-Beginning with the effective date of
this modification, paragraphs (d) and (e) are amended to read as follows:
d. Total funds currently available for payment and allotted to this
contract are increased by $375,464, from $1,132,973 to $1,508,437 of
which $1,373,414 represents the estimated reimbursable costs and
$135,023 the fixed fee. For further provisions on funding, refer to
the LIMITATION OF FUNDS clause made a part of the contract under
Section 1.
e. It is estimated that the amount currently allotted will cover
performance of work under the contract through November 30, 1996.
<TABLE>
ARTICLE H.4.-SALARY RATE LIMITATION LEGISLATION PROVISIONS-paragraph (b) is
amended to add the following public law citation for award of FY 1996 funds:
<CAPTION>
b. Public Law Fiscal Year Period Salary Rate Limit
---------- ----------- ------ -----------------
<S> <C> <C> <C>
P.L. 104-56 1996 10/1/95-9/30/96 $125,000
continuing resolution
</TABLE>
-4-
<PAGE> 1
EXHIBIT 10.35
<PAGE> 2
DOE F 4600.1 (3-85) EXHIBIT 10.35
U.S. DEPARTMENT OF ENERGY
NOTICE OF FINANCIAL ASSISTANCE AWARD
Under the authority of Public Law 95-91, U.S. DEPARTMENT OF ENERGY ORGANIZATION
ACT and subject to legislation, regulations and policies applicable to (cite
legislative program title):
HEALTH AND ENVIRONMENTAL RESEARCH
---------------------------------
1. PROJECT TITLE
Microbial Genome Sequencing
2. INSTRUMENT TYPE
___ GRANT X COOPERATIVE AGREEMENT
---
3. RECIPIENT (Name, address, zip code, area code and telephone No.)
Collaborative Research, Inc.
1365 Main Street
Waltham, MA 02154 617/487-7979
4. INSTRUMENT NO.
DE-FC02-95ER61967
5. AMENDMENT NO.
A000
6. BUDGET PERIOD
FROM: 12/01/94
THRU: 11/30/95
7. PROJECT PERIOD
FROM: 12/01/94
THRU: 11/30/97
8. RECIPIENT PROJECT DIRECTOR (Name and telephone No.)
Douglas R. Smith 617/487-7979
9. RECIPIENT BUSINESS OFFICER (Name and telephone No.)
Gerald F. Vovis 617/487-7979
10. TYPE OF AWARD
X NEW ___ CONTINUATION ___ RENEWAL
---
___ REVISION ___ SUPPLEMENT ___ OTHER
<PAGE> 3
11. DOE PROJECT OFFICER (Name, address, zip code, telephone No.)
D. Jay Grimes, ER-74
U.S. Department of Energy
Washington, D.C. 20585 301/903-4183
12. ADMINISTERED FOR DOE BY (Name, address, zip code, telephone No.)
Susan K. Borthwick, Contract Specialist
U.S. Department of Energy
9800 South Cass Avenue
Argonne, IL 60439 708/252-2377
13. RECIPIENT TYPE
___ STATE GOV'T
___ INDIAN TRIBAL GOV'T
___ HOSPITAL
X FOR PROFIT ORGANIZATION
---
___ INDIVIDUAL
___ LOCAL GOV'T
___ INSTITUTION OF HIGHER EDUCATION
___ OTHER NONPROFIT ORGANIZATION
X C ___ P ___ SP
---
___ OTHER (Specify) _____________
14. ACCOUNTING AND APPROPRIATIONS DATA
a. Appropriation Symbol
89X0224.91
b. B&R Number
KP0203/KP0402
c. FT/AFP/OC
YA/CH/410
d. CFA Number
N/A
15. EMPLOYER I.D. NUMBER/SSN
042297484
16. BUDGET AND FUNDING INFORMATION
a. Current Budget Period Information
(1) DOE Funds Obligated This Action $1,000,000.00
(2) DOE Funds Authorized for Carry Over $-0-
(3) DOE Funds Previously Obligated in this Budget Period $-0-
(4) DOE Share of Total Approved Budget $1,000,000.00
(5) Recipient Share of Total Approved Budget $-0-
(6) Total Approved Budget $1,000,000.00
2
<PAGE> 4
b. Cumulative DOE Obligations
(1) This Budget Period $ 1,100,000.00
[Total of lines a.(1) and a.(3)]
(2) Prior Budget Periods $ - 0 -
(3) Project Period to Date $ 1,100,000.00
[Total of lines b.(1) and b.(2)]
17. TOTAL ESTIMATED COST OF PROJECT $ N/A
(This is the current estimated cost of the project. It is not a promise to
award nor an authorization to expend funds in this amount.)
18. AWARD/AGREEMENT TERMS AND CONDITIONS
This award/agreement consists of this form plus the following:
a. Special terms and conditions (if grant) or schedule, general
provisions, special provisions (if cooperative agreement)
b. Applicable program regulations (specify ) 10 CFR Part 605
(Date) 1/1/93
c. DOE Assistance Regulations, 10 CFR Part 600, as amended, Subparts A
and B and X C (Cooperative Agreements).
d. Application/proposal dated 4/20/94 ,
X as submitted
---
--- with changes as negotiated
19. REMARKS
- See attached Page No. 2 of this Notice of Financial Assistance Award.
20. EVIDENCE OF RECIPIENT ACCEPTANCE
/s/ Gerald F. Vovis 1/6/95
------------------------------------------ ------
(Signature of Authorized Recipient Official) (Date)
Gerald F. Vovis, Ph.D.
------------------------------------------
(Name)
Senior V.P., Research & Development
------------------------------------------
(Title)
21. AWARDED BY
/s/ James R. Bieschke, Branch Chief 12/21/94
------------------------------------------- --------
(Signature) (Date)
James R. Bieschke, Branch Chief
-------------------------------------------
(Name)
Contracts Division
-------------------------------------------
(Title)
3
<PAGE> 5
Amendment No. A000 to
Cooperative Agreement
No. DE-FC02-95ER61967
Page No. 2
19. REMARKS (continued)
a. The following terms and conditions, attached hereto, are made a part
hereof:
1. Budget Pages (DOE F 4620.1) which set forth the approved budgets
for budget periods 1, 2, and 3;
2. DOE General Terms and Conditions for Research Financial
Assistance Awards, coded GPRG-0694;
3. Special Terms and Conditions for Research Financial Assistance
Awards, coded SPRG-1094;
4. Federal Assistance Reporting Checklist dated 3/28/94; and
5. Intellectual Property Provisions for Grants with Profit-Making
Organizations and Individuals - Small Business, coded GPSB-987.
6. Additional Special Provisions, coded SP-1294
b. All references to grant(s) contained herein shall be interpreted to
mean Cooperative Agreement(s). All references to the term grantee,
Participant, recipient or awardee contained herein shall be
interpreted to mean Collaborative Research, Inc.
c. In accordance with 10 CFR 600.125(e)(1) preaward expenditures of
otherwise allowable costs incurred by the recipient on or after
December 1, 1994 through the date contained in Block 21. of the
NOTICE OF FINANCIAL ASSISTANCE AWARD are hereby authorized.
4
<PAGE> 6
<TABLE>
<CAPTION>
Equipment Year 1 Year 2 Year 3
Description Unit Price Amount # Amount # Amount #
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
VaxStation 4000/90 (64 Mb RAM) $ 19,500 $ 58,500 3 $ 19,500 1
X-terminals with 12 Mb ram and
software license $ 6,000 $ 6,000 1
9-gigabyte disks for VaxStations $ 3,799 $ 34,191 9 $ 26,593 7
Alpha AXP 3000/800 for assembly and analysis $ 30,000 $ 30,000 1
256 Mb memory for Alpha AXP 3000/800 $ 25,827 $ 25,82 1
Disk controller accelerator $ 2,500 $ 2,500 1
Compugen bioaccelerator board 320 $134,960 $134,960 1
4 gigabyte disks for Alpha AXP $ 2,500 $ 7,500 3 $ 7,500 3
tape drive with stacker $ 13,000 $ 13,000 1
network hardware plus installation $ 5,000 $ 5,000 1
Molecular Dynamics scanner $ 40,000
Perkin Elmer 9600 PCR Machine $ 12,000 $ 12,000 1 $ 12,480 1
DTE boxes $ 9,500 $ 9,500 1
6000V power supplies $ 3,000 $ 6,000 2
Heating circulator $ 700 $ 700 1
UV crosslinker $ 1,000 $ 1,000 1
Freezer (-20) $ 1,000 $ 1,000 1
Freezer (-80) $ 7000 $ 7,000 1
DNA prepper $ 75,000 $ 75,000 1
Pipetting robot $ 50,000 $ 50,000 2
Vortex mixer $ 900 $ 900 1
Omnifuge plus rotor $ 8,000 $ 8,000 1
Microfuge $ 1,500 $ 4,500 3 $ 4,500 1
Semiautomated blot washing device $ 2,000 $ 8,000 4 $ 2,000 1
G2 shakers $ 1,300 $ 5,200 4 $ 1,352 1
incubators for cultures and hybridization $ 3,000 $ 6,000 2
Gyratory floor shaker $ 6,000 $ 6,000 1
Lab computer, centris 610 $ 2,500 $ 2,500 1
Speedvac $ 3,000 $ 3,000 1
Vac pump for Speed Vac $ 2,000 $ 2,000 1
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
IAS Infrared hybridizer/detector $150,000 $150,000 1
Miscellaneous small equipment $ 5,000 $ 5,000 1 $ 5,200 1 $ 5,408 1
Hamilton multi-channel syringes $ 800 $ 6,400 8 $ 3,200 4 $ 3,200 4
Electronic multi-channel pipet $ 814.00 $ 2,442 3 $ 814 1
Manual multi-channel pipet $ 700.00 $ 4,200 6 $ 1,400 2
Totals $283,860 $487,079 $16,108
</TABLE>
6
<PAGE> 8
<TABLE>
DOE GENERAL TERMS AND CONDITIONS FOR
RESEARCH FINANCIAL ASSISTANCE AWARDS
------------------------------------
Table of Contents
-----------------
<CAPTION>
Number Subject Page
- ------ ------- ----
<S> <C> <C>
1. Explanation. . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Recipient Adherence to Award Terms and Conditions. . . . . . 2
3. Definitions. . . . . . . . . . . . . . . . . . . . . . . . .
a. Principal Investigator . . . . . . . . . . . . . . . . . 2
b. Prior Approval . . . . . . . . . . . . . . . . . . . . . 2
4. Authorized Recipient Signatures for Prior Approval Requests 3
5. Allowable Costs/Applicable Cost Principles . . . . . . . . . 3
6. Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
7. Preaward Costs . . . . . . . . . . . . . . . . . . . . . . . 5
8. Reporting Requirements . . . . . . . . . . . . . . . . . . . 5
9. Cost Sharing . . . . . . . . . . . . . . . . . . . . . . . . 6
10. Continuations, Renewals, and Extensions. . . . . . . . . . . 6
11. Maximum DOE Obligation . . . . . . . . . . . . . . . . . . . 7
12. Transfers of Funds Between Financial Assistance Awards . . . 7
13. Property
a. Real and Tangible. . . . . . . . . . . . . . . . . . . . 7
b. Intangible Property. . . . . . . . . . . . . . . . . . . 8
14. Change or Absence of Principal Investigator or Designated
Key Personnel. . . . . . . . . . . . . . . . . . . . . . . . 8
15. Changes in Objectives or Scope . . . . . . . . . . . . . . . 9
16. Transfer of Substantive Programmatic Effort. . . . . . . . . 9
17. Consultant Services. . . . . . . . . . . . . . . . . . . . . 9
18. Paperwork Reduction. . . . . . . . . . . . . . . . . . . . . 9
19. Generally Applicable Requirements
a. Animal Welfare . . . . . . . . . . . . . . . . . . . . . 10
b. Research Involving Recombinant DNA Molecules . . . . . . 10
c. Use of Human Subjects. . . . . . . . . . . . . . . . . . 10
20. Nondiscrimination. . . . . . . . . . . . . . . . . . . . . . 10
21. Public Access to Information . . . . . . . . . . . . . . . . 10
22. Acknowledgment of Support. . . . . . . . . . . . . . . . . . 11
23. National Security. . . . . . . . . . . . . . . . . . . . . . 11
24. Suspensions and Terminations . . . . . . . . . . . . . . . . 12
25. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 12
26. Foreign Travel . . . . . . . . . . . . . . . . . . . . . . . 13
27. Financial Assistance Awards to Individuals . . . . . . . . . 13
</TABLE>
7
<PAGE> 9
1. EXPLANATION.
-----------
a. These general terms and conditions do not restate all the provisions
of applicable statutes and regulations, nor do they represent an
exhaustive listing of all requirements applicable to this award.
Rather, they highlight and are consistent with those requirements
which are especially pertinent to research awards in general. They
are emphasized by inclusion here because: (1) they are invoked with
high frequency; (2) their violation is a matter of especially serious
concern (e.g., use of human subjects); (3) restating them in the
research context will allow them to be more easily understood by the
research community.
b. In addition to these general terms and conditions, the recipient must
comply with all governing requirements, including those identified in
block 18 of DOE F 4600.1, "Notice of Financial Assistance Award," and
those included in the "Special Terms and Conditions" attached to this
award.
2. RECIPIENT ADHERENCE TO THE TERMS AND CONDITIONS.
-----------------------------------------------
a. The recipient's signature on the application and on DOE F 4600.1
signifies the recipient's agreement to all terms and conditions of
the award. Should the recipient believe modification of any of the
terms and conditions of this award is necessary, an authorized
official of the recipient organization or, in the case of an
individual, the recipient must submit a written request on its own
behalf or on behalf of any subgrant recipient or applicant for prior
approval of the contracting officer named on the face page of this
award.
b. Following this procedure is very important because many of the terms
and conditions of this award are required by statute and must be
enforced by the Department of Energy.
3. DEFINITIONS.
-----------
a. PRINCIPAL INVESTIGATOR. As used herein, the scientist or other
programmatic expert named in block 8 of the DOE F 4600.1 designated
by the recipient organization to direct the scientific/technical
efforts being supported (also called program director or project
director/leader).
b. PRIOR APPROVAL. A statement in writing, signed by the contracting
officer, that a cost may be incurred or an action may be taken. The
approval may take the form of a letter or a revision to the award.
If actions or costs requiring prior approval are specified in the
application and are not expressly disapproved by
-8-
<PAGE> 10
DOE in the attached "Special Terms and Conditions," the award of
the action constitutes such prior approval.
4. AUTHORIZED RECIPIENT SIGNATURES FOR PRIOR APPROVAL REQUESTS.
-----------------------------------------------------------
All requests for prior approval must be signed by an individual who is
authorized to act for the recipient organization. The signature of the
principal investigator (unless also a corporate office or otherwise
authorized) is insufficient to obtain action on a prior approval request,
although countersignature by the principal investigator is not
discouraged. Requests for budget revisions shall be made using the same
budget format as used in applying for the award and must be supported by a
narrative justification. Other prior approval requests may be made by
letter. Prior approval requests should be addressed to the contracting
officer named on the face page of this award.
5. ALLOWABLE COSTS/APPLICABLE COST PRINCIPLES.
------------------------------------------
a. In accordance with the applicable cost principles cited below, the
allowable costs of this award shall consist of the actual allowable
direct costs incident to performance of the project, plus the
allocable portion of the allowable indirect costs, if any, of the
organization, less applicable credits. The allowable costs shall not
exceed the amount shown on the face page of this award for the total
approved budget for the current budget period (line 16a.(6), DOE F
4600.1, "Notice of Financial Assistance Award").
b. The allowability of costs for work performed under this award and any
subsequent subaward will be determined in accordance with the Federal
cost principles applicable to the recipient or subrecipient in effect
on the date of award or the date of the subaward, except as modified
by other provisions of this award or the subaward. The recipient or
subrecipient shall specify in any cost-reimbursement contract under
the award or subaward the applicable cost principles cited in this
provision that apply to the contractor.
c. The Federal cost principles applicable to specific types of
recipients, subrecipients, and contractors under awards and subawards
are as follows:
(1) INSTITUTIONS OF HIGHER EDUCATION. Office of Management and
Budget (OMB) Circular A-21, "Cost Principles Applicable to
Grants, Contracts, and Other Agreements with Institutions of
Higher Education," is applicable to both public and private
colleges and universities.
(2) STATE AND LOCAL GOVERNMENTS AND INDIAN TRIBAL GOVERNMENTS. OMB
Circular A-87, "Cost Principles Applicable to Grants, Contracts
and Other Agreements with State and Local Governments," is
applicable to
-9-
<PAGE> 11
State, local, and Indian tribal governments, and
shall also be used to the extent appropriate for foreign
governments.
(3) HOSPITALS. Title 45 CFR Part 74, Appendix E, "Principles for
Determining Costs Applicable to Research and Development under
Grants and Contracts with Hospitals," applies to nonprofit and
for-profit hospitals.
(4) OTHER NONPROFIT ORGANIZATIONS AND INDIVIDUALS. OMB Circular
A-122, "Cost Principles Applicable to Grants, Contracts, and
Other Agreements with Nonprofit Organizations," applies to
nonprofit organizations and individuals, except for those
specifically exempted by the terms of the circular or those
nonprofit organizations and individuals covered by the cost
principles cited in paragraph 5.c.(1), (2), or (3) above.
(5) COMMERCIAL FIRMS AND CERTAIN NONPROFIT ORGANIZATIONS. Title 48
CFR Subpart 31.2, "Contracts with Commercial Organizations," as
supplemented by 48 CFR Subpart 931.2, applies to those nonprofit
organization not covered by OMB Circular A-122, and to all
commercial organizations not covered by the cost principles in
paragraph 5.c.(3).
6. PAYMENT.
-------
a. Payments under this award will be made by an advance payment method
unless DOE determines that the recipient's financial management
system does not meet the requirements of 10 CFR 600.109 or the
recipient has not maintained or demonstrated the willingness and
ability to maintain procedures that will minimize the time elapsing
between transfer of funds from the U.S. Treasury and their
disbursement for award-related purposes.
b. The appropriate advance payment method or the reimbursement method
and the cognizant finance office are specified in the attached
"Special Terms and Conditions."
c. Advances by the recipient to subrecipient and contractor
organizations must conform substantially to the same standards of
time and amount that govern advances made by the Federal Government
to the recipient. Excess cash advances erroneously withdrawn from
the U.S. Treasury shall be promptly refunded to DOE unless the funds
will be disbursed within 7 calendar days or the amount is less than
$10,000 and will be disbursed within 30 calendar days.
d. Interest earned on advance payments to other than State governments
or their subrecipients shall be reported on SF-272, "Report of
Federal Cash
-10-
<PAGE> 12
Transactions," and promptly remitted to the cognizant
finance office by check payable to the Department of Energy (unless
otherwise specified in the attached "Special Terms and Conditions").
7. PREAWARD COSTS.
--------------
a. ALL AWARDS. Any preaward expenditures are made at the recipient's
risk. Approval of preaward costs by the Contracting Officer or
incurrence by the recipient does not impose any obligation on DOE if
an award is not subsequently made, or if an award is made for a
lesser amount than the recipient expected.
b. RESEARCH AWARDS ONLY.
--------------------
(1) For new or renewal research awards, recipients may incur
preaward costs up to ninety (90) days prior to the effective
date of the award. Preaward costs for periods preceding 90 days
prior to the effective date of the award are allowable only if
approved in writing, prior to incurrence, by a DOE Contracting
Officer.
(2) For continuation awards within a multiple year project, prior to
receipt of continuation funding, preaward expenditures by
recipients are not subject to the limitation or approval
requirements of paragraph 7.b.(1) of this section.
