UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1 to Form 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended June 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number 0-15609
Agouron Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
California 33-0061928
(State or other jurisdiction of (I.R.S. EmployerIdentification No.)
incorporation or organization)
10350 North Torrey Pines Road, La Jolla, California 92037-1020
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 622-3000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, without par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
On July 28, 1998, the aggregate market value of the common stock held by
nonaffiliates totaled approximately $724,738,000 based on the closing stock
price as reported by The Nasdaq Stock Market.
On July 28, 1998, there were approximately 31,097,000 shares of common
stock, without par value, of the registrant issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant's definitive proxy statement to be prepared pursuant to
Regulation 14A and filed in connection with solicitation of proxies for its
Annual Meeting of Stockholders, to be held on October 28, 1998, is incorporated
by reference into Part III of this Form 10-K.
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PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) List of documents filed as part of this report:
(1) Financial Statements and Supplementary Data
Reference is made to the Index to Financial Statements and
Schedules under Item 8 in Part II hereof, where these
documents are listed.
(2) Exhibits - see (c) below
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of fiscal 1998.
(c) Exhibits
Exhibit
Number Exhibit
-------- ----------------------------------------------------------
2.1(a) Agreement and Plan of Reorganization dated as of April 28,
1997, between Agouron Pharmaceuticals, Inc., Agouron
Acquisition Corporation and Alanex Corporation.
3.1(b) Restated Articles of Incorporation (December 10, 1992).
3.2(c) Amended and Restated Bylaws (Restated June 17, 1991).
4.1(d) Rights Agreement dated November 7, 1996, as amended on
November 27, 1996, between the Company and Chase Mellon
Shareholder Services. L.L.C., which includes, as Exhibit
A, the Certificate of Determination, Preferences and
Rights of Series B Participating Preferred Stock as filed
with the California Secretary of State on November 20,
1996.
10.01(h) 1990 Stock Option Plan (Restated November 2, 1995).
10.02(k) Form of 1990 Incentive Stock Option Agreement.
10.03(k) Form of 1990 Non-Statutory Stock Option Agreement for
Employees/Officers/Directors.
10.04(k) Form of 1990 Non-Statutory Stock Option Agreement for
Consultants.
10.05(c) 1985 Stock Option Plan (Last Amended August 14, 1991).
10.06(e) Agouron Pharmaceuticals, Inc. 401(k) Plan
(Amended August 1992).
10.07(b) Agouron Pharmaceuticals, Inc. Employee Stock Purchase Plan
(October 15, 1992).
10.08(b) Agouron Pharmaceuticals, Inc. Flexible Benefits Plan
(December 10, 1992).
10.09(f) Agreement Two dated February 28, 1994 between Japan
Tobacco Inc. and the Company.
(Portions of the agreement receive confidential treatment
pursuant to an application filed April 25, 1994; File No.
0-15609).
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Exhibit
Number Exhibit
-------- ----------------------------------------------------------
10.10(g) Development and License Agreement dated December 1, 1994
between Japan Tobacco Inc. and the Company (Portions of
the agreement receive confidential treatment pursuant to
an application dated January 31, 1995).
10.11(h) First Amendment to Development and License Agreement
effective December 1, 1994 between Japan Tobacco Inc. and
the Company. (Confidential treatment has been requested
for portions of this agreement pursuant to an application
dated January 31, 1996. The underlying agreement was filed
as Exhibit 10.54 on Form 10-Q for the period ended
December 31, 1994, and portions thereof receive
confidential treatment pursuant to an order of the
Securities and Exchange Commission dated June 28, 1995.)
10.12(i) Amendment effective January 1, 1996 to the Agouron
Pharmaceuticals, Inc. 401(k) Plan.
10.13(j) 1996 Stock Option Plan.
10.14(j) Form of 1996 Incentive Stock Option Agreement.
10.15(j) Form of 1996 Non-Statutory Stock Option Agreement
for Employees/Officers/Directors.
