UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED MARCH 31, 1995
Commission File Number 0-14758
SOMATIX THERAPY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2762045
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
850 Marina Village Parkway, Alameda, California 94501
(Address of principal executive offices) (zip code)
(510) 748-3000
(Registrant's telephone number, including area code)
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 / /
The number of shares outstanding of each of the issuer's classes
of common stock as of:
Class Outstanding at March 31, 1995
_________________________________________________________________
Common Stock, $0.01 Par Value 18,101,685
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_________
TABLE OF CONTENTS
_________
PAGE NO.
PART II. OTHER INFORMATION
Item 6 . . . . . . . . . . . . . . . . . . . . . . . . . 1
Exhibits Index and Reports on Form 8-K/A . . . . . . . . . . . 1
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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PART II. OTHER INFORMATION
Item 6(a). Exhibits.
The following documents are referenced or included in
this report:
Exhibit
No.
_______
2.1<F1>* Agreement and Plan of Reorganization dated December 19,
1994 as amended on January 18, 1995 and January 31, 1995 among
Somatix, STC Acquisition Co. and Merlin Pharmaceutical
Corporation. Reference Exhibit Number 3.
3.1 Amended and Restated Certificate of Incorporation of Somatix
Therapy Corporation, as filed with the Delaware Secretary of
State on November 29, 1994.
3.2 Bylaws of Somatix Therapy Corporation, as amended and
restated September 29, 1994.
10.1<F1> Escrow Agreement, dated as of February 3, 1995, by and
between STC Acquisition Company, The First National Bank of
Boston and the stockholders of Merlin Pharmaceutical Corporation.
Reference Exhibit Number 4.
10.2<F1>* Consulting and Repurchase Agreement, dated February 3,
1995, between Somatix and Samuel D. Waksal. Reference Exhibit
Number 5.
10.3<F1>* Consulting and Repurchase Agreement, dated January 21,
1995, between Somatix and Thomas Shenk. Reference Exhibit
Number 6.
10.4<F1>* Consulting and Repurchase Agreement, dated February 3,
1995, between Somatix and R. Jude Samulski. Reference Exhibit
Number 7.
10.5<F1>* Consulting and Repurchase Agreement, dated February 3,
1995, between Somatix and Michael Kaplitt. Reference Exhibit
Number 8.
10.6<F1>* Consulting and Repurchase Agreement, dated February 3,
1995, between Somatix and Matthew During. Reference Exhibit
Number 9.
10.7<F1> Indemnification Agreement, dated as of December 19,
1994 as amended by Amendment No. 1, dated as of February 3, 1995,
among Merlin Pharmaceutical Corporation and Samuel D. Waksal.
Reference Exhibit Number 10.
10.8<F1> Promissory Note, dated February 2, 1995, by and between
Samuel D. Waksal and Somatix Therapy Corporation. Reference
Exhibit Number 11.
10.9<F2> Merlin Pharmaceutical Corporation 1993 Stock Option
Plan. Reference Exhibit Number 99.1.
10.10<F2> Non-Qualified Stock Option Agreement to be generally
used in connection with Merlin Pharmaceutical Corporation 1993
Stock Option Plan. Reference Exhibit Number 99.2.
10.11<F2> Stock Option Assumption Agreement - Installment
Option. Reference Exhibit Number 99.3.
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10.12<F2> Stock Option Assumption Agreement - Immediately
Exercisable Option. Reference Exhibit Number 99.4.
10.13* License Agreement, dated January 10, 1994, between Merlin
Pharmaceutical Corporation and University of Florida Research
Foundation.
10.14* License Agreement, dated May 1, 1994, between Merlin
Pharmaceutical Corporation and University of Pittsburgh - of the
Commonwealth System of Higher Education.
10.15* License Agreement, dated August 11, 1994, between Merlin
Pharmaceutical Corporation and The Research Foundation of State
University of New York.
10.16* License Agreement, dated August 17, 1994, between Merlin
Pharmaceutical Corporation and University of Pittsburgh - of the
Commonwealth System of Higher Education.
10.17 Sublease Agreement, dated December 1, 1994, between
Merlin Pharmaceutical Corporation and ICAgen, Inc.
10.18* Amendment dated February 15, 1995 to License Agreement,
dated May 1, 1994, between Merlin Pharmaceutical Corporation and
University of Pittsburgh - of the Commonwealth System of Higher
Education.
10.19 Employment Agreement, dated April 7, 1995, between Somatix
and Jan Drayer, M.D.
27<F3> Financial Data Schedule.
* Confidential Treatment has been requested for certain portions
of this agreement.
[FN]
<F1> Incorporated by reference to exhibit filed with
registrant's Amendment No. 1 to Current Report on Form 8-K/A as
filed with the SEC on February 14, 1995.
<F2> Incorporated by reference to exhibit filed with
registrant's Registration Statement on Form S-8 as filed with the
SEC on March 3, 1995.
<F3> Incorporated by reference to exhibit filed with
registrant's Form 10-Q as filed with the SEC on April 26, 1995.
2
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SOMATIX THERAPY CORPORATION
March 31, 1995
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
DATE: May 12, 1995 By: MARK N.K. BAGNALL
___________________________
Vice President, Finance
(Principal Financial and
Accounting Officer)
3
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Page 1
State of Delaware
Office of the Secretary of State
____________________________________
I, Edward J. Freel, Secretary of State of the State of
Delaware, do hereby certify the attached is a true and correct copy
of the Restated Certificate of "Somatix Therapy Corporation", filed
in this office on the twenty-ninth day of November, A.D. 1994, at
10 o'clock a.m.
A certified copy of this certificate has been forwarded to the
New Castle County Recorder of Deeds for recording.
[SEAL OF THE SECRETARY'S OFFICE OF DELAWARE]
EDWARD J. FREEL
Edward J. Freel, Secretary of State
0915119 8110 AUTHENTICATION: 7317015
944229586 DATE: 11-29-94
PAGE
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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SOMATIX THERAPY CORPORATION,
a Delaware corporation
SOMATIX THERAPY CORPORATION, a corporation organized and
existing under the Delaware General Corporation Law, DOES HEREBY
CERTIFY:
FIRST: The original Certificate of Incorporation of
Somatix Therapy Corporation was filed with the Secretary of State
of Delaware on May 26, 1981, under the name Hana Bio Media, Inc.
SECOND: The Amended and Restated Certificate of
Incorporation of Somatix Therapy Corporation in the form set forth
below has been duly adopted in accordance with the provisions of
Sections 245 and 242 of the Delaware General Corporation Law by the
directors and stockholders of the Corporation.
THIRD: The Amended and Restated Certificate of
Incorporation so adopted reads in full as follows:
ARTICLE I
The name of this corporation is Somatix Therapy
Corporation.
ARTICLE II
The address of the registered office of the corporation
in the State of Delaware is 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent
at such address is The Corporation Trust Company.
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ARTICLE III
The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which
corporations may be organized under the Delaware General
Corporation Law.
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ARTICLE IV
(A) Classes of Stock. The corporation is authorized to
issue two classes of shares to be designated, respectively,
"Preferred Stock" and "Common Stock." The total number of shares
of capital stock that the corporation is authorized to issue is
Forty-One Million (41,000,000) shares. The total number of shares
of Preferred Stock that the corporation shall have authority to
issue is One Million (1,000,000) shares, having a par value of
$0.01 per share, and the total number of shares of Common Stock
that the corporation shall have authority to issue is Forty Million
(40,000,000) shares, having a par value of $0.01 per share.
(B) Rights, Preferences and Restrictions of Preferred
Stock. The Preferred Stock may be issued from time to time in one
or more series. The Board of Directors is hereby authorized,
within the limitations and restrictions stated in this Amended and
Restated Certificate of Incorporation, to fix or alter by
resolution or resolutions providing for the issuance of any wholly
unissued series of Preferred Stock, the dividend rights, dividend
rate, conversion rights, voting rights, rights and terms of
redemption (including sinking fund provisions), the redemption
price or prices and the liquidation preferences of any wholly
unissued series of Preferred Stock, and the number of shares
constituting any such series and the designation thereof, and to
increase or decrease the number of shares of any series subsequent
to the issue of shares of that series, but not below the number of
shares of such series then outstanding. In case the number of
shares of any series shall be so decreased, the shares constituting
such decrease shall resume the status that they had prior to the
adoption of the resolution originally fixing the number of shares
of such series.
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(C) Common Stock.
1. Dividend Rights. Subject to the prior rights of
holders of all classes of stock at the time outstanding having
prior rights as to dividends, the holders of the Common Stock shall
be entitled to receive, when, if and as declared by the Board of
Directors, out of any assets of the corporation legally available
therefor, such dividends as may be declared from time to time by
the Board of Directors.
2. Liquidation Rights. Subject to the prior rights of
holders of all classes of stock at the time outstanding having
prior rights as to liquidation, upon the liquidation, dissolution
or winding up of the corporation, the assets of the corporation
shall be distributed ratably to the holders of the Common Stock.
3. Redemption. The Common Stock is not redeemable as
a matter of right by any holder thereof.
2.
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4. Voting Rights. The holder of each share of Common
Stock shall have the right to one vote, and shall be entitled to
notice of any stockholder's meeting in accordance with this Amended
and Restated Certificate of Incorporation and the Bylaws of this
corporation, and shall be entitled to vote upon such matters and in
such manner as may be provided by law.
ARTICLE V
Except as otherwise provided in this Amended and Restated
Certificate of Incorporation, in furtherance and not in limitation
of the powers conferred by statute, the Board of Directors is
expressly authorized to make, repeal, alter, amend and rescind any
or all of the Bylaws of the corporation.
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ARTICLE VI
The number of directors of the corporation shall be fixed
from time to time by a bylaw or amendment thereof duly adopted by
the Board of Directors or by the stockholders.
ARTICLE VII
Elections of directors need not be by written ballot
unless the Bylaws of the corporation shall so provide.
ARTICLE VIII
Meetings of stockholders may be held within or without
the State of Delaware, as the Bylaws may provide. The books of the
corporation may be kept (subject to any provision contained in the
statutes) outside the State of Delaware at such place or places as
may be designated from time to time by the Board of Directors or in
the Bylaws of the corporation.
ARTICLE IX
A director of the corporation shall not be personally
liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of the law, (iii) under Section 174 of the Delaware
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General Corporation Law or (iv) for any transaction from which the
director derived any improper personal benefit. If the Delaware
General Corporation Law is amended after approval by the
stockholders of this Article IX to authorize corporation action
further eliminating or limiting the personal liability of
directors, then the liability of a director of the corporation
shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law as so amended.
Any repeal or modification of the foregoing provisions of
this Article IX by the stockholders of the corporation shall not
adversely affect any right or protection of a director of the
corporation existing at the time of such repeal or modification.
ARTICLE X
To the fullest extent permitted by applicable law, this
corporation is also authorized to provide indemnification of (and
advancement of expenses to) such agents (and any other persons to
which Delaware law permits this corporation to provide
indemnification) through Bylaw provisions, agreements with such
agents or other persons, vote of stockholders or disinterested
directors or otherwise, in excess of the indemnification and
advancement otherwise permitted by Section 145 of the Delaware
General Corporation Law, subject only to limits created by
applicable Delaware law (statutory or non-statutory), with respect
to actions for breach of duty to this corporation, its stockholders
and others.
Any repeal or modification of any of the foregoing
provisions of this Article X shall not adversely affect any right
or protection of a director, officer, agent or other person
existing at the time of, or increase the liability of any director
of this corporation with respect to, any acts or omissions of such
director, officer or agent occurring prior to such repeal or
modification.
ARTICLE XI
The corporation reserves the right to amend, alter,
change or repeal any provision contained in this Amended and
Restated Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
ARTICLE XII
This corporation shall have perpetual existence.
* * *
4.
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IN WITNESS WHEREOF, SOMATIX THERAPY CORPORATION has
caused this Amended and Restated Certificate of Incorporation to be
executed by the undersigned on the 25th day of November, 1994.
SOMATIX THERAPY CORPORATION
By: DAVID W. CARTER
________________________________
David W. Carter, Chairman of the
Board, President and Chief
Executive Officer
ATTEST:
MARK N.K. BAGNALL
____________________________
Mark N.K. Bagnall, Secretary
5.
BYLAWS
OF
SOMATIX THERAPY CORPORATION
(As Amended and Restated September 29, 1994)
ARTICLE I
Offices
Section 1. The registered office shall be in the City
of Wilmington, County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at
such other places both within and without the State of Delaware
as the Board of Directors may from time to time determine or the
business of the corporation may require.
ARTICLE II
Meetings of Stockholders
Section 1. All meetings of the stockholders for the
election of directors shall be held in the City of Alameda, State
of California, at such place as may be fixed from time to time by
the Board of Directors, or at such other place either within or
without the State of Delaware as shall be designated from time to
time by the Board of Directors and stated in the notice of the
meeting. Meetings of stockholders for any other purpose may be
held at such time and place, within or without the State of
Delaware, as shall be stated in the notice of the meeting or in a
duly executed waiver of notice thereof.
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Section 2. The annual meeting of the stockholders
shall be held on such date and at such time as may be designated
from time to time by the Board of Directors.
Section 3. Written notice of the annual meeting
stating the place, date and hour of the meeting shall be given to
each stockholder entitled to vote at such meeting not less than
ten (10) nor more than sixty (60) days before the date of the
meeting.
Section 4. The officer who has charge of the stock
ledger of the corporation shall prepare and make, or cause a
third party to prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours,
for a period of at least ten days prior to the meeting, either at
a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by
any stockholder who is present.
Section 5. Special meetings of the stockholders of
this Corporation, for any purpose or purposes, unless otherwise
prescribed by statute or by the certificate of incorporation, may
be called by the Chief Executive Officer or the President, and
shall be called by the Chief Executive Officer or the President
or Secretary at the request in writing of a majority of the Board
of Directors, or at the request in writing of
2.
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stockholders owning a majority in amount of the entire capital
stock of the corporation issued and outstanding and entitled to
vote. Such request shall state the purpose or
purposes of the proposed meeting.
Section 6. Written notice of a special meeting stating
the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given not less
than ten (10) nor more than sixty (60) days before the date of
the meeting, to each stockholder entitled to vote at such
meeting.
Section 7. Business transacted at any special meeting
of stockholders shall be limited to the purposes stated in the
notice.
Section 8. The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at all
meetings of the stockholders for the transaction of business,
except as otherwise provided by statute or by the certificate of
incorporation.
Section 9. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting
from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such
adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been
transacted at the meeting as originally notified. If the
adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting,
a notice of the
3.
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adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
Section 10. When a quorum is present at any meeting,
the vote of the holders of a majority of the stock having voting
power present in person or represented by proxy shall decide any
question brought before such meeting, unless the question is one
upon which by express provision of the statutes or of the
certificate of incorporation, a different vote is required, in
which case such express provision shall govern and control the
decision of such question.
Section 11. Unless otherwise provided in the
certificate of incorporation, each stockholder shall at every
meeting of the stockholders be entitled to one vote in person or
by proxy for each share of the capital stock having voting power
held by such stockholder, but no proxy shall be voted on after
three years from its date, unless the proxy provides for a longer
period.
Section 12. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at
any annual or special meeting of stockholders of the corporation,
or any action which may be taken at any annual or special meeting
of such stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting
forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at
a meeting at which all shares entitled to vote thereon were
present and voted. Prompt notice of the taking of the corporate
4.
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action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in
writing.
ARTICLE III
Directors
Section 1. The number of directors which shall
constitute the whole board shall not be less than five (5) nor
more than eight (8), with the number of directors presently set
at six (6). The first board shall consist of five directors.
Thereafter, within the limits above specified, the number of
directors shall be determined by resolution of the Board of
Directors or by the stockholders at the annual meeting of the
stockholders, except as provided in Section 2 of this Article
III, and each director elected shall hold office until his
successor is elected and qualified. Directors need not be
stockholders.
Section 2. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors
may be filled by a majority of the directors then in office,
though less than a quorum, or by a sole remaining director, and
the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall
qualify, unless sooner displaced. If there are no directors in
office, then an election of directors may be held in the manner
provided by statute. If, at the time of filling any vacancy or
any newly created directorship, the directors then in office
shall constitute less than a majority of the whole board (as
constituted immediately prior to any such increase), the Court of
Chancery may, upon application of any stockholder or stockholders
holding at least ten percent of the total number of the shares at
the time outstanding having the right to vote for such directors,
5.