(3) Preaward costs, as incurred by the recipient, must be necessary
for the effective and economical conduct of the project, and the
costs must be otherwise in accordance with these rules and may
not include those specific costs for which agency prior approval
is required under the circulars. In any instance in which the
circulars permit the agency to grant prior approval to the
recipient, it is the Department's intention to do so.
c. OTHER THAN RESEARCH AWARDS. All other financial assistance
recipients may incur preaward costs only if the expenditure is
approved in writing, prior to incurrence, by the Contracting Officer.
In the case of governmental entities, the approval must additionally
be reflected on the award notice.
(Note: This provision does not apply to bid and proposal costs that may
be recovered through an indirect cost rate negotiated in accordance with
the applicable Federal cost principles.)
-11-
<PAGE> 13
8. REPORTING REQUIREMENTS.
----------------------
a. Attached to the award is a completed EIA 459A, "Federal Assistance
Reporting Checklist," a checklist of the reports required under the
award. (See 10 CFR 600.115 for general reporting requirements and 10
CFR 605.19 for reporting requirements for the Office of Energy
Research's Special Research Financial Assistance Program.)
b. The recipient shall submit a technical progress report (also called a
performance report) as part of any application for continuation or
renewal of DOE support. This report shall be submitted in lieu of a
separate annual performance report. Upon completion or termination
of the project, the final technical report shall be prepared in
accordance with the applicable program rule cited on the face page of
the award or, in the absence of such program rule coverage, in
accordance with the technical reporting format specified in DOE Order
1332.2, the UNIFORM REPORTING SYSTEM FOR FEDERAL ASSISTANCE (GRANTS
AND COOPERATIVE AGREEMENTS).
c. Instructions concerning financial reports to be submitted in
conjunction with this award are specified in the "Special Terms and
Conditions."
9. COST SHARING.
------------
a. As shown on the face page of the award, any cost sharing shall defray
only the allowable costs of the project in accordance with the
statutes, regulations, applicable cost principles, and other terms
and conditions governing the award. Cost sharing contributions may
be incurred either as direct or indirect costs, and include cash or
in-kind contributions by the recipient, its subrecipients, or
contractors. The cost sharing may be in any allowable budget
category or combination of categories. When a direct cost item
represents some or all of the non-Federal contribution, any
associated indirect costs may not be charged to Federal funds but may
be counted as part of the cost sharing. The classification of
contributed costs as direct or indirect must be consistent with the
classification of similar items charged to DOE funds.
b. Valuation of in-kind contributions and documentation of cost sharing
shall be in accordance with 10 CFR 600.107.
10. CONTINUATIONS, RENEWALS, AND EXTENSIONS.
---------------------------------------
a. Continuations. Recipients are responsible for ensuring that properly
completed applications for continuation awards are submitted to DOE
no later than 3 months prior to the expiration date of the current
budget period shown on the
-12-
<PAGE> 14
DOE F 4600.1. (For the continuation of an
action which had been awarded under the Office of Energy Research's
Financial Assistance Program in accordance with 10 CFR Part 605, an
application for a continuation award must be submitted to DOE no
later than 3 months before the expiration of the current budget
period.)
b. RENEWALS. If a recipient wishes to apply for a renewal award to
receive funding beyond the scheduled expiration of the existing
project period, a properly completed application must be submitted to
DOE no later than 5 months prior to the scheduled expiration date of
the project period as shown on the DOE F 4600.1 unless a program rule
or other published instruction establishes a different application
deadline. (For the renewal of an action which had been awarded under
the Office of Energy Research's Financial Assistance Grants Program
in accordance with 10 CFR Part 605, an application for a renewal
award must be submitted to DOE no later than 6 months prior to the
scheduled expiration of the project period.)
c. EXTENSIONS. (1) Recipients of research awards may extend the
expiration date of the final budget period of the project (thereby
extending the project period) if additional time beyond the
established expiration date is needed to assure adequate completion
of the original scope of work within the funds already made
available. A single extension, which shall not exceed twelve (12)
months, may be made for this purpose, and must be made prior to the
originally established expiration date. The recipient must notify
the cognizant DOE Contracting Officer in the awarding office in
writing within ten (10) days of making the extension. (2) DOE may
extend any budget period of any type of financial assistance without
the need for competition or a justification of restricted eligibility
if: (i) In the case of the final budget period of a project period,
the additional time necessary is 18 months or less in total, or for
all other budget periods, the additional time necessary is 6 months
or less in total; and (ii) The recipient submits a written request
for an extension before the expiration date of the budget period in
process and includes a justification for the extension along with an
expenditure plan for the use of any additional funds requested. An
expenditure plan need not be provided when no additional funds are
requested, unless the recipient intends to rebudget funds in such a
way as to require DOE prior approval or unless the recipient is
instructed otherwise by the Contracting Officer.
11. MAXIMUM DEPARTMENT OBLIGATION to the recipient is the amount shown on the
DOE F 4600.1. DOE shall not be obligated to make any additional,
supplemental, continuation, renewal, or other award for the same or any
other purpose.
-13-
<PAGE> 15
12. TRANSFERS OF FUNDS BETWEEN FINANCIAL ASSISTANCE INSTRUMENTS.
-----------------------------------------------------------
Transfers of funds between DOE awards, and transfers of funds from a DOE
award to a project (or portion of a project) not supported by that award,
require the prior approval of DOE. The transfer of funds into a DOE
award-supported project from a award awarded by another Federal agency
does not require DOE approval, but may require the approval of the other
Federal agency. Funds so transferred from the award of another Federal
agency may not be used to satisfy any cost sharing requirement on a DOE
award.
13. PROPERTY.
--------
a. REAL AND TANGIBLE PERSONAL PROPERTY.
-----------------------------------
(1) No real property may be acquired under this award.
(2) Title to any equipment (for the purposes of DOE awards,
equipment comprises any article of tangible personal property
that has a useful life of more than 2 years and an acquisition
cost of $500 or more) or supplies acquired by a nonprofit
institution of higher education or a nonprofit organization, the
primary purpose of which is to conduct scientific research,
shall vest in the recipient without further obligation or
accountability to the U.S. Government. However, DOE retains the
right to transfer ownership of any item of equipment having a
unit acquisition cost of $1,000 or more under the conditions
specified in 10 CFR 600.117(d)(2). This exemption is derived
from Public Law 95-224, The Federal Grant and Cooperative
Agreement Act of 1977, as amended (31 U.S.C. 6306).
(3) Title to equipment and supplies acquired by all other recipients
shall vest in the recipient. However, such recipients shall be
accountable for equipment with a unit acquisition cost of $1,000
or more acquired under this award as specified in 10 CFR
600.117(d)(2), (3), and (4). For such recipients, unused
supplies exceeding $1,000 in aggregate current fair market value
shall be accounted for at closeout. In this case DOE shall be
compensated in an amount computed in accordance with section
600.117(e) if the supplies are retained for use on non-Federal
activities.
(4) All recipients shall follow property management policies and
procedures that provide for adequate control of the acquisition
and use of the assets acquired under the award.
(5) The Contracting Officer by written notice to the Recipient, may
abandon any property, title to which is vested in the
Government, in place, and
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<PAGE> 16
thereafter all obligations of the Government regarding such
abandoned property shall cease.
b. INTANGIBLE PROPERTY. The treatment and reporting requirements of
patent and data rights and copyrights are specified in the "Special
Terms and Conditions" of the award.
14. CHANGE OR ABSENCE OF THE PRINCIPAL INVESTIGATOR OR DESIGNATED KEY
PERSONNEL. Since the DOE decision to fund a project is based, to a
significant extent, on the qualifications and level of participation of
the principal investigator, change of a principal investigator or a
significant change in responsibilities or level of effort of the principal
investigator or, in certain cases, other key personnel identified as such
in the special terms and conditions of the award is considered a change in
the approved project. In addition, any continuous absence of the
principal investigator in excess of three months, or plans for the
principal investigator to become substantially less involved in the
project than was indicated in the application as accepted, requires
approval. The recipient is encouraged to contact DOE immediately upon
becoming aware that any of these changes are likely to be proposed, but in
any event must do so and receive Departmental approval before effecting
any such change.
15. CHANGES IN OBJECTIVES OR SCOPE. Any change in the objective or scope of
the award-supported project requires the prior approval of DOE. This
includes changes in the phenomenon or phenomena under study and in the
methodologies or experiments if they are a specific objective of the
research work as stated in the application approved by DOE.
16. TRANSFER OF SUBSTANTIVE PROGRAMMATIC EFFORT. None of the substantive
effort of the project may be transferred by contract or subgrant to
another organization or person without the prior approval of DOE. This
provision does not apply to the procurement of equipment, supplies,
materials, or general support services; these services may, however, be
subject to other prior approval requirements (e.g., those found in the
applicable cost principles or procurement standards).
17. CONSULTANT SERVICES. Costs of consultant services are allowable in
accordance with the applicable cost principles. These principles include
the requirement that the consultant not be an employee of the recipient
organization; the one exception to this requirement applies to colleges
and universities. For colleges and universities, in unusual cases, and
only with the prior approval of DOE, intraorganizational consultation may
be permitted across departmental lines or at a separate or remote
operation.
-15-
<PAGE> 17
18. PAPERWORK REDUCTION.
-------------------
a. The award is subject to the requirements of the Paperwork Reduction
Act of 1980 as implemented by the Office of Management and Budget
rules, "Controlling Paperwork Burdens on the Public," published at 5
CFR 1320 (48 FR 13666, 3-31-83). These requirements apply if the
recipient will collect information from ten or more respondents at
the specific request of DOE, or if the award requires specific DOE
approval of the information collection or the collection procedures.
b. The recipient shall submit any proposed sponsored information
collection under paragraph 19a, above, to the contracting officer
named on the face page of this award. The proposal shall be
submitted at least 120 days prior to the intended date of information
collection. DOE will seek the requisite approval from the Office of
Management and Budget and will promptly notify the recipient of the
disposition of the request.
19. GENERALLY APPLICABLE REQUIREMENTS. In accordance with 10 CFR 600.12, this
award is subject to a number of statutory and other generally applicable
requirements. Those requirements most pertinent to research projects are
highlighted below:
a. Any recipient performing research on vertebrate animals shall comply
with the Laboratory Animal Welfare Act of 1966, as amended (7 USC
2131 ET SEQ.), and the regulations promulgated thereunder by the
Secretary of Agriculture (9 CFR subchapter A, parts 1, 2, 3, and 4)
pertaining to the care, handling, and treatment of vertebrate animals
held or used for research, teaching, or other activities supported by
Federal awards. The recipient is expected to ensure that the
guidelines described in Department of Health and Human Services
(DHHS) Publication No. (NIH) 85-23, "Guide for the Care and Use of
Laboratory Animals," are followed and to comply with the "U.S.
Government Principles for the Utilization and Care of Vertebrate
Animals Used in Testing, Research and Training" (included as an
Appendix to the NIH Guide).
b. RESEARCH INVOLVING RECOMBINANT DNA MOLECULES. Any recipient
performing research involving recombinant DNA molecules and/or
organisms and viruses containing recombinant DNA molecules agrees by
acceptance of this award to comply with the National Institute's of
Health "Guidelines for Research Involving Recombinant DNA Molecules,"
6-83 (48 FR 24556) or such later revision of those guidelines as may
be published in the FEDERAL REGISTER.
c. USE OF HUMAN SUBJECTS IN RESEARCH, DEVELOPMENT, AND RELATED
ACTIVITIES. Any DOE recipient performing research, development, or
related activities involving
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<PAGE> 18
human subjects must comply with regulations found at 10 CFR Part 745,
"Protection of Human Subjects," and any additional provisions which
may be included in the "Special Terms and Conditions" of the award.
Such provisions are intended to safeguard the rights and welfare of
human subjects at risk of possible physical, psychological, or social
injury as a consequence of their participation.
20. NONDISCRIMINATION. The award is subject to the provisions of 10 CFR 1040,
Nondiscrimination in Federally Assisted Programs.
21. PUBLIC ACCESS TO INFORMATION.
----------------------------
a. The Freedom of Information Act, as amended, and the DOE implementing
regulations (10 CFR 1004) require DOE to release certain documents
and records regarding awards to any person who provides a written
request. The intended use of the information will not be a criterion
for release. These requirements apply to information held by DOE and
do not require recipients, their subrecipients, or their contractors
to permit public access to their records.
b. Records maintained by DOE with respect to awards are subject to the
provisions of the Privacy Act and the DOE implementing regulations
(10 CFR 1008) if those records constitute a "system of records" as
defined in the Act and the regulations. Generally, records
maintained by recipients, their subrecipients, or their contractors
are not subject to these requirements.
22. ACKNOWLEDGMENT OF SUPPORT. Publication of the results of the award is
encouraged subject to any applicable restrictions in 10 CFR 600.33
(Patents, Data, and Copyrights). Any article published shall include an
acknowledgment that the research was supported, in whole or in part, by a
DOE award (with the award number) and a statement that such support does
not constitute an endorsement by DOE of the views expressed in the
article.
23. NATIONAL SECURITY.
-----------------
a. It is not expected that activities under the award will generate or
otherwise involve classified information (i.e., Restricted Data,
Formerly Restricted Data, National Security Information).
b. However, if in the opinion of the recipient or DOE such involvement
becomes expected prior to the closeout of the award, the recipient or
DOE shall notify the other in writing immediately. If the recipient
believes any information developed or acquired may be classifiable,
the recipient shall not provide the potentially classifiable
information to anyone, including the DOE officials with
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<PAGE> 19
whom the recipient normally communicates, except the Director of
Classification, and shall protect such information as if it were
classified until notified by DOE that a determination has been made
that it does not require such handling. Correspondence which includes
the specific information in question shall be sent by registered mail
to U.S. Department of Energy, ATTN: Director of Classification, DP-32,
Washington, DC 20545. If the information is determined to be
classified, the recipient may wish to discontinue the project, in
which case the recipient and DOE shall terminate the award by mutual
agreement. If the award is to be terminated, all material deemed by
DOE to be classified shall be forwarded to DOE, in a manner specified
by DOE, for proper disposition. If the recipient and DOE wish to
continue the award, even though classified information is involved,
the recipient shall be required to obtain both personnel and facility
security clearances through the Office of Safeguards and Security for
Headquarters awarded awards or from the cognizant field office
Division of Safeguards and Security for awards obtained through DOE
field organizations. Costs associated with handling and protecting
any such classified information shall be negotiated at the time the
determination to proceed is made.
24. SUSPENSIONS AND TERMINATIONS.
----------------------------
a. Under the provisions of 10 CFR 600.29 and 600.121, DOE may suspend or
terminate the award, in whole or in part, (1) when DOE believes that
the recipient has materially failed to comply with the terms and
conditions of the award, (2) for any reason by mutual agreement
between DOE and the recipient upon the request of either party, or
(3) when the parties cannot mutually agree to the extent of a
termination.
b. Normally, DOE action to suspend or terminate an award for cause will
be taken only after DOE has informed the recipient of any deficiency
on its part and given an opportunity to correct it. However, DOE may
immediately suspend or terminate the award without prior notice when
it believes such action is necessary to protect the interests of the
Government.
c. No costs incurred during a suspension period or after the effective
date of a termination will be allowable, except those costs which, in
the opinion of DOE, the recipient could not reasonably avoid or
eliminate or which were otherwise authorized by the suspension or
termination notice, provided such costs would otherwise be allowable
under the terms of the award and the applicable Federal cost
principles.
d. Final allowable costs under a termination settlement shall be in
accordance with the terms of the award, including this term, and the
appropriate Federal cost
-18-
<PAGE> 20
principles. In no event will the total of payments under a terminated
award exceed the amount obligated by DOE or the DOE PRO RATA share
when cost-sharing was required, whichever is less.
e. Within 90 days after the termination of the award, the recipient
shall submit any final financial, performance, and other reports
required by the terms and conditions of the award. (See 10 CFR
600.115 and 600.116).
f. A notice of termination other than by mutual agreement may be subject
to review according to the provisions of 10 CFR 600.26, Disputes and
Appeals.
25. INTEREST.
--------
a. Notwithstanding any other term or condition of the grant/cooperative
agreement, all amounts that become payable by the recipient to the
Government under the grant/cooperative agreement shall bear simple
interest from the date due until paid unless paid within 30 days of
becoming due. The interest rate shall be the interest rate
established by the Secretary of the Treasury (Secretary) as provided
in section 11 of the Debt Collection Act of 1982 (31 U.S.C. 3717),
which is applicable to the period in which the amount becomes due, as
provided in paragraph (b) below, and then at the rate applicable for
each 3-month period as fixed by the Secretary until the amount is
paid.
b. Amounts shall be due at the earliest of the following dates:
(1) The date fixed under the grant/cooperative agreement.
(2) The date of the first written demand for payment consistent with
the grant/cooperative agreement, including any demand resulting
from a termination.
(3) The date the Government transmits to the recipient a proposed
agreement to confirm completed negotiations establishing the
amount of debt.
c. The interest charge made under this provision may be reduced in
accordance with the procedures prescribed in 4 CFR 102.13 or in
accordance with agency regulations in effect on the date of original
award of the grant/cooperative agreement.
26. FOREIGN TRAVEL.
--------------
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<PAGE> 21
Foreign travel is any travel outside Canada and the United States and its
territories and possessions or, for recipients located in another country,
travel outside that country. The International Air Transportation Fair
Competitive Practices Act of 1974 (49 USC 1517) (Fly America Act) requires
Federal recipients to use U.S. flag carriers for Government-financed
international air travel to the extent these carriers are available.
Recipients contemplating the use of non-U.S. flag carriers should consult
with the DOE contracting officer prior to the trip.
27. FINANCIAL ASSISTANCE AWARDS TO INDIVIDUALS
Any financial assistance award to an individual is considered a "Federal
benefit" as defined by Section 5301 of the Anti-Drug Abuse Act of 1988
(Public Law 100-690) and is therefore subject to the provisions of that
act.
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<PAGE> 22
SPECIAL TERMS AND CONDITIONS FOR RESEARCH FINANCIAL ASSISTANCE AWARDS
The requirements of this attachment take precedence over all other requirements
of this award found in regulations, the general terms and conditions, DOE
orders, etc., except requirements of statutory law. Any apparent contradiction
of statutory law stated herein should be presumed to be in error until
recipient has sought and received clarifications from the Contracting Officer.
1. CONTRACTING OFFICER
Name: June M. Wiinikka
Address: U.S. Department of Energy
Chicago Operations Office
Contracts Division
9800 South Cass Avenue
Argonne, Illinois 60439
Telephone: (708) 252-2126
2. FINANCE OFFICE
U.S. Department of Energy
Chicago Operations Office
Finance and Accounting Division
9800 South Cass Avenue
Argonne, Illinois 60439
3. PAYMENT - Payment under this award will be made by:
(a) Advance Payment Method -
/ / Department of Health & Human Services (DHHS) Payment Management
System (PMS) formerly DOE Letter of Credit.
The recipient shall request cash only as needed for immediate
disbursements, shall report cash disbursements in a timely manner,
and shall impose the same standards of timing and amount, including
reporting requirements, on secondary recipients.
/X/ Treasury Check
SF 270, Request for Advance or Reimbursement, may be submitted as
necessary. The timing and amount of advances shall be as close as
is
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<PAGE> 23
administratively feasible to the actual disbursements. Such
requests shall not be made in excess of reasonable estimates of cash
outlays for a 30 day period.
Be advised that if the payment request is $25,000.00 or more and the
payment office has on file a payment information form an electronic
funds transfer will be accomplished.