10.16(j) Form of 1996 Stock Option
Agreement for Consultants 10.17(l) Second Amendment to
Development and License Agreement effective January 17,
1997 between Japan Tobacco Inc. and the Company
(Confidential treatment has been requested for
portions of this agreement pursuant to an application
dated August 21, 1997, as separately filed with the
Securities and Exchange Commission. The underlying
agreement was filed as Exhibit 10.54 on Form 10-Q for the
period ended December 31, 1994, and portions thereof
receive confidential treatment pursuant to an orde
of the Securities and Exchange Commission dated
June 28, 1995.)
10.18(l) Third Amendment to Development and License Agreement
effective December 1, 1996 between Japan Tobacco Inc. and
the Company. (Confidential treatment has been requested
for portions of this agreement pursuant to an application
dated August 21, 1997, as separately filed with the
Securities and Exchange Commission. The underlying
agreement was filed as Exhibit 10.54 on Form 10-Q for the
period ended December 31, 1994, and portions thereof
receive confidential treatment pursuant to an order of the
Securities and Exchange Commission dated June 28, 1995.)
10.19(l) VIRACEPT License Agreement between the Company and Japan
Tobacco Inc. and F. Hoffmann-La Roche Ltd dated June 30,
1997. (Confidential treatment has been requested for
portions of this agreement pursuant to an application
dated August 21, 1997, as separately filed with the
Securities and Exchange Commission.)
10.20(m) Form of 1998 Employee Stock Option Plan.
10.21(m) Form of 1998 Employee Non-Statutory Stock Option
Agreement.
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Exhibit
Number Exhibit
-------- ----------------------------------------------------------
10.22 License and Supply Agreement between the Company and Japan
Energy Corporation effective as of June 30, 1998.
(Confidential treatment has been requested for portions of
this agreement pursuant to an application dated August 4,
1998, as separately filed with the Securities and Exchange
Commission.)
10.23 Common Stock Purchase Agreement between The Immune
Response Corporation and the Company dated June 11, 1998.
(Confidential treatment has been requested for portions of
this agreement pursuant to an application dated August 4,
1998, as separately filed with the Securities and Exchange
Commission.)
10.24 Amendment to the VIRACEPT License Agreement between the
Company and Japan Tobacco Inc. and F. Hoffmann-La Roche
Ltd as of May 1, 1998. (Confidential treatment has been
requested for portions of this agreement pursuant to an
application dated August 4, 1998, as separately filed with
the Securities and Exchange Commission.)
21/#/ Subsidiaries of Agouron Pharmaceuticals, Inc.
23.1/#/ Consent of Independent Accountants.
27/#/ Financial Data Schedule. (Exhibit 27 is submitted as
an exhibit only in the electronic format of this Annual
Report on Form 10-K submitted to the Securities and
Exchange Commission.)
99/#/ Important Factors Regarding Forward-Looking Statements.
# Previously filed
(a) Incorporated by Reference to Form 8-K filed on May 23, 1997.
(b) Incorporated by Reference to Form 10-Q filed for the quarter ended
December 31, 1992. (c) Incorporated by Reference to Form 10-K filed for the
year ended June 30, 1991. (d) Incorporated by Reference for Form 8-K/A
filed on December 20, 1996. (e) Incorporated by Reference to Form 10-K
filed for the year ended June 30, 1992. (f) Incorporated by Reference to
Form 10-Q/A filed for the quarter ended March 31, 1994. (g) Incorporated by
Reference to Form 10-Q filed for the quarter ended December 31, 1994. (h)
Incorporated by Reference to Form 10-Q filed for the quarter ended December
31, 1995. (i) Incorporated by Reference to Form 10-Q filed for the quarter
ended March 31, 1996. (j) Incorporated by Reference to Form S-8 filed on
November 26, 1996. (k) Incorporated by Reference to Form 10-Q for the
quarter ended December 31, 1996. (l) Incorporated by Reference to Form 10-K
for the year ended June 30, 1997. (m) Incorporated by Reference to Form S-8
filed on February 19, 1998.
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AGOURON PHARMACEUTICALS, INC.