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summarily order an election to be held to fill any such vacancies
or newly created directorships, or to replace the directors
chosen by the directors then in office.
Section 3. The business of the corporation shall be
managed by or under the direction of its Board of Directors which
may exercise all such powers of the corporation and do all such
lawful acts and things as are not by statute or by the
certificate of incorporation or by these bylaws directed or
required to be exercised or done by the stockholders.
Meetings of the Board of Directors
Section 4. The Board of Directors of the corporation
may hold meetings, both regular and special, either within or
without the State of Delaware.
Section 5. The first meeting of each newly elected
Board of Directors shall be held immediately following the annual
meeting of stockholders and no notice of such meeting shall be
necessary to the newly elected directors in order legally to
constitute the meeting, provided a quorum shall be present. In
the event such meeting is not held at such time, the meeting may
be held at such time and place as shall be specified in a notice
given as hereinafter provided for special meetings of the Board
of Directors, or as shall be specified in a written waiver signed
by all of the directors.
Section 6. Regular meetings of the Board of Directors
may be held without notice at such time and at such place as
shall from time to time be determined by the board.
Section 7. Special meetings of the Board of Directors
may be called for any purpose or purposes at any time by the
Chairman of the Board or the Chief
6.
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Executive Officer or the President or any Vice President or the
Secretary or any two (2) directors. Notice of time and place of
special meetings shall be delivered on four (4) days' notice to
each director by mail or 48 hours' notice to each director either
personally or by telephone or telegram. The notice need not
specify the purpose of the meeting nor the place if the meeting
is to be held at the principal executive office of the
corporation.
Section 8. At all meetings of the Board of Directors a
majority of the authorized number of directors shall constitute a
quorum for the transaction of business and the act of a majority
of the directors present at any meeting at which there is a
quorum shall be the act of the Board of Directors, except as may
be otherwise specifically provided by statute or by the
certificate of incorporation. If a quorum shall not be present
at any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be
present. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of
directors, if any action taken is approved by at least a majority
of the required quorum for that meeting.
Section 9. Unless otherwise restricted by the
certificate of incorporation or these bylaws, any action required
or permitted to be taken at any meeting of the Board of Directors
or of any committee thereof may be taken without a meeting, if
all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the board or committee.
7.
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Section 10. Unless otherwise restricted by the
certificate of incorporation or these bylaws, members of the
Board of Directors, or any committee designated by the Board of
Directors, may participate in a meeting of the Board of
Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at
the meeting.
Committees of Directors
Section 11. The Board of Directors may, by resolution
passed by a majority of the whole board, designate one or more
committees, each committee to consist of one or more of the
directors of the corporation. The board may designate one or
more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the
committee.
In the absence of disqualification of a member of a
committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any
such absent or disqualified member.
Any such committee, to the extent provided in the
resolution of the Board of Directors, shall have and may exercise
all the powers and authority of the Board of Directors in the
management of the business and affairs of the corporation, and
may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the
power or authority in reference to amending the
8.
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certificate of incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease
or exchange of all or substantially all of the corporation's
property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution,
or amending the bylaws of the corporation; and, unless the
resolution or the certificate of incorporation expressly so
provide, no such committee shall have the power or authority to
declare a dividend or to authorize the issuance of stock. Such
committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board
of Directors.
Section 12. Each committee shall keep regular minutes
of its meetings and report the same to the Board of Directors
when required.
Compensation of Directors
Section 13. Unless otherwise restricted by the
certificate of incorporation or these bylaws, the Board of
Directors shall have the authority to fix the compensation of
directors. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be
paid a fixed sum for attendance at each meeting of the Board of
Directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor. Members of special
or standing committees may be allowed like compensation for
attending committee meetings.
9.
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Removal of Directors
Section 14. Unless otherwise restricted by the
certificate of incorporation or bylaw, any director or the entire
Board of Directors may be removed, with or without cause, by the
holders of a majority of shares entitled to vote at an election
of directors.
ARTICLE IV
Notices
Section 1. Whenever, under the provisions of the
statutes or of the certificate of incorporation or of these
bylaws, notice is required to be given to any director or
stockholder, it shall not be construed to mean personal notice,
but such notice may be given in writing, by first-class mail or
telegraphic or other written communication, charges prepaid,
addressed to such director or stockholder, at his address as it
appears on the records of the corporation, with postage thereon
prepaid, and such notice shall be deemed to be given at the time
when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given
under the provisions of the statutes or of the certificate of
incorporation or of these bylaws, a written waiver of notice or a
consent to a holding of the meeting or an approval of the
minutes, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed
equivalent thereto.
10.
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ARTICLE V
Officers
Section 1. The officers of the corporation shall be
chosen by the Board of Directors and shall be a chief executive
officer, a president, a secretary and a chief financial officer.
The Board of Directors may elect from among its members a
Chairman of the Board and a Vice Chairman of the Board. The
Board of Directors may also choose one or more vice-presidents,
assistant secretaries and assistant treasurers. Any number of
offices may be held by the same person, unless the certificate of
incorporation or these bylaws otherwise provide.
Section 2. The Board of Directors at its first meeting
after each annual meeting of stockholders shall choose a chief
executive officer, a president, a chief financial officer and a
secretary, and may choose one or more vice-presidents, one or
more assistant secretaries, and one or more assistant treasurers.
Section 3. The Board of Directors may appoint such
other officers and agents as it shall deem necessary, who shall
hold their offices for such terms and shall exercise such powers
and perform such duties as shall be determined from time to time
by the Board of Directors.
Section 4. The salaries of all officers and agents of
the corporation shall be fixed by the Board of Directors.
Section 5. The officers of the corporation shall hold
office until their successors are chosen and qualify. Any
officer elected or appointed by the Board of Directors may be
removed at any time by the affirmative vote of a majority of the
Board
11.
<PAGE>
of Directors. An officer may resign at any time by giving
written notice to the corporation. Any resignation shall take
effect at the date of the receipt of that notice or at any later
time specified in that notice; and, unless otherwise specified in
that notice, the acceptance of the resignation is without
prejudice to the rights, if any, of the corporation under any
contract to which the officer is a party. Any vacancy occurring
in any office of the corporation shall be filled by the Board of
Directors.
The Chairman of the Board
Section 6. The Chairman of the Board, if any, shall
preside at all meetings of the Board of Directors and of the
stockholders at which he shall be present. He shall have and may
exercise such powers as are, from time to time, assigned to him
by the Board and as may be provided by law.
Section 7. In the absence of the Chairman of the
Board, the Vice Chairman of the Board, if any, shall preside at
all meetings of the Board of Directors and of the stockholders at
which he shall be present. He shall have and may exercise
such powers as are, from time to time, assigned to him by the
Board and as may be provided by law.
The Chief Executive Officer, President and Vice-President
Section 8. The Chief Executive Officer shall be the
chief executive officer of the corporation; and in the absence of
the Chairman and Vice Chairman of the Board he shall preside at
all meetings of the stockholders and the Board of Directors; he
shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the
Board of Directors are carried into effect.
12.
<PAGE>
Section 9. The Chief Executive Officer shall execute
bonds, mortgages and other contracts requiring a seal, under the
seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the
Board of Directors to some other officer or agent of the
corporation.
Section 10. In the absence of the Chief Executive
Officer or in the event of his inability or refusal to act, the
President shall perform the duties of the Chief Executive
Officer, and when so acting shall have all the powers of and be
subject to all the restrictions upon the Chief Executive Officer.
The President shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 11. In the absence of the President or in the
event of his inability or refusal to act, the Vice-President, if
any (or in the event there be more than one Vice-President, the
Vice-Presidents in the order designated by the directors, or in
the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so
acting shall have all the powers of and be subject to all the
restrictions upon the President. The Vice-Presidents shall
perform such other duties and have such other powers as the Board
of Directors may from time to time prescribe.
The Secretary and Assistant Secretary
Section 12. The Secretary shall attend all meetings of
the Board of Directors and all meetings of the stockholders and
record all the proceedings of the meetings of the corporation and
of the Board of Directors in a book to be kept for that
13.
<PAGE>
purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of
all meetings of the stockholders and special meetings of the
Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors or Chief Executive Officer,
under whose supervision he shall be. He shall have custody of
the corporate seal of the corporation and he, or an assistant
secretary, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested
by his signature or by the signature of such assistant secretary.
The Board of Directors may give general authority to any other
officer to affix the seal of the corporation and to attest the
affixing by his signature.
Section 13. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined
by the Board of Directors (or if there be no such determination,
then in the order of their election) shall, in the absence of the
Secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the secretary and
shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
The Chief Financial Officer
Section 14. The Chief Financial Officer shall have the
custody of the corporate funds and securities and shall keep full
and accurate accounts of receipts and disbursements in books
belonging to the corporation and shall deposit all moneys and
other valuable effects in the name and to the credit of the
corporation in such depositories as may be designated by the
Board of Directors.
14.
<PAGE>
Section 15. The Chief Financial Officer shall disburse
the funds of the corporation as may be ordered by the Board of
Directors or Chief Executive Officer, taking proper vouchers for
such disbursements, and shall render to the Chief Executive
Officer and the Board of Directors, at its regular meetings, or
when the Board of Directors so requires, an account of all his
transactions as Chief Financial Officer and of the financial
condition of the corporation.
Section 16. If required by the Board of Directors, the
Chief Financial Officer shall give the corporation a bond (which
shall be renewed every six years) in such sum and with such
surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his
office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the
corporation.
Section 17. The Assistant Treasurer, or Controller, or
if there shall be more than one, the Assistant Treasurers or
Controllers in the order determined by the Board of Directors (or
if there be no such determination, then in the order of their
election) shall, in the absence of the Chief Financial Officer or
in the event of his inability or refusal to act, perform the
duties and exercise the powers of the Chief Financial Officer and
shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
15.
<PAGE>
ARTICLE VI
Certificate of Stock
Section 1. Every holder of stock in the corporation
shall be entitled to have a certificate, signed by, or in the
name of the corporation by, the chairman or vice-chairman of the
Board of Directors, or the President or a Vice-President and the
Chief Financial Officer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the corporation,
certifying the number of shares owned by him in the corporation.
Certificates may be issued for partly paid shares and
in such case upon the face or back of the certificates issued to
represent any such partly paid shares, the total amount of the
consideration to be paid therefor, and the amount paid thereon
shall be specified.
If the corporation shall be authorized to issue more
than one class of stock or more than one series of any class, the
powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of
such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the
corporation shall issue to represent such class or series of
stock, provided that, except as otherwise provided in section 202
of the General Corporation Law of Delaware, in lieu of the
foregoing requirements, there may be set forth on the face or
back of the certificate which the corporation shall issue to
represent such class or series of stock, a statement that the
corporation will furnish without charge to each stockholder who
so requests the powers, designations, preferences and relative,
participating, optional or other special
16.
<PAGE>
rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences
and/or rights.
Section 2. Any of or all the signatures on the
certificate may be facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or registrar at the
date of issue.
Section 3. The Chairman of the Board, the Chief
Executive Officer, the President, or any Vice President, or any
other person authorized by resolution of the Board or by any of
the foregoing designated officers, is authorized to vote on
behalf of the corporation any and all shares of any other
corporation or corporations, foreign or domestic, standing in the
name of the corporation. The authority granted to these
officers to vote or represent on behalf of the corporation any
and all shares held by the corporation in any other corporation
or corporations may be exercised by any of these officers in
person or by any person authorized to do so by a proxy duly
executed by these officers.
Lost Certificates
Section 4. The Board of Directors may direct a new
certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation
alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming the
certificate of stock to be lost, stolen or
17.
<PAGE>
destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and
as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the corporation
a bond in such sum as it may direct as indemnity against any
claim that may be made against the corporation with respect to
the certificate alleged to have been lost, stolen or destroyed.
Transfer of Stock
Section 5. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares
duly endorsed or accompanied by proper evidence of succession,
assignation or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction
upon its books.
Fixing Record Date
Section 6. In order that the corporation may determine
the stockholders entitled to notice of or to vote at any meeting
of stockholder or any adjournment thereof, or to express consent
to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may
fix, in advance, a record date, which shall not be more than
sixty nor less than ten days before the date of such meeting, nor
more than sixty days prior to any other action. A
18.
<PAGE>
determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any
adjournment of the meeting: provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
Registered Stockholders
Section 7. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such
owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares and shall not be
bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.
ARTICLE VII
General Provisions
Dividends
Section 1. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of
incorporation, if any, may be declared by the Board of Directors
at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in property or in shares of the capital
stock, subject to the provisions of the certificate of
incorporation.
Section 2. Before payment of any dividend, there may
be set aside out of any funds of the corporation available for
dividends such sum or sums as the directors from time to time, in
their absolute discretion, think proper as a reserve or reserves
to
19.
<PAGE>
meet contingencies, or for equalizing dividends, or for repairing
or maintaining any property of the corporation, or for such other
purposes as the directors shall think conducive to the interest
of the corporation, and the directors may modify or abolish any
such reserve in the manner in which it was created.
Checks
Section 3. All checks or demands for money and notes
of the corporation shall be signed by such officer or officers or
such other person or persons as the Board of Directors may from
time to time designate.
Fiscal Year
Section 4. The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.
Seal
Section 5. The Board of Directors may adopt a
corporate seal having inscribed thereon the name of the
corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or reproduced
or otherwise.
Indemnification
Section 6. The corporation shall, to the fullest
extent permitted by Section 145 of the General Corporation Law of
Delaware, as that Section may be amended and supplemented from
time to time, indemnify any director of the corporation, against
expenses (including attorneys' fees), judgments, fines, amounts
paid in settlement and/or other matters referred to in or covered
by that Section, by reason of the fact that he is or
20.
<PAGE>
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
Expenses incurred by a director of the corporation in
defending a civil or criminal action, suit or proceeding by
reason of the fact that he is or was a director, officer,
employee or agent of the corporation (or is or was serving at the
request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise) shall be paid by the corporation in advance
of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director to
repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the corporation as authorized
by relevant sections of the General Corporation Law of Delaware;
provided, however, the corporation shall not be required to
advance such expenses to a director (i) who commences any action,
suit or proceeding as a plaintiff unless such advance is
specifically approved by a majority of the Board of Directors or
(ii) who is party to an action, suit or proceeding brought by the
corporation and approved by a majority of the Board which
alleges willful misappropriation of corporate assets by such
director, disclosure of confidential information in violation of
such director's fiduciary or contractual obligations to the
corporation, or any other willful and deliberate breach in bad
faith of such director's duty to the corporation or its
stockholders.
21.
<PAGE>
The corporation's obligation to provide indemnification
under this Section 6 of Article VII shall be offset to the extent
the indemnified party is indemnified by any other source
including, but not limited to, any applicable insurance coverage
under a policy maintained by the corporation, the indemnified
party or any other person.
The indemnification and advancement of expenses
provided for in this Section 6 of Article VII (i) shall not be
deemed exclusive of any other rights to which those indemnified
may be entitled under any by-law, agreement or vote of
stockholders or disinterested directors or otherwise, both as to
action in their official capacities and as to action in another
capacity while holding such office, (ii) shall continue as to a
person who has ceased to be a director and (iii) shall inure to
the benefit of the heirs, executors and administrators of such a
person.
The foregoing provisions of this Section 6 of Article
VII shall be deemed to be a contract between the corporation and
each director of the corporation, who serves in such capacity at
any time while this bylaw is in effect, and any repeal or
modification thereof shall not affect any rights or obligations
then existing with respect to any state of facts then or
theretofore existing or any action, suit or proceeding
theretofore or thereafter brought based in whole or in part upon
any such state of facts.
The Board of Directors in its discretion shall have
power on behalf of the corporation to indemnify any person, other
than a director or officer, made a party to any action, suit or
proceeding by reason of the fact that such person, such person's
testator or intestate, is or was an employee of the corporation.
22.
<PAGE>
The phrases and terms set forth in this Section 6 of
Article VII shall be given the same meaning as the identical
terms and phrases are given in Section 145, as that Section may
be amended and supplemented from time to time.