Payment Reporting Requirements for both DHHS-PMS and Treasury
Check/Electronic Funds Transfer
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Reporting Frequency No. of Copies Addressee
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal Cash Transactions Report
SF 272 2/ 2 1/
Federal Cash Transactions Report
Continuation, SF 272-A 3/ 2 1/
-------------------------------------------------------------------------------------
<FN>
1/ Contracting Officer
2/ When total annual advances for all financial assistance awards are:
Under $1 million - Submit 15 working days after each quarter ending
December 31, March 31, June 30, and September 30.
$1 million or more - Submit on the 15th working day after each month.
3/ Submitted with each SF 272 when the recipient has more than one
financial assistance award.
For net disbursements (Item 11(h) of SF 272), please indicate in
Section 14 (Remarks) or by attachment, that portion of disbursement
consisting of Government Capital Equipment funds by individual
award.
</TABLE>
(b) Reimbursement Payment Method
Treasury Check
SF 270, Request for Advance or Reimbursement, shall be submitted
monthly unless more frequent submission is authorized in the award.
-22-
<PAGE> 24
Be advised that if the payment request is $25,000.00 or more and the
payment office has on file a payment information form an electronic
funds transfer will be accomplished.
For net disbursements (Item 11(h) of SF 272), please indicate in
Section 14 (Remarks) or by attachment, that portion of disbursement
consisting of Government Capital Equipment funds by individual award.
4. FEDERALLY-OWNED PROPERTY
/N/A/ In accordance with OMB Circular A-110, a listing (DOE F 4300.3
Summary Report of DOE-Owned Plant and Capital Equipment) of
Federally-Owned Property, whether fabricated, furnished or purchased,
with capital equipment funds shall be submitted to the Contracting
Officer within 30 days after 2/28 of each year and of the final date
of the award. The report must separate out or identify which items
were furnished to the recipient and which items were purchased with
capital equipment funds under this award. In accordance with OMB
Circular A-110, the results of the biennial physical inventory of
Federally-owned equipment shall also be provided.
5. PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS
It is the sense of the Congress that, to the greatest extent practicable,
all equipment and products purchased with funds provided under this award
should be American-made.
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<PAGE> 25
DOE F 4600-2
(09-92)
Replaces E1A-459A
All Other Editions Are Obsolete
<TABLE>
U.S. Department of Energy
FEDERAL ASSISTANCE REPORTING CHECKLIST
- ---------------------------------------------------------------------------------------------------------------
<S> <C>
1. Identification Number: 2. Program/Project Title:
DE-FC-02-95ER61967 Microbial Genome Sequencing
- ---------------------------------------------------------------------------------------------------------------
3. Recipient:
Collaborative Research, Inc.
- ---------------------------------------------------------------------------------------------------------------
4. Reporting Requirements: Frequency No. of Addresses
Copies
PROGRAM/PROJECT MANAGEMENT REPORTING
/ / DOE F 4600.3. "Federal Assistance Milestone Plan"
/ / DOE F 4600.3A. "Milestone Log"
/ / DOE F 4600.4. "Federal Assistance Budget Information"
/ / DOE F 4600.5. "Federal Assistance Management
Summary Report"
/ / DOE F 4600.6, "Federal Assistance Program/Project
Status Report"
/x/ SF-269 or SF-269A, "Financial Status Report" Y 3 See NFAA Bl. 12
TECHNICAL INFORMATION REPORTING
/x/ DOE F 1430.22, Notice of Energy RD&D Project* 0 and X See 5a below See 5a below
/x/ Technical Progress Report (Informal) X See 5b below 3 See NFAA Bl. 11
/x/ Topical Report (Informal) A See 5c below 3 See NFAA Bl. 11
/x/ Final Technical Report F See 5d below 1 See NFAA Bl. 11
2 See NFAA Bl. 12
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 26
- --------------------------------------------------------------------------------
FREQUENCY CODES AND DUE DATES:
* Submit for research projects only.
A. As Necessary; within 5 calendar days after events
F. Final; 90 calendar days after the performance of the effort ends.
Q. Quarterly; within 30 days after end of calendar quarter or portion
thereof.
O. One time after project starts; within 30 days after award.
X. Required with proposals or the application or with significant
planning changes.
Y. Yearly; 30 days after the end of program year. (Financial Status
Reports 90 days).
S. Semiannually; within 30 days after end of program fiscal half year.
- --------------------------------------------------------------------------------
5. Special Instructions:
a. For Research Projects Only: NOTICE OF ENERGY RD&D (DOE F 1430.22):
Notice of Energy RD&D is due within 30 days after initial award. One copy
shall be submitted to the address identified in NFAA Block 11, and two
copies shall be submitted to the address identified in NFAA Block 12.
Also, three copies of the Notice of Energy RD&D shall be submitted with
each renewal application to the address identified in NFAA Block 11.
b. PROGRESS REPORT: Three copies of an informal Continuation Progress Report
(generally 2 pages per project or task) must be submitted 90 days prior to
the anticipated continuation funding date (10 CFR 605.19(a)(1)). Renewal
applications must be submitted no later than 6 months prior to the
scheduled expiration of the project period (10 CFR 605.9(h); and must
include a separate section that describes the results of work accomplished
through the date of the renewal application (10 CFR 605.9(j)).
c. SPECIAL REPORTS: Three copies of topical reports, reprints, conference
papers, etc. must be submitted as soon as possible after the event occurs
and with the renewal application (10 CFR 605.19(a)(3)).
d. FINAL REPORT: Three copies must be submitted within 90 days after the
expiration date of the total performance period if the project is not to
be renewed or extended, and must be accompanied by 2 copies of DOE F
1332.15, Recommendations for the Announcement and Distribution of
Department of Energy Scientific and Technical Information.
6. Prepared by: (Signature and Date)
March 28, 1994
_______________________________________________
7. Reviewed by: (Signature and Date)
_______________________________________________
For use with 10 CFR Part 605 Grants and Cooperative Agreements (Except
Conferences)
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<PAGE> 27
INTELLECTUAL PROPERTY PROVISIONS FOR GRANTS WITH
PROFIT-MAKING ORGANIZATIONS AND INDIVIDUALS - SMALL BUSINESS
<TABLE>
<CAPTION>
SECTION TITLE PAGE NO
- ------- ----- -------
<C> <S> <C>
1 Authorization and Consent 1
2 Notice and Assistance 1
Regarding Patent and Copyright
Infringement
3 Reporting of Royalties 1
4 Patent Rights 2
5 Additional Technical Data 9
Requirements
6 Rights in Technical Data - Long 9
Form
7 Rights to Proposal Data 12
</TABLE>
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<PAGE> 28
ARTICLE 1. AUTHORIZATION AND CONSENT
The Government hereby gives its authorization and consent for all use and
manufacture of any invention described in and covered by a patent of the United
States in the performance of this grant or any part hereof or any amendment
hereto or any contract hereunder (including all lower-tier contracts
hereunder).
ARTICLE 2. NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT
INFRINGEMENT
The provisions of this clause shall be applicable only if the amount of this
grant exceeds $10,000.
(a) The Grantee shall report to the Contracting Officer, promptly and in
reasonable written detail, each notice or claim of patent or
copyright infringement based on the performance of this grant of
which the Grantee has knowledge.
(b) In the event of any claim or suit against the Government on account
of any alleged patent or copyright infringement arising out of the
performance of this grant or out of the use of any supplies furnished
or work or services performed hereunder, the Grantee shall furnish to
the Government when requested by the Contracting Officer, all
evidence and information in possession of the Grantee pertaining to
such suit or claim. Such evidence and information shall be furnished
at the expense of the Government except where the Grantee has agreed
to indemnify the Government.
(c) This article shall be included in all contracts under this grant.
ARTICLE 3. REPORTING OF ROYALTIES
If this grant is an amount which exceeds $10,000 and if any royalty payments
are directly involved in the grant or are reflected in the grant price to the
Government, the Grantee agrees to report in writing to the Patent Counsel (with
notification by Patent Counsel to the Contracting Officer) during the
performance of this grant and prior to its completion or final settlement the
amount of any royalties or other payments paid or to be paid by it directly to
others in connection with the performance of this Grant together with the names
and addresses of licensors to whom such payments are made and either the patent
numbers involved or such other information as will permit identification of the
patents or other basis on which the royalties are to be paid. The approval of
DOE of any individual payments or royalties shall not stop the Government at
any time from contesting the enforceability, validity or scope of, or title to,
any patent under which a royalty or payments are made.
SECTION 4. PATENT RIGHTS
(a) Definitions
-----------
(1) "Invention" means any invention or discovery which is or may be
patentable or otherwise protectable under Title 35 of the United
States Code (U.S.C.) or any novel variety of plant which is or
may be protected under the Plant Variety Protection Act (7
U.S.C. 2321 et seq.).
(2) "Subject Invention" means any invention of the Grantee conceived
or first actually reduced to practice in the performance of
work under this grant, provided that in the case of a variety of
plant the date of determination [as defined in section 44(d) of
the Plant Variety Protection Act, 7 U.S.C. 2401(d)] must also
occur during the period of grant performance.
(3) "Practical Application" means to manufacture in the case of a
composition or product, to practice in the case of a process or
method, or to operate in the case of a machine or system; and, in
each case, under such conditions as to establish that the
invention is utilized and that its
-27-
<PAGE> 29
benefits are, to the extent permitted by law or Government
regulations, available to the public on reasonable terms.
(4) "Made" when used in relation to any invention means the conception or
first actual reduction to practice of such invention.
(5) "Small Business Firm" means a small business concern as defined at
Section 2 of Public Law 85-536 (15 U.S.C. 632) and implementing
regulations of the Administrator of the Small Business
Administration. For the purpose of this clause, the size standard
for small business concerns involved in the Government procurement
and subcontracting, at 13 CFR 121.3-8, and 13 CFR 121.3-12,
respectively, will be used.
(6) "Nonprofit Organization" means a university or other institution of
higher education or an organization of the type described in section
501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c) and
exempt from taxation under section 501(a) of the Internal Revenue
Code [26 U.S.C. 501(a)] or any nonprofit scientific or educational
organization qualified under a state nonprofit organization statute.
(7) "Patent Counsel" means the Department of Energy (DOE) Patent Counsel
assisting the DOE contracting activity.
(b) Allocation of Principal Rights
------------------------------
(1) The Grantee may retain the entire right, title, and interest
throughout the world to each subject invention subject to the
provisions of this clause and 35 U.S.C. 203. With respect to any
subject invention in which the Grantee retains title, the Federal
Government shall have a nonexclusive, nontransferable, irrevocable,
paid-up license to practice or have practiced for or on behalf of the
United States the subject invention throughout the world.
(2) (Reserved.)
(c) Invention Disclosure, Election of Title and Filing of Patent
------------------------------------------------------------
Application by Grantee
----------------------
(1) The Grantee will disclose each subject invention to the Patent
Counsel within two months after the inventor discloses it in writing
to Grantee personnel responsible for patent matters. The disclosure
to the Patent Counsel shall be in the form of a written report and
shall identify the grant under which the invention was made and the
inventor(s). It shall be sufficiently complete in technical detail
to convey a clear understanding to the extent known at the time of
the disclosure of the nature, purpose, operation, and the physical,
chemical, biological or electrical characteristics of the invention.
The disclosure shall also identify any publication, on sale or public
use of the invention and whether a manuscript describing the
invention has been submitted for publication and, if so, whether it
has been accepted for publication at the time of disclosure. In
addition, after disclosure to the Patent Counsel, the Grantee will
promptly notify the Patent Counsel of the acceptance of any
manuscript describing the invention for publication or of any on sale
or public use planned by the Grantee.
(2) The Grantee will elect in writing whether or not to retain title to
any such invention by notifying the Patent Counsel within two years
of disclosure to the Patent Counsel. However, in any case where
publication, on sale or public use has initiated the one year
statutory period wherein valid patent protection can still be
obtained in the United States, the period for election of title may
be
-28-
<PAGE> 30
shortened by Patent Counsel to a date that is no more than sixty
days prior to the end of the statutory period.
(3) The Grantee will file its initial patent application on a subject
invention to which it elects to retain title within one year after
election of title or, if earlier, prior to the end of any statutory
period wherein valid patent protection can be obtained in the United
States after a publication, on sale, or public use. The Grantee will
file patent applications in additional countries or international
patent offices within either ten months of corresponding initial
patent application or six months from the date permission is granted
by the Commissioner of Patents and Trademarks to file foreign patent
applications where such filing has been prohibited by a Secrecy
Order.
(4) Request for extension of the time for disclosure to the Patent
Counsel, election, and filing, under subparagraphs (1), (2), and (3)
may, at the discretion of the Patent Counsel by granted.
(d) Conditions When the Government May Obtain Title
-----------------------------------------------
The Grantee will convey to DOE, upon written request, title to any subject
invention:
(1) If the Grantee fails to disclose or elect title to the subject
invention within the times specified in (c) above, or elects not to
retain title; provided that the DOE may only request title within 60
days after learning of the failure of the grantee to disclose or
elect within the specified times;
(2) In those countries in which the Grantee fails to file patent
applications within the times specified in (c) above; provided,
however, that if the Grantee has filed a patent application in a
country after the time specified in (c) above but prior to its
receipt of the written request of the Patent Counsel, the Grantee
shall continue to retain title in that country; or
(3) In any country in which the Grantee decides not to continue the
prosecution of any application for, to pay the maintenance fees on,
or defend in a reexamination or opposition proceeding on, a patent on
a subject invention.
(e) Minimum Rights to Grantee and Protection of the Grantee Right to File
---------------------------------------------------------------------
(1) The Grantee will retain a nonexclusive, royalty-free license
throughout the world in each subject invention to which the
Government obtains title except if the Grantee fails to disclose the
subject invention within the times specified in (c) above. The
Grantee's license extends to its domestic subsidiaries and
affiliates, if any, within the corporate structure of which the
Grantee is a part and includes the right to grant sublicenses of the
same scope to the extent the Grantee was legally obligated to do so
at the time the grant was awarded. The license is transferable only
with the approval of the DOE except when transferred to the successor
of that part of the Grantee's business to which the invention
pertains.
(2) The Grantee's domestic license may be revoked or modified by DOE to
the extent necessary to achieve expeditious practical application of
the subject invention pursuant to an application for an exclusive
license submitted in accordance with applicable provisions at 37 CFR
404 and 10 CFR 781. This license will not be revoked in that field
of use or the geographical areas in which the Grantee has achieved
practical application and continues to make the benefits of the
invention reasonably accessible to the public. The license in any
foreign country may be revoked or modified at the discretion of DOE
to the extent that Grantee, its licensees, or its domestic
subsidiaries or affiliates have failed to achieve practical
application in that foreign country.
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<PAGE> 31
(3) Before revocation or modification of the license, DOE will furnish
the Grantee a written notice of its intention to revoke or modify the
license, and the Grantee will be allowed thirty days (or such other
time as may be authorized by DOE for good cause shown by the Grantee)
after the notice to show cause why the license should not be revoked
or modified. The Grantee has the right to appeal, in accordance with
37 CFR 404 and 10 CFR Part 781, any decision concerning the
revocation or modification of its license.
(f) Grantee Action to Protect Government's Interest
-----------------------------------------------
(1) The Grantee agrees to execute or to have executed and promptly
deliver to the Patent Counsel all instruments necessary to:
(i) Establish or confirm the rights the Government has throughout
the world in those subject inventions to which the Grantee
elects to retains title, and
(ii) Convey title to DOE when requested under (d) above and to enable
the Government to obtain patent protection throughout the world
in that subject invention.
(2) The Grantee agrees to require, by written agreement, its employees,
other than clerical and nontechnical employees, to disclose promptly
in writing to personnel identified as responsible for the
administration of patent matters and in a format suggested by the
Grantee each subject invention made under this grant in order that
the Grantee can comply with the disclosure provision of (c) above and
to execute all papers necessary to file patent applications on
subject inventions and to establish the Government's rights in the
subject inventions. The disclosure format should require, as a
minimum, the information requested by subparagraph (c)(1) above. The
Grantee shall instruct such employees through the employee agreements
or suitable educational programs on the importance of reporting
inventions in sufficient time to permit the filing of patent
applications prior to United States or foreign statutory bars.
(3) The Grantee will notify the Patent Counsel of any decision not to
continue prosecution of a patent application, pay maintenance fees,
or defend in a reexamination or opposition proceeding on a patent, in
any country, not less than thirty days before the expiration of the
response period required by the relevant patent office.
(4) The Grantee agrees to include, within the specification of any United
States patent applications and any patent issuing thereon covering a
subject invention, the following statement, "This invention was made
with Government support under (identify the grant) awarded by the
Department of Energy. The Government has certain rights in this
invention."
(5) The Grantee agrees to:
(i) Upon request, provide a report to the close-out of the grant
listing all subject inventions or stating that there were none;
(ii) Provide, upon request, a copy of the patent application, filing
date, serial number and title, patent number and issue date for
any subject invention in any country in which the grantee has
applied for a patent; and
(iii) Provide, upon request, but not more than annually, listings
of all subject inventions which were disclosed to DOE
during the applicable reporting period.
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<PAGE> 32
(g) Contracts and Subgrants under the Grant
---------------------------------------
(1) The Grantee will include this clause, suitably modified to identify
the parties, in all contracts and subgrants under the grant,
regardless of tier, for experimental, developmental, or research work
to be performed by a small business firm or a domestic nonprofit
organization. The contractor or subgrantee will retain all rights
provided for the Grantee in this clause, and the Grantee will not, as
part of the consideration for awarding the contract or subgrant,
obtain rights in the contractor's or subgrantee's subject inventions.
(2) The Grantee will include in all other contracts or subgrants under
the grant, regardless of tier, for experimental, developmental,
demonstration, or research work the patent rights clause required of
41 CFR 9-9.107-5(a) or 9-9.107-6, as appropriate, modified to
identify the parties.
(3) In the case of contract or subgrant under the grant at any tier, DOE,
the contractor or subgrantee, and the Grantee agree that the mutual
obligations of the parties created by this clause constitute a
contract between the contractor or subgrantee and DOE with respect to
those matters covered by this clause.
(h) Reporting on Utilization of Subject Inventions
----------------------------------------------
The Grantee agrees to submit on request periodic reports no more frequently
than annually on the utilization of a subject invention or on efforts at
obtaining such utilization that are being made by the Grantee or its licensees
or assignees. Such reports shall include information regarding the status of
development, date of first commercial sale or use, gross royalties received by
the Grantee, and such other data and information as DOE may reasonably specify.
The Grantee also agrees to provide additional reports as may be requested by
DOE in connection with any march-in proceeding undertaken by DOE in accordance
with paragraph (j) of this clause. As required by 35 U.S.C. 202(c)(5), DOE
agrees it will not disclose such information to persons outside the Government
without permission of the Grantee.
(i) Preference for United States Industry
-------------------------------------
Notwithstanding any other provision of this clause, the Grantee agrees that
neither it nor any assignee will grant to any person the exclusive right to use
or sell any subject inventions in the United States unless such person agrees
that any products embodying the subject invention or produced through the use
of the subject invention will be manufactured substantially in the United
States. However, in individual cases, the requirement for such an agreement
may be waived by DOE upon a showing by the Grantee or its assignee that
reasonable but unsuccessful efforts have been made to grant licenses on similar
terms to potential licensees that would be likely to manufacture substantially
in the United States or that under the circumstances domestic manufacture is
not commercially feasible.