August 7, 1998 By: /s/ Steven S. Cowell
---------------------------------
Steven S. Cowell
Corporate Vice President
Chief Financial Officer
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PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED (DESIGNATED BY AN ASTERISK (*)
AND WHITE SPACE) AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
DATED AUGUST 4, 1998; FILE NO. 0-15609
LICENSE AND SUPPLY AGREEMENT
This License and Supply Agreement ("Agreement"), effective as of the 30th
day of June 1998, is by and between Japan Energy Corporation, a corporation duly
organized and existing under the laws of Japan and having its principal place of
business at 10-1, Toranomon 2-chome, Minato-ku, Tokyo 105-8407, Japan
(hereinafter referred to as "JE"), and Agouron Pharmaceuticals, Inc., a
corporation duly organized and existing under the laws of the State of
California, U.S.A., and having its principal place of business at 10350 North
Torrey Pines Road, La Jolla, California 92037, U.S.A. (hereinafter referred to
as "Agouron"). JE and Agouron are sometimes hereinafter each referred to as a
Party (collectively "Parties") to this Agreement.
BACKGROUND
JE possesses technical information and know-how pertaining to a certain
pharmaceutical compound designated JE-2147 and its related compounds that may be
useful in the treatment and prevention of Human Immunodeficiency Virus
infections and other diseases.
The Parties entered into a Confidentiality Agreement effective December 31,
1997 (the "Confidentiality Agreement") and a Material Transfer Agreement
effective December 31, 1997 (the "Material Transfer Agreement"), pursuant to
which Agouron has undertaken certain evaluations of JE-2147.
JE holds patents rights pertaining to JE-2147 and its related compounds.
Agouron desires to obtain a license from JE to enable Agouron to develop
and commercialize Product (as hereinafter defined) in certain countries of the
world, and JE is willing to grant such license on the terms and conditions
hereinafter set forth.
The Parties wish to cooperate under the terms of this Agreement to optimize
the development and commercialization of Product.
The Parties also wish to confirm their arrangement regarding the supply of
Compound by JE to Agouron and the supply of Product by Agouron to JE (both terms
as hereinafter defined).
On June 30, 1998, the parties executed and delivered to each other, by
telefax, a prior version of this Agreement. The parties now wish to supersede
such prior version of this Agreement and to formally enter into this revised
version of this Agreement.
NOW, THEREFORE, in consideration of the premises, and the mutual covenants,
benefits and obligations set forth herein, the Parties agree as follows:
<PAGE>
ARTICLE I - DEFINITIONS
When used in this Agreement, the following terms shall have the meanings
set out in this Article I. Except as otherwise explicitly provided, all
references to Articles and Sections shall refer to the Articles and Sections of
this Agreement, and all references to Attachments, Exhibits and Schedules shall
refer to the Attachments, Exhibits and Schedules to this Agreement, all of which
are incorporated herein by reference.
Section 1.01 "Affiliate" means any person, organization or entity that is,
directly or indirectly, controlling, controlled by, or under common control with
JE or Agouron, as the case may be. The term "control" (including, with
correlative meaning, the terms "controlled by" and "under common control with"),
as used with respect to any person, organization or entity, means the
possession, directly or indirectly, of the power to direct, or cause the
direction of, the management and policies of such person, organization or
entity, whether through the ownership of voting securities, or by contract or
court order or otherwise. The ownership of voting securities of a person,
organization or entity shall not, in and of itself, constitute "control" for
purposes of this definition, unless said ownership is of a majority of the
outstanding securities entitled to vote of such person, organization or entity.
Affiliate shall also mean a limited partnership in which a subsidiary of Agouron
and/or JE is a general partner.
Section 1.02 "Combination Product" means *
Section 1.03 "Compound" means the chemical compound known by the JE code
name JE-2147 ("JE-2147"), whose chemical structure is as follows:
*
(chemical structure)
The definition of Compound also means: (i) *
Section 1.04 "Compound Supply Plan" means the supply plan under which JE
will provide Compound to Agouron in accordance with the provisions of Section
4.04.