Loans
Section 7. The Board of Directors of this corporation
may, without shareholder approval, authorize loans to, or
guaranty obligations of, or otherwise assist, including, without
limitation, the adoption of employee benefit plans under which
loans and guarantees may be made, any officer or other employee
of the corporation or of its subsidiary, including any officer or
employee who is a director of the corporation or its subsidiary,
whenever, in the judgment of the directors, such loan, guaranty
or assistance may reasonably be expected to benefit the
corporation. The loan, guaranty or other assistance may be with
or without interest, and may be unsecured, or secured in such
manner as the Board of Directors shall approve, including,
without limitation, a pledge of shares of stock of the
corporation.
ARTICLE VIII
Amendments
Section 1. These bylaws may be altered, amended or
repealed or new bylaws may be adopted by the stockholders or by
the Board of Directors, when such power is conferred upon the
Board of Directors by the certificate of incorporation at any
regular meeting of the stockholders or of the Board of Directors
or at any special meeting of the stockholders or of the Board of
Directors if notice of such alteration, amendment, repeal or
adoption of new bylaws be contained in the notice of such special
23.
<PAGE>
meeting. If the power to adopt, amend or repeal bylaws is
conferred upon the Board of Directors by the certificate or
incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal bylaws.
24.
FINAL 1/6/94
LICENSE AGREEMENT
UNIVERSITY OF FLORIDA RESEARCH FOUNDATION, INC.
AND
MERLIN PHARMACEUTICAL CORPORATION
This Agreement is made and entered into this 10th day of
January, 1994, by and between the UNIVERSITY OF FLORIDA RESEARCH
FOUNDATION, INC., a not-for-profit corporation, organized and
existing under the laws of the Commonwealth State of Florida,
having its principal office at 223 Grinter Hall, Gainesville,
Florida, 32611-2037, U.S.A. (hereinafter referred to as
UNIVERSITY), and Merlin Pharmaceutical Corporation, a corporation
duly organized under the laws of Delaware and having its principal
office at 180 Varick Street, New York, N.Y. 10014, U.S.A.
(hereinafter referred to as LICENSEE).
WHEREAS, UNIVERSITY is the owner of certain Patent Rights,
UNIVERSITY Case [*]
WHEREAS, UNIVERSITY desires to have the Patent Rights utilized in
the public interest;
WHEREAS, LICENSEE has represented to UNIVERSITY, to induce
UNIVERSITY to enter into this Agreement, that LICENSEE is
experienced in the development, production, manufacture, marketing and
sale of products and/or the use of similar products to the
LICENSED TECHNOLOGY (as defined below) and the LICENSEE shall
commit itself to a thorough, vigorous and diligent program of
exploiting the PATENT RIGHTS so that public utilization results
therefrom; and
WHEREAS, LICENSEE desires to obtain a license under the Patent
Rights upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto agree as
follows:
1
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
ARTICLE 1 - DEFINITIONS
For purposes of this Agreement, the following words and
phrases shall have the following meanings:
1.1 LICENSEE shall mean LICENSEE and all entities at least
fifty percent (50%) owned or controlled by LICENSEE, an entity
which directly or indirectly owns or controls more than fifty
percent (50%) of the voting stock of LICENSEE and any entity, the
majority ownership of which is directly or indirectly common to the
ownership of LICENSEE.
1.2 LICENSED TECHNOLOGY shall mean any product or part
thereof or process which is:
(a) covered in whole or in part by an issued, unexpired or
pending claim contained in the Patent Rights (hereinafter
defined) in the county in which any such product or part thereof is
made, used or sold or in which any such process is used or sold;
(b) manufactured by using a process or is employed to
practice a process which is covered in whole or in part by an
issued, unexpired claim or a pending claim contained in the Patent
Rights in the country in which any process that is included in
LICENSED TECHNOLOGY is used or in which such product or part
thereof is used or sold.
1.3 NET SALES shall mean LICENSEE's invoice price for
products or processes included in LICENSED TECHNOLOGY and produced
hereunder less the sum of the following:
(a) actual cost of freight charges or freight absorption,
separately stated in such invoice;
(b) trade, quantity or standard trade cash discounts
allowed, if any;
(c) sales taxes, tariff duties and or use taxes
separately stated on each invoice.
1.4 PATENT RIGHTS shall mean UNIVERSITY intellectual property
described below:
(a) [*]
(b) any reissues, reexaminations or extensions of the
United States patent described in (a) above.
2
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
1.5 FIELD(S) OF USE shall mean:
[*]
ARTICLE 2 - GRANT
2.1 UNIVERSITY hereby grants, [*].
2.2 UNIVERSITY [*].
2.3 LICENSEE shall [*].
2.4 LICENSEE agrees to [*].
2.5 The license granted hereunder shall not be construed to
confer any rights upon LICENSEE by implication, estoppel or
otherwise as to any technology not specifically set forth in
Article 2 herein.
2.6 LICENSEE further agrees that it shall abide by all rights and
limitations of U.S. Code, Title 35, Chapter 38, and
implementing regulations thereof, for all PATENT RIGHTS invented in
whole or in part with federal money.
ARTICLE 3 - DUE DILIGENCE
3.1 LICENSEE shall use its best efforts to bring the LICENSED
TECHNOLOGY to market through a thorough, diligent program for
exploitation of the PATENT RIGHTS and to continue active, diligent
marketing efforts for the LICENSED TECHNOLOGY throughout
3
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
the life of this Agreement.
3.2 In addition, LICENSEE shall adhere to the following
milestone payments for each Licensed Product:
[*]
3.3 LICENSEE's failure to perform in accordance with 3.1 and 3.2
hereof shall be grounds for UNIVERSITY to terminate this
Agreement.
ARTICLE 4 - ROYALTIES
4.1 In consideration of the rights, privileges and license
granted by UNIVERSITY hereunder, LICENSEE shall pay royalties and other
monetary consideration as follows:
(a) [*]
(b) Royalties based on [*] per calendar year as follows:
[*]
4
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
(c) [*]
4.2 Royalty payments shall be paid to UNIVERSITY in United
States dollars and directed to the address set forth in Article 11
hereof within thirty (30) days after the end of each March 31,
June 30, September 30 and December 31.
4.3 Royalty payments which are overdue shall bear interest at the
rate of one percent (1%) above the prime rate in effect at the Chase
Manhattan Bank (N.Y.) on the due date per month.
ARTICLE 5 - REPORTS
5.1 Within thirty (30) days after each March 31, June 30,
September 30 and December 31 of each year during the term of this
Agreement, LICENSEE shall deliver to UNIVERSITY true and accurate
reports of the following information in a form acceptable to
UNIVERSITY:
(a) number of LICENSED TECHNOLOGY products manufactured and
sold by LICENSEE and all sublicensees;
(b) total billings for such products;
(c) accounting for all LICENSED TECHNOLOGY processes used or
sold by LICENSEE [*];
(d) deductions set forth in Article 1.3;
5
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
(e) total royalties due; and
(f) name and addresses of sublicensees.
5.2 If no royalties shall be due hereunder, LICENSEE shall so
advise UNIVERSITY in writing within thirty (30) days after the end of
any calendar quarter for which no royalties are due.
5.3 LICENSEE shall keep full true and accurate books of
account, in accordance with generally accepted accounting
principles, containing all information that may be necessary for
the purpose of showing the amounts payable to UNIVERSITY hereunder.
Said books of account shall be kept at LICENSEE's principal place of
business. Said books and the supporting data shall be open at all
reasonable times for five (5) years following the end of the
calendar year to which they pertain, to the inspection of
UNIVERSITY or its agents for the purpose of verifying LICENSEE's
royalty statement or compliance in other respects with this
Agreement.
ARTICLE 6 - PATENT PROSECUTION
6.1 UNIVERSITY shall maintain during the term of this
Agreement the PATENT RIGHTS in the United States. LICENSEE shall have
the opportunity to advise and cooperate with UNIVERSITY in the
maintenance of such patents. LICENSEE may assist UNIVERSITY in
obtaining patent extension pursuant to U.S. Code, Title 35, Section 156
and LICENSEE and the UNIVERSITY shall mutually agree on the law firm to
be retained.
6.2 All fees and costs, including attorneys' fees, relating to
the filing, prosecution and maintenance of the PATENT RIGHTS
shall be the responsibility of LICENSEE, whether incurred prior to or
after the date of this Agreement.
ARTICLE 7 - INFRINGEMENT ACTIONS
7.1 LICENSEE shall inform UNIVERSITY promptly in writing of any
alleged infringement of the PATENT RIGHTS by a third party and of any
available evidence thereof.
7.2 During the term of this Agreement, UNIVERSITY shall have the
right, but shall not be obligated, to prosecute at its own
expense all infringements of the PATENT RIGHTS and, in furtherance of
such right, LICENSEE hereby agrees that UNIVERSITY may include LICENSEE
as a party plaintiff in any such suit, without expense to LICENSEE.
The total cost of any such infringement action commenced or defended
solely by UNIVERSITY shall be borne by UNIVERSITY and UNIVERSITY shall
keep any recovery or damages for past infringement derived therefrom.
6
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
7.3 If UNIVERSITY has been unable to eliminate a substantial
infringement within twelve months of becoming aware of such
infringement or receiving notification from LICENSEE of the
existence of a substantial infringement or has not instituted
infringement litigation, LICENSEE shall be excused from the payment of
the Minimum annual maintenance fees and Running Royalty for
products sold in the United States. Thereafter, when the
substantial infringement has ceased or an infringement suit
initiated, UNIVERSITY shall so notify LICENSEE in writing, at which
time LICENSEE's obligation to pay such royalties shall resume as of the
date of such notification.
7.4 In the event that a declaratory judgment action alleging
invalidity or noninfringement of any of the PATENT RIGHTS shall be
brought against LICENSEE, UNIVERSITY, at its option, shall have the
right, within thirty (30) days after commencement of such action, to
intervene and take over the sole defense of the action at its
own expense.
7.5 In any infringement suit UNIVERSITY may institute to
enforce the PATENT RIGHTS pursuant to this Agreement, LICENSEE
shall cooperate in all respects and, to the extent possible, have its
employees testify when requested and make available relevant
records, papers, information, samples, specimens, and the like.
ARTICLE 8 - INDEMNIFICATION INSURANCE/LIMITATION OF LIABILITY
8.1 LICENSEE shall at all times during the term of this
Agreement and thereafter, indemnify, defend and hold UNIVERSITY,
its trustees, officers, employees and affiliates, harmless against all
claims and expenses, including legal expenses and reasonable
attorneys' fees, arising out of the death of or injury to any
person or persons or out of any damage to property or the
environment, and against any other claim, proceeding, demand,
expense and liability of any kind whatsoever resulting from the
production, manufacture, sale, use, lease, consumption or
advertisement of the LICENSED TECHNOLOGY or arising from any
obligation of LICENSEE hereunder.
8.2 LICENSEE shall obtain and carry in full force and effect
liability insurance which shall protect LICENSEE and UNIVERSITY in
regard to events covered by Paragraph 8.1, above.
8.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, UNIVERSITY MAKES NO REPRESENTATIONS AND EXTENDS NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR
PENDING. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A
REPRESENTATION MADE OR WARRANTY GIVEN BY UNIVERSITY THAT THE
PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOT
INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY.
7
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
ARTICLE 9 - ASSIGNMENT
9.1 This Agreement is not assignable and any attempt to do so
shall be null and void.
<PAGE>
ARTICLE 10 - ARBITRATION
10.1 Any and all claims, disputes or controversies arising
under or in connection with this Agreement which the parties cannot
resolve shall be submitted to arbitration by one arbitrator in
Gainesville, Florida, in accordance with the rules of the American
Arbitration Association then obtaining. Judgment on any
arbitration averred may be entered by a court of competent
jurisdiction.
ARTICLE 11 - TERM AND TERMINATION
11.1 UNIVERSITY shall have the right to terminate this
Agreement if:
(a) LICENSEE shall default in the performance of any of the
obligations herein contained and such default has not been
cured within thirty (30) days after receiving written notice
thereof from UNIVERSITY; or
(b) LICENSEE shall cease to carry out its business,
become bankrupt or insolvent, apply for or consent to the
appointment of a trustee, receiver or liquidator of its assets or seek
relief under any law for the aid of debtors.
11.2 [*]
11.3 Upon termination of this Agreement neither party shall be
released from any obligation that matured prior to the effective date
of such termination. LICENSEE and any sublicensee may,
however, up to the effective date of such termination, sell all
products under the LICENSED TECHNOLOGY, provided that LICENSEE
shall pay to UNIVERSITY the royalties thereon as required by
Article 4 hereof and submit the reports required by Article 11
hereof.
11.4 [*]
ARTICLE 12 - NOTICES
12.1 Any notice or communication pursuant to this Agreement shall
be sufficiently made or given if sent by certified, first
class mail, postage prepaid, addressed to the address below or as
either party shall designate by written notice to the other party.
8
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
In the case of UNIVERSITY:
President
University of Florida Research Foundation, Inc.
223 Grinter Hall
Gainesville, FL 32611-2037
With a copy to:
Director
Office of Patent, Copyright and Technology
Licensing
186 Grinter Hall
Gainesville, FL 32611-2037
In the case of LICENSEE:
Dr. Sam Waxel
Chairman and CEO
Merlin Pharmaceutical Corporation
180 Varick Street
New York, N.Y. 10014
ARTICLE 13 - AMENDMENT, MODIFICATION
13.1 This Agreement may not be amended or modified except by the
execution of a written instrument signed by the parties hereto.
<PAGE>
ARTICLE 14 - MISCELLANEOUS
14.1 This Agreement shall be construed and interpreted in
accordance with the laws of the Commonwealth of Florida.
14.2 The parties acknowledge that this Agreement sets forth the
entire understanding and agreement of the parties hereto as to the
subject matter hereof and supersedes all previous
understandings written or oral.
14.3 This Agreement shall not be construed as conferring any
right to use in advertising, publicity or other promotional
activities any name, trade name, trademark, or other designation
(including any contraction, abbreviation, or simulation of any of the
foregoing). Without the express written approval of the other party,
neither party shall use any designation of the other party in any
promotional activity associated with this Agreement or the LICENSED
TECHNOLOGY. Neither party shall issue any press release or make any
public statement in regard to this Agreement without
the prior written approval
9
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
of the other party, except that LICENSEE may state that it is
licensed by UNIVERSITY under the Patent Rights and that UNIVERSITY may
state that it has licensed LICENSEE under the Patent Rights.
14.4 If one or more of the provisions of this Agreement shall be
held invalid, illegal or unenforceable, the remaining provisions shall
not in any way be affected or impaired thereby. In the event any
provision is held, illegal, invalid or unenforceable, the
parties shall use reasonable efforts to substitute a valid, legal and
enforceable provision which, insofar as is practical,
implements purposes of the section held invalid, illegal and
unenforceable.
14.5 Failure at any time to require performance of any of the
provisions herein shall not waive or diminish a party's right
thereafter to demand compliance therewith or with any other
provision. Waiver of any default shall not waive any other
default. A party shall not be deemed to have waived any rights
hereunder unless such waiver is in writing and signed by a duly
authorized officer of the party making such waiver.
IN WITNESS WHEREOF, the parties have set their hands and seals this
17th day of March, 1994.
ATTEST: UNIVERSITY OF FLORIDA RESEARCH
FOUNDATION, INC.
KATHERINE [illegible]
By KAREN A. HOLBROOK
________________________________
Karen A. Holbrook
President 2/17/94
(Typed Name and Title and Date)
ATTEST: MERLIN PHARMACEUTICAL CORPORATION
By SAMUEL D. WAKSAL
________________________________
Samuel D. Waksal
Chairman/CEO 1/11/94
(Typed Name and Title and Date)
10.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
APPENDIX A
[*]
11
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
LICENSE AGREEMENT
This Agreement is made and entered into this 1st day of
May, 1994, by and between THE UNIVERSITY OF PITTSBURGH - OF THE
COMMONWEALTH SYSTEM OF HIGHER EDUCATION, a non-profit corporation,
organized and existing under the laws of the Commonwealth of
Pennsylvania, having its principal office at 4200 Fifth Avenue,
Pittsburgh, PA 15260 (UNIVERSITY) and MERLIN PHARMACEUTICAL
CORPORATION, 180 Varick Street, 8th Floor, New York, NY 11014
(LICENSEE).