(j) March-in Rights
---------------
The Grantee agrees that with respect to any subject invention in which it has
acquired title, DOE has the right in accordance with the procedures in 37 CFR
401.6 and any supplemental regulations of DOE to require the Grantee, as
assignee or exclusive licensee of a subject invention to grant a nonexclusive,
partially exclusive, or exclusive license in any field of use to a responsible
applicant or applicants, upon terms that are reasonable under the
circumstances, and if the Grantee, assignee, or exclusive licensee refuses such
a request, DOE has the right to grant such a license itself if DOE determines
that:
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<PAGE> 33
(1) Such action is necessary because the Grantee or assignee has not
taken, or is not expected to take within a reasonable time, effective
steps to achieve practical application of the subject invention in
such field of use;
(2) Such action is necessary to alleviate health or safety needs which
are not reasonably satisfied by the Grantee, assignee, or their
licensees;
(3) Such action is necessary to meet requirements for public use
specified by federal regulations and such requirements are not
reasonably satisfied by the Grantee, assignee, or licensees; or
(4) Such action is necessary because the agreement required by paragraph
(i) of this clause has not been obtained or waived or because a
licensee of the exclusive right to use or sell any subject invention
in the United States is in breach of such agreement.
(k) Special Provisions for Grants with Nonprofit Organizations
----------------------------------------------------------
If the Grantee is a non-profit organization, it agrees that:
(1) Rights to a subject invention in the United States may not be
assigned without the approval of DOE, except where such assignment is
made to an organization which has as one of its primary functions the
management of inventions, provided that such assignee will be subject
to the same provisions as the grant;
(2) The Grantee will share royalties collected on a subject invention
with the inventor, including Federal employee co-inventors (when DOE
deems it appropriate) when the subject invention is assigned in
accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;
(3) The balance of any royalties or income earned by the Grantee with
respect to subject inventions, after payment of expenses (including
payments to inventors) incidental to the administration of subject
inventions, will be utilized for the support of scientific research
or education; and
(4) It will make efforts that are reasonable under the circumstances to
attract licensees of subject inventions that are small business firms
and that it will give a preference to a small business firm when
licensing a subject invention if the Grantee determines that the
small business firm has a plan or proposal for marketing the
invention which, if executed, is equally as likely to bring the
invention to practical application as any plans or proposals from
applications that are not small business firms; provided that the
Grantee its also satisfied that the small business firm has the
capability and resources to carry out is plan or proposal. The
decision whether to give a preference in any specific case will be at
the discretion of the Grantee. However, the Grantee agrees that the
Secretary of Commerce may review the Grantee's licensing program and
decisions regarding small business applicants, and the Grantee will
negotiate changes to its licensing policies, procedures, or practices
with the Secretary of Commerce when the Secretary of Commerce's
review discloses that the Grantee could take reasonable steps to
implement more effectively the requirements of this paragraph (k)(4).
(l) Communications
--------------
The DOE central point of contact for communications or matters relating to this
clause is the Patent Counsel.
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<PAGE> 34
ARTICLE 4. ADDITIONAL TECHNICAL DATA REQUIREMENTS
(a) In addition to the technical data specified elsewhere in this grant
to be delivered, the Contracting Officer may at any time during the
grant performance or within one year after final payment call for the
Grantee to deliver any technical data first produced or specifically
used in the performance of this grant except technical data
pertaining to items of standard commercial design.
(b) The provisions of the "Rights in Technical Data" article included in
this grant are applicable to all technical data called for under this
"Additional Technical Data Requirements" article. Accordingly,
nothing contained in this article shall require the Grantee to
actually deliver any technical data, the delivery of which is excused
by paragraph (e) of the Rights in Technical Data article.
(c) When technical data are to be delivered under this article, the
Grantee will be compensated for appropriate costs for converting such
data into the prescribed from, for reproduction, and for delivery.
ARTICLE 5. RIGHTS IN TECHNICAL DATA - LONG FORM
(a) Definitions
-----------
(1) "Technical Data" means recorded information regardless of form or
characteristic, of a scientific or technical nature. It may, for
example, document research, experimental, developmental, or
demonstration, or engineering work, or be usable or used to define a
design or process, or to procure, produce, support, maintain, or
operate material. The data may be graphic or pictorial delineations
in media such as drawings or photographs, text in specifications or
related performance or design type documents or computer software
(including computer programs, computer software data bases, and
computer software documentation). Examples of technical data include
research and engineering data, engineering drawings and associated
lists, specifications, standards, process sheets, manuals, technical
reports, catalog item identification, and related information.
Technical data as used herein does not include financial reports,
cost analyses, and other information incidental to contract
administration.
(2) "Proprietary Data" means technical data which embody trade secrets
developed at private expense, such as design procedures or
techniques, chemical composition of materials, or manufacturing
methods, processes, or treatment, including minor modifications
thereof, provided that such data:
(i) Are not generally known or available from other sources without
obligation concerning this confidentiality;
(ii) Have not been made available by the owner to others without
obligation concerning their confidentiality; and
(iii) Are not already available to the Government without
obligation concerning their confidentiality.
(3) "Grant Data" means technical data first produced in the performance
of the grant, technical data which are specified to be delivered in
the grant, technical data that may be called for under the
"Additional Technical Data Requirements" article of the grant, if
any, or technical data actually delivered in connection with the
grant.
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<PAGE> 35
(4) "Unlimited Rights" means rights to use, duplicate, or disclose
technical data, in whole or in part, in any manner and for any
purpose whatsoever, and to permit others to do so.
(b) Allocation of Rights
--------------------
(1) The Government shall have:
(i) Unlimited rights in grant data except as otherwise provided
below with respect to proprietary data.
(ii) The right to remove, cancel, correct or ignore any markings not
authorized by the terms of this grant of any technical data
furnished hereunder, if in response to a written inquiry by DOE
concerning the propriety of the markings, the Grantee fails to
respond thereto within 60 days or fails to substantiate the
proprietary of the markings. In either case DOE will notify the
Grantee of the action taken.
(iii) No rights under this grant in any technical data which are
not grant data.
(2) The Grantee shall have:
(i) The right to withhold proprietary data in accordance with the
provisions of this article, and
(ii) The right to use for its private purposes, subject to patent,
security or other provisions of this grant, grant data it first
produces in the performance of this grant provided the data
requirements of this grant have been met as of the date of the
private use of such data. The Grantee agrees that to the extent
it receives or is given access to proprietary data or other
technical, business or financial data in the form of recorded
information from DOE or a DOE grant, contract or subcontractor,
the Grantee shall treat such data in accordance with any
restrictive legend contained thereon, unless use is specifically
authorized by prior written approval of the Contracting Officer.
(3) Nothing contained in this "Rights in Technical Data" article shall
imply a license to the Government under any patent or be construed as
affecting the scope of any license or other rights otherwise granted
to the Government under any patent.
(c) Copyrighted Material
--------------------
(1) The Grantee shall not, without prior written authorization of the
Contracting Officer, establish a claim to statutory copyright in any
grant data first produced in the performance of the grant. To the
extent such authorization is granted, the Government reserves for
itself and others acting on its behalf a royalty-free, nonexclusive,
irrevocable, world-wide license for Governmental purposes to publish,
distribute, translate, duplicate, exhibit and perform any such data
copyrighted by the Grantee.
(2) The Grantee agrees not to include in the technical data delivered
under the grant any material copyrighted by the Grantee and not to
knowingly include any material copyrighted by others without first
granting or obtaining at no cost a license therein for the benefit of
the Government of the same scope as set forth in paragraph (c)(1)
above. If such royalty-free license is unavailable and the Grantee
nevertheless determines that such copyrighted material must be
included in the technical data to be delivered, rather than merely
incorporated therein by
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<PAGE> 36
reference, the Grantee shall request the written authorization of the
Contracting Officer to include such copyrighted material in the
technical data without a license.
(d) Contracting Under this Grant
----------------------------
It is the responsibility of the Grantee to obtain from its
contractors hereunder technical data and rights therein, on behalf of the
Government, necessary to fulfill the Grantee's obligations to the
Government with respect to such data. In the event of refusal by a
contractor hereunder to accept an article affording the Government such
rights, the Grantee shall:
(1) Promptly submit written notice to the Contracting Officer setting
forth reasons for said contractor refusal and other pertinent
information which may expedite disposition of the matter; and
(2) Not proceed with said contract without the written authorization of
the Contracting Officer.
(e) Withholding of Proprietary Data
-------------------------------
Notwithstanding the inclusion of the "Additional Technical Data
Requirements" article in this grant or any provision of this grant
specifying the delivery of technical data, the Grantee may withhold
proprietary data from delivery, provided that the Grantee furnishes in
lieu of any such proprietary data so withheld technical data disclosing
the source, size, configuration, mating and attachment characteristics,
functional characteristics and performance requirements ("Form, Fit and
Function" data, e.g., specification control drawings, catalog sheets,
envelope drawings, etc.) or a general description of such proprietary data
where "Form, Fit and Function" data are not applicable. The Government
shall acquire no rights to any proprietary data so withheld except that
such data shall be subject to the "inspection rights" provisions of
paragraph (f), and, if included, the "limited rights in proprietary data"
provisions of paragraph (g) and the "Grantee licensing" provisions or
paragraph (h).
(f) Inspection Rights
-----------------
Except as may be otherwise specified in this grant for specific items
of proprietary data which are not subject to this paragraph, the
Contracting Officer's representatives, at all reasonable times up to three
(3) years after final payment under this grant, may inspect at the
Grantee's facility any proprietary data withheld under paragraph (e) and
not furnished under paragraph (g), if included, for the purposes of
verifying that such data properly fell within the withholding provision of
paragraph (e), or for evaluating work performance.
ARTICLE 7. RIGHTS TO PROPOSAL DATA
It is agreed that as a condition of the award of this grant or modification
thereto, and notwithstanding the provisions of any notice appearing on the
proposal(s), the Government shall have the right to use, duplicate, and
disclose and have others to do so for any purpose whatsoever, the technical
data contained in the proposal(s) upon which this grant or modification is
based.
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<PAGE> 37
<TABLE>
ADDITIONAL SPECIAL PROVISIONS
<CAPTION>
Item Page
- ---- ----
<C> <S> <C>
A. Statement of Substantial Involvement 1
B. Technical Direction and Surveillance 2
</TABLE>
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<PAGE> 38
A. Statement of Substantial Involvement
------------------------------------
The U.S. Department of Energy (hereinafter "DOE") and Collaborative Research
Division, Collaborative Research, Inc. (hereinafter referred to as CRD)
hereby enter into a Cooperative Agreement ("Agreement") for the purpose of
conducting a three-year, mutually agreeable research program entitled
"Microbial Genome Sequencing."
This Agreement supports the application of a random shotgun-based multiplex
sequencing strategy to the genome of a thermophilic archaebacterium,
Methanobacterium thermoautotrophicum, and other program-relevant bacteria to
be determined at a later date. The project will enhance the knowledge and
understanding of microbial genomes, contribute to DOE goals within the
Microbial Genome Initiative, and provide a beneficial resource for the
scientific and technical community.
The following statements describe the anticipated substantial involvement
between DOE and CRD, under the Cooperative Agreement awards.
DOE ROLES AND RESPONSIBILITIES: The DOE will provide programmatic direction
and evaluation, through normal project monitoring, technical review, and peer
review, and also through the creation of and participation on a Microbial
Genome Advisory Board (hereinafter referred to as the MGAB). Through its
participation on the MGAB, the DOE will be involved with selection of strains
for sequencing and the DOE will have responsibility for final approval of all
strains selected. Also, through its participation on the MGAB, the DOE will
provide evaluation and review of technical and scientific reports; however,
final content of all reports, including the annual progress report, is the
responsibility of the CRD. The DOE will conduct an annual on-site review of
all project activities, for the purpose of providing input for future
programmatic direction of the project; as necessary, the DOE will also review
cognizant financial reports.
PARTICIPANT ROLES AND RESPONSIBILITIES: The CRD shall provide all personnel,
facilities, equipment, supplies, and services, and otherwise do all things
necessary for, or incident to, conducting the research project as set forth
in the application dated April 21, 1994. CRD is responsible for the overall
management of effort necessary for timely and professional execution of the
project work, and for coordination of the effort with other Microbial Genome
Initiative investigators, in conjunction with direction and guidance from the
MGAB and DOE. It is also incumbent on CRD to make publicly available all
microbial genome map and sequence data within six months after the data are
obtained; data should be placed into public community databases, when
possible. Sequence data must be submitted to Genome Sequence Data Base
(GSDB), GenBank, or any appropriate site that processes sequence entries for
international distribution.
The substantial involvement by the DOE under this Agreement will remain in
effect for the term of the Cooperative Agreement award unless otherwise
amended. Moreover, this statement of substantial involvement by the DOE does
not increase the DOE's liability under the Agreement award.
B. Technical Direction and Surveillance
------------------------------------
(1) The work to be performed by the Participant under this Cooperative
Agreement is subject to the surveillance and written Technical
Direction of a "DOE Project Officer", identified in block 11 of the
face page. The term "Technical Direction" is defined to include,
without limitation, the following:
(a) Directions to the Participant which redirects the work effort,
shift work emphasis between work areas or tasks, require pursuit
of certain lines of inquiry, fill in details or otherwise
provide technical guidance to the Participant in order to
accomplish the tasks and requirements stated in the Statement of
Work as contained in the Agreement.
-37-
<PAGE> 39
(b) Provision of information to the participant which assists in the
interpretation of drawings, specifications or technical portions of
the Statement of Work as contained in the Agreement.
(c) Review and, where required by the Cooperative Agreement, approval of
technical reports, drawings, specifications or technical information
to be delivered by the Participant to DOE under the Cooperative
Agreement.
(2) Technical direction and management surveillance shall not impose
tasks or requirements upon the Participant additional to or different
from the tasks and requirements stated in the Statement of Work, of
this Agreement. The Technical Direction to be valid:
(a) Must be issued in writing consistent with the tasks and
requirements stated in the Statement of Work of this Agreement;
and
(b) May not:
1 constitute an assignment of additional work outside the
task requirements stated in the Statement of Work of this
Agreement;
2 in any manner cause an increase or decrease in the total
estimated project cost or the time required for project
performance;
3 change any of the expressed terms, conditions or
specifications of the Cooperative Agreement; or
4 accept non-conforming work.
(3) The Participant shall proceed promptly with the performance of
Technical Directions duly issued by the DOE Project Officer in the
manner prescribed by paragraph (2) and which are within his authority
under the provisions of paragraph (1); provided, however, that the
Participant shall immediately cease the performance of any Technical
Direction upon receipt of a written instruction to that effect from
the Contracting Officer.
(4) If in the opinion of the Participant any Technical Direction issued
by the DOE Project Officer is within one of the categories as defined
in (2)(b) 1 through 4 above, the Participant shall not proceed but
shall notify the Contracting Officer in writing within five working
days after the receipt of any such Technical Direction and shall
request the Contracting Officer to rescind such direction or mutually
agree to modify the agreement accordingly.
(5) The only persons authorized to give Technical Direction to the
Participant under this agreement are the Contracting Officer and any
"DOE Project Officer" as listed in Block 11 of the NFAA. Any action
taken by the Participant in response to any direction given by any
person other than the Contracting Officer shall not be binding upon
the Government.
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<PAGE> 40
DOE F 4600.1 (3-85)
U.S. DEPARTMENT OF ENERGY
NOTICE OF FINANCIAL ASSISTANCE AWARD
Under the authority of Public Law 95-91, U.S. DEPARTMENT OF ENERGY ORGANIZATION
ACT and subject to legislation, regulations and policies applicable to (cite
legislative program title):
HEALTH AND ENVIRONMENTAL RESEARCH
1. PROJECT TITLE
Microbial Genome Sequencing
2. INSTRUMENT TYPE
___ GRANT X COOPERATIVE AGREEMENT
3. RECIPIENT (Name, address, zip code, area code and telephone No.)
Genome Therapeutics Corporation
100 Beaver St.
Waltham, MA 02154 617/893-5007
4. INSTRUMENT NO.
DE-FC02-95ER61967
5. AMENDMENT NO.
A001
6. BUDGET PERIOD
FROM: 12/01/94
THRU: 11/30/95
7. PROJECT PERIOD
FROM: 12/01/94
THRU: 11/30/97
8. RECIPIENT PROJECT DIRECTOR (Name and telephone No.)
Douglas R. Smith 617/893-5007
9. RECIPIENT BUSINESS OFFICER (Name and telephone No.)
Gerald F. Vovis 617/893-5007
10. TYPE OF AWARD
___ NEW ___ CONTINUATION ___ RENEWAL
X REVISION ___ SUPPLEMENT ___ OTHER
<PAGE> 41
11. DOE PROJECT OFFICER (Name, address, zip code, telephone No.)
D. Jay Grimes, ER-74
U.S. Department of Energy
Washington, D.C. 20585 301/903-4183
12. ADMINISTERED FOR DOE BY (Name, address, zip code, telephone No.)
Susan K. Borthwick, Contract Specialist
U.S. Department of Energy
9800 South Cass Avenue
Argonne, IL 60439 708/252-2377
13. RECIPIENT TYPE
___ STATE GOV'T
___ INDIAN TRIBAL GOV'T
___ HOSPITAL
X FOR PROFIT ORGANIZATION
___ INDIVIDUAL
___ LOCAL GOV'T
___ INSTITUTION OF HIGHER EDUCATION
___ OTHER NONPROFIT ORGANIZATION
X C ___ P ___ SP
___ OTHER (Specify) _____________
14. ACCOUNTING AND APPROPRIATIONS DATA
a. Appropriation Symbol
89X0224.91
b. B&R Number
KP0203
c. FT/AFP/OC
YA/CH/410
d. CFA Number
N/A
15. EMPLOYER I.D. NUMBER/SSN
042297484
<TABLE>
<CAPTION>
16. BUDGET AND FUNDING INFORMATION
<C> <S>
a. Current Budget Period Information
(1) DOE Funds Obligated This Action $ (77,000.00)
(2) DOE Funds Authorized for Carry Over $ -0-
(3) DOE Funds Previously Obligated in this Budget Period $ 1,100,000.00
(4) DOE Share of Total Approved Budget $ 1,023,000.00
(5) Recipient Share of Total Approved Budget $ -0-
(6) Total Approved Budget $ 1,023,000.00
</TABLE>
-2-
<PAGE> 42
b. Cumulative DOE Obligations
(1) This Budget Period $ 1,023,000.00
[Total of lines a.(1) and a.(3)]
(2) Prior Budget Periods $ -0-
(3) Project Period to Date $ 1,023,000.00
[Total of lines b.(1) and b.(2)]
17. TOTAL ESTIMATED COST OF PROJECT $ N/A
(This is the current estimated cost of the project. It is not a promise to
award nor an authorization to expend funds in this amount.)
18. AWARD/AGREEMENT TERMS AND CONDITIONS
This award/agreement consists of this form plus the following:
(a) Special terms and conditions (if grant) or schedule, general
provisions, special provisions (if cooperative agreement)
(b) Applicable program regulations (specify ) 10 CFR Part 605
(Date) 1/1/95
(c) DOE Assistance Regulations, 10 CFR Part 600, as amended, Subparts A
and __ B (Grants) or X C (Cooperative Agreements).
(d) Application/proposal dated 4/20/94 ,
X as submitted
__ with changes as negotiated
19. REMARKS
- - This amendment deobligates $77,000.00 from the current budget period.
20. EVIDENCE OF RECIPIENT ACCEPTANCE
/s/ Gerald F. Vovis 8/31/95
- ----------------------------------------------------------
(Signature of Authorized Recipient Official) (Date)
Gerald F. Vovis, Ph.D.