Section 1.05 "Control," "Controlled" or "Controlling" means *
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Section 1.06 "Development Program" means *
Section 1.07 "Development Program Patent Rights" means *
Section 1.08 "Development Program Technology" means *
3
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Section 1.09 "Dossier" means the document that is filed with and approved
by a government or health authority for purposes of Registration, for example, a
Marketing Authorization Application.
Section 1.10 "Effective Date" means June 30, 1998.
Section 1.11 "EMEA" means the European Agency for the Evaluation of
Medicinal Products.
Section 1.12 "FDA" means the United States Food and Drug Administration.
Section 1.13 "Field" means *
Section 1.14 "Initial Commercial Sale" means the first commercial sale of a
Product *
Section 1.15 "JE Territory" means Japan, Taiwan, South Korea and North
Korea.
Section 1.16 "JE Patent Rights" means: *
Section 1.17 "JE Technology" means *
Section 1.18 "Licensed Territory" means all countries of the world, except
for Japan, Taiwan, South Korea and North Korea.
Section 1.19 "MAA" means Marketing Authorization Application.
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Section 1.20 "Major Market European Country" means the United Kingdom,
France, Germany, Spain or Italy.
Section 1.21 "Net Sales" means the gross amount invoiced for Product by
Agouron, its Affiliates and sublicensees to non-Affiliated third parties, other
than separately itemized transportation costs, and sales taxes and other taxes
that are directly linked to and included in the gross amount invoiced, as
computed on a product-by-product basis for the countries concerned, less: *
Section 1.22 "New Drug Application" or "NDA" means a new drug application,
product license application or comparable regulatory submission to the FDA, the
EMEA or an equivalent agency of a country in the Territory for permission to
commence commercial sale of a Product.
Section 1.23 "Patent Rights" means, collectively, *
Section 1.24 "Product" means any *
Section 1.25 "Registration" means the official approval by the government
or health authority in a country (or supra-national organization, such as the
European Agency for the Evaluation of Medicinal Products) that is required for a
Product to be offered for sale in such country, including such authorizations as
may be required for the production, importation, pricing, reimbursement and sale
of such Product, and for subsequent regulatory filings for line extensions
and/or additional indications of such Product.
Section 1.26 "Territory" means *
Section 1.27 "Trade Dress" means any materials directly supporting the
commercialization of a Product, including, but not limited to, packaging,
package inserts, advertising or selling aids, brochures, mailings and/or other
marketing or packaging materials.
Section 1.28 "Trademark(s)" means any trademark selected and owned by a
Party and registered (or applied for) by such Party, its Affiliate(s) and
sublicensee(s) in the Territory for use in connection with the marketing of
Products. The definition of Trademark(s) shall not refer to trade names or
designs such as logos used by a Party to designate the name of such Party.
5
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Section 1.29 "United States" or "U.S." means the United States of America,
its territories, possessions and protectorates (including Puerto Rico), and the
District of Columbia.
Section 1.30 "Valid Claim" means a *
ARTICLE II - COMMERCIAL RIGHTS
Section 2.01 License Grants. To implement the development and
commercialization of Compound and/or Products, the Parties, subject to the other
applicable provisions of this Agreement, grant and accept the license rights
provided below in this Article II.
(a) Subject to the provisions of Section 2.01(c), and Article V, JE grants
Agouron the exclusive right, even as to JE (with right of sublicense), to use,
offer for sale, sell and/or import in or into the Licensed Territory, Compound
and Products under applicable JE Patent Rights and Development Program Patent
Rights, and using applicable JE Technology and Development Program Technology.
(b) *
(c) *
6
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(d) *
(e) Agouron grants JE *
(f) Agouron grants JE *
(g) Agouron grants JE *
7
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(h) Subject to the provisions of Section 4.04, Agouron shall have *
Subject to the provisions of Section 4.04, JE shall have a *
(i) *
(j) *
(k) *
8
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(l) Agouron agrees to use reasonable efforts to not sell Product in the
Licensed Territory to persons who it knows, or has reason to know, will resell
and/or transfer such Product outside of the Licensed Territory.