WHEREAS, UNIVERSITY is the owner of certain PATENT
RIGHTS, [*] and has the right to grant licenses under said
PATENT RIGHTS;
WHEREAS, UNIVERSITY desires to have the PATENT RIGHTS
utilized in the public interest;
WHEREAS, LICENSEE has represented to UNIVERSITY, to
induce UNIVERSITY to enter into this Agreement, that LICENSEE is
experienced in the development, production, manufacture, marketing
and sale of products and/or the use of similar products to the
LICENSED TECHNOLOGY (as defined below) and that LICENSEE shall
commit itself to a thorough, vigorous and diligent program of
exploiting the PATENT RIGHTS so that public utilization results
therefrom; and
WHEREAS, LICENSEE desires to obtain a license under the
PATENT RIGHTS upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto agree as
follows:
-1-
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
ARTICLE 1 - DEFINITIONS
For purposes of this Agreement, the following words and
phrases shall have the following meanings:
1.1 LICENSEE shall mean Merlin Pharmaceutical
Corporation and all entities at least fifty percent (50%) owned or
controlled by Merlin Pharmaceutical Corporation, an entity which
directly or indirectly owns or controls more than fifty percent
(50%) of the voting stock of Merlin Pharmaceutical Corporation and
any entity, the majority ownership of which is directly or
indirectly common to the ownership of Merlin Pharmaceutical
Corporation.
1.2 LICENSED TECHNOLOGY shall mean any product or part
thereof or process which is:
(a) covered in whole or in part by an issued,
unexpired or pending claim contained in the PATENT RIGHTS in the
country in which any such product or part thereof is made, used or
sold or in which any such process is used or sold;
(b) developed or manufactured by using a process or
is employed to practice a process which is covered in whole or in
part by an issued, unexpired claim or a pending claim contained in
the PATENT RIGHTS in the country in which any process that is
included in LICENSED TECHNOLOGY is used or in which such product or
part thereof is used or sold.
1.3 NET SALES shall mean LICENSEE's invoice price for
products or processes included in LICENSED TECHNOLOGY and produced
hereunder less the sum of the following:
(a) actual cost of freight charges or freight
absorption, separately stated in such invoice;
(b) trade, quantity or standard trade cash
discounts allowed, if any; and
(c) sales, tariff duties and/or use taxes
separately stated on each invoice.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
-2-
<PAGE>
1.4 PATENT RIGHTS shall mean UNIVERSITY intellectual
property described below:
(a) the United States and foreign patents and/or
patent applications listed in Exhibit A;
(b) United States and foreign patents issued from
the applications listed in Exhibit A and from divisionals and
continuations of these applications;
(c) claims of U.S. and foreign continuation-in-part
applications, and of the resulting patents, which are directed to
subject matter specifically described in the U.S. and foreign
applications listed in Exhibit A;
(d) claims of all foreign patent applications, and
of the resulting patents, which are directed to subject matter
specifically described in the United States patents and/or patent
applications described in (a), (b) or (c), above.
ARTICLE 2 - GRANT
2.1 UNIVERSITY hereby grants, to the extent it may
lawfully do so, the right and [*] are granted, unless this Agreement is
terminated sooner as hereinafter provided herein. The license
granted hereby is subject to the rights of the United States
government, if any, as set forth in 35 USC Section 200, et seq.
2.2 UNIVERSITY [*].
2.3 [*] .
2.4 LICENSEE shall [*].
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*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
[*].
2.5 LICENSEE agrees that any sublicense granted by it
shall provide that the obligations to UNIVERSITY of Articles 2, 7,
8, 9, 10 and 11 of this Agreement shall be binding upon the
sublicensee as if it were party to this Agreement.
2.6 LICENSEE agrees to forward to UNIVERSITY a copy of
any and all sublicense agreements promptly upon execution thereof.
LICENSEE further agrees to attach copies of the Articles set forth
in 2.5, above, to each sublicense agreement.
2.7 The license granted hereunder shall not be construed
to confer any rights upon LICENSEE by implication, estoppel or
otherwise as to any technology not specifically set forth in
Exhibit A hereof.
ARTICLE 3 - DUE DILIGENCE
3.1 LICENSEE shall use its best efforts to bring the
LICENSED TECHNOLOGY to market through a thorough, diligent program
for exploitation of the PATENT RIGHTS and to continue active,
diligent marketing efforts for the LICENSED TECHNOLOGY throughout
the life of this Agreement.
3.2 In addition, LICENSEE shall adhere to the following
milestones:
(a) [*]
(b) [*]
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*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
3.3 LICENSEE's failure to perform in accordance with 3.1
and 3.2 hereof shall be grounds for UNIVERSITY to terminate this
Agreement. Upon termination, all rights to and interest in the
LICENSED TECHNOLOGY and PATENT RIGHTS shall revert to UNIVERSITY.
ARTICLE 4 - ROYALTIES AND OTHER LICENSE CONSIDERATION
4.1 In consideration of the rights, privileges and
license granted by UNIVERSITY hereunder, LICENSEE shall pay
royalties and other monetary consideration as follows:
(a) [*]
(b) Royalties based on [*] per calendar year
in each country in which Patent Rights exist as follows:
(i) [*]
(ii) [*]
(iii) [*]
(c) [*]
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*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
(d) [*]
(i) [*]
(ii) [*]
(iii) [*]
(iv) [*]
(v) [*]
4.2 Royalty payments shall be paid to UNIVERSITY in
United States dollars and directed to the address set forth in
Article 11 hereof within thirty (30) days after the end of each
March 31, June 30, September 30 and December 31.
4.3 Royalty payments which are overdue shall bear
interest at the rate of 3% per annum.
ARTICLE 5 - REPORTS
5.1 Within thirty (30) days after each March 31,
June 30, September 30 and December 31 of each year during the term
of this Agreement, LICENSEE shall deliver to UNIVERSITY true
and accurate reports of the following information in a form
acceptable to UNIVERSITY.
(a) number of LICENSED TECHNOLOGY products
manufactured and sold by LICENSEE and all sublicensees;
-6-
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
(b) total billings for such products;
(c) Accounting for all LICENSED TECHNOLOGY
processes used or sold by LICENSEE and all sublicensees;
(d) deductions set forth in Article 1.3;
(e) total royalties due; and
(f) name and addresses of sublicensees.
5.2 If no royalties shall be due hereunder, LICENSEE
shall so advise UNIVERSITY in writing within thirty (30) days after
the end of any calendar quarter for which no royalties are due.
5.3 LICENSEE shall keep full true and accurate books of
account, in accordance with generally accepted accounting
principles, containing all information that may be necessary for
the purpose of showing the amounts payable to UNIVERSITY hereunder.
Said books of account shall be kept at LICENSEE's principal place
of business. Said books and the supporting data shall be open at
all reasonable times for three (3) years following the end of the
calendar year to which they pertain, to the inspection of
UNIVERSITY or its agents for the purpose of verifying LICENSEE's
royalty statement or compliance in other respects with this
Agreement.
ARTICLE 6 - PATENT PROSECUTION
6.1 UNIVERSITY has or shall apply for, seek prompt
issuance of and maintain during the term of this Agreement the
PATENT RIGHTS in the United States and foreign countries selected
in a written notice to UNIVERSITY by LICENSEE. LICENSEE shall have
the opportunity to advise and cooperate with UNIVERSITY in the
prosecution, filing and maintenance of such patents.
6.2 In addition to payments described in Article 4
hereof, all fees and costs, including attorneys' fees, relating to
the filing, prosecution and maintenance of the PATENT RIGHTS shall
be the responsibility of LICENSEE, whether incurred prior to or
after the date of this Agreement.
-7-
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
Such fees and costs incurred prior to the date hereof shall be paid
by LICENSEE to UNIVERSITY within ten (10) business days of
execution of the Agreement.
ARTICLE 7 - INFRINGEMENT ACTIONS
7.1 LICENSEE shall inform UNIVERSITY promptly in writing
of any alleged infringement of the PATENT RIGHTS by a third party
and of any available evidence thereof.
7.2 During the term of this Agreement, UNIVERSITY shall
have the right, but shall not be obligated, to prosecute at its own
expense all infringements of the PATENT RIGHTS and, in furtherance
of such right, LICENSEE hereby agrees that UNIVERSITY may include
LICENSEE as a party plaintiff in any such suit, without expense to
LICENSEE. The total cost of any such infringement action commenced
or defended solely by UNIVERSITY shall be borne by UNIVERSITY and
UNIVERSITY shall keep any recovery or damages for past infringement
derived therefrom.
7.3 If within six (6) months after having been notified
of any alleged infringement, UNIVERSITY shall have been
unsuccessful in persuading the alleged infringer to desist and
shall not have brought and shall not be diligently prosecuting an
infringement action, or if UNIVERSITY shall notify LICENSEE at any
time prior thereto of its intention not to bring suit against any
alleged infringer, then, and in those events only, LICENSEE shall
have the right, but shall not be obligated, to prosecute at its own
expense any infringement of the PATENT RIGHTS, and LICENSEE may,
for such purposes, use the name of UNIVERSITY as party plaintiff;
provided, however, that such right to bring such an infringement
action shall remain in effect only for so long as the license
granted herein remains exclusive. No settlement, consent judgment
or other voluntary final disposition of the suit may be entered
into without the consent of UNIVERSITY, which consent shall not
unreasonably be withheld. LICENSEE shall indemnify UNIVERSITY
against any order for costs that may be made against UNIVERSITY in
such proceedings.
7.4 In the event that LICENSEE shall undertake the
enforcement and/or defense of the PATENT RIGHTS by litigation,
LICENSEE may withhold up to fifty percent (50%) of the payments
otherwise thereafter due UNIVERSITY under Article 4 hereunder and
apply the same toward reimbursement of up to half of LICENSEE's
expenses, including reasonable attorneys' fees, in connection
therewith. Any recovery of damages by LICENSEE for each such suit
shall be
-8-
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
applied first in satisfaction of any unreimbursed expenses and
legal fees of LICENSEE relating to such suit, and next toward
reimbursement of UNIVERSITY for any payments under Article 4 past
due or withheld and applied pursuant to this Article 7. The
balance remaining from any such recovery shall be divided equally
between LICENSEE and UNIVERSITY.
7.5 In the event that a declaratory judgment action
alleging invalidity or noninfringement of any of the PATENT RIGHTS
shall be brought against LICENSEE, UNIVERSITY, at its option, shall
have the right, within thirty (30) days after commencement of such
action, to intervene and take over the sole defense of the action
at its own expense.
7.6 In any infringement suit, either party may institute
to enforce the PATENT RIGHTS pursuant to this Agreement, the other
party hereto shall, at the request and expense of the party
initiating such suit, cooperate in all respects and, to the extent
possible, have its employees testify when requested and make
available relevant records, papers, information, samples, specimens
and the like.
ARTICLE 8 - INDEMNIFICATION/INSURANCE/LIMITATION OF LIABILITY
8.1 LICENSEE shall at all times during the term of this
Agreement and thereafter, indemnify, defend and hold UNIVERSITY,
its trustees, officers, employees and affiliates, harmless against
all claims and expenses, including legal expenses and reasonable
attorneys' fees, arising out of the death of or injury to any
person or persons or out of any damage to property or the
environment, and against any other claim, proceeding, demand,
expense and liability of any kind whatsoever resulting from the
production, manufacture, sale, use, lease, consumption or
advertisement of the LICENSED TECHNOLOGY or arising from any
obligations of LICENSEE hereunder.
8.2 LICENSEE shall, following commencement of clinical
trials, obtain and carry in full force and effect liability
insurance which shall protect LICENSEE and UNIVERSITY in regard to
events covered by Article 8.1, above.
8.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, UNIVERSITY MAKES NO REPRESENTATIONS AND EXTENDS NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT
NOT LIMITED TO
-9-
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING. NOTHING
IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR
WARRANTY GIVEN BY UNIVERSITY THAT THE PRACTICE BY LICENSEE OF THE
LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS OF
ANY THIRD PARTY.
ARTICLE 9 - ASSIGNMENT
9.1 [*]
ARTICLE 10 - ARBITRATION
10.1 Any and all claims, disputes or controversies
arising under or in connection with this Agreement which the
parties cannot resolve shall be submitted to arbitration by one
arbitrator in Pittsburgh, Pennsylvania, in accordance with the
rules of the American Arbitration Association then obtaining.
Judgment on any arbitration averred may be entered by a court of
competent jurisdiction.
ARTICLE 11 - TERMINATION
11.1 UNIVERSITY shall have the right to terminate this
Agreement if:
(a) LICENSEE shall default in the performance of
any of the obligations herein contained and such default has not
been cured within thirty (30) days after receiving written notice
thereof from UNIVERSITY; or
(b) LICENSEE shall cease to carry out its business,
become bankrupt or insolvent, apply for or consent to the
appointment of a trustee, receiver or liquidator of its assets or
seek relief under any law for the aid of debtors.
11.2 [*]
10.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
11.3 Upon termination of this Agreement neither party
shall be released from any obligation that matured prior to the
effective date of such termination. LICENSEE and any sublicensee
may, however, after the effective date of such termination, sell
all products under the LICENSED TECHNOLOGY, provided that LICENSEE
shall pay to UNIVERSITY the royalties thereon as required by
Article 4 hereof and submit the reports required by Article 5
hereof.
ARTICLE 12 - NOTICES
12.1 Any notice or communication pursuant to this
Agreement shall be sufficiently made or given if sent by certified,
first-class mail, postage prepaid, addressed to the address below
or as either party shall designate by written notice to the other
party.
In the case of UNIVERSITY:
Director
Office of Technology Transfer
and Intellectual Property
911 William Pitt Union
Pittsburgh, PA 15260
In the case of LICENSEE:
President
Merlin Pharmaceutical Corporation
180 Varick Street, 8th Floor
New York, NY 11014
ARTICLE 13 - AMENDMENT, MODIFICATION
13.1 This Agreement may not be amended or modified except
by the execution of a written instrument signed by the parties
hereto.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
11.
<PAGE>
ARTICLE 14 - MISCELLANEOUS
14.1 This Agreement shall be construed and interpreted in
accordance with the laws of the Commonwealth of Pennsylvania.
14.2 The parties acknowledge that this Agreement sets
forth the entire understanding and agreement of the parties hereto
as to the subject matter hereof and supersedes all previous
understandings written or oral.
14.3 Nothing contained in this Agreement shall be
construed as conferring any right to use in advertising, publicity
or other promotional activities any name, trade name, trademark or
other designation (including any contraction, abbreviation or
simulation of any of the foregoing). Without the express written
approval of the other party, neither party shall use any
designation of the other party in any promotional activity
associated with this Agreement or the LICENSED TECHNOLOGY. Neither
party shall issue any press release or make any public statement in
regard to this Agreement without the prior written approval of the
other party.
14.4 If one or more of the provisions of this Agreement
shall be held invalid, illegal or unenforceable, the remaining
provisions shall not in any way be affected or impaired thereby.
In the event any provision is held, illegal or unenforceable, the
parties shall use reasonable efforts to substitute a valid, legal
and enforceable provision which, insofar as is practical,
implements purposes of the section held invalid, illegal and
unenforceable.
14.5 Failure at any time to require performance of any of
the provisions herein shall not waive or diminish a party's right
thereafter to demand compliance therewith or with any other
provision. Waiver of any default shall not waive any other
default. A party shall not be deemed to have waived any rights
hereunder unless such waiver is in writing and signed by a duly
authorized officer of the party making such waiver.
12.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
IN WITNESS WHEREOF, the parties have set their hands and
seals this 1st day of May, 1994.
UNIVERSITY OF PITTSBURGH - OF
THE COMMONWEALTH SYSTEM OF
WITNESS: HIGHER EDUCATION
[ILLEGIBLE] By BEN J. TUCHI
Ben J. Tuchi
Senior Vice Chancellor
Business and Finance
WITNESS: MERLIN PHARMACEUTICAL
CORPORATION
GRACE McCARTY By SAMUEL WAKSAL
Samuel D. Waksal, Ph.D.
Chairman
(Typed Name and Title)
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*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
EXHIBIT A
[*]
14.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
LICENSE AGREEMENT
BETWEEN
THE RESEARCH FOUNDATION OF STATE UNIVERSITY OF NEW YORK
AND
MERLIN PHARMACEUTICAL CORPORATION
This Agreement, made and entered into on the date of
execution, by and between THE RESEARCH FOUNDATION OF STATE
UNIVERSITY OF NEW YORK, a non-profit corporation duly organized and
existing under the laws of the State of New York and having an
office at State University of New York at Stony Brook, (mailing
address: W5510 Frank Melville, Jr. Memorial Library, Stony Brook,
New York 11794-3366, U.S.A.) (hereinafter referred to as
FOUNDATION) and MERLIN PHARMACEUTICAL CORPORATION, a corporation of
the State of New York, having its principal office at 180 Varick
Street, New York, NY 10014 (mailing address: same), (hereinafter
referred to as LICENSEE).