- ------------------------------------------------
(Name)
Sr. Vice President, R & D
- ------------------------------------------------
(Title)
21. AWARDED BY
/s/ Charles G. Frazier 24 Aug. 1995
- ----------------------------------------------------------
(Signature) (Date)
Charles G. Frazier, Branch Chief
- ------------------------------------------------
(Name)
Contracts Division
Contracting Officer
- ------------------------------------------------
(Title)
-3-
<PAGE> 43
CONTRACT NO. NO1-NS-4-2305 EXHIBIT B (REVISED)
MODIFICATION NO. 5
FEDERAL CONTRACTS AFFECTED BY NAME CHANGE TO GENOME THERAPEUTICS CORPORATION
NIEHS Contract #273-93-1-0011, National Institute of Environmental Health
Services
Attn: James Patterson, Contracting Officer
Contracts and Procurement Branch, NIEHS
P.O. Box 12874
Research Triangle Park, North Carolina 27709
NIH Contract #263-92-C-0099, Division of Procurement, National Institutes of
Health
Attn: Pamela L. Beverly, Contracting Officer
Division of Procurement, OA
Executive Plaza South, Room 818
6120 Executive Boulevard
Rockville, Maryland 20892
NINDS Contract #N01-NS-4-2305, National Institute of Neurological Disorders and
Stroke
Attn: Kirkland L. Davis, Contracting Officer
Contracts Management Branch
Federal Building, Room 901
7550 Wisconsin Avenue
Bethesda, Maryland 20892
-4-
<PAGE> 44
DOE F 4600.1 (3-85)
U.S. DEPARTMENT OF ENERGY
NOTICE OF FINANCIAL ASSISTANCE AWARD
Under the authority of Public Law 95-91, U.S. DEPARTMENT OF ENERGY ORGANIZATION
ACT and subject to legislation, regulations and policies applicable to (cite
legislative program title):
HEALTH AND ENVIRONMENTAL RESEARCH
1. PROJECT TITLE
Microbial Genome Sequencing
2. INSTRUMENT TYPE
___ GRANT X COOPERATIVE AGREEMENT
3. RECIPIENT (Name, address, zip code, area code and telephone No.)
Genome Therapeutics Corporation
100 Beaver St.
Waltham, MA 02154 617/893-5007
4. INSTRUMENT NO.
DE-FC02-95ER61967
5. AMENDMENT NO.
A0002
6. BUDGET PERIOD
FROM: 12/01/95
THRU: 11/30/96
7. PROJECT PERIOD
FROM: 12/01/94
THRU: 11/30/97
8. RECIPIENT PROJECT DIRECTOR (Name and telephone No.)
Douglas R. Smith 617/893-5007
9. RECIPIENT BUSINESS OFFICER (Name and telephone No.)
Gerald F. Vovis 617/893-5007
10. TYPE OF AWARD
___ NEW X CONTINUATION ___ RENEWAL
___ REVISION ___ SUPPLEMENT ___ OTHER
<PAGE> 45
11. DOE PROJECT OFFICER (Name, address, zip code, telephone No.)
D. Jay Grimes, ER-74
U.S. Department of Energy
Germantown, MD 20585 301/903-4183
12. ADMINISTERED FOR DOE BY (Name, address, zip code, telephone No.)
Susan K. Borthwick, Contract Specialist
U.S. Department of Energy
9800 South Cass Avenue
Argonne, IL 60439 708/252-2377
13. RECIPIENT TYPE
___ STATE GOV'T
___ INDIAN TRIBAL GOV'T
___ HOSPITAL
X FOR PROFIT ORGANIZATION
___ INDIVIDUAL
___ LOCAL GOV'T
___ INSTITUTION OF HIGHER EDUCATION
___ OTHER NONPROFIT ORGANIZATION
X C ___ P ___ SP
___ OTHER (Specify) _____________
14. ACCOUNTING AND APPROPRIATIONS DATA
a. Appropriation Symbol
89X0224.91
b. B&R Number
KP0203/KP0402
c. FT/AFP/OC
YA/CH/410
d. CFA Number
N/A
15. EMPLOYER I.D. NUMBER/SSN
042297484
<TABLE>
<CAPTION>
16. BUDGET AND FUNDING INFORMATION
<C> <S> <C>
a. Current Budget Period Information
(1) DOE Funds Obligated This Action $ 1,000,000.00
(2) DOE Funds Authorized for Carry Over $ -0-
(3) DOE Funds Previously Obligated in this Budget Period $ -0-
(4) DOE Share of Total Approved Budget $ 1,000,000.00
(5) Recipient Share of Total Approved Budget $ -0-
(6) Total Approved Budget $ 1,000,000.00
</TABLE>
-2-
<PAGE> 46
b. Cumulative DOE Obligations
(1) This Budget Period $ 1,000,000.00
[Total of lines a.(1) and a.(3)]
(2) Prior Budget Periods $ 1,023,000.00
(3) Project Period to Date $ 2,023,000.00
[Total of lines b.(1) and b.(2)]
17. TOTAL ESTIMATED COST OF PROJECT $ N/A
(This is the current estimated cost of the project. It is not a promise to
award nor an authorization to expend funds in this amount.)
18. AWARD/AGREEMENT TERMS AND CONDITIONS
This award/agreement consists of this form plus the following:
a. Special terms and conditions (if grant) or schedule, general
provisions, special provisions (if cooperative agreement)
b. Applicable program regulations (specify ) 10 CFR Part 605
(Date) 1/1/95
c. DOE Assistance Regulations, 10 CFR Part 600, as amended, Subparts A
and X B and X D (if cooperative agreement).
d. Application/proposal dated 4/20/94 ,
X as submitted
___ with changes as negotiated
19. REMARKS
Effective on the first day of the budget period added by this amendment,
the Budget Period 2 Budget Page, attached hereto, is substituted for th Budget
Period 2 Budget Page previously incorporated into this grant. All other terms
and conditions remain unchanged.
20. EVIDENCE OF RECIPIENT ACCEPTANCE
/s/ Gerald F. Vovis 1/15/96
- --------------------------------------------------------------
(Signature of Authorized Recipient Official) (Date)
Gerald F. Vovis, Ph.D.
- ----------------------------------------------------------
(Name)
Senior V.P., Research & Development
- ----------------------------------------------------------
(Title)
21. AWARDED BY
/s/ June M. Wiinikka, Branch Chief Dec 23, 1995
- ------------------------------------------------------------------
(Signature) (Date)
June M. Wiinikka, Branch Chief
- ----------------------------------------------------------
(Name)
-3-
<PAGE> 47
Contracts Division
Contracting Officer
-------------------
(Title)
-4-
<PAGE> 48
DOE F 4620.1 OMB Control No.
(04-93) 1910-1400
All Other Editions Are Obsolete OMD Burden Disclosure
Statement on Reverse
U.S. Department of Energy
BUDGET PAGE
(See reverse for Instructions)
Budget Period 2
Organization
Genome Therpapeutics, Corp. Budget Page No. 2
Principal Investigator (PIV Project Director (PD) Requested Duration 12
(Months) Douglas R. Smith, Ph.D.
A. SENIOR PERSONNEL: PI/PD, Co-PI's, Faculty and
Other Senior Associates (List each separately with title, A.7 show number
in bracket(s))
1. Douglas R. Smith
CAL: 0.1
ACAD:
SUMR:
Funds Requested by Applicant: $9,000
Funds Granted by DOE:
2.
3.
4.
5.
6. ( ) Others (List Individually on Budget Explanation Page)
7. (1) Total Senior Personnel (1-6)
CAL: 0.1
ACAD:
SUMR:
Funds Requested by Applicant: 9,000
-5-
<PAGE> 49
Funds Granted by DOE:
B. Other Personnel (Show Numbers in Brackets)
1. (1) Post Doctoral Associates
CAL: 0.2
ACAD:
SUMR:
Funds Requested by Applicant: 13,000
Funds Granted by DOE
2. (3) Other Professionals (Technician Programmer, etc.)
CAL: 8.5
ACAD:
SUMR:
Funds Requested by Applicant: 292,024
Funds Granted by DOE
3. ( ) Graduate Students
4. ( ) Undergraduate Students
5. ( ) Secretarial - Clerical
6. ( ) Other
Total Salaries and Wages (A+B)
CAL:
ACAD:
SUMR:
Funds Requested by Applicant: 314,024
Funds Granted by DOE
C. Fringe Benefits (if charged as direct costs)
CAL:
ACAD:
SUMR:
Funds Requested by Applicant: 106,768
Funds Granted by DOE
Total Salaries, Wages and Fringe Benefits (A+B+C)
CAL:
ACAD:
-6-
<PAGE> 50
SUMR:
Funds Requested by Applicant: 420,792
Funds Granted by DOE
D. Permanent Equipment (List Item and Dollar Amount for Each Item)
Total Permanent Equipment
E. Travel
1. Domestic (Incl. Canada and U.S. Possessions)
CAL:
ACAD:
SUMR:
Funds Requested by Applicant: 5,824
2. Foreign
Total Travel: 5,824
F. Trainee/Participant Costs
1. Stipends (itemize levels, types + totals on budget justification
page)
2. Tuition & Fees
3. Trainee Travel
4. Other (fully explain on justification page)
Total Participants ( ) Total Costs
G. Other Direct Costs
1. Materials and Supplies
CAL:
ACAD:
SUMR:
Funds Requested by Applicant: 218,933
2. Publication Costs/Documentation/Dissemination
3. Consultant Services
4. Computer (ADP) Services
5. Subcontracts
CAL:
ACAD:
SUMR:
Funds Requested by Applicant: 40,000
-7-
<PAGE> 51
6. Other
CAL:
ACAD:
SUMR:
Funds Requested by Applicant: 16,520
Total Other Direct Costs: 275,458
H. Total Direct Costs (A through G)
CAL:
ACAD:
SUMR:
Funds Requested by Applicant: 702,069
I. Indirect Costs (Specify Rate and Base)
45% x 662,069 (MTDC)
Total Indirect Costs: 297,931
J. Total Direct and Indirect Costs (H+I): 1,000,000
K. Amount of Any Required Cost-Sharing From Non-Federal Sources
L. Total Cost of Project (J+K): 1,000,000
-8-
<PAGE> 1
EXHIBIT 10.36
<PAGE> 2
EXHIBIT 10.36
SILICON VALLEY BANK 45 William Street, Suite 170 Wellesley, MA 02181
617.431.9901
June 1, 1995
Genome Therapeutics Corp.
100 Beaver Street
Waltham, MA 02154
Mr. Fenel Eloi
Chief Financial Officer
Dear Mr. Eloi:
We are pleased to inform you that Silicon Valley Bank, a California chartered
bank (the "Lender") with its principal place of business at 3000 Lakeside
Drive, Santa Clara, CA 95054 and with a loan production office located in
Wellesley Office Park, 45 William Street, Suite 170 Wellesley, Massachusetts,
02181 doing business under the name "Silicon Valley East," has approved a
non-revolving line of credit in the amount of Five Hundred Thousand Dollars
($500,000.00) (the "Credit Facility") to Genome Therapeutics Corp. (the
"Borrower") to be used to finance the acquisition of equipment. The foregoing
Commitment shall not become effective unless and until an executed copy of this
Agreement, together will all necessary accompanying documentation as well as
the Loan Fee described below has been returned to Lender no later than twenty
one (21) days from the date of the Agreement. The Commitment shall be subject
to the following terms:
Borrowings under the Credit Facility will be permitted through December 1,
1995, with a payment schedule more particularly described in the accompanying
promissory note of even date (the "Note").
The Credit Facility shall bear an interest rate of one and one-half (1.500)
percentage points over Lender's Prime Rate. Prime Rate means the rate from
time to time announced and made effective by Lender as its Prime Rate.
Borrower's interest rate shall change each time the Prime Rate changes.
Interest will be charged monthly in arrears and shall be calculated on a
360-day year. Lender shall be authorized to debit Borrowers principal account
or any other account maintained by Borrower with Lender for any principal,
interest or fees associated with Borrowers facility with or without notice to
Borrower. A facility fee in the amount of Two Thousand and 00/100 Dollars
($2,000.00) as well as any out-of-pocket expenses incurred by Lender in
connection with the establishment of the Credit Facility must be paid at the
time the documents are returned to Lender.
Borrowings under the Credit Facility shall be secured by the equipment financed
under the Credit Facility.
Borrower may request advances under the Note (each an "Advance" and
collectively, the "Advances") from Lender in an aggregate amount not to exceed
Five Hundred Thousand Dollars ($500,000.00). To evidence the Advances, Borrower
shall deliver to Lender, at the time of each advance request, an invoice for
the equipment to be purchased or the equipment which was purchased after
December 31, 1994. The Advances shall be used only to purchase equipment and
shall not exceed One Hundred Percent (100%) of the invoice amount approved from
time to time by Lender, excluding taxes, shipping and installation expense.
Tenant Improvements may, however, comprise up to Twenty Thousand Dollars
($20,000.00) of the aggregate Advances.
Any Advances thereunder will be made only if, in the sole opinion of Lender,
there exists no default under any of the documentation executed by Borrower to
Lender, including this Agreement. A default shall be further defined in the
Note.
(Member FDIC)
<PAGE> 3
Genome Therapeutics Corp.
June l, 1995
2
So long as the Credit Facility remains outstanding, Borrower shall comply with
the following covenants as well as any other covenants contained in the
accompanying Promissory Note:
A. FINANCIAL COVENANTS.
1. MINIMUM LIQUIDITY. Borrower shall maintain, on a quarterly
basis, beginning with the quarter ended March 31, 1995,
minimum unrestricted cash of $1,200,000.00. In the event
Borrower's cash falls below $1,200,000.00, Borrower will
pledge to Lender a certificate of deposit (the "CD") in an
amount equal to 10% of the outstanding loan balance; in the
event minimum cash falls below $900,000.00, Borrower shall
increase the amount of the CD to an amount equal to 50% of
the outstanding balance of the Credit Facility; and if
Borrower's cash falls below $600,000.00, Borrower shall
increase the CD to an amount equal to 100% of the
outstanding balance of the Credit Facility. Borrower shall
execute any additional documentation that Lender may require
in connection with the CD pledge.
2. MINIMUM EQUITY. Borrower shall maintain, on a quarterly
basis, a minimum Tangible Capital Base ("TCB") of
$4,000,000.00, decreasing to $3,000,000.00 beginning as the
quarter ending September 30, 1995, further decreasing to
$2,500,000.00 beginning as of the quarter ending September
30, 1996. TCB is defined as stockholders equity plus
subordinated debt (debt which is formally subordinated to
Lender) less intangibles (including but not limited to
goodwill, capitalized software and excess purchase costs).
3. MAXIMUM LEVERAGE. Borrower shall maintain, on a monthly
basis, a maximum total debt to TCB ratio of .75 to 1.00.
4. PROFITABILITY/MAXIMUM LOSS. Borrower's maximum quarterly
losses shall not exec $600,000.
B. OTHER REQUIREMENTS.
1. AFFIRMATIVE COVENANTS. Borrower covenants and agrees with
Lender, that while this Agreement is in effect, Borrower
shall:
a. FINANCIAL STATEMENTS. Furnish Lender with, as soon as
available, but in no event later than ninety (90) days
after the end of each fiscal year, Borrower's balance
sheet and income statement for the year ended, audited
by a certified public accountant satisfactory to
Lender, and, as soon as available, but in no event
later than forty-five (45) days after the end of each
quarter, Borrower's balance sheet and profit and loss
statement for the period ended, prepared and certified
as correct to the best knowledge and belief by
Borrower's chief financial officer or other officer or
person acceptable to Lender. All financial reports
required to be provided under this Agreement shall be
prepared in accordance with generally accepted
accounting principles, applied on a consistent basis,
and certified by Borrower as being true and correct
Borrower shall furnish to Lender, as soon as available,
but in no event later than 5 days after filing,
Borrower's 10Q and 10K reports, prepared by Borrower.
Notwithstanding the
-2-
<PAGE> 4
Genome Therapeutics Corp.
June 1, 1995
3
foregoing, in the event Borrower's minimum cash
falls below $1,500,000.00, Borrower shall provide
its balance sheet and profit and loss statement not
later then fifteen (15) days after the end of each
month.
b. COMPLIANCE CERTIFICATE. Provide Lender with, as
soon as available, but in no event later than
forty-five (45) days after the end of each quarter, a
compliance certificate executed by Borrower's chief
financial officer, or other officer or person
acceptable to Lender, certifying that the
representations and warranties set forth in this
Agreement are true and correct as of the date of the
certificate and further certifying that, as of the date
of the certificate, no event of default exists under
this Agreement or under any other documentation from
Borrower to Lender. Notwithstanding the foregoing, in
the event Borrowers minimum cash falls below
$1,500,000.00, Borrower shall provide its compliance
statements within fifteen (15) days after the end of
each month.
c. ADDITIONAL REPORTS. In the event Borrower's minimum
cash falls below $1,500,000.00, Borrower shall provide
to Lender, not later than fifteen (15) days after the
end of each month, with a cash flow forecast, in form
and substance, acceptable to Lender.
d. INSURANCE. Maintain adequate fire insurance
satisfactory to Lender, copy of which shall be
forwarded to Lender.
e. MANAGEMENT LETTER. Provide copy of Borrower's annual
management letter provided by Borrower's auditors and
with copies of all legal process served upon Borrower.
f. ORGANIZATION. To remain duly organized under the laws
of the Commonwealth of Massachusetts, and not to file
for protection under the United States Bankruptcy Code.
2. Negative Covenants. Borrower covenants and agrees with Lender
that while this Agreement is in effect, Borrower shall not,
without the prior written consent of Lender:
a. Except for "Permitted Liens" as such term is defined
herein directly or indirectly pledge, grant, create, or
permit to exist any security interest, lien or other
encumbrance upon any of Borrower's assets except in
favor of Lender.
b. (i) Pay any dividends other than (a) dividends from
Borrower's subsidiaries to Borrower (b) cash dividends
not in excess None Dollars ($ 0.00 /s/ JSP/FME) in
any fiscal year of Borrowers, and (c) dividends
payable solely in capital stock of Borrower without
Lender's written consent, which consent shall not be
unreasonably withheld, or (ii) participate in any
merger or consolidation unless the merger or
consolidation (a) involves a same or relevant
business, (b) causes no event of default as defined
herein or in the accompanying Notes, and
-3-
<PAGE> 5
Genome Therapeutics Corp.
June 1,1995
4
without the written consent of Lender which shall not
be unreasonably withheld.
c. Dispose of any of Borrower's material assets other than
(i) transfers in the ordinary course of business,(ii)
transfers of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or
its subsidiaries, or (iii) transfers of worn-out or
obsolete assets.
d. Except for "Permitted Indebtedness' as such terms is
defined herein, incur any further indebtedness for
borrowed money, provided, however, (i) indebtedness to
Lender or (ii) indebtedness incurred for the purchase
or lease of equipment
e. Default under any loan, extension of credit, security
agreement, purchase or sales agreement, or any other
agreement in favor of any other creditor or person that
may materially affect any of Borrowers property or
Borrower's ability to repay the indebtedness to Lender.
3. As used herein, "PERMITTED LIENS" means the following:
a. Any liens existing as of the date hereof and disclosed
on the Schedule and any liens arising under this
Agreement or the other Loan Documents;
b. subject to the government's rights, described
above, to the technology first reduced to
practice under such grant and the rights of Harvard
College described belowILiens for taxes, fees,
assessments or other governmental charges or levies
either not delinquent or being contested in good faith
by appropriate proceedings, PROVIDED the same have no
priority over any of Bank's security interests;
c. Liens upon or in any equipment acquired by
Borrower or any of its subsidiaries after the date
hereof to secure the purchase price of such equipment
or indebtedness incurred solely for the purpose of
financing the acquisition of such equipment,
provided that the lien is confined solely to the
property so acquired and improvements thereon, and the
proceeds of such equipment;
d. Liens on equipment leased by Borrower or any
subsidiary pursuant to an operating lease in the
ordinary course of business (including proceeds thereof
and accessions thereto) incurred solely for the purpose
of financing the lease of such equipment (including
liens pursuant to capital leases permitted and liens
arising from UCC financing statements regarding leases
permitted by this Agreement);
e. Leases or subleases and non-exclusive licenses and
sublicenses granted to others in the ordinary course
of Borrower's business not interfering in any material
respect with the business of Borrower and its
subsidiaries taken as a whole, and any interest or
title of a lessor, licensor or under any lease or
license;
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<PAGE> 6
Genome Therapeutics Corp.