Section 2.02 Discontinuance of the Development Program
(a) Agouron shall, in a timely manner, use reasonable diligence in the
development and Registration of a Product in the Field in the Licensed
Territory. Reasonable diligence means a commercially reasonable standard of
effort based on the commercial potential for such Product in the Licensed
Territory. Development efforts undertaken by Agouron's Affiliates and
sublicensees shall be attributed to Agouron. *
(b) *
9
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Section 2.03 Diligent Efforts to Market *
ARTICLE III - SHARING AND PROTECTION OF INTELLECTUAL PROPERTY
Section 3.01 Patents.
(a) *
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(b) *
(c) *
(d) *
(e) *
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(f) *
(g) *
(h) *
(i) *
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(j) *
(k) *
(l) *
Section 3.02 Infringement of Patents of Third Parties. Each Party, its
Affiliates and sublicensees, and their respective employees and agents shall use
diligent efforts to avoid known
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infringement of patents of any third party *
Section 3.03 Trademarks. *
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Section 3.04 Information Exchange. *
Section 3.05 Confidentiality. Except as otherwise expressly specified
in this Agreement and except for the proper exercise of any license rights
granted or rights reserved under this Agreement, JE and Agouron shall each
keep in confidence and shall each use its best efforts to cause its
respective Affiliates, employees, directors, agents, consultants, clinical
research associates, outside contractors, clinical investigators and
sublicensees to whom it is permitted to disclose information pursuant to
the terms of this Agreement to retain in confidence all confidential and
proprietary information of the other Party, including the *
Without limiting the foregoing, JE and Agouron shall each exercise the
same degree of diligence and care with respect to the above-described
information as it exercises with respect to its other proprietary
information. Each Party represents to the other Party that it maintains
policies and procedures designed to prevent the unauthorized disclosure of
its proprietary data and information. *
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The preceding obligations of confidentiality shall be waived as to
information that the Party claiming waiver can demonstrate, based on
written records: (i) was in the public domain at the time of disclosure
hereunder; (ii) comes into the public domain through no fault of the Party
claiming waiver; (iii) was known to the Party claiming waiver prior to its
disclosure under this Agreement, unless such information was obtained from
the other Party on a confidential basis; (iv) is disclosed on a
non-confidential basis to the Party claiming waiver by a third party having
a lawful right to make such disclosure on a non-confidential basis; (v) is
published with the prior mutual agreement of the Parties, after having
given consideration to appropriate commercial factors; (vi) comes into the
public domain through governmental publication of a patent application; or
(vii) is required to be disclosed to file a patent or other regulatory
application or to comply with applicable laws and regulations. *
The Parties acknowledge and agree that the Parties' rights and
obligations under the Confidentiality Agreement and the Material Transfer
Agreement between the Parties which were both originally entered into on
December 22, 1997 are hereby superseded by the provisions of this Section
3.05.
Section 3.06 Publication. JE and Agouron each acknowledges the
interests of the other Party in publishing certain of the results of its
development and Registration of a Product to obtain recognition within the
scientific community and to advance the state of scientific knowledge. The
Parties also recognize their mutual interests in obtaining valid patent
protection for their drug products. Consequently, a Party, its employees or
consultants wishing to make a publication shall *
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ARTICLE IV - DEVELOPMENT AND COMMERCIALIZATION STRUCTURE
Section 4.01 Coordination. Coordination of the Parties' development
and commercialization efforts for Compound and Products in the Licensed
Territory shall be carried out as specified in Sections 4.02 and 4.03.
Section 4.02 Development and Registration; Responsibility for
Development Costs. JE and Agouron acknowledge their mutual intention to
cooperate in a commercially reasonable manner in the timely development of
Compound and Products in the Territory. The Parties further acknowledge
their mutual willingness to discuss ad hoc agreements to establish
appropriate mechanisms for such cooperation. Recognizing the importance of
timely initiation of development activities, however, JE and Agouron agree
to the following basic approach to development of Compound and Products in
the Licensed Territory, and to the conduct and funding of their respective
development activities.