WITNESSETH
WHEREAS, FOUNDATION is the owner of all rights, title and
interest to any technology or discovery, made or conceived in
performance of a research program under the direction of
[*] (INVENTOR), and involving the development of
[*] ; and
WHEREAS, FOUNDATION has the right to grant licenses to these
technologies or discoveries so that they may be utilized in the
public interest, and is willing to grant a license thereunder to
LICENSEE so that said objective may be accomplished; and
WHEREAS, LICENSEE is desirous of obtaining certain rights and
licenses from FOUNDATION relating to the aforementioned technology
and discovery (such technology and discovery hereinafter defined),
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto agree as
follows:
ARTICLE I - DEFINITIONS
For the purposes of this Agreement, the following words and
phrases shall have the following meanings:
1.1 "LICENSEE" shall mean Merlin Pharmaceutical Corporation
and any subsidiary of Merlin Pharmaceutical Corporation.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
1.2 "SUBSIDIARY" shall mean any corporation, company or other
entity more than fifty percent (50%) of whose voting stock is owned
or controlled directly or indirectly by LICENSEE.
1.3 "TECHNOLOGY" shall be limited to mean all inventions,
discoveries, information, technical data or other know-how, whether
patentable or not, related to the [*] which FOUNDATION has heretofore
developed and is free to disclose and furnish to LICENSEE hereunder.
1.4 "LICENSED PRODUCT" shall mean any item, the manufacture,
use or sale of which, whether as a single item or part of a kit,
utilizes TECHNOLOGY.
1.5 "DIRECT SALES" shall mean sales by LICENSEE to end-users.
1.6 As used herein, the phrase "NET SALES" shall mean
LICENSEE'S billings for LICENSED PRODUCTS produced hereunder less
the sum of the following:
(a) Discounts allowed in amounts customary in the trade
for direct sales.
(b) Sales taxes, tariff duties and/or use taxes directly
imposed and with reference to particular sales.
(c) Outbound transportation prepaid or allowed.
(d) Amounts allowed or credited on returns.
No deductions shall be made for commissions paid to
individuals whether they be with independent sales agencies or
regularly employed by LICENSEE and on its payroll, or cost of
collections. LICENSED PRODUCTS shall be considered "SOLD" when
payments are received.
1.7 "EFFECTIVE DATE" shall mean the first date written in
this Agreement.
ARTICLE II - GRANT
2.1 The FOUNDATION hereby grants to LICENSEE a [*]
license to use and practice TECHNOLOGY to make, have
made, use, lease, and/or sell LICENSED PRODUCTS, [*]
unless sooner terminated as hereinafter provided.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
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2.2 [*]
2.3 The FOUNDATION represents and warrants that it is the
owner of TECHNOLOGY free and clear of all liens, claims and
encumbrances and has the sole and unrestricted right to grant the
license as set forth herein.
ARTICLE III - DUE DILIGENCE
[*]
ARTICLE IV - ROYALTIES AND PATENT COSTS
For the rights and privileges granted under the license,
LICENSEE will pay to FOUNDATION in the manner shown below:
[*]
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
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[*]
ARTICLE V - REPORTS AND RECORDS
5.1 LICENSEE shall keep full, true and accurate books of
account containing all particulars which may be necessary for the
purpose of showing the amount payable to FOUNDATION by way of
royalty as aforesaid. Said books of accounts shall be kept at
LICENSEE'S principal place of business or the principal place of
business of a Division of LICENSEE which is marketing the LICENSED
PRODUCT. Said books and the supporting data shall be open at all
reasonable times, for five (5) years following the end of the
calendar year to which they pertain, to the inspection of
FOUNDATION'S Internal Audit Division and/or of an independent
certified public accountant retained by FOUNDATION and/or a
certified public accountant employed by FOUNDATION, for the purpose
of verifying LICENSEE'S royalty statement or compliance in other
respects with this license.
5.2 LICENSEE, within ninety (90) days after the close of each
calendar quarter of each year, shall deliver to FOUNDATION a true
and accurate report, giving such particulars of the business
conducted by LICENSEE during the preceding three (3) month period
under this license as are pertinent to a royalty accounting under
this license. These shall include at least the following:
(a) Total number of units of LICENSED PRODUCTS sold by
LICENSEE.
(b) Discounts allowed as defined in the definition of NET
SALES in paragraph 1.6.
(c) Total royalties due.
5.3 LICENSEE shall pay to FOUNDATION the royalties due and
payable under this Agreement quarterly, no later than ninety (90)
days after each calendar quarter. If no royalties are due, it
shall be so reported.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
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ARTICLE VI - TERMINATION
6.1 If LICENSEE shall become bankrupt or insolvent and/or if
the business of LICENSEE shall be placed in the hands of a
receiver, assignee or trustee for the benefit of creditors, whether
by the voluntary act of LICENSEE or otherwise, LICENSEE shall
immediately notify FOUNDATION and FOUNDATION shall thereupon have
the right to terminate this Agreement by giving written notice to
LICENSEE of such termination and specifying the effective date
thereof, which shall be at least thirty (30) days after the date
the notice is mailed by FOUNDATION. Such notice shall be sent to
LICENSEE by certified mail at an address designated as provided in
Article XIV hereof, or to such other address as LICENSEE may
designate from time to time in writing by notice to FOUNDATION, and
the rights, privileges, and license granted hereunder shall
thereupon immediately terminate and neither party shall have any
further rights, duties or obligations hereunder except as may have
then accrued under this Agreement.
6.2 Upon any material breach or default of this Agreement by
LICENSEE, FOUNDATION shall have the right to terminate this
Agreement and the rights and license granted hereunder by ninety
(90) days notice by certified mail to LICENSEE. Such termination
shall become effective unless LICENSEE has cured any such breach or
default prior to the expiration of ninety (90) days from receipt of
FOUNDATION'S notice of termination. In the event of such
termination, the parties shall no longer have any rights, duties or
obligations hereunder subsequent to the date of such termination,
except as may have then accrued under this Agreement.
6.3 Upon termination of this Agreement for any reason,
nothing herein shall be construed to release either party of any
obligation which matured prior to the effective date of such
termination, and LICENSEE may, after the effective date of such
termination, sell all LICENSED PRODUCTS, and complete LICENSED
PRODUCTS in the process of manufacture at the time of such
termination and sell the same, provided that LICENSEE pays to
FOUNDATION the royalties thereon as set forth in Article IV of this
Agreement and the reports required by Article V hereof on LICENSED
PRODUCTS.
ARTICLE VII - UNLICENSED ACTIVITY AND INFRINGEMENT
7.1 LICENSEE and FOUNDATION shall promptly inform the other
in writing of any license infringement by a third party and provide
available evidence of infringement.
7.2 If within thirty (30) days after notification of alleged
infringement FOUNDATION has not been successful in persuading the
alleged infringer to desist and is not diligently prosecuting an
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
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infringement action or if FOUNDATION notifies LICENSEE of its
intent not to bring action against the alleged infringer, LICENSEE
with permission of FOUNDATION may, but is not obligated to bring
action at its own expense and may use the name of FOUNDATION as
party plaintiff.
7.3 In any suit involving the enforcement or defense of the
licensed rights, the other party hereto agrees, at the request and
expense of the party initiating such suit, to cooperate in all
respects and to have its employees testify when requested and to
make available relevant records, papers, information, samples,
specimens and the like.
7.4 No settlement or consent judgement or other voluntary
final disposition of an enforcement and/or defense suit initiated
by either party to the Agreement may be entered into without the
consent of the other which consent will not be unreasonably
withheld.
7.5 In the event that a declaratory judgement action alleging
invalidity or non-infringement of the licensed rights is brought
against LICENSEE, FOUNDATION reserves the right, within thirty (30)
days after commencement of such action, to intervene and take over
the sole defense to the action at its own expense.
7.6 If LICENSEE is required to pay a royalty or damages to
another party resulting from a final judgment or settlement to
which FOUNDATION consents (such other party being hereinafter
referred to as "THIRD PARTY LICENSORS") in order to make, have
made, lease or sell a LICENSED PRODUCT, then and in the event, the
royalty payable by LICENSEE to FOUNDATION on such LICENSED PRODUCT
shall be reduced by the amount of royalty that LICENSEE shall be
required to pay to such THIRD PARTY LICENSOR. If LICENSEE avails
itself of this provision, LICENSEE agrees to supply FOUNDATION with
proof of royalties paid to such THIRD PARTY LICENSOR.
7.7 The total cost of any infringement action commenced or
defended solely by FOUNDATION shall be borne by FOUNDATION, and
FOUNDATION shall keep any recovery or damages derived therefrom.
7.8 The cost of any infringement action commenced or defended
by LICENSEE shall be borne by the LICENSEE. The LICENSEE, however,
may withhold royalties in any given calendar year and apply the
same towards reimbursement of its expenses and any recovery of
damages by LICENSEE from any such suit shall be applied first in
satisfaction of any unreimbursed expenses and legal fees of
LICENSEE relating to the suit or settlement thereof, and the
balance of such recovery shall be paid proportionately to
FOUNDATION pursuant to Article IV.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
6
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ARTICLE VIII - ASSIGNMENT
LICENSEE may assign or otherwise transfer this Agreement and
the license granted hereby and the rights acquired by it hereunder
so long as such assignment or transfer is accompanied by: (1) a
sale or other transfer of LICENSEE'S entire business or (2) sale or
other transfer of that part of LICENSEE'S business to which the
license granted hereby relates.
ARTICLE IX - NON-USE OF NAMES
LICENSEE shall not use the names of FOUNDATION, State
University of New York at Stony Brook, nor State of New York, nor
inventors, nor any adaptation thereof in any advertising,
promotional or sales literature without prior written consent
obtained from FOUNDATION in each case, except that LICENSEE may
state that it is licensed by FOUNDATION.
ARTICLE X - UNITED STATES GOVERNMENT
EXPORT CONTROL REGULATIONS
The Export Regulations of the U.S. Department of Commerce
prohibit, except under a special validated license, the exportation
from the United States of technical data relating to certain
commodities (listed in the Regulations), unless the exporter has
received certain written assurance from the foreign importer. In
order to facilitate the exchange of technical information under
this Agreement, therefore, LICENSEE hereby gives its assurance to
FOUNDATION that LICENSEE will not knowingly, unless prior
authorization is obtained from the U.S. Office of Export Controls,
re-export directly or indirectly any technical data received from
FOUNDATION under this Agreement and will not export directly the
LICENSED PRODUCT or such technical data to any restricted country.
FOUNDATION neither represents that a license is or is not
required nor that, if required, it will be issued by the U.S.
Department of Commerce.
ARTICLE XI - HOLD HARMLESS
Except for legal actions included within Article VII of this
Agreement, LICENSEE shall defend or settle, at its own expense, any
claim, action, suit or legal proceedings which may be brought
against FOUNDATION by reason of the manufacture or distribution of
LICENSED PRODUCT by LICENSEE and will indemnify and hold FOUNDATION
harmless from and against all damages and costs adjudged or decreed
against and actually paid by FOUNDATION in any such claim, action,
suit or legal proceeding in accordance with a final decree of final
judgment rendered by a Court of Competent Jurisdiction in a
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
7
<PAGE>
decision, unappealed or unappealable, or any costs actually paid by
FOUNDATION in connection with any settlement of any such claim,
action, suit or legal proceeding; provided, however, that
FOUNDATION shall have given LICENSEE prompt written notice of such
claim, action, suit or legal proceeding and shall permit LICENSEE,
by counsel of its own choosing, to defend or settle same, and
provided further that FOUNDATION shall not have settled such claim,
action, suit or legal proceeding without the consent of LICENSEE,
which consent shall not be unreasonably withheld. LICENSEE agrees
to name FOUNDATION as named insured on any product liability
insurance obtained by LICENSEE.
ARTICLE XII - BENEFITS OF LITIGATION, EXPIRATION OR ABANDONMENT
In case any patent within the patent rights granted hereunder
expires or is abandoned, or is declared invalid or otherwise
construed by a court of last resort or by a lower court from whose
decree no appeal is taken or certiorari granted within the period
allowed therefor, then the LICENSEE shall have the right to
terminate the Agreement in accordance with Article 6.3.
ARTICLE XIII - MISCELLANEOUS PROVISIONS
13.1 This Agreement shall be construed, governed, interpreted
and applied in accordance with the laws of the State of New York,
U.S.A., except that questions affecting the construction and effect
of any patent shall be determined by the law of the country in
which the patent was granted.
13.2 The parties hereto acknowledge that this instrument sets
forth the entire Agreement and understanding of the parties hereto
as to the subject matter hereof, and shall not be subject to any
change or modification except by the execution of a written
instrument signed to by the parties hereto.
13.3 The provisions of this Agreement are severable, and in
the event that any provisions of this Agreement are determined to
be invalid or unenforceable under any controlling body of law, such
invalidity or unenforceability shall not in any way affect the
validity or enforceability of the remaining provisions hereof.
13.4 Wherever the consent of FOUNDATION is required under this
Agreement, and LICENSEE has given prior written notice and
FOUNDATION raises no objection in writing within the required
period of time after the giving of such notice, or thirty (30) days
in the event no required period is stated, then FOUNDATION shall be
deemed to have approved any action stated in the notice.
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
8
<PAGE>
ARTICLE XIV - PAYMENTS, NOTICE AND OTHER COMMUNICATIONS
Any payment, notice or other communication pursuant to this
license shall be sufficiently made or given on the date of mailing
if sent to such party by certified air mail, postage prepaid,
addressed to it at its address below or as it shall designate by
written notice given to the other party:
The Research Foundation of
State University of New York
State University of New York at Stony Brook
W5510 Frank Melville, Jr. Memorial Library
Stony Brook, New York 11794-3366
In the case of LICENSEE:
Merlin Pharmaceutical Corporation
180 Varick Street
New York, NY 10014
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and seals and duly executed this License Agreement the date
first above written.
THE RESEARCH FOUNDATION OF
STATE UNIVERSITY OF NEW YORK
BY: E. K. SCHULER 8/8/94
Eugene K. Schuler, Jr. Date
TITLE: Associate Vice President for Research and
Campus Director of Technology Transfer
MERLIN PHARMACEUTICAL CORPORATION
BY: S. D. WAKSAL 8/11/94
(Samuel D. Waksal, Ph.D.) Date
TITLE: CHAIRMAN
(Chairman)
9
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
LICENSE AGREEMENT
This Agreement is made and entered into this 17 day of
August, 1994, by and between the UNIVERSITY OF PITTSBURGH - OF THE
COMMONWEALTH SYSTEM OF HIGHER EDUCATION, a non-profit corporation,
organized and existing under the laws of the Commonwealth of
Pennsylvania, having its principal office at 4200 Fifth Avenue,
Pittsburgh, PA 15260 (UNIVERSITY) and MERLIN PHARMACEUTICAL
CORPORATION, 180 Varick Street, 8th Floor, New York, NY 11014
(LICENSEE).
WHEREAS, UNIVERSITY is the owner of certain PATENT
RIGHTS, on [*] and has the right to grant licenses under said PATENT
RIGHTS;
WHEREAS, UNIVERSITY desires to have the PATENT RIGHTS
utilized in the public interest;
WHEREAS, LICENSEE has represented to UNIVERSITY, to
induce UNIVERSITY to enter into this Agreement, that LICENSEE is
experienced in the development, production, manufacture, marketing
and sale of products and/or the use of similar products to the
LICENSED TECHNOLOGY (as defined below) and that LICENSEE shall
commit itself to a thorough, vigorous and diligent program of
exploiting the PATENT RIGHTS so that public utilization results
therefrom; and
WHEREAS, LICENSEE desires to obtain a license under the
PATENT RIGHTS upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto agree as
follows:
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*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
ARTICLE 1 - DEFINITIONS
For purposes of this Agreement, the following words and
phrases shall have the following meanings:
1.1 LICENSEE shall mean Merlin Pharmaceutical
Corporation and all entities at least fifty percent (50%) owned or
controlled by Merlin Pharmaceutical Corporation, an entity which
directly or indirectly owns or controls more than fifty percent
(50%) of the voting stock of Merlin Pharmaceutical Corporation and
any entity, the majority ownership of which is directly or
indirectly common to the ownership of Merlin Pharmaceutical
Corporation.