June 1, 1995
5
f. Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;
g. Easements, reservations, rights-of-way, restrictions,
minor defects or irregularities in title and other
similar charges or encumbrances affecting real property
not constituting a material adverse effect on
Borrower's business;
h. Liens that are not prior to the lien of Bank which
constitute rights of set-off of a customary nature or
bankers' liens with respect to amounts on deposit,
whether arising by operation of law or by contract, in
connection with arrangements entered into with banks in
the ordinary course of business;
i. Earn-out and royalty obligations existing on the date
hereof or entered into with a permitted acquisition;
and
j. Liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by
liens of the type described in clauses (a), (c), and
(d) above, PROVIDED that any extension, renewal or
replacement principal amount of the indebtedness being
extended, renewed or refinanced does not increase.
4. As use herein, "PERMITTED INDEBTEDNESS" means:
a. Indebtedness of Borrower in favor of Bank arising
under this Agreement or any other Loan Documents;
b. Existing Indebtedness disclosed on the Schedule
attached hereto, if any;
c. Subordinate Debt; including convertible debentures;
/s/ JSP/FME
d. Indebtedness to trade creditors incurred in the ordinary
course of business;
e. Indebtedness secured by Permitted Liens;
f. Other Indebtedness, not otherwise permitted hereby, not
exceeding Two Hundred Thousand ($200,000.00 /s/JSP/FME)
in the aggregate outstanding at any time; and
g. Extensions, refinancing, modifications, amendments, and
restatements of any items of Permitted Indebtedness (a)
through (e) above, provided that the principal amount
thereof is not increased or the terms thereof are not
modified to impose more burdensome terms upon Borrower
or its subsidiary, as the case may be.
If Lender waives any rights under this Agreement, it will not affect any future
action Lender may wish to take. This Agreement shall be binding upon any of
Borrowers successors in interest. This Agreement shall be
-5-
<PAGE> 7
Genome Therapeutics Corp.
June 1, 1995
6
governed by the laws of the Commonwealth of Massachusetts. Borrower accepts
for itself and in connection with its properties, unconditionally, the
non-exclusive jurisdiction of any state or federal court of competent
jurisdiction in the Commonwealth of Massachusetts in any action, suit, or
proceeding of any kind against it which arises out of or by reason of this
Agreement; provided, however, that if for any reason Lender cannot avail itself
of the courts of the Commonwealth of Massachusetts, then venue shall lie in
Santa Clara County, California. Lender and Borrower hereby waive the right to
any jury trial proceeding, or counterclaim brought by either Lender or Borrower
against the other. (INITIAL HERE /s/ JSP/FME).
This Agreement shall become effective only when it shall have been executed by
Borrower and Lender (provided, however, in no event shall this Agreement become
effective until signed by an officer of Lender in California).
Borrower will consider Lender to be its primary bank, specifically, Borrower
agrees to use Silicon Valley Bank as its primary disbursement account.
Silicon Valley Bank is delighted to extend this Commitment to Genome
Therapeutics Corp. and looks forward to many successful years of working
together.
Very Truly yours,
SILICON VALLEY BANK doing business as "Silicon Valley
East"
By: /s/ Joan S. Parsons
___________________
Joan S. Parsons, Vice President
-6-
<PAGE> 8
Genome Therapeutics Corp.
June 1, 1995
7
SILICON VALLEY BANK
By:__________________________________
Name:________________________________
Title:_______________________________
(Signed at San Jose, California)
Agreed and accepted this 1st day of June, 1995.
Genome Therapeutics Corp.
By: /s/ Fenel M. Eloi
_______________________
Name: Fenel M. Eloi
_____________________
Title: VP, CFO, Treasurer
_____________________
enclosures:
a. Promissory Notes
b. Security documents
c. Borrowing base and compliance certificates
d. Other ancillary documents and forms
-7-
<PAGE> 9
CORPORATE RESOLUTION TO BORROW
________________________________________________________________________________
Borrower: Genome Therapeutics Corp. Lender: Silicon Valley Bank, a
100 Beaver Street California-chartered bank doing
Waltham, MaA 02154 business as Silicon Valley East
Wellesley Office Park
45 William Street, Suite 170
Wellesley, MA 02181
________________________________________________________________________________
I, the undersigned Clerk or Assistant Clerk of Genome Therapeutics Corp. (the
"Corporation"), Hereby Certify that the Corporation is organized and existing
under and by virtue of the laws of the Commonwealth of Massachusetts as a
corporation for profit, with its principal office at 100 Beaver Street,
Waltham, MA 02154, and is duly authorized to transact business in the
Commonwealth of Massachusetts.
I Further Certify that at a meeting of the Directors of the Corporation (or by
other duly authorized corporate action in lieu of a meeting), duly called and
held on April 28, 1995, at which a quorum was present and voting, the
following resolutions were adopted:
<TABLE>
Be It Resolved, that any one (1) of the following named officers, employees, or
agents of this Corporation, whose actual signatures are shown below:
<CAPTION>
Names Positions Actual Signatures
- ----- --------- -----------------
<S> <C> <C>
Fenel M. Eloi V.P., Treas., C.F.O., & Asst. Clerk X/s/ Fenel M. Eloi
- -------------------- ------------------------------------ --------------------
Dr. Gerald F. Vovis Sr. V.P. of Research & Development X/s/ Gerald F. Vovis
- -------------------- ------------------------------------ --------------------
X
- -------------------- ------------------------------------ --------------------
X
- -------------------- ------------------------------------ --------------------
</TABLE>
acting for and on behalf of this Corporation and as its act and deed be, and
they hereby are, authorized and empowered:
BORROW MONEY. To borrow from time to time from Silicon Valley Bank, a
California-chartered bank ("Lender"), on such terms as may be agreed upon
between the officers, employees, or agents and Lender, such sum or sums of
money as in their judgment should be borrowed, without limitation.
EXECUTE NOTES. To execute and deliver to Lender the promissory note or
notes of the Corporation, on Lender's forms, at such rates of interest and
on such terms as may be agreed upon, evidencing the sums of money so
borrowed or any indebtedness of the Corporation to Lender, and also to
execute and deliver to Lender one or more renewals, extensions,
modifications, refinancings, consolidations, or substitutions for one or
more of the notes, or any portion of the notes.
GRANT SECURITY. To mortgage, pledge, hypoth ecate, or otherwise encumber
and deliver to Lender, as security for the payment of any loans so
obtained, any promi ssory notes so ex ecuted, or any other or further
indebtedness of the Corporation to Lender at any time owing, however the
same may be evidenced, any property now or hereafter belonging to the
Corporation or in which the Corporation now or hereafter may have an
interest, including without limitation all real property and all personal
property of the Corporation. Such property may be mortgaged, pledged,
hypothecated, or encumbered at the time such loans are obtained or such
indebtedness is incurred, or at any other time or times, and may be either
in addition to or in lieu of any property theretofore mortgaged, pledged,
hypothecated, or encumbered.
EXECUTE SECURITY DOCUMENTS. To execute and deliver to Lender the forms of
mortgage, deed of trust, pledge agreement, hypothecation agreement, and
other security agreements and financing statements which may be submitted by
Lender, and which shall evidence the terms and conditions under and pursuant
to which such liens and encumbrances, or any of them, are given; and also to
execute and deliver to Lender any other written instruments, any chattel
paper, or any other collateral, of any kind or nature, which they may in
their discretion deem reasonably necessary or proper in
-8-
<PAGE> 10
connection with or pertaining to the giving of the liens and encumbrances.
Notwithstanding the foregoing, any one of the above authorized officers,
employees, or agents may execute, deliver, or record financing statements.
NEGOTIATE ITEMS. To draw, endorse, and discount with Lender all draft s,
trade acceptances, promissory notes, or other evidences of indebtedness
payable to or belonging to the Corporation or in which the Corporation may
have an interest, and either to receive cash for the same or to cause such
proceeds to be credited to the account of the Corporation with Lender, or to
cause such other disposition of the proceeds derived therefrom as they may
deem advisable.
FURTHER ACTS. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder,
and in all cases, to do and perform such other acts an d things, to pay any
and all fees and costs, and to execute and deliver such other documents and
agreements, including agreements waiving the right to a trial by jury, as
they may in their discretion deem reasonably necessary or proper in order to
carry into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender. Any such
notice shall not affect any of the Corporation's agreements or commitments in
effect at the time notice is given.
FOREIGN EXCHANGE CONTRACT. Execute and deliver foreign exchange contracts,
either spot or forward, from time to time, in such amount as, in the judgement
of the officer or officers herein authorized.
LETTER OF CREDIT. To execute letter of credit applications and other related
documents pertaining to Lender's issuance of letters of credit.
I FURTHER CERTIFY that the officers, employees, and agents named above are duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupy the positions set opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever. The Corporation has no corporate seal, and
therefore, no seal is affixed to this certificate.
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<PAGE> 11
06-01-1995 CORPORATE RESOLUTION TO BORROW Page 2
(continued)
________________________________________________________________________________
IN TESTIMONY WHEREOF, I have hereunto set my hand on June 1, 1995 and attest
that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X /s/ Fenel M. Eloi
__________________
* Clerk or Assistant Clerk
X /s/ Robert J. Hennesey
_______________________
*NOTE: In case the Clerk or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, this certificate should
also be signed by a second officer or Director of the Corporation.
________________________________________________________________________________
LASER PRO, Reg. U. S. Pat. &T.M. Off., Ver. 3.19(c) 1995 CFI ProServices, Inc.
All rights reserved. [MA-C10 GENOME.LN G1.OVL]
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<PAGE> 12
PROMISSORY NOTE
Borrower: Genome Therapeutics Corp. Lender: Silicon Valley Bank, a
100 Beaver Street California-chartered bank doing
Waltham, MA 02154 business as Silicon Valley East
Wellesley Office Park 45 William
Street, Suite 170, Wellesley, MA
02181
________________________________________________________________________________
Principal Amount: $500,000.00 Date of Note: June 1, 1995
PROMISE TO PAY. Genome Therapeutics Corp. ("Borrower") promises to pay to
Sillcon Valley Bank a California-chartered bank doing business as Silicon
Valley East ("Lender"), or order, in lawful money of the United States of
America, the principal amount of Five Hundred Thousand & 00/100 Dollars
($500,000.00) or so much as may be outstanding, together with interest on the
unpaid principal balance of each advance. Interest shall be calculated from
the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in accordance with the following payment
schedule:
The Draw Period shall begin as of this date and shall end on December
1, 1995. Borrower shall pay regular monthly payments of all accrued
unpaid interest due as of each payment date, beginning July 1, 1995,
with interest calculated on the unpaid principal balances at an
interest rate as described below in the paragraph entitled "Interest
Rate A", and all subsequent interest payments will be due on the same
day of each month thereafter through December 1, 1995. The
outstanding principal balance on December 1, 1995 will be payable in
thirty-six (36) even payments of principal plus interest due as of
each payment date, beginning January 1, 1996, with interest calculated
on the unpaid principal balances at an interest rate as described
below in the paragraph entitled "Interest Rate B", and all subsequent
payments of principal plus interest will be due on the same day of
each month thereafter. The final payment, due on December 1, 1998
will be for all outstanding principal plus all accrued interest not
yet paid.
Interest on this Note is computed on a 365/360 simple interest basis; that is,
by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender
at Lender's address shown above or at such other place as Lender may designate
in writing. Unless otherwise agreed or required by applicable law, payments
will be applied first to accrued unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs and late charges.
INTEREST RATE A. From the date hereof through the end of the Draw Period, the
interest rate is subject to change from time to time based on changes in an
index which is Lender's Prime Rate (the "Index). This is the rate Lender
charges, or would charge, on 90-day unsecured loans to the most creditworthy
corporate customers. This rate may or may not be the lowest rate available
from Lender at any given time. Lender will tell Borrower the current Index
rate upon Borrowers request. Borrower understands that Lender may make loans
based on other rates as well. The interest rate change will not occur more
often than each time the prime rate is adjusted by Silicon Valley Bank. The
Index currently is 9.000% per annum. The interest rate to be applied to the
unpaid principal balance of this Note through the end of the Draw Period will
be at a rate of 1.500 percentage points over the Index, resulting in an initial
rate of 10.500% per annum. NOTICE: Under no circumstances will the interest
rate on this Note be more than the maximum rate allowed by applicable law.
INTEREST RATE B. Beginning as of the day following the end of the Draw Period,
the interest rate to be applied to the unpaid principal balance of this Note
will be fixed at a rate equal to 1.500 percentage points over the then current
Index. NOTICE. Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law. Whenever increases occur
in the interest rate, Lender, at its option, may do one or more of the
following: (a) increase Borrower's payments to ensure Borrower's loan will pay
off by its original final maturity date, (b) increase Borrower's payments to
cover accruing interest, (c)
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<PAGE> 13
increase the number of Borrower's payments, and
(d) continue Borrower's payments at the same amount and increase Borrowers
final payment
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing, Borrower may pay
without penalty all or a portion of the amount owed earlier than it is due.
Early payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower's obligation to continue to make payments under the
payment schedule. Rather, they will reduce the principal balance due and may
result in Borrower making fewer payments..
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform
when any other term, obligation, covenant, or condition contained in this Note
or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) Borrower defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrowers property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrowers behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor
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<PAGE> 14
Promissory Note
(Continued)
tries to take any of Borrower's property on or in which Lender has a lien or
security interest. This includes a garnishment of any of Borrower's accounts
with Lender. (g) Any of the events described in this default section occurs
with respect to any guarantor of this Note. (h) A Material adverse change
occurs in Borrowers financial condition, or Lender believes the prospect of
payment or performance of the Indebtedness is impaired.
LENDER'S RIGHTS. Upon default Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, do one or both of the following: (a)increase the variable
interest rate on this Note to 5.000 percentage points over the otherwise
effective interest rate and (b) add any unpaid accrued interest to principal
and such sum will bear interest therefrom until paid at the rate provided in
this Note (including any increased rate). The interest rate will not exceed
the maximum rate permitted by applicable law. Lender may hire or pay someone
else to help collect this Note if Borrower does not pay. Borrower also will
pay Lender that amount. This includes, subject to any limits under applicable
law, Lender's attorneys' fees and Lender's legal expenses whether or not there
is a lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
If not prohibited be applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.
LINE OF CREDIT. This Note evidences a straight line of credit until December
1, 1995 Once the total amount of principal has been advanced, Borrower is not
entitled to further loan advances. Advances under this Note, as well as
directions for payment from Borrower's accounts, may be requested orally or in
writing by Borrower or by an authorized person. Lender may, but need not
require that all oral requests be confirmed in writing. Borrower agrees to be
liable for all sums either (a) advanced in accordance with the instructions of
an authorized person or (b) credited to any of Borrower's accounts with Lender.
The unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender's internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under
this Note if: (a) Borrower or any guarantor is in default under the terms of
this Note or any agreement that Borrower or any guarantor has with Lender,
including any agreement made in connection with the signing of this Note; (b)
Borrower or any guarantor ceases doing business or is insolvent; (c) any
guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
guarantor's guarantee of this Note or any other loan with Lender; or (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender.
ADVANCE RATE. At any time from the date hereof through the end of the Draw
Period, Borrower may request advances (each an "Advance" and collectively, the
"Advances") from Lender in an aggregate amount not to exceed the principal
amount of the Note. To evidence the Advances, Borrower shall deliver to
Lender, at the time of each advance request, an invoice for the equipment to be
purchased or equipment purchased after December 31, 1994. The Advances shall
be used to purchase equipment shall not exceed One Hundred Percent (100%) of
the invoice amount approved from time to time by Lender, excluding taxes,
shipping and installation expense. Tenant Improvements may, however, comprise
up to the aggregate of $20,000.00 in Advances, based upon 100% of the invoice
amount for tenant improvements made after December 31, 1994.
LETTER AGREEMENT. This Note is subject to and shall be governed by all the
terms and conditions of the Letter Agreement dated June 1, 1995, as such
agreement may be amended from time to time, between Borrower and Lender, which
Letter Agreement is incorporated herein by reference.
PAYMENT OF LOAN FEE. Borrower shall pay to Lender a fee in the amount of Two
Thousand and 00/100 Dollars ($2,000.00) plus all out-of-pocket expenses.
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<PAGE> 15
REQUEST TO DEBIT. Borrower will regularly deposit a substantial amount of
funds received from its business activities in accounts maintained at Silicon
Valley Bank. Borrower hereby authorizes Lender to debit any accounts with
Lender, including, without limitation, Account Number _______________ for
payments of principal and interest due on the loan and any other obligations
owing by Borrower to Lender. Lender will notify Borrower of all debits which
Lender makes against Borrower's accounts. Any such debits against Borrower's
accounts in no way shall be deemed a set-off.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law,
waive any applicable statute of limitations, presentment, demand for payment,
protest and notice of dishonor. Upon any change in the terms of this Note, and
unless otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan, or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lenders
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also
agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE
NOTE.
BORROWER:
GENOME THERAPEUTICS CORP.
By: /s/ Fenel M. Eloi
-------------
Name: Fenel M. Eloi
-------------
Title: VP, CFO, Treas., Asst.-Clerk
----------------------------
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<PAGE> 16
COMMERCIAL SECURITY AGREEMENT
________________________________________________________________________________
Borrower: GENOME THERAPEUTICS CORP. Lender: SILICON VALLEY BANK, a California-
100 Beaver Streee chartered bank doing business as
Waltham, MA 02154 Silicon Valley East Wellesley
Office Park
45 William Street, Suite 170
Wellesley, MA 02181
________________________________________________________________________________
THIS COMMERCIAL SECURITY AGREEMENT IS ENTERED INTO BETWEEN GENOME THERAPEUTICS
CORP. (REFERRED TO BELOW AS "GRANTOR"); AND SILICON VALLEY BANK, A
CALIFORNIA-CHARTERED BANK (REFERRED TO BELOW AS "LENDER"). FOR VALUABLE
CONSIDERATION, GRANTOR GRANTS TO LENDER A SECURITY INTEREST IN THE COLLATERAL
TO SECURE THE INDEBTEDNESS AND AGREES THAT LENDER SHALL HAVE THE RIGHTS STATED
IN THIS AGREEMENT WITH RESPECT TO THE COLLATERAL, IN ADDITION TO ALL OTHER
RIGHTS WHICH LENDER MAY HAVE BY LAW.
DEFINITIONS. The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
AGREEMENT. The word "Agreement" means this Commercial Security
Agreement together with all exhibits and schedules attached to this
Commercial Security Agreement from time to time, if any, as amended
from time to time.
COLLATERAL. The word "Collateral" means the following described
property of Grantor, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located:
FIXTURES AND EQUIPMENT
EQUIPMENT IS MORE PARTICULARLY DESCRIBED ON EXHIBIT "A" ATTACHED
HERETO:
In addition, the word "Collateral" includes all the following, whether
now owned or hereafter acquired, whether now existing or hereafter
arising, and wherever located:
(a) All attachments, accessions, accessories, tools, parts,
supplies, Increases, and additions to and all replacements of and
tutions for any property described above.
(b) All products and produce of any of the property described in
this Collateral section.
(c) All accounts, contract rights, general intangibles, instruments,
rents, monies, payments, and all other rights, arising out of a
sale, lease, or other disposition of any of the property described
In this Collateral section.
(d) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section.
(e) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing,
photograph, microfilm, microfiche, or electronic media, together
with all of
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<PAGE> 17
Grantor's right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or
data on electronic media.
EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled "Events of Default."
GRANTOR. The word "Grantor' means GENOME THERAPEUTICS CORP., its
successors and assigns
GUARANTOR. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means the Indebtedness evidenced by
the Note, including all principal and interest, together with all other
indebtedness and costs and expenses for which Grantor is responsible under
this Agreement or under any of the Related Documents. (INITIAL HERE /s/FME).
-------
LENDER. The word "Lender" means SILICON VALLEY BANK, a California-chartered
bank, its successors and assigns.
NOTE. The word "Note" means the notes, letters of credits or credit
agreements in any principal amount from Borrower to Lender, together with
all renewals of, extensions of, modifications of, refinancings of,
consolidations of and substitutions for the notes, letters of credit or
credit agreements.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranies, security agreements,
mortgages, deeds of trust and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as follows:
PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such
financing statements and to take whatever other actions are requested by
Lender to perfect and continue Lenders security interest in the Collateral.
Upon request of Lender, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and Grantor will note
Lender's interest upon any and all chattel paper if not delivered to Lender
for possession by Lender. Grantor hereby appoints Lender as its
irrevocable attorney-in-fact for the purpose of executing any documents
necessary to perfect or to continue the security interest granted in this
Agreement. Lender may at any time, and without further authorization from
Grantor, file a carbon, photographic or other reproduction of any financing
statement or of this Agreement for use as a financing statement. Grantor
will reimburse Lender for all expenses for the perfection and the
continuation of the perfection of Lender's security interest in the
Collateral. Grantor promptly will notify Lender before any change in
Grantor's name including any change to the assumed business names of
Grantor.
NO VIOLATION. The execution and delivery of this Agreement will not violate
any law or agreement governing Grantor or to which Grantor is a party, and
its certificate or articles of incorporation and bylaws do not prohibit
any term or condition of this Agreement.
ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and complies with
applicable laws concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in act obligated as they appear
to be on the Collateral.
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<PAGE> 18
LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, will deliver
to Lender in form satisfactory to Lender a schedule of real properties
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<PAGE> 19
06-01-1995 COMMERCIAL SECURITY AGREEMENT PAGE 2
(Continued)
- --------------------------------------------------------------------------------
and Collateral locations relating to Grantor's operations, including without
limitation the following: (a) all real property owned or being purchased by
Grantor; (b) all real property being rented or leased by Grantor; (c) all
storage facilities owned, rented, leased, or being used by Grantor; and (d) all
other properties where Collateral is or may be located. Except in the ordinary
course of its business, Grantor shall not remove the Collateral from its
existing locations without the prior written consent of Lender.
REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the extent the
Collateral consists of intangible property such as accounts, the records
concerning the Collateral) at Grantor's address shown above, or at such other
locations as are acceptable to Lender. Except in the ordinary course of its
business, including the sales of inventory, Grantor shall not remove the
Collateral from its existing locations without the prior written consent of
Lender. To the extent that the Collateral consists of vehicles, or other
titled property, Grantor shall not take or permit any action which would
require application for certificates of title for the vehicles outside the
Commonwealth of Massachusetts, without the prior written consent of Lender.
TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall not sell,
offer to sell, or otherwise transfer or dispose of the Collateral. While
Grantor is not in default under this Agreement, Grantor may sell inventory, but
only in the ordinary course of its business and only to buyers who qualify as a
buyer in the ordinary course of business. A sale in the ordinary course of
Grantors business does not Include a transfer in partial or total satisfaction
of a debt or any bulk sale. Grantor shall not pledge, mortgage, encumber or
otherwise permit the Collateral to be subject to any lien, security interest,
encumbrance, or charge, other than the security interest provided for in this
Agreement, without the prior written consent of Lender. This includes security
interests even if junior in right to the security interests granted under this
Agreement. Unless waived by Lender, all proceeds from any disposition of the
Collateral (for whatever reason) shall be held in trust for Lender and shall
not be commingled with any other funds; provided however, this requirement
shall not constitute consent by Lender to any sale or other disposition. Upon
receipt, Grantor shall immediately deliver any such proceeds to Lender.
TITLE. Grantor represents and warrants to Lender that it holds good and
marketable title to the Collateral, free and clear of all liens and
encumbrances except for the lien of this Agreement. No financing statement
covering any of the Collateral is on file in any public office other than those
which reflect the security interest created by this Agreement or to which
Lender has specifically consented. Grantor shall defend Lender's rights in the
Collateral against the claims and demands of all other persons.
COLLATERAL SCHEDULES AND LOCATIONS. Insofar as the Collateral consists of
inventory, Grantor shall deliver to Lender, as often as Lender shall require,
such lists, descriptions, and designations of such Collateral as Lender may
require to identify the nature, extent, and location of such Collateral. Such
information shall be submitted for Grantor and each of its subsidiaries or
related companies.
MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all tangible
Collateral in good condition and repair. Grantor will not commit or permit
damage to or destruction of the Collateral or any part of the Collateral.
Lender and its designated representatives and agents shall have the right at
all reasonable times to examine, inspect, and audit the Collateral wherever
located. Grantor shall immediately notify Lender of all cases involving the
return, rejection, repossession, loss or damage of or to any Collateral; of any
request for credit or adjustment or of any other
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<PAGE> 20
dispute arising with respect to the Collateral; and generally of all happenings
and events affecting the Collateral or the value or the amount of the
Collateral.
TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes, assessments
and liens upon the Collateral, its use or operation, upon this Agreement, upon
any promissory note or notes evidencing the Indebtedness, or upon any of the
other Related Documents. Grantor may withhold any such payment or may elect to
contest any lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender's interest in
the Collateral is not jeopardized in Lender's sole opinion. If the Collateral
is subjected to a lien which is not discharged within fifteen (15) days,
Grantor shall deposit with Lender cash, a sufficient corporate surety bond or
other security satisfactory to Lender in an amount adequate to provide for the
discharge of the lien plus any interest, costs, attorneys' fees or other
charges that could accrue as a result of foreclosure or sale of the Collateral.
In any contest Grantor shall defend itself and Lender and shall satisfy any
final adverse judgment before enforcement against the Collateral. Grantor
shall name Lender as an additional obligee under any surety bond furnished in
the contest proceedings.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply promptly with
all laws, ordinances, rules and regulations of all governmental authorities,
now or hereafter in effect, applicable to the ownership, production,
disposition, or use of the Collateral. Grantor may contest in good faith any
such law, ordinance or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as Lender's interest in the
Collateral, in Lender's opinion, is not jeopardized.
HAZARDOUS SUBSTANCES. Grantor represents and warrants that the Collateral
never has been, and never will be so long as this Agreement remains a lien on
the Collateral, used for the generation, manufacture, storage, transportation,
treatment, disposal, release or threatened release of any hazardous waste or
substance, as those terms are defined in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, el seq. ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation
and Recovery Act, 49 U.S.C. Section 6901, et seq., or other applicable state or
Federal laws, rules, or regulations adopted pursuant to any of the foregoing.
The terms "hazardous waste" and "hazardous substance' shall also include,
without limitation, petroleum and petroleum by-products or any fraction thereof
and asbestos. The representations and warranties contained herein are based on
Grantor's due diligence in investigating the Collateral for hazardous wastes
and substances. Grantor hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws, and (b) agrees to
indemnity and hold harmless Lender against any and all claims and losses
resulting from a breach of this provision of this Agreement. This obligation
to Indemnify shall survive the payment of the Indebtedness and the satisfaction
of this Agreement.
MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain all
risks insurance, including without limitation fire, theft and liability
coverage together with such other insurance as Lender may require with respect
to the Collateral, in form, amounts, coverages and basis reasonably acceptable
to Lender and issued by a company or companies reasonably acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at
least ten (10) days' prior written notice to Lender and not including any
disclaimer of the insurer's liability for failure to give such a notice. Each
insurance policy also shall include an endorsement providing that coverage in
favor of Lender will not be impaired in any way by any act, omission or default
of Grantor or any other person. In connection with all policies covering
assets in which Lender holds or is offered a security interest, Grantor will
provide Lender with such loss payable or other endorsements as Lender may
require. If Grantor at any time fails to obtain or maintain any insurance as
required under this Agreement, Lender may (but shall not be obligated to)
obtain such insurance as Lender deems appropriate, including if it so chooses
"single interest insurance," which will cover only Lender's interest in the
Collateral.
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<PAGE> 21
APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender of any
loss or damage to the Collateral. Lender may make proof of loss if Grantor
fails to do so within fifteen (15) days of the casualty. All proceeds of any
insurance on the Collateral, including accrued proceeds thereon, shall be held
by Lender as part of the Collateral. If Lender consents to repair or
replacement of the damaged or destroyed Collateral, Lender shall, upon
satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds
for the reasonable cost of repair or restoration. If Lender does not consent
to repair or replacement of the Collateral, Lender shall retain a sufficient
amount of the proceeds to pay all of the Indebtedness, and shall pay the
balance to Grantor. Any proceeds which have not been disbursed within six (6)
months after their receipt and
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<PAGE> 22
06-01-1995 COMMERCIAL SECURITY AGREEMENT PAGE 3
(Continued)
- -------------------------------------------------------------------------------
which Grantor has not committed to the repair or restoration of the Collateral
shall be used to prepay the Indebtedness.
INSURANCE RESERVES. Lender may require Grantor to maintain with Lender reserves
for payment of insurance premiums, which reserves shall be created by monthly
payments from Grantor of a sum estimated by Lender to be sufficient to produce,
at least fifteen (15) days before the premium due date, amounts at least equal
to the insurance premiums to be paid. If fifteen (15) days before payment is
due, the reserve funds are insufficient, Grantor shall upon demand pay any
deficiency to Lender. The reserve funds shall be held by Lender as a general
deposit and shall constitute a non-interest-bearing account which Lender may
satisfy by payment of the insurance premiums required to be paid by Grantor as
they become due. Lender does not hold the reserve funds in trust for Grantor,
and Lender is not the agent of Grantor for payment of the insurance premiums
required to be paid by Grantor. The responsibility for the payment of premiums
shall remain Grantor's sole responsibility.
INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to Lender
reports on each existing policy of insurance showing such information as Lender
may reasonably request including the following: (a) the name of the insurer, (b)
the risks insured; (c) the amount of the policy; (d) the property insured; (e)
the then current value on the basis of which insurance has been obtained and the
manner of determining that value; and (f) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often than
annually) have an independent appraiser satisfactory to Lender determine, as
applicable, the cash value or replacement cost of the Collateral.
GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of
the tangible personal property and beneficial use of all the Collateral and may
use it in any lawful manner not inconsistent with this Agreement or the Related
Documents, provided that Grantor's right to possession and beneficial use shall
not apply to any Collateral where possession of the Collateral by Lender is
required by law to perfect Lender's security interest in such Collateral. If
Lender at any time has possession of any Collateral, whether before or after an
Event of Default, Lender shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral if Lender takes such action for
that purpose as Grantor shall request or as Lender, in Lender's sole
discretion, shall deem appropriate under the circumstances, but failure to
honor any request by Grantor shall not of itself be deemed to be a failure to
exercise reasonable care. Lender shall not be required to take any steps
necessary to preserve any rights in the Collateral against prior parties, nor
to protect, preserve or maintain any security interest given to secure the
Indebtedness.
EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may (but
shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Lender
for such purposes will then bear interest at the rate charged under the Note
from the date incurred or paid by Lender to the date of repayment by Grantor.
All such expenses shall become a part of the Indebtedness and, at Lender's
option, will (a) be payable on demand, (b) be added to the balance of the Note
and be apportioned among and be payable with any installment payments to become
due during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will
be due and payable at the Note's maturity. This Agreement also will secure
payment
-21-
<PAGE> 23
of these amounts. Such right shall be in addition to all other rights
and remedies to which Lender may be entitled upon the occurrence of an Event of
Default.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when due on
the Indebtedness.
OTHER DEFAULTS. Failure of Grantor to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents or in any other agreement between Lender and
Grantor.
INSOLVENCY. The dissolution or termination of Grantor's existence as a going
business, the insolvency of Grantor, the appointment of a receiver for any
part of Grantor's property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Grantor.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against the Collateral or any other collateral securing
the Indebtedness. This includes a garnishment of any of Grantors deposit
accounts with Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or such Guarantor dies
or becomes incompetent.
ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the Massachusetts Uniform Commercial Code. In addition and
without limitation, Lender may exercise any one or more of the following rights
and remedies:
ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to pay,
immediately due and payable, without notice.
ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender all or
any portion of the Collateral and any and all certificates of title and
other documents relating to the Collateral. Lender may require Grantor to
assemble the Collateral and make it available to Lender at a place to be
designated by Lender. Lender also shall have full power to enter upon the
property of Grantor to take possession of and remove the Collateral. If the
Collateral contains other goods not covered by this Agreement at the time of
repossession, Grantor agrees Lender may take such other goods, provided that
Lender makes reasonable efforts to return them to Grantor after
repossession.
SELL THE COLLATERAL. Lender shall have full power to sell, lease, transfer,
or otherwise deal with the Collateral or proceeds thereof in its own name
or that of Grantor. Lender may sell the Collateral at public auction or
private sale. Unless the Collateral threatens to decline speedily in value
or is of a type customarily sold on a recognized market, Lender will give
Grantor reasonable notice of the time after which any private sale or any
other intended disposition of the Collateral is to be made. The requirements
of reasonable notice shall be met if such notice is given at least ten (10)
days before the time of the sale or disposition. All expenses relating to
the disposition of the Collateral, including without limitation the expenses
of retaking, holding, insuring, preparing for sale and selling the
Collateral, shall become a part of the Indebtedness secured by this
-22-
<PAGE> 24
Agreement and shall be payable on demand, with interest at the Note rate
from date of expenditure until repaid.
APPOINT RECEIVER. To the extent permitted by applicable law, Lender shall
have the following rights and remedies regarding the appointment of a
receiver: (a) Lender may have a receiver appointed as a matter of right, (b)
the receiver may be an employee of Lender and may serve without bond, and
(c) all fees of the receiver and his or her attorney shall become part of
the Indebtedness secured by this Agreement and shall be payable on demand,
with interest at the Note rate from date of expenditure until repaid.
COLLECT REVENUES, Apply Accounts. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from the
Collateral. Lender may at any time in its discretion transfer any Collateral
into its own name or that of its nominee and receive the payments, rents,
income, and revenues therefrom and hold the same as security for the
Indebtedness or apply it to payment of the Indebtedness in such order of
preference as Lender may determine. Insofar as the Collateral consists of
accounts, general intangibles, insurance policies, instruments, chattel
paper, chooses in action, or similar property, Lender may demand, collect,
receipt for, settle, compromise, adjust, sue for, foreclose, or
-23-
<PAGE> 25
06-01-1995 COMMERCIAL SECURITY AGREEMENT PAGE 4
(Continued)
- --------------------------------------------------------------------------------
realize on the Collateral as Lender may determine, whether or not Indebtedness
or Collateral is then due. For these purposes, Lender may, on behalf of and in
the name of Grantor, receive, open and dispose of mail addressed to Grantor,
change any address to which mail and payments are to be sent; and endorse
notes, checks, drafts, money orders, documents of title, instruments and items
pertaining to payment, shipment, or storage of any Collateral. To facilitate
collection, Lender may notify account debtors and obligers on any Collateral to
make payments directly to Lender.
OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the Collateral,
Lender may obtain a judgment against Grantor for any deficiency remaining on
the Indebtedness due to Lender after application of all amounts received
from the exercise of the rights provided in this Agreement. Grantor shall
be liable for a deficiency even if the transaction described in this
subsection is a sale of accounts or chattel paper.
OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and remedies of
a secured creditor under the provisions of the Uniform Commercial Code, as
may be amended from time to time. In addition, Lender shall have and may
exercise any or all other rights and remedies it may have available at law,
in equity, or otherwise.
CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether evidenced
by this Agreement or the Related Documents or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election by
Lender to pursue any remedy shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to perform an
obligation of Grantor under this Agreement, after Grantor's failure to
perform, shall not affect Lender's right to declare a default and to
exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the party
or parties sought to be charged or bound by the alteration or amendment.
ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's legal
expenses, incurred in connection with the enforcement of this Agreement.
Lender may pay someone else to help enforce this Agreement, and Grantor
shall pay the costs and expenses of such enforcement. Costs and expenses
include Lenders attorneys' fees and legal expenses whether or not there is a
lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (and including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
Grantor also shall pay all court costs and such additional fees as may be
directed by the court.
CAPTION HEADINGS. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
-24-
<PAGE> 26
MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Grantor under this
Agreement shall be joint and several, and all references to Grantor shall mean
each and every Grantor. This means that each of the Borrowers signing below is
responsible for all obligations in this Agreement.
NOTICES. All notices required to be given under this Agreement shall be given
in writing, may be sent by telefacsimilie, and shall be effective when actually
delivered or when deposited with a nationally recognized overnight courier or
deposited in the United States mail, first class, postage prepaid, addressed to
the party to whom the notice is to be given at the address shown above. Any
party may change its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose of the notice
is to change the party's address. To the extent permitted by applicable law,
if there is more than one Grantor, notice to any Grantor will constitute notice
to all Grantors. For notice purposes, Grantor agrees to keep Lender informed
at all times of Grantor's current address(es).
POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and lawful
attorney-in-fact, irrevocably, with full power of substitution to do the
following (a) to demand, collect, receive, receipt for, sue and recover all
sums of money or other property which may now or hereafter become due, owing or
payable from the Collateral; (b) to execute, sign and endorse any and all
claims, instruments, receipts, checks, drafts or warrants issued in payment for
the Collateral; (c) to settle or compromise any and all claims arising under
the Collateral, and, in the place and stead of Grantor, to execute and deliver
its release and settlement for the claim; and (d) to file any claim or claims
or to take any action or institute or take part in any proceedings, either in
its own name or in the name of Grantor, or otherwise, which in the discretion
of Lender may seem to be necessary or advisable. This power is given as
security for the Indebtedness, and the authority hereby conferred is and shall
be irrevocable and shall remain in full force and effect until renounced by
Lender.
SEVERABILITY. If a court of competent jurisdiction finds any provision of this
Agreement to be invalid or unenforceable as to any person or circumstance, such
finding shall not render that provision invalid or unenforceable as to any
other persons or circumstances. If feasible, any such offending provision
shall be deemed to be modified to be within the limits of enforceability or
validity; however, if the offending provision cannot be so modified, it shall
be stricken and all other provisions of this Agreement in all other respects
shall remain valid and enforceable.
SUCCESSOR INTERESTS. Subject to the limitations set forth above on transfer of
the Collateral, this Agreement shall be binding upon and inure to the benefit
of the parties, their successors and assigns.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate
as a waiver of such right or any other right. A waiver by Lender of a
provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor any course
of dealing between Lender and Grantor, shall constitute a waiver of any of
Lender's rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this Agreement,
the granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and
in all cases such consent may be granted or withheld in the sole discretion of
Lender.
ADDITIONAL PROVISION. If any law is passed that requires additional action on
the part of Lender, Grantor shall fully cooperate with Lender in complying with
the law and accordingly, shall reimburse Lender for all costs and expenses
which Lender incurs to comply with the law.
REQUEST TO HOLD. Borrower acknowledges and agrees that Lender may place a hold
on any deposit account pledged to Lender as Collateral for the Note.
-25-
<PAGE> 27
06-01-1995 COMMERCIAL SECURITY AGREEMENT Page 5
(Continued)
- -------------------------------------------------------------------------------
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL
SECURITY AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
JUNE 1, 1995. THIS COMMERCIAL SECURITY AGREEMENT IS EXECUTED UNDER SEAL
GRANTOR:
GENOME THERAPEUTICS CORP.