(a) *
(b) The Parties acknowledge that it will be necessary to amend and
update the Development Program as additional information becomes available
concerning the prerequisites necessary for Registration of Product in the
Licensed Territory. *
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(c) As soon as possible after the execution of this Agreement, the
Parties shall promptly reach agreement on the basic terms under which JE
will manufacture and supply Compound to Agouron, its Affiliates and
sublicensees *
(d) Agouron shall be responsible *
(e) Agouron,* , shall be responsible for submission of Dossiers for a
Product to the regulatory authorities in the Licensed Territory in pursuit
of approvals to sell such Product and *
All Dossiers for Product in the Licensed Territory shall be owned by
and be in the name of Agouron.
(f) JE shall cooperate with Agouron to *
(g) JE will be responsible for *
(h) JE shall be responsible *
(i) To the extent required to support Registrations of a Product (such
as for Investigational New Drug Applications and New Drug Applications),
Agouron shall have
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*
(j) Each Party agrees to use its diligent efforts in responding in a
timely manner, *
(k) Agouron shall keep JE informed of its progress in the development
and Registration of Products. This information exchange shall include, *
(l) JE and Agouron shall each use qualified persons in the development
activities of the Development Program.
(m) All work in connection with the development of Compound or
Products, to the extent required by applicable laws or regulations, shall
be conducted in accordance with Good Laboratory Practices, Good
Manufacturing Practices and Good Clinical Practices, as such rules of
practice are amended from time to time. Each Party in the conduct of its
activities shall comply with all applicable laws, rules and regulations of
each jurisdiction within the Territory
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that are applicable to the development, testing, manufacture, labeling,
packaging, storage, marketing, distribution, sale, promotion and
import or export of Product.distribution, sale, promotion and import
or export of Product.
(n) *
Section 4.03 Marketing. * JE and Agouron agree to the following basic
approach to the marketing of Products in the Licensed Territory, and to the
conduct of their marketing activities in their respective marketing
territories.
(a) Agouron shall be responsible for *
(b) *
(c) Agouron shall keep JE informed of Agouron's current and planned
marketing activities in the Licensed Territory. *
JE shall keep Agouron informed of JE's marketing activities in the JE
Territory. *
(d) Unless prohibited by law or regulation, the labeling for a Product
in the countries in the Licensed Territory shall *
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(e) *
(f) Agouron and JE shall each use qualified persons in its marketing
activities for a Product in its respective marketing territories.
(g) Agouron shall be responsible for responding, in a timely manner, *
(h) Each Party, its Affiliates and sublicensees, agrees throughout the
duration of this Agreement to notify the other Party immediately in English
of *
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(i) Each Party further agrees to immediately notify the other Party of
any information *
The information to be provided hereunder shall be provided in English.
(j) Without limiting the foregoing, it is also understood that each
Party may notify its Affiliates or sublicensees of *
Section 4.04 Supply of Compound. It is anticipated that timely
development of Compound and/or a Product will require the manufacture of
significant amounts of the Compound, and that successful worldwide
commercialization of a Product will require annual production of large
quantities of the Compound.
(a) In accordance with the provisions of Section 4.04, Agouron shall
purchase from JE, and JE shall timely deliver Compound for use in the
development and Registration activities for Compound and/or Product,
including using Compound to make Product to be used in clinical studies and
trials and for special license sales. *
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(b) In accordance with the provisions of Section 4.04, Agouron shall
purchase from JE, and JE shall timely deliver Compound for use in making
the finished dosage form(s) of Product to be sold in the Licensed
Territory, *
(c) JE shall maintain books of account and complete and accurate
records of all of its FBMCC of procuring and/or producing such Compound *
(d) *
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(e) *
(i)
(ii)
(iii)
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(iv) Sale and delivery of Compound will be subject to an agreed-upon
form of purchase order being issuedby Agouron and accepted by JE. *
(v) *
(vi) *
(vii) *
(f) *
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(i) *
(ii) *
(g) *
Section 4.05 Supply of Product. The details for manufacturing Product
will be determined after the execution of this Agreement, according to the
following conditions:
(a) Agouron shall be responsible for manufacturing Product.