1.2 LICENSED TECHNOLOGY shall mean any product or part
thereof or process which is:
(a) covered in whole or in part by an issued,
unexpired or pending claim contained in the PATENT RIGHTS in the
country in which any such product or part thereof is made, used or
sold or in which any such process is used or sold;
(b) developed or manufactured by using a process or
is employed to practice a process which is covered in whole or in
part by an issued, unexpired claim or a pending claim contained in
the PATENT RIGHTS in the country in which any process that is
included in LICENSED TECHNOLOGY is used or in which such product or
part thereof is used or sold.
1.3 NET SALES shall mean LICENSEE's invoice price for
products or processes included in LICENSED TECHNOLOGY and produced
hereunder less the sum of the following:
(a) actual cost of freight charges or freight
absorption, separately stated in such invoice;
(b) trade, quantity or standard trade cash
discounts allowed, if any; and
(c) sales, tariff duties and/or use taxes
separately stated on each invoice.
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*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
1.4 PATENT RIGHTS shall mean UNIVERSITY intellectual
property described below:
(a) the United States and foreign patents and/or
patent applications listed in Exhibit A;
(b) United States and foreign patents issued from the
applications listed in Exhibit A and from divisionals and
continuations of these applications;
(c) claims of U.S. and foreign continuation-in-part
applications, and of the resulting patents, which are directed to
subject matter specifically described in the U.S. and foreign
applications listed in Exhibit A;
(d) claims of all foreign patent applications, and of
the resulting patents, which are directed to subject matter
specifically described in the United States patents and/or patent
applications described in (a), (b) or (c), above.
ARTICLE 2 - GRANT
2.1 UNIVERSITY hereby grants, to the extent it may
lawfully do so, the right and [*] are granted, unless this Agreement is
terminated sooner as hereinafter provided herein. The license
granted hereby is subject to the rights of the United States
government, if any, as set forth in 35 USC Section 200, et seq.
2.2 UNIVERSITY [*].
2.3 [*]
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*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
2.4 LICENSEE shall [*] privileges and licenses granted
hereunder [*] .
2.5 LICENSEE agrees that any sublicense granted by it
shall provide that the obligations to UNIVERSITY of Articles 2, 7, 8,
9, 10 and 11 of this Agreement shall be binding upon the
sublicensee as if it were party to this Agreement.
2.6 LICENSEE agrees to forward to UNIVERSITY a copy of any
and all sublicense agreements promptly upon execution thereof.
LICENSEE further agrees to attach copies of the Articles set forth in
2.5, above, to each sublicense agreement.
2.7 The license granted hereunder shall not be construed to
confer any rights upon LICENSEE by implication, estoppel or
otherwise as to any technology not specifically set forth in
Exhibit A hereof.
ARTICLE 3 - DUE DILIGENCE
3.1 LICENSEE shall use its best efforts to bring the
LICENSED TECHNOLOGY to market through a thorough, diligent program for
exploitation of the PATENT RIGHTS and to continue active,
diligent marketing efforts for the LICENSED TECHNOLOGY throughout the
life of this Agreement.
3.2 In addition, LICENSEE shall adhere to the following
milestones:
(a) [*]
(b) [*]
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*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
3.3 LICENSEE's failure to perform in accordance with 3.1 and
3.2 hereof shall be grounds for UNIVERSITY to terminate this
Agreement. Upon termination, all rights to and interest in the
LICENSED TECHNOLOGY and PATENT RIGHTS shall revert to UNIVERSITY.
ARTICLE 4 - ROYALTIES AND OTHER LICENSE CONSIDERATION
4.1 In consideration of the rights, privileges and
license granted by UNIVERSITY hereunder, LICENSEE shall pay
royalties and other monetary consideration as follows:
(a) [*]
(b) Royalties based on [*] per calendar year in each country
in which PATENT RIGHTS exist as follows:
(i) [*]
(ii) [*]
(iii) [*]
(c) [*]
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*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
(d) [*]
(i) [*]
(ii) [*]
(iii) [*]
(iv) [*]
(v) [*]
4.2 Royalty payments shall be paid to UNIVERSITY in
United States dollars and directed to the address set forth in
Article 11 hereof within thirty (30) days after the end of each
March 31, June 30, September 30 and December 31.
4.3 Royalty payments which are overdue shall bear
interest at the rate of 3% per annum.
ARTICLE 5 - REPORTS
5.1 Within thirty (30) days after each March 31,
June 30, September 30 and December 31 of each year during the
term of this Agreement, LICENSEE shall deliver to UNIVERSITY
true and accurate reports of the following information in a
form acceptable to UNIVERSITY.
(a) number of LICENSED TECHNOLOGY products
manufactured and sold by LICENSEE and all sublicensees;
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*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
(b) total billings for such products;
(c) Accounting for all LICENSED TECHNOLOGY
processes used or sold by LICENSEE and all sublicensees;
(d) deductions set forth in Article 1.3;
(e) total royalties due; and
(f) name and addresses of sublicensees.
5.2 If no royalties shall be due hereunder, LICENSEE
shall so advise UNIVERSITY in writing within thirty (30) days after the
end of any calendar quarter for which no royalties are due.
5.3 LICENSEE shall keep full true and accurate books of
account, in accordance with generally accepted accounting
principles, containing all information that may be necessary for
the purpose of showing the amounts payable to UNIVERSITY hereunder.
Said books of account shall be kept at LICENSEE's principal place of
business. Said books and the supporting data shall be open at all
reasonable times for three (3) years following the end of the calendar
year to which they pertain, to the inspection of
UNIVERSITY or its agents for the purpose of verifying LICENSEE's
royalty statement or compliance in other respects with this
Agreement.
ARTICLE 6 - PATENT PROSECUTION
6.1 UNIVERSITY has or shall apply for, seek prompt
issuance of and maintain during the term of this Agreement the
PATENT RIGHTS in the United States and foreign countries selected in a
written notice to UNIVERSITY by LICENSEE to the extent that
UNIVERSITY is legally able to do so under foreign patent laws.
LICENSEE shall have the opportunity to advise and cooperate with
UNIVERSITY in the prosecution, filing and maintenance of such
patents.
6.2 In addition to payments described in Article 4
hereof, all fees and costs, including attorneys' fees, relating to the
filing, prosecution and maintenance of the PATENT RIGHTS shall be the
responsibility of LICENSEE, whether incurred prior to or
after the date of this Agreement.
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*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
Such fees and costs incurred prior to the date hereof shall be paid by
LICENSEE to UNIVERSITY within ten (10) business days of
execution of the Agreement.
ARTICLE 7 - INFRINGEMENT ACTIONS
7.1 LICENSEE shall inform UNIVERSITY promptly in writing of
any alleged infringement of the PATENT RIGHTS by a third party and of
any available evidence thereof.
7.2 During the term of this Agreement, UNIVERSITY shall have
the right, but shall not be obligated, to prosecute at its own expense
all infringements of the PATENT RIGHTS and, in furtherance of such
right, LICENSEE hereby agrees that UNIVERSITY may include LICENSEE as a
party plaintiff in any such suit, without expense to LICENSEE. The
total cost of any such infringement action commenced or defended solely
by UNIVERSITY shall be borne by UNIVERSITY and UNIVERSITY shall keep
any recovery or damages for past infringement derived therefrom.
7.3 If within six (6) months after having been notified of
any alleged infringement, UNIVERSITY shall have been
unsuccessful in persuading the alleged infringer to desist and
shall not have brought and shall not be diligently prosecuting an
infringement action, or if UNIVERSITY shall notify LICENSEE at any time
prior thereto of its intention not to bring suit against any alleged
infringer, then, and in those events only, LICENSEE shall have the
right, but shall not be obligated, to prosecute at its own expense any
infringement of the PATENT RIGHTS, and LICENSEE may,
for such purposes, use the name of UNIVERSITY as party plaintiff;
provided, however, that such right to bring such an infringement
action shall remain in effect only for so long as the license
granted herein remains exclusive. No settlement, consent judgment or
other voluntary final disposition of the suit may be entered
into without the consent of UNIVERSITY, which consent shall not
unreasonably be withheld. LICENSEE shall indemnify UNIVERSITY
against any order for costs that may be made against UNIVERSITY in such
proceedings.
7.4 In the event that LICENSEE shall undertake the
enforcement and/or defense of the PATENT RIGHTS by litigation,
LICENSEE may withhold up to fifty percent (50%) of the payments
otherwise thereafter due UNIVERSITY under Article 4 hereunder and apply
the same toward reimbursement of up to half of LICENSEE's
expenses, including reasonable attorneys' fees, in connection
therewith. Any recovery of damages by LICENSEE for each such suit
shall be
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which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
applied first in satisfaction of any unreimbursed expenses and
legal fees of LICENSEE relating to such suit, and next toward
reimbursement of UNIVERSITY for any payments under Article 4 past due
or withheld and applied pursuant to this Article 7. The
balance remaining from any such recovery shall be divided equally
between LICENSEE and UNIVERSITY.
7.5 In the event that a declaratory judgment action
alleging invalidity or noninfringement of any of the PATENT RIGHTS
shall be brought against LICENSEE, UNIVERSITY, at its option, shall
have the right, within thirty (30) days after commencement of such
action, to intervene and take over the sole defense of the action at
its own expense.
7.6 In any infringement suit, either party may institute to
enforce the PATENT RIGHTS pursuant to this Agreement, the other party
hereto shall, at the request and expense of the party
initiating such suit, cooperate in all respects and, to the extent
possible, have its employees testify when requested and make
available relevant records, papers, information, samples, specimens and
the like.
ARTICLE 8 - INDEMNIFICATION/INSURANCE/LIMITATION OF LIABILITY
8.1 LICENSEE shall at all times during the term of this
Agreement and thereafter, indemnify, defend and hold UNIVERSITY,
its trustees, officers, employees and affiliates, harmless against all
claims and expenses, including legal expenses and reasonable
attorneys' fees, arising out of the death of or injury to any
person or persons or out of any damage to property or the
environment, and against any other claim, proceeding, demand,
expense and liability of any kind whatsoever resulting from the
production, manufacture, sale, use, lease, consumption or
advertisement of the LICENSED TECHNOLOGY or arising from any
obligation of LICENSEE hereunder.
8.2 LICENSEE shall, following commencement of clinical
trials, obtain and carry in full force and effect liability
insurance which shall protect LICENSEE and UNIVERSITY in regard to
events covered by Article 8.1, above.
8.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, UNIVERSITY MAKES NO REPRESENTATIONS AND EXTENDS NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT
NOT LIMITED TO
-9-
*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING. NOTHING IN
THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR
WARRANTY GIVEN BY UNIVERSITY THAT THE PRACTICE BY LICENSEE OF THE
LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS OF ANY
THIRD PARTY.
ARTICLE 9 - ASSIGNMENT
9.1 [*]
ARTICLE 10 - ARBITRATION
10.1 Any and all claims,disputes or controversies arising
under or in connection with this Agreement which the parties cannot
resolve shall be submitted to arbitration by one arbitrator in
Pittsburgh, Pennsylvania, in accordance with the rules of the
American Arbitration Association then obtaining. Judgment on any
arbitration averred may be entered by a court of competent
jurisdiction.
ARTICLE 11 - TERMINATION
11.1 UNIVERSITY shall have the right to terminate this
Agreement if:
(a) LICENSEE shall default in the performance of
any of the obligations herein contained and such default has not
been cured within thirty (30) days after receiving written notice
thereof from UNIVERSITY; or
(b) LICENSEE shall cease to carry out its business,
become bankrupt or insolvent, apply for or consent to the
appointment of a trustee, receiver or liquidator of its assets or seek
relief under any law for the aid of debtors.
11.2 [*]
-10-
*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
11.3 Upon termination of this Agreement neither party
shall be released from any obligation that matured prior to the
effective date of such termination. LICENSEE and any sublicensee may,
however, after the effective date of such termination, sell
all products under the LICENSED TECHNOLOGY, provided that LICENSEE
shall pay to UNIVERSITY the royalties thereon as required by
Article 4 hereof and submit the reports required by Article 5
hereof.
ARTICLE 12 - NOTICES
12.1 Any notice or communication pursuant to this
Agreement shall be sufficiently made or given if sent by certified,
first-class mail, postage prepaid, addressed to the address below or as
either party shall designate by written notice to the other party.
In the case of UNIVERSITY:
Director
Office of Technology Transfer
and Intellectual Property
911 William Pitt Union
Pittsburgh, PA 15260
In the case of LICENSEE:
President
Merlin Pharmaceutical Corporation
180 Varick Street, 8th Floor
New York, NY 11014
ARTICLE 13 - AMENDMENT, MODIFICATION
13.1 This Agreement may not be amended or modified except by
the execution of a written instrument signed by the parties
hereto.
-11-
*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
ARTICLE 14 - MISCELLANEOUS
14.1 This Agreement shall be construed and interpreted in
accordance with the laws of the Commonwealth of Pennsylvania.
14.2 The parties acknowledge that this Agreement sets
forth the entire understanding and agreement of the parties hereto as
to the subject matter hereof and supersedes all previous
understandings written or oral.
14.3 Nothing contained in this Agreement shall be
construed as conferring any right to use in advertising, publicity or
other promotional activities any name, trade name, trademark or other
designation (including any contraction, abbreviation or
simulation of any of the foregoing). Without the express written
approval of the other party, neither party shall use any
designation of the other party in any promotional activity
associated with this Agreement or the LICENSED TECHNOLOGY. Neither
party shall issue any press release or make any public statement in
regard to this Agreement without the prior written approval of the
other party.
14.4 If one or more of the provisions of this Agreement shall
be held invalid, illegal or unenforceable, the remaining
provisions shall not in any way be affected or impaired thereby. In
the event any provision is held, illegal or unenforceable, the parties
shall use reasonable efforts to substitute a valid, legal and
enforceable provision which, insofar as is practical,
implements purposes of the section held invalid, illegal and
unenforceable.
14.5 Failure at any time to require performance of any of the
provisions herein shall not waive or diminish a party's right
thereafter to demand compliance therewith or with any other
provision. Waiver of any default shall not waive any other
default. A party shall not be deemed to have waived any rights
hereunder unless such waiver is in writing and signed by a duly
authorized officer of the party making such waiver.
-12-
*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
IN WITNESS WHEREOF, the parties have set their hands and
seals this 17 day of August, 1994.
UNIVERSITY OF PITTSBURGH - OF
THE COMMONWEALTH SYSTEM OF
WITNESS: HIGHER EDUCATION
[ILLEGIBLE] By BEN J. TUCHI
Ben J. Tuchi
Senior Vice Chancellor
Business and Finance
WITNESS: MERLIN PHARMACEUTICAL
CORPORATION
TRACI McCARTY By SAM D. WAKSAL
Samuel D. Waksal
Chairman
(Typed Name and Title)
-13-
*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
EXHIBIT A
[*]
*Confidential treatment is requested for the language
which has been underscored or marked [*]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
-14-
SUBLEASE AGREEMENT
This Sublease Agreement ("Sublease") dated this 1st day of
December, 1994, by and between ICAgen, Inc., as sublessor
("Sublessor") and Merlin Pharmaceutical Corporation, as sublessee
("Sublessee").
WITNESSETH:
WHEREAS, pursuant to a Lease Agreement dated December 17,
1992 between Sublessor as Tenant, and Imperial Center Partnership and
Petula Associates, Ltd., as tenants in common operating as a
joint venture, as Landlord, a copy of which is attached hereto as
EXHIBIT A (the "Lease"), Sublessor has leased from Landlord
certain building space located at 4222 Emperor Boulevard,
Morrisville, North Carolina containing approximately 7,009 square feet,
such premises being shown on the floor plan attached hereto as EXHIBIT
B (the "Premises"); and
WHEREAS, sublessee desires to sublease from Sublessor
certain space located in the Premises containing 2,500 square
feet (the "Subpremises") with the location of the Subpremises
shown on the floor plan attached hereto as EXHIBIT C and
Sublessor desires to sublease the Subpremises to Sublessee on the terms
and conditions set forth herein; and
WHEREAS, Landlord has consented to the sublease of the
subpremises by Landlord's Certificate dated as of November 22,
1994, which certificate is attached hereto as EXHIBIT D and made
a part hereto by reference.