By: /s/ Fenel M. Eloi
-----------------
Name: Fenel M. Eloi Title: VP, CFO, Treas.
------------- ---------------
- -------------------------------------------------------------------------------
LASERPRO,Reg.U.S.Pat&T.M.Off.,Ver.3.20(c)1995CFIProServices,inc. All rights
reserved.[MA-E40GENOME.LN G1.OVL]
-26-
<PAGE> 28
NOTICE OF INSURANCE REQUIREMENTS
________________________________________________________________________________
Borrower: GENOME THERAPEUTICS CORP. Lender: SILICON VALLEY BANK, a California-
100 Beaver Streee chartered bank doing business as
Waltham, MA 02154 Silicon Valley East Wellesley
Office Park
45 William Street, Suite 170
Wellesley, MA 02181
________________________________________________________________________________
Lex Insurance
To: 80 Thoreau Street, P.O. Box 630 DATE: June 1, 1995
Concord, MA 01742
Dear Insurance Agent:
GENOME THERAPEUTICS CORP. ("Borrower") is obtaining a loan from SILICON VALLEY
BANK, a California-chartered bank. Please send appropriate evidence of
insurance to SILICON VALLEY BANK, a California-chartered bank, together with
the requested endorsements, on the following property, which Borrower is giving
as security for the loan.
COLLATERAL: FIXTURES AND EQUIPMENT
EQUIPMENT IS MORE PARTICULARLY DESCRIBED ON EXHIBIT "A" ATTACHED
HERETO:.
TYPE. All risks, including fire, theft and liability.
AMOUNT. Full insurable value.
BASIS. Replacement value.
ENDORSEMENTS. Lender's loss payable clause with stipulation that
coverage will not be cancelled or diminished without a minimum of
ten (10) days' prior written notice to Lender.
Borrower:
Genome Therapeutics Corp.
By: /s/ Fenel M. Eloi
-----------------
Name: Fenel M. Eloi Title: VP, CFO, Treas.
------------- ---------------
MAIL TO:
SILICON VALLEY BANK, a California-chartered bank
Wellesley Office Park
45 William Street, Suite 170
Wellesley, MA 02181 LASER PRO. Reg. U.S. Pat. &T.M. Off., Ver.
3.19(c) 1995 CFl ProServices, Inc.
All Rights Reserved.
-27-
<PAGE> 29
AGREEMENT TO PROVIDE INSURANCE
________________________________________________________________________________
Borrower: GENOME THERAPEUTICS CORP. Lender: SILICON VALLEY BANK, a
100 Beaver Street California-chartered bank doing
Waltham, MA 02154 business as Silicon Valley East
Wellesley Office Park
45 William Street, Suite 170
Wellesley, MA 02181
________________________________________________________________________________
INSURANCE REQUIREMENTS. GENOME THERAPEUTICS CORP. ("Grantor") understands that
insurance coverage is required in connection with the extending of a loan or
the providing of other financial accommodations to Grantor by Lender. These
requirements are set forth in the security documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):
COLLATERAL: FIXTURES AND EQUIPMENT
EQUIPMENT IS MORE PARTICULARLY DESCRIBED ON EXHIBIT "A" ATTACHED
HERETO:.
TYPE. All risks, including fire, theft and liability.
AMOUNT. Full insurable value.
BASIS. Replacement value.
ENDORSEMENTS. Lender's loss payable clause with stipulation that
coverage will not be cancelled or diminished without a minimum of
ten (10) days' prior written notice to Lender.
INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender. Grantor
understands that credit may not be denied solely because insurance was not
purchased through Lender.
FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender, on or
before closing, evidence of the required insurance as provided above, with an
effective date of June 1, 1995, or earlier. Grantor acknowledges and agrees
that if Grantor fails to provide any required insurance or fails to continue
such insurance in force, Lender may do so at Grantor's expense as provided in
the applicable security document. The cost of any such insurance, at the
option of Lender, shall be payable on demand or shall be added to the
indebtedness as provided in the security document. GRANTOR ACKNOWLEDGES THAT
IF LENDER SO PURCHASES ANY SUCH INSURANCE, THE INSURANCE WILL PROVIDE LIMITED
PROTECTION AGAINST PHYSICAL DAMAGE TO THE COLLATERAL, UP TO THE BALANCE OF THE
LOAN; HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL MAY NOT BE INSURED. IN
ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR PROPERTY DAMAGE
INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF ANY FINANCIAL
RESPONSIBILITY LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide lo any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JUNE 1, 1995.
GRANTOR:
GENOME THERAPEUTICS CORP.
By: /s/ Fenel M. Eloi
------------------
Name: Fenel M. Eloi Title: VP, CFO, Treas.
------------- ---------------
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<PAGE> 30
FOR LENDER USE ONLY
INSURANCE VERIFICATION
DATE: ___________________________________________ PHONE:______________________
AGENTS NAME: ____________________________________
INSURANCE COMPANY: ______________________________
POLICY NUMBER: __________________________________
EFFECTIVE DATES: ________________________________
COMMENTS:________________________________________
- -------------------------------------------------------------------------------
LASER PRO, Reg. U.S. Pat. &T.M. Off., Ver. 3.19 (c) 1995 CFI ProServices, Inc.
All rights reserved. [MA-110 GENOME.LN Gl.OVL]
-29-
<PAGE> 31
DISBURSEMENT REQUEST AND AUTHORIZATION
________________________________________________________________________________
Borrower: GENOME THERAPEUTICS CORP. Lender: SILICON VALLEY BANK, a California-
100 Beaver Streee chartered bank doing business as
Waltham, MA 02154 Silicon Valley East Wellesley
Office Park
45 William Street, Suite 170
Wellesley, MA 02181
________________________________________________________________________________
LOAN TYPE. This is a Variable Rate (1.500% over SILICON VALLEY BANK PRIME
RATE, making an initial rate of 10.500%), Generic Payment Stream Loan to a
Corporation for $500,000.00.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for (please
initial):
g Personal, Family, or Household Purposes or Personal
--------------
Investment.
gX Business (Including Real Estate Investment).
-------------
SPECIFIC PURPOSE. The specific purpose of this loan is: finance equipment and
tenant improvements.
<TABLE>
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $500,000.00 as follows:
<S> <C>
Amount paid to Borrower directly: $500,000.00
$500,000.00 Deposited to Account #---------
Note Principal:
</TABLE>
<TABLE>
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:
<S> <C>
Prepaid Finance Charges Paid in Cash: $2,035.00
$2,000.00 Loan Fees
$35.00 Credit Report
Other Charges Paid in Cash: $ 170.00
$150.00 Information America Search
$20.00 UCC Filing Fee
Total Charges Paid in Cash: $2,205.00
</TABLE>
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL
CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER.
THIS AUTHORIZATION IS DATED JUNE 1, 1995.
BORROWER:
GENOME THERAPEUTICS CORP.
By: /S/ Fenel M. Eloi
-----------------
Name: Fenel M. Eloi Title: VP, CFO, Treas.
------------- ---------------
- -------------------------------------------------------------------------------
Variable Pate. Generic. LASER PRO.Reg.U.S.Pat.&T.M.Off.,Ver.3.20(c)1995CFI
Proservices,Inc. All rights reserved.[MA-120 GENOME.LN GI.OVL]
-30-
<PAGE> 32
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of November 13, 1995, by
and between Genome Therapeutics Corporation ("Borrower") whose address is 100
Beaver Street, Waltham, MA 02154 and Silicon Valley Bank, a California-
chartered bank ("Lender"), with its principal place of business at 3003 Tasman
Drive, Santa Clara, CA 95054 and with a loan production office located at
Wellesley Office Park, 40 William Street Suite 350, Wellesley, MA 02181, doing
business under the name "Silicon Valley East".
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Lender, Borrower is indebted to Lender pursuant to, among
other documents, a promissory note , dated June 1, 1995, in the original
principal amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00)
(the "Credit Facility"), and, being issued concurrently herewith, a promissory
in the original principal amount of One Million Five Hundred Thousand and
00/100 Dollars ($1,500,000.00) (the "Equipment Line"). The Credit Facility
and the Equipment Line, together with other promissory notes from Borrower to
Lender, are governed by the terms of a Letter Agreement dated June 1, 1995,
between Borrower and Lender, as such agreement may be amended from time to time
(the "Letter Agreement").
Hereinafter, all indebtedness owing by Borrower to Lender shag be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL Repayment of the Indebtedness is secured by a
Security Agreement dated June 1, 1995 (the "Security Agreement").
Hereinafter, the above-described security documents, together with all other
documents securing payment of the Note (and other notes executed by Borrower in
favor of Lender) shall be referred to as the "Security Documents".
Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Indebtedness shall be referred to as the "Existing
Loan Documents."
3. DESCRIPTION OF CHANGE IN TERMS,
A Modification(s) to Loan Agreement
---------------------------------
1. The "Financial Covenants" are hereby amended to read, in their
entirety:
a. PROFITABILITY - (Tested Quarterly) Borrower shall achieve
profitability on a quarterly basis. Notwithstanding the
foregoing, Borrower may incur quarterly losses, provided such
losses shall not to exceed $600,000.00 each quarter. In addition,
a maximum aggregate loss of $2,000,000.00 shall be allowed at the
end of each fiscal year.
b. TANGIBLE NET WORTH - (Tested Quarterly) Maintain a minimum
Tangible Net Worth (TNW) of $5,000,000.00. TNW is defined as
Stockholders' Equity plus Subordinated Debt (debt which is
formally subordinated to the Lender) less intangibles (including
but not limited to Goodwill, Capitalized Software and Excess
Purchase Costs).
c. LEVERAGE - (Tested Quarterly) Maintain a ratio of Total
Liabilities less Subordinated Debt divided by TNW not to
exceed .75 to 1.00. For purposes of calculation, deferred revenue
shall be excluded from liabilities.
<PAGE> 33
d. MINIMUM UNRESTRICTED CASH - (Tested Monthly) Borrower shall maintain a
minimum unrestricted cash of $3,000,000.00.
2. Borrower shall now furnish Lender with monthly balance sheet and
profit and loss statements no later than thirty (30) days after the
end of each month.
4. PAYMENT OF FACILITY FEE Borrower shall pay Lender a fee in the amount of
Three Thousand 00/100 Dollars ($3,000.00) (the "Facility Fee"), plus all
out-of-pocket expenses.
5. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
6. NO DEFENSES OF BORROWER. Borrower agrees that as of this date, it has
no defenses against the obligations to pay any amounts under the Indebtedness.
7. CONTINUING VALIDITY Borrower understands and agrees that in modifying the
existing Indebtedness, Lender is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents.
Except as expressly modified pursuant to this Loan Modification Agreement, the
terms of the Existing Loan Documents remain unchanged and in full force and
effect Lender's agreement to modifications to the existing Indebtedness
pursuant to this Loan Modification Agreement in no way shall obligate Lender to
make any future modifications to the Indebtedness. Nothing in this Loan
Modification Agreement shall constitute a satisfaction of the Indebtedness. It
is the intention of Lender and Borrower to retain as liable parties all makers
and endorsers of Existing Loan Documents, unless the party is expressly
released by Lender in writing. No maker, endorser, or guarantor will be
released by virtue of this Loan Modification Agreement. The terms of this
Paragraph apply not only to this Loan Modification Agreement but also to all
subsequent loan modification agreements.
8. JURISDICTION/VENUE. Borrower accepts for itself and in connection
with its properties, unconditionally, the non-exclusive jurisdiction of any
state or federal court of competent jurisdiction in the Commonwealth of
Massachusetts in any action, suit or proceeding of any kind against it which
arises out of or by reason of this Loan Modification Agreement provided,
however, that if for any reason Lender cannot avail itself of the courts of the
Commonwealth of Massachusetts, then venue shall lie in Santa Clara County,
California.
9. COUNTERSIGNATURE. This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Lender
(provided, however, in no event shall this Loan Modification Agreement become
effective until signed by an officer of Lender in California).
10. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Facility Fee.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: LENDER:
GENOME THERAPEUTICS CORPORATION SILICON VALLEY BANK doing
business as SILICON VALLEY EAST
By:/s/ Fenel M. Eloi
------------- By:
Name: Fenel M. Eloi --------------------------
------------
Name:
Title: VP, CFO, Treas. ------------------------
---------------
Title:
------------------------
-2-
<PAGE> 34
SILICON VALLEY BANK
By:
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
(Signed at Santa Clara County, CA)
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PROMISSORY NOTE
________________________________________________________________________________
Borrower: Genome Therapeutics Corp. Lender: SILICON VALLEY BANK, a
100 Beaver Street California-chartered bank doing
Waltham, MA 02154 business as Silicon Valley East
Wellesley Office Park
45 William Street, Suite 170
Wellesley, MA 02181
________________________________________________________________________________
Principal Amount: $1,500,000.00
Initial Rate: 9.750%
Date of Note: November 13, 1995
PROMISE TO PAY. Genome Therapeutics Corporation ("Borrower") promises to pay
to SILICON VALLEY BANK, a California-chartered bank, a California bank with a
loan production office in Wellesley, Massachusetts ("Lender"), or order, in
lawful money of the United States of America, the principal amount of One
Million Five Hundred Thousand & 00/100 Dollars ($1,500,000.00) or so much as
may be outstanding, together with interest on the unpaid outstanding principal
balance of each advance. Interest shall be calculated from the date of each
advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in accordance with the following payment
schedule:
The Draw Period shall begin as of this date and shall end on August
31, 1996 (the "Draw Period"). Each Incremental Draw (as defined
below) shall be payable in thirty-six (36) even payments of principal
plus interest due beginning one month following the date the
Incremental Draw is made, and all subsequent payments of principal
plus interest will be due on the same day of each month thereafter.
The final payment, due on August 31, 1999, or thirty-six (36) months
following the date of the final Incremental Draw, whichever shall
first occur, will be for all outstanding principal plus all accrued
interest not yet paid.
Interest on this Note is computed on 365/380 simple interest basis; that is, by
applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender
at 3000 Lakeside Drive, Santa Clara, California 95054. Unless otherwise agreed
or required by applicable law, payments will be applied first to accrued unpaid
interest, then to principal, and any remaining amount to any unpaid collection
costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is Lender's Prime Rate
(the "Index"). This is the rate Lender charges, or would charge, on 90-day
unsecured loans to the most creditworthy corporate customers. This rate may or
may not be the lowest rate available from Lender at any given time. Lender
will tell Borrower the current Index rate upon Borrower's request. Borrower
understands that Lender may make loans based on other rates as well. The
interest rate change will not occur more often than each time the prime rate is
adjusted by Silicon Valley Bank. The Index currently is 8.750% per annum. The
interest rate to be applied to the unpaid principal balance of this Note will
be at a rate of 1.000 percentage point over the Index, resulting in an initial
rate of 9.750% per annum. NOTICE: Under no circumstances will the interest
rate on this Note be more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing, Borrower may pay
without penalty all or a portion of the amount owed earlier than it is due.
Early payments will not, unless agreed to by Lender in writing, relieve
Borrower
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of Borrower's obligation to continue to make payments of accrued
unpaid interest. Rather, they will reduce the principal balance due.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) Borrower defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d)
Any representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor
tries to take any of Borrower's property on or in which Lender has a lien or
security interest. This includes a garnishment of any of Borrower's accounts
with Lender. (g) Any of the events described in this default section occurs
with respect to any guarantor of this Note. (h) A material adverse change
occurs in Borrower's financial condition, or Lender believes the prospect of
payment or performance of the Indebtedness is impaired.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance of this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also, if
permitted under applicable law, do one or both of the following: (a) increase
the variable interest rate on this Note to 6.000 percentage points over the
Index, and (b) add any unpaid accrued interest to principal and such sum will
bear interest therefrom until paid at the rate provided in this Note (including
any increased rate). The interest rate will not exceed the maximum rate
permitted by applicable law. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.
LINE OF CREDIT. This Note evidences a straight line of credit until AUGUST 31,
1996. /s/ FME Once the total amount of principal has been advanced, Borrower
is not entitled to further loan advances. Advances under this Note, as well as
directions for payment from Borrower's accounts, may be requested orally or in
writing by Borrower or by an authorized person. Lender may, but need not,
require that all oral requests be confirmed in writing. Borrower agrees to be
liable for all sums either: (a) advanced in accordance with the instructions
of an authorized person or (b) credited to any of Borrower's accounts with
Lender. The unpaid principal balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no obligation to advance
funds under this Note if: (a) Borrower or any guarantor is in default under
the terms of this Note or any agreement that Borrower or any guarantor has with
Lender, including any agreement made in connection with the signing of this
Note; (b) Borrower or any guarantor ceases doing business or is insolvent; (c)
any guarantor seeks, claims or otherwise attempts to limit, modify or revoke
such guarantor's guarantee of this Note or any other loan with Lender; or (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender.
REQUEST TO DEBIT ACCOUNTS. Borrower will regularly deposit all funds received
from its business activities in accounts maintained by Borrower at Silicon
Valley Bank. Borrower hereby requests and authorizes Lender to debit any of
Borrower's accounts with Lender, specifically, without limitation, Account
Number 700914370, for payments of interest and principal due on the loan and
any other obligations owing by Borrower to Lender. Lender will notify
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Borrower of all debits which Lender makes against Borrower's accounts. Any such
debits against Borrower's accounts in no way shall be deemed a set-off.
ADVANCE RATE. At any time from the date hereof through the end of the Draw
Period, Borrower may request advances (each an "Advance" and collectively the
"Advances") from Lender in an aggregate amount not to exceed the principal
amount of the Note. The Advances shall be used to purchase equipment and shall
not exceed one hundred percent (100%) of the invoice amount approved from time
to time by Lender, excluding taxes, shipping and installation expenses.
Advances may also be used for approved software purchases provided such
Advances do not exceed one hundred percent (100%) of the invoice amount
approved from time to time by Lender, up to a maximum of $75,000.00.
Additionally, Advances may be used for tenant improvements provided such
improvements do not exceed one hundred percent (100%) of the invoice amount,
approved from time to time by Lender, up to a maximum of $180,000.00. To
evidence the Advances, Borrower shall deliver to Lender, at the time of each
advance request, an invoice(s) for the equipment, software, or tenant
improvements to purchased. Advances shall be made in minimum increments of
$500,000.00 each (the "Incremental Draw").
LETTER AGREEMENT. Except as otherwise provided for in this Note, this Note is
subject to and shall be governed by all the terms and conditions of the Letter
Agreement dated June 1, 1995 between Borrower and Lender (the "Agreement"),
which Letter Agreement is incorporated herein by reference.
FACILITY FEE. This Note is subject to a facility fee in the amount of Three
Thousand and 00/100 Dollars ($3,000.00) (the "Facility Fee") plus all
out-of-pocket expenses.
WAIVERS AND GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by
law, waive presentment, demand for payment, protest and notice of dishonor.
Upon any change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. To the
extent permitted by applicable law, all such parties agree that Lender may
renew or extend (repeatedly and for any length of time) this loan, or release
any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All
such parties agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. THIS NOTE IS
EXECUTED UNDER SEAL. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES
RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
Genome Therapeutics Corporation
By: /s/ Fenel M. Eloi
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Name: Fenel M. Eloi Title: VP, CFO, Treas.
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EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our reports dated October 4, 1995 (except with respect to the
matter discussed in Note 10(b) as to which the date is December 6, 1995)
included in this Form 10-K, into the Company's previously filed Form S-8
Registration Statements No. 2-77846, No. 2-81123, No. 2-95446, No. 33-12633,
No. 33-27885, No. 33-45432, No. 0-10824 and No. 03-361191.
/s/ Arthur Andersen LLP
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ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 9, 1996