(b) *
(c) *
26
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(d) *
(e) *
(i) *
(ii) *
27
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(iii) *
(iv) *
(v) *
(f) *
(g) *
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(h) *
ARTICLE V - ADVANCE PAYMENTS AND ROYALTIES
Section 5.01 Advanced Payments and Royalties.
(a) Subject to the terms and conditions of this Agreement and in
consideration for the rights granted to Agouron under this Agreement,
Agouron shall make the following one-time-only payments to JE:
<TABLE>
<CAPTION>
PAYMENT
MILESTONE EVENT (U.S. Dollars)
<S> <C>
(i) Within thirty (30)days of execution of this Agreement $6,000,000
(ii) * *
(iii)* *
(iv) * *
(v) * *
(vi) * *
TOTAL PAYMENTS: $26,000,000
* *
</TABLE>
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*
(b) *
(c) The Parties agree that the calculation of the amount of royalties
due shall be subject to and in accordance with the following provisions:
(i) *
(ii) *
(iii) *
30
<PAGE>
(iv) *
(v) *
(vi) *
(vii) *
(viii) *
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Section 5.02 General Licensing Terms.
(a) *
(b) The Parties agree that the accounting and payment of royalties
shall comply with the following terms and conditions:
(i) *
(ii) *
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(iii) *
(iv) Agouron shall maintain and cause its Affiliates and sublicensees
to maintain books of account and complete and accurate records pertaining
to the sale or other disposition of Products and of the royalties and other
amounts payable under this Agreement in sufficient detail to *
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(c) *
(d) *
Section 5.03 Foreign Currency.
(a) Net Sales and any milestone and royalty amounts shall be stated in
United States dollars. Remittal of milestone payments and royalties shall
be made in United States dollars. *
(b) *
ARTICLE VI - TERM AND TERMINATION
Section 6.01 Termination for Breach *
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Section 6.02 Termination by Agouron.
(a) *
(b) *
35
<PAGE>
(c) *
Section 6.03 Termination by Mutual Agreement. The Parties may at any
time terminate this Agreement, in part or in its entirety, by mutual
written agreement.
Section 6.04 Termination Upon Bankruptcy.. In the event that a Party
is subject to any proceeding under the bankruptcy laws, including
appointment of a receiver, trustee, liquidator or other custodian of its
business or substantially all of its assets, and such proceeding, if
involuntary, is not dismissed or discharged within one hundred fifty (150)
days after such proceeding is instituted, or upon the liquidation,
dissolution, or winding up of its business, then this Agreement, at the
election of the other Party, shall be terminated in its entirety for cause
upon a notice in writing of at least fifteen (15) days from the Party who
is not bankrupt or insolvent.
Section 6.05 Disposition of Inventory In the event of the cancellation
or termination of any license rights with respect to a Product, the
inventory of such Product may be sold for up to * after date of
cancellation or termination, provided the required payments, if any, are
paid thereon.
Section 6.06 Effect of Termination. *
ARTICLE VII - WARRANTIES AND COVENANTS;
INDEMNITIES; INSURANCE; DISPUTE RESOLUTION
Section 7.01 Warranties and Covenants.
(a) Each Party represents and warrants to the other Party that it has
the legal power, authority and right to enter into this Agreement and to
perform all of its respective obligations set forth herein, including the
attachments hereto.
36
<PAGE>
(b) JE acknowledges and represents that the patents and patent
applications listed in Schedule 2 are the only patents and patent
applications included within the JE Patent Rights that are jointly owned by
JE and a third party, and that such patents and patent applications are
only subject to the conditions and restrictions noted on Schedule 2 and,
except as otherwise noted on Schedule 2, that the license of such JE Patent
Rights to Agouron under the terms of this Agreement do not require the
consent of such joint owner. *
(c) JE represents and warrants that, as of the date this Agreement is
executed, it was not aware of the existence of any patent applications or
patents owned and Controlled by a third party covering Compound that might
materially prevent the Parties from commercializing Compound in the
Licensed Territory, except for the patent application listed in Schedule
7.01(c).