NOW THEREFORE, for and in consideration of the payments
referenced herein, and other mutual good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. SUBLEASE TERM: Sublessor hereby subleases the
Subpremises to Sublessee for a period of one (1) year commencing
December 1, 1994. Sublessee may extend this Sublease for two (2)
successive terms of one (1) year each pursuant to the provisions
of this Section 1. Sublessee shall give Sublessor written notice
("Sublessee's Notice") of its desire to extend to Sublease at
least ninety (90) days prior to the expiration of the original
term or any extended term, provided Sublessee is not in default
beyond any applicable cure period set forth in this Sublease on
the date of such notice. Within 10 days from the receipt of the
Sublessee's Notice, Sublessor shall give Sublessee written notice
("Sublessor's Notice") of the amount of the increase, if any, to
the Base Rent for such extended term. Any such increase shall
represent Sublessor's increased costs under the Lease associated with
the premises. Within 10 days from the receipt of Sublessor's Notice,
Sublessee shall give Sublessor written notice of its intention to
extend the Sublease. In the event Sublessee does not respond within 10
days to Sublessor's Notice, the Sublease shall be extended on the terms
of the Sublessor's Notice. Such extended terms shall be upon all of
the terms and conditions hereof. The parties agree that this
Sublease shall terminate upon (i) the termination of the Lease,
for whatever reason, or (ii) Sublessor giving Sublessee at least
ninety (90) days prior written notice of its intention to
terminate this Sublease. As used herein, the "Term" of this
Sublease shall include the original term and any extended terms.
<PAGE>
2. BASE RENT: (a) Sublessee shall pay to Sublessor as
Base Rent the monthly sum of $3,493.39 for the rent of the
Subpremises, provided that Base Rent for any partial month shall
be prorated. Each installment of Base Rent shall be due and
payable in advance on the first day of each month during the term of
this Sublease, at the address shown for Sublessor in Article
10 hereof, or at such other address as Sublessor may direct in
writing.
(b) Upon the execution of this Sublease, Sublessee
agrees to deposit with Sublessor the sum of $3,493.39 as security for
any arrears of Base Rent or additional rent or to repair any
damage to the Subpremises and to ensure Sublessee's prompt and
complete compliance with the terms and covenants with this
Sublease. If Sublessee fails to pay rent or other charges due
hereunder or otherwise defaults with respect to any provision of
this Sublease, Sublessor may use, apply or retain any or any
portion of said deposit for the payment of any rent or other
charge in default or for the payment of any other sum to which
Sublessor may become obligated by reason of Sublessee's default
or to compensate for any loss or damage which Sublessor may
suffer thereby. Such deposit may further be used by Sublessor,
following Sublessee's surrender of the Subpremises, to repair and
restore the Premises to the extent necessitated by Sublessee's
damage to the Subpremises not restoring the Subpremises in
accordance with the Sublease or surrendering the same in an
unclean condition.
(c) Rent received after the fifteenth day of any month shall
be subject to a late charge equal to Four Percent (4.0%) of the
delinquent Base Rent.
3. COMPLIANCE WITH LEASE: Sublessee shall comply with all of
the provisions of the Lease except those provisions which
conflict with the terms of the Sublease, and all rules and
regulations of Landlord or Sublessor therein promulgated
thereunder. Notwithstanding anything to the contrary in this
Sublease, Sublessee shall not take any action or admit to taking any
action which would cause Sublessor to be in default under the Lease.
4. UTILITIES: During the Term, Sublessee shall pay for
any Utilities Increase based on the following formula:
Any Utilities Increase will be multiplied by the Number of
Sublessee's employees based on the Premises divided by the total
number of Sublessee's and Sublessor's employees minus three (-3)
based on the Premises.
For purposes of this Section 4, "Utilities" shall mean
Sublessor's costs with respect to the Premises for (1) water,
electricity, gas, sewage and any other utilities used by the
Sublessor at the Premises and (ii) cleaning and copying charges. For
purposes of this Section 4, "Utilities Increase" shall be the
difference for any month during the Term from the average total
Utilities for the three (3) months immediately preceding this
Sublease.
5. INDEMNITY AND INSURANCE: Sublessee agrees to indemnify and
hold harmless Sublessor, from any liability for damages to
any person or property in, on or about the Subpremises from any
cause, unless caused by the negligence or willful act of
Sublessor or its
2
<PAGE>
agents. If such damages are caused by the negligence or willful act of
Sublessor or its agents, Sublessor shall indemnify and hold harmless
Sublessee from any resulting liability. Sublessee shall procure and
keep in effect during the Term public liability and property damage
insurance coverage of at least $1,000,000 with the Sublessor named as
additional insured thereunder. Such policies shall contain language
that the policies may not be cancelled or changed except after thirty
(30) days notice to Sublessor. Sublessee shall deliver copies of
original policies or satisfactory certificates thereof.
7. CONDITION OF PREMISES: Sublessee acknowledges it has
examined the Subpremises and accepts the same except for any
latent defects which Sublessee shall have thirty (30) days after
commencement of occupancy to report. All improvements or
alterations proposed for the Subpremises must be approved by the
Sublessor and the Landlord prior to construction.
8. ASSIGNMENT OR SUBLETTING WITHOUT SUBLESSOR'S PRIOR
WRITTEN CONSENT: Sublessee may not assign its interest in the
Sublease or sublet the Subpremises.
9. MISCELLANEOUS:
(a) The headings of the various articles of this
Agreement are intended only for convenience and are not intended to
limit, define or construe the scope of any article of this
Agreement, nor offset the provisions thereof.
(b) Neither the method of computation of rent nor any
other provision of this Agreement shall be deemed to create any
relationship between the parties hereto other than that of
Sublessor and Sublessee.
(c) This Agreement shall be governed and construed in
accordance with the laws of North Carolina.
(d) This Agreement may be modified or amended only by
written agreement of both parties hereto.
(g) If any provision of this Agreement shall be deemed to be
in contravention of any law, then the court rendering such
determination shall have the authority to strike the contravening
provision from this Agreement, with the remaining provisions of
this Agreement remaining in full force and effect.
(h) This Agreement, and the covenants, conditions,
warranties and agreements made and entered into by the parties
hereto are declared binding on their respective heirs,
successors, representatives and assigns.
3
<PAGE>
(i) Whenever under this Agreement a provision is made
for notice of any kind, it shall be deemed sufficient service
thereof if such notice is in writing addressed to the respective
party at the address shown below and delivered via hand delivery
or overnight courier, with proof of delivery thereof.
If to Sublessor:
ICAgen, Inc.
4222 Emperor Boulevard, Suite 460
Morrisville, North Carolina 27560
If to Sublessee:
Merlin Pharmaceutical Corporation
180 Varick Street, 7th Floor
New York, New York 10014
[Signature Page Attached and Incorporated Herein By Reference]
4
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands and seals as of the day and year first written above.
SUBLESSOR:
ICAgen, Inc.
By: P. KAY WAGONER
______________________________
Its: President
ATTEST:
CLAUDIA A. JONES
______________________
Secretary/Assistant
Secretary
[CORPORATE SEAL]
SUBLESSEE:
MERLIN PHARMACEUTICAL CORPORATION
DANA M. FAULK
_________________________________
By: Samuel K. Waksal [Dana M.
Faulk]
Title: Chairman of the Board
and Chief Executive
Officer [President]
ATTEST:
DANA M. FAULK
_________________________
Secretary/Assistant
Secretary
[CORPORATE SEAL]
5
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF DURHAM
I, W. E. Walker, Notary Public for said County and State,
certify that Claudia A. Jones personally came before me this day
and acknowledged that she is Assistant Secretary of ICAgen, Inc., a
North Carolina corporation, and that by authority duly given
and as the act of the corporation the foregoing instrument was
signed in its name by its ______________ President, sealed with
its corporate seal, and attested by him/her as its Assistant
Secretary.
WITNESS my hand and official seal, this the 8th day of
December, 1994.
W. E. WALKER
______________________________
Notary Public
My commission expires:
6/28/97
STATE OF NORTH CAROLINA
COUNTY OF WAKE
I, W. E. Walker, Notary Public for said County and State,
certify that Dana H. Fowlkes personally came before me this day
and acknowledged that he is Assistant Secretary of Merlin
Pharmaceutical Corporation, a professional corporation, and that
by authority duly given and as the act of the corporation the
foregoing instrument was signed in its name by its ______________
President, sealed with its corporate seal, and attested by him as its
Assistant Secretary.
WITNESS my hand and official seal, this the 8th day of
December, 1994.
W. E. WALKER
______________________________
Notary Public
My commission expires:
6/28/97
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands and seals as of the day and year first written above.
SUBLESSOR:
ICAgen, Inc.
By:___________________________
Its:__________________________
ATTEST:
_________________________
Secretary/Assistant
Secretary
[CORPORATE SEAL]
SUBLESSEE:
MERLIN PHARMACEUTICAL CORPORATION
SAMUEL D. WAKSAL
______________________________
By: Samuel K. Waksal
Title: Chairman of the Board
and Chief Executive
Officer
ATTEST:
BRIAN W. PUSCH
______________________
Secretary
[CORPORATE SEAL]
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF WAKE
I, _________________________, Notary Public for said County
and State, certify that ____________________ personally came
before me this day and acknowledged that he/she is ______________
Secretary of ICAgen, Inc., a North Carolina corporation, and that by
authority duly given and as the act of the corporation the
foregoing instrument was signed in its name by its ______________
President, sealed with its corporate seal, and attested by
him/her as its _______________________ Secretary.
WITNESS my hand and official seal, this the _____ day of
________________, 1994.
______________________________
Notary Public
My commission expires:
______________________
STATE OF NEW YORK
COUNTY OF NEW YORK
I, Hilary H. Watson, Notary Public for said County and
State, certify that Brian W. Pusch personally came before me this day
and acknowledged that he is ___________________ Secretary of
Merlin Pharmaceutical Corporation, a professional corporation,
and that by authority duly given and as the act of the
corporation the foregoing instrument was signed in its name by
its Chairman of the Board and Chief Executive Officer sealed with its
corporate seal, and attested by him/her as its ______________
Secretary.
WITNESS my hand and official seal, this the 8th day of
December, 1994.
HILARY H. WATSON
______________________________
Notary Public
My commission expires:
______________________
<PAGE>
LANDLORD'S CERTIFICATE
Re: Lease by Imperial Center Partnership and Petula Associates,
Ltd., as tenants in common operating as a joint venture
("Landlord") to ICAgen, Inc. ("Tenant") dated December 17, 1992,
for 7,009 square feet located at 4222 Emperor Boulevard,
Morrisville, North Carolina (the "Premises").
Landlord under the referenced Lease hereby certifies unto Tenant
and Merlin Pharmaceutical Corporation ("Sublessee") as follows:
1. Attached hereto is a true, accurate and complete copy
of the Lease and all amendments thereof, which Lease is not in
default and is in full force and effect as of the date hereof.
2. The Lease commencement date was August 1, 1993, and the
current term of the Lease ends July 31, 1998.
3. Landlord hereby consents to the subletting of that
certain portion of the Premises as shown on the floor plan
attached thereto as EXHIBIT A by the Tenant to Sublessee;
however, such consent shall not be deemed to be a release or
waiver of any rights of Landlord against the Tenant.
Telephone Number ________ Telecopy Number _____________
This certification is given by Landlord as of November 22, 1994.
WITNESS: LANDLORD: Imperial Center Partnership
and Petula Associates, Ltd., as tenants
in common operating as a joint venture
A. ROGERS
IMPERIAL CENTER PARTNERSHIP
____________________
By: SEBY B. JONES
______________________________
Name: Seby B. Jones
Title: General Partner
PETULA ASSOCIATES, LTD, AN IOWA
CORPORATION
By: TIMOTHY E. MINTON
________________________________
Timothy E. Minton
Vice President & Secretary
<PAGE>
[UL DESIGN NO. U465]
LAYOUT OF 4222 EMPEROR BOULEVARD
AMENDMENT TO LICENSE AGREEMENT
AMENDMENT, dated as of February 15, 1995, (this
"Amendment") to License Agreement, dated as of May 1, 1994, by and
between The University of Pittsburgh - of the Commonwealth System
of Higher Education (the "University") and Merlin Pharmaceutical
Corporation, a Delaware corporation ("Licensee").
W I T N E S S E T H :
WHEREAS, the University and the Licensee are parties to a
License Agreement made and entered into May 1, 1994 (the "License
Agreement") by and between the University and Licensee;
WHEREAS, certain amounts payable by the Licensee pursuant
to the License Agreement are due and owing; and
WHEREAS, the Licensee and, subject to payment by the
Licensee of the amounts due and owing under the License Agreement,
the University wish to amend the License Agreement upon the terms
and subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the
covenants contained in this Amendment and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. (a) Section 1.4 of the License Agreement shall be
amended by deleting the text thereof in its entirety and inserting
in lieu thereof the following text:
1.4 PATENT RIGHTS shall mean UNIVERSITY intellectual
property described below:
(a) the United States and foreign patents
and/or patent applications and/or invention disclosures listed in
Exhibit A;
(b) United States and foreign patents issued
from the applications or with respect to the invention disclosures
listed in Exhibit A and from divisionals and continuations of these
applications or invention disclosures;
(c) claims of U.S. and foreign continuation-
in-part applications, and of the resulting patents, which are
directed to subject matter specifically described in the U.S. and foreign
applications or with respect to the invention disclosures listed in
Exhibit A;
(d) claims of all foreign patent applications
and of the resulting patents, which are directed
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
to subject matter specifically described in the United States
patents and/or patent applications and/or invention disclosures
described in (a), (b) or (c) above.
(b) Exhibit A of the License Agreement shall be
amended by deleting it in its entirety and inserting in lieu
thereof Exhibit A attached hereto.
2. This Amendment shall become effective on the date
(the "Effective Date") when the later of the following shall have
occurred: (a) [*] and (b) counterparts hereof shall have been
executed and delivered by the University and Licensee. From and
after the Effective Date, all references in the License Agreement
to the License Agreement shall be deemed to be references to such
License Agreement as amended hereby.
3. Capitalized terms used in this Amendment and defined
in the introductory paragraph or recitals of this Amendment shall
have the respective meanings provided therein. Capitalized terms
used in this Amendment and not otherwise defined in this Amendment
shall have the respective meanings provided in the License
Agreement.
4. This Amendment shall be construed and interpreted in
accordance with the laws of the Commonwealth of Pennsylvania.
-2-
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their
duly authorized officers to execute and deliver this Amendment as
of the date first above written.
UNIVERSITY OF PITTSBURGH - OF THE
COMMONWEALTH SYSTEM OF HIGHER
EDUCATION
BEN J. TUCHI
By___________________________________
Ben J. Tuchi, Ph.D.
Senior Vice Chancellor, Business &
Finance
MERLIN PHARMACEUTICAL CORPORATION
DAVID W. CARTER
By___________________________________
David W. Carter
Chairman of the Board and Chief
Executive Officer
-3-
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
<PAGE>
EXHIBIT A
1. [*]
2. [*]
3. [*]
A-1
*Confidential treatment is requested for the language
which has been underscored or marked [redacted]. Such
language has been deleted from the copy filed with the
SEC on May 15, 1995 with the Current Report on
Form 10-Q of Somatix Therapy Corporation.
SOMATIX
Somatix Therapy Corporation
850 Marina Village Parkway
Alameda, CA 94501
510/748-3000
510/769-8533
April 7, 1995
Jan Drayer, M.D.
5850 Pinewood Drive
Oakland, CA 94611
Re: EMPLOYMENT AGREEMENT
Dear Jan,
Somatix Therapy Corporation proposes to enter into the following
employment agreement ("Agreement") with you.
I have incorporated the terms regarding your employment into this
agreement and the proposed terms and conditions are set forth
below. If the terms of the Agreement are satisfactory, please
indicate your acceptance of the Agreement by executing this
letter and returning it to me.
This Agreement supersedes any other agreement, plan, program or
practice previously in effect which did or may have affected or
pertained to you by which Somatix or any related company may have
provided for separation allowances, termination allowances or
other severance or termination benefits to its senior management.
This Agreement will continue to be valid and enforceable after a
merger, acquisition or change of control.
1. DEFINITIONS
The terms defined in this section shall have the meanings
set forth below for purposes of this Agreement.
a. "Board of Directors" shall mean the Board of Somatix
Therapy Corporation.
b. "Somatix" or "Company" shall mean Somatix Therapy
Corporation.
c. "Employee" shall refer to you, Jan Drayer.
d. "Without Cause" shall mean that, Somatix has without
"Cause", as defined below, and without the Employee's written
consent:
(1) terminated the Employee's services with the
Company;
(2) materially reduced the Employee's duties,
responsibilities and status with Somatix;
<PAGE>
Jan Drayer, M.D. CONFIDENTIAL
April 7, 1995
Page 2
(3) reduced the Employee's base salary by more than
five percent (except pursuant to Company mandated pay cuts or pay
reductions which are uniformly applied to the Company's
management); or
(4) required that the Employee be based at a location
more than 40 miles from the Employee's home location.
e. "Cause" shall mean misconduct, including but not
limited to the following:
(1) embezzlement, theft, misuse of confidential
information or any other illegal or improper act by the employee
against Somatix;
(2) conduct that constitutes a material breach of
Somatix policy, after ten (10) days notice and failure to cure;
(3) unauthorized conduct that causes, or could
potentially cause, harm to the health or safety of other
Employees; and/or
(4) any other unauthorized conduct that causes, or
could potentially cause, material harm to the business or
reputation of Somatix, after ten (10) days notice and failure to
cure.
f. "Change of Control" solely for purposes of this
Agreement shall mean any transaction or series of related
transactions in which (i) substantially all of the assets of the
Company are sold; or (ii) any merger, reorganization or
acquisition in which the stockholders of the Company immediately
prior to such transaction or series of related transactions hold
less than 51% of the equity securities of the surviving entity
(or any parent thereof) immediately after such transaction,
unless, such surviving entity elects in writing to assume this
Agreement and the obligations of the Company hereunder in its
entirety.
2. DUTIES AND OBLIGATIONS
a. The Employee shall serve as the Company's Executive
Vice President of Gene Therapy Development which title was
approved at the Company's Board of Directors (the "Board")
meeting on March 15, 1995. Employee's duties shall include all
things necessary or advisable to manage and conduct the gene
therapy development of the Company, including duties reasonably
set forth by the Chief Executive Officer or the Board from time
to time.
<PAGE>
Jan Drayer, M.D. CONFIDENTIAL
April 7, 1995
Page 3
b. Employee agrees to abide by the terms and conditions of
the Company's standard Proprietary Information and Inventions
Agreement between Employee and the Company, a copy of which is
attached hereto as Exhibit A. Employee further agrees that at
all times both during his employment by the Company and after his
termination, he will keep in confidence and trust, and will not
use or disclose except as directed by the Company, any
confidential or proprietary information of the Company.
c. Employee agrees to indemnify and hold the Company
harmless against any liability, damage, claims, or suits and
related costs and expenses that may arise directly or indirectly
out of Employee's termination of any employment relationship or
agreement. Further, Employee represents that he has not entered
into, and agrees not to enter into, any agreement in conflict
with the terms of this Agreement or his employment with the
Company.
3. DEVOTION OF TIME TO THE COMPANY'S BUSINESS
a. Employee shall devote substantially all of his business
time, attention, knowledge, skills and interests to the business
of the Company and the Company shall be entitled to all of the
benefits and profits arising from or incident to such work,
services and advice of Employee.
b. During the term of this Agreement, Employee shall not,
whether directly or indirectly, render any services of a
commercial or professional nature to any other person or
organization, whether for compensation or otherwise, without the
prior consent of the Chief Executive Officer. The employee is
not currently engaged on the Board nor employed by any other
company.
c. During the term of this agreement, Employee shall not,
directly or indirectly, engage or participate in any business
that is in competition with the business of the Company.
4. COMPENSATION AND BENEFITS
a. Base Compensation - Beginning March 20, 1995, the
Company shall pay to Employee an annual salary of Two Hundred
Thirty Thousand dollars ($230,000), less all applicable
withholdings, prorated for any partial employment period and
payable in equal monthly installments in accordance with the
Company's payroll schedule. The Compensation Committee of the
Board shall annually review the then-current level of Employee's
salary to determine the amount, if any, of salary change,
<PAGE>
Jan Drayer, M.D. CONFIDENTIAL
April 7, 1995
Page 4
provided that the foregoing shall not serve to exempt Employee
from any Company mandated pay cuts or pay reductions which are
uniformly applied to the Company's management, any pay increase
or pay cut will be effective as of July 30 of the year such
adjustment is made and the Board shall advise Employee of such
adjustment, if any.
b. Bonus - The Employee will be eligible to participate
in the Company's Management Incentive Plan, accordingly, the
Compensation Committee may authorize payment of bonuses to
Employee based on the Plan upon the achievement by the employee
of certain objectives established by the Chief Executive Officer
of the Company.
c. Benefits - At the time of this Agreement or for such
time as otherwise provided in this Agreement, Employee shall be
entitled to participate in such fringe benefits that are
available to employees of the Company at that time including:
family health insurance, dental insurance, group term life
insurance, short-term disability insurance, long-term disability
insurance, vacation pay, sick pay, 401(k) and other benefits that
may be added to the Company's benefit program from time to time.
(1) Life Insurance - In addition to the group term
life insurance coverage provided to all employees of the Company,
the Company will assist you in providing additional life
insurance protection through the establishment of a split-dollar
life insurance program, as detailed in the Split-Dollar Life
Insurance Agreement included as Attachment A.
(2) Disability Insurance - In addition to the short-
term and long-term disability insurance coverage provided to all
employees of the Company, the Company will assist you in
providing additional long-term disability insurance protection
through the purchase of an individual policy that will, without
offsets for social security, worker's compensation or other
disability benefits, provide insurance coverage in the amount of
$5,000 per month. Upon your resignation or termination from
employment, this disability insurance policy and any dividends
shall be released to you or your successor employer upon written
request.
d. Stock Options - At the time entering into this
Agreement, the Employee has stock options totalling (150,000) One
hundred fifty thousand shares of the Company's Common Stock (the
"Option Shares") under the Company's 1992 Stock Option Plan, as
amended, (the "Plan"), and from time to time
<PAGE>
Jan Drayer, M.D. CONFIDENTIAL
April 7, 1995
Page 5
may be granted additional stock options.
5. ELIGIBILITY FOR SEVERANCE BENEFITS
a. General Rule - Except as otherwise provided in this
Agreement, the Employee shall be entitled to severance benefits
set forth in Section 6 should his employment be terminated
Without Cause. A Change of Control shall be deemed to be a
termination without Cause.
b. Death or Disability - If the Employee dies after he has
ceased to be an Employee but prior to receiving full payment of
his separation pay, if any, any portion of the separation pay
that remains to be paid shall be paid to the surviving spouse of
the Employee, or, if there is no surviving spouse, to the
Employee's estate.
6. TERMINATION OF EMPLOYMENT
a. The Company may terminate Employee's employment under
this Agreement at any time, for any reason, with or without Cause
by giving written notice of its intent to terminate the
employment (a "Termination").
(1) Should the Employee be terminated Without Cause,
the Company will pay twelve (12) months base salary to the
Employee, hereafter, the "Severance Benefits".
(2) Should the Employee resign his position at any
time or should the Employee's employment be terminated for
Cause, the Company's obligation to pay any salary or other benefits
specified in this Agreement shall cease on the effective date of
the resignation or termination of employment.
b. Continue Insurance Coverage - Somatix shall continue
to provide the Employee with medical and dental insurance
coverage by paying the COBRA payments for a period equal to the
number of months used to compute his separation pay. To the
maximum extent permitted by law, the number of months of
continued insurance coverage provided to the Employee under this
section shall reduce the number of months of continued coverage
that must be made available to the Employee (and his dependents,
if applicable) under (COBRA).
<PAGE>
Jan Drayer, M.D. CONFIDENTIAL
April 7, 1995
Page 6
c. 401(k) Savings Plan - Upon the Employee's termination,
the Company will vest the accrued matching funds of the Company's
contribution for the Employee's 401(k) program. The Employee's
approved 401(k) deduction will be made from the final paycheck
but will not be made from any severance pay unless the Company is
otherwise notified by the Employee.
d. Stock Options - For the purposes of this Agreement, the
vesting terms described in the Plan are modified as follows:
Upon the termination of employee's employment Without Cause, the
Employee's unvested stock options will be accelerated by eight
(8) additional quarterly installments.
e. Time and Form of Payment - No Employee shall be
entitled to receive severance benefits before the date he ceases
to be an Employee. The Employee must elect to have his severance
benefits paid in one of the following ways:
(1) A single lump sum distribution paid upon, or as
soon as reasonably practicable after, the termination of his
employment; or
(2) A deferred lump sum distribution paid in January
of the year following the year his employment terminates; or
(3) Two installments, which do not have to be of equal
amounts, with the first paid upon, or as soon as reasonably
practicable after, the termination of his employment and the
second paid in January of the year following the year his
employment terminates.
Election of one of the above methods is accomplished by providing
written notice to the Company's Human Resource Department of such
election within fifteen calendar day's of the Employee's
termination. If no election is made within that period, the
severance benefits will automatically be paid pursuant to
Section 6(e)(1). Without regard to the payment method elected,
no interest shall accrue or be paid with respect to the amount
of the Employee's severance benefits.
f. Reductions - The severance benefits paid to the
Employee shall be reduced by any amount that the Employee owes
to the Company on the date he ceases to be an Employee.
Except for any payments for earned salary, accrued but
unused vacation, 401(k) Plan distributions, and the above
mentioned severance benefits, if applicable,
<PAGE>
Jan Drayer, M.D. CONFIDENTIAL
April 7, 1995
Page 7
neither party will be obligated to pay the other any payment as a
result of, or in connection with, the termination of Employee's
employment with Somatix (including but not limited to any salary
or benefits following the date of termination).
7. MISCELLANEOUS.
a. Governing Law - This Agreement shall be interpreted,
construed, governed and enforced according to the laws of the
State of California.
b. Attorneys' Fees - In event of any controversy, claim
or dispute between the parties, arising out of or relating to
this Agreement or the breach hereof, or the interpretation
hereof, each party shall bear its own legal fees and expenses.
Notwithstanding the foregoing, in the event of a finding by any
court having jurisdiction over such matter that any party
initiating an action under this Agreement failed to have a
reasonable prospect of prevailing on its claim, the court shall
have discretion to award the prevailing party attorneys' fees and
costs incurred by it with respect to such claim or action. The
"prevailing party" means the party determined by the court to
have most nearly prevailed, even if such party did not prevail
in all matters, not necessarily the one in whose favor a judgment
is rendered.
c. Amendments - No amendment or modification of the terms
or conditions of this Agreement shall be valid unless in writing
and signed by the parties hereto.
d. Severability - All agreements and covenants contained
herein are severable, and in the event any of the above shall be
held to be invalid or unenforceable, this Agreement shall be
interpreted as if such invalid agreements or covenants were not
contained herein.
e. Successors and Assigns - The rights and obligations of
the company under this Agreement shall inure to the benefit of
and shall be binding upon the successors and assigns of the
Company. The Employee shall not be entitled to assign any of his
rights or obligations under this Agreement.
f. Entire Agreement - This Agreement, along with any other
Agreements set forth herein, included with limitation, the
Proprietary Information and
<PAGE>
Jan Drayer, M.D. CONFIDENTIAL
April 7, 1995
Page 8
Inventions Agreement, constitutes the entire agreement between
the parties with respect to the employment of Employee.
If you have any questions, please do not hesitate to call me at
(510) 748-3050.
Very truly yours,
DAVID W. CARTER
David W. Carter
Chief Executive Officer and
Chairman of the Board
Somatix Therapy Corporation
AGREED TO AND ACCEPTED BY:
JAN DRAYER
____________________ Date: 4/11/95
Jan Drayer, Employee
<PAGE>
CONFIDENTIAL
ATTACHMENT A
SPLIT-DOLLAR LIFE INSURANCE AGREEMENT
This agreement, made and entered into this 20th day of March,
1995 by and between Somatix Therapy Corporation, a Delaware
corporation, hereinafter referred to as the "Company", and Jan
Drayer, hereinafter referred to as the "Executive" and "Insured".
Whereas the Executive is a trusted and valued employee of the
Company and the Company highly values the efforts, abilities and
accomplishments of the Executive; and
Whereas the Company is concerned with the welfare of its
employees and their families and believes it is meritorious to
assist them in providing for their financial security; and
Whereas the Board of Directors of the Company has determined
that it would be in the Company's best interest to participate
in a Split-Dollar Insurance Plan with the Executive; and
Whereas the Executive has acquired a life insurance policy and
the Company and the Executive desire to make said insurance
policy subject to a Split-Dollar arrangement;
Now therefore, the parties hereto mutually agree as follows:
I. Title to Policy and Incidents of Ownership
The Executive shall be the owner of the policy and shall have all
incidents of ownership except those assigned pursuant to the
provisions of Article III for security purposes only, including
but not limited to:
A. The right to designate and to change the beneficiary;
B. The right to receive and to have his successor or assigns
receive any amount in excess of the amount payable to the Company as
hereinafter provided in Article IV at the time of the death of the
insured; and
C. The right, at any time, to repay the amounts hereinafter
described in Article II, thereby releasing any claim which the
Company might have against such contract.
The intention of the parties is that the Company possess no
policy rights or incidents of ownership, other than those
assigned as security for the indebtedness, which will permit the
Company to unilaterally impair the right or interests of the
Executive, or his designee or assignee in any way.
The Executive hereby agrees, however, that while this agreement
is in effect, he shall notify the Company of any intent to
exercise any right of ownership in the policy other than the
right to change the beneficiary at least thirty (30) days prior
to the exercise of such right of ownership.
<PAGE>
II. Premium Payments
A. The Company will pay the premium of the policy. The
Company's portion for this premium will be a minimum of
$15,000 annually for split-dollar life and $5,000 for additional
disability insurance. Such premium may be paid annually or more
frequently as the Company may elect. The Company's premium
payments shall be remitted to the insurer before the expiration
of the grace period for premium payments. The Executive may
repay any amount of such premiums advanced for his benefit at any
time.
B. The total amount of such payments by the Company, less the
total amount of any repayments by the Executive shall constitute
an indebtedness to the Company.
III. Security
A. In order to secure the repayment of the indebtedness, the
Executive agrees to execute a Collateral Assignment of the
insurance policy in a form approved by the insurance company and
shall deliver physical custody of the policy to the Company.
B. In the event of the termination of this agreement, pursuant
to the provisions of Article V hereof, the Company shall, upon
receipt of an amount equal to the total amount of the
indebtedness then due to the Company, cancel and release the
Collateral Assignment of the insurance policy and redeliver
physical custody thereof to the Executive.
In the event the Executive does not satisfy the indebtedness
to the Company within thirty (30) of the termination of this
agreement, the Company shall have the right, without further
notice to the Executive, to exercise its right as Collateral
Assignee to obtain a cash loan from the Insurer in accordance
with the loan provisions of the policy, provided, however, that
the total amount of any cash loan or loans so obtained shall not
exceed the total amount of the indebtedness of the Executive then
due under the terms of this agreement.
IV. Death Benefits
A. The portion of the death benefit to be paid to the Company
shall be the amount equal to the net cash surrender value of the
policy up to, but not exceeding, the then remaining balance of
any indebtedness incurred for the purposes of paying premiums
under the policy. Such value shall be determined as of the end
of the period for which premiums have been paid.
B. The portion of the death benefit payable to the beneficiary
or beneficiaries designated by the Executive shall be the balance
of the proceeds, if any, as provided in the policy.
V. Term
This agreement shall be effective as of the date of this
agreement and shall continue until terminated by the death of the
insured or mutual agreement of the parties hereto.
VI. Amendment
This agreement may be amended at any time by the mutual consent
of the parties hereto.
<PAGE>
CONFIDENTIAL
VII. Applicable Law
This agreement shall be governed by the laws of the State of
California.
VIII. Benefit
This agreement shall be binding upon the parties hereto, the
Executive's heirs, executors and administrators, and either
party's successors or assigns. The parties hereto hereby agree
for themselves, their heirs, executors, administrators,
successors or assigns to execute any and all instruments and to
perform all acts which may be necessary and proper to carry out
the purposes of this agreement.
IX. Administrator
Thea Drayer shall serve as the administrator of this plan.
In witness whereof, the parties have executed this agreement on
the date indicated.
Company:
Somatix Therapy Corporation
By: DAVID W. CARTER ARLENE JORDAN-LEVY
______________________ _________________________
Witness
Executive:
JAN DRAYER, M.D. ARLENE JORDAN-LEVY
________________ _________________________
Jan Drayer, M.D. Witness