(d) JE represents and warrants that: (i) it has the right to grant the
licenses set forth in Article II; and (ii) there are no suits, claims or
proceedings pending in any court or by or before any governmental body or
agency with respect to the JE Patent Rights or JE Technology that would
materially interfere with the ability of Agouron to fully exercise the
licenses granted to it under this Agreement, including the exclusive
license rights under Section 2.01(a). Agouron represents that, to the best
of its knowledge, it does not have any know-how, trade secret, experimental
data, formula, expert opinion, experimental procedure or other confidential
and/or proprietary information specifically concerning the Compound,
intermediates thereof, or a Product that was developed or acquired by or on
behalf of Agouron before the Effective Date of this Agreement that is
necessary for either: (i) the formulation (including sustained-release
formulations), manufacture, use and/or application of Product; or (ii)
obtaining Registration of Product, including, but not limited to,
information and data arising out of pre-clinical and clinical trials
involving Product and all NDA applications for Product, and which is under
the Control of Agouron.
(e) Each Party covenants that it shall not commit any act or fail to
take any action that, in any significant way, would be in conflict with its
material obligations under this Agreement and the attachments hereto.
(f) Each Party promises to comply in all material respects with the
terms of the licenses granted to it under this Agreement, and with all
federal, state, local and foreign laws, rules and regulations applicable to
the development, manufacture, distribution, import and export, and sale of
pharmaceutical products pursuant to this Agreement.
(g) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH OF
THE PARTIES MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER INCLUDED WITHIN
THE CLAIMS OF THE PATENT RIGHTS, INCLUDING THE COMPOUND. THE PARTIES
UNDERSTAND AND AGREE THAT DEVELOPMENT AND COMMERCIALIZATION OF COMPOUND
AND/OR PRODUCTS WILL INVOLVE APPROVAL BY REGULATORY AUTHORITIES, AND THAT
NO PARTY IS GUARANTEEING THE SAFETY OR EFFICACY OF COMPOUND AND/OR
PRODUCTS,
37
<PAGE>
OR THAT COMPOUND AND/OR PRODUCTS WILL RECEIVE THE REQUIRED APPROVALS.
Section 7.02 Indemnities; Insurance.
(a) Agouron shall indemnify and hold harmless JE and its Affiliates,
employees, and agents (a "JE Indemnified Party") from and against any and
all liabilities, losses, damages, costs, or expenses (including reasonable
investigative and attorneys' fees) which the JE Indemnified Party may
incur, suffer or be required to pay resulting from or arising in connection
with any product liability or other claims (other than claims for patent
infringement) arising from the use by any person of any Product, to the
extent such product liability or other claim results from the negligent,
reckless or intentional misconduct of Agouron, its Affiliates or
sublicensees, or their respective employees and agents, or on account of
Agouron's failure to fulfill its obligations or undertakings under this
Agreement; provided, however, that in no event shall Agouron be liable to a
JE Indemnified Party for any indirect, incidental, special or consequential
damages, including loss of revenues or profits from sales of Products.
(b) JE shall indemnify and hold harmless Agouron and its Affiliates,
employees, and agents (an "Agouron Indemnified Party") from and against any
and all liabilities, losses, damages, costs, or expenses (including
reasonable investigative and attorneys' fees) that the Agouron Indemnified
Party may incur, suffer or be required to pay, resulting from or arising in
connection with any product liability or other claims (other than claims
for patent infringement) arising from the use by any person of any Product,
to the extent such product liability or other claim results from the
negligent, reckless or intentional misconduct of JE, its Affiliates or
sublicensees, or their respective employees and agents, or on account of
JE's failure to fulfill its obligations or undertakings under this
Agreement; provided, however, that in no event shall JE be liable to an
Agouron Indemnified Party for any indirect, incidental, special or
consequential damages, including loss of revenues or profits from sales of
Products.
(c) To the extent that a product liability or other claim (other than
a claim for patent infringement) results from the negligent, reckless or
intentional misconduct of more than one Party, their Affiliates,
sublicensees, or their respective employees and agents, the Parties agree
to share in an equitable manner such liabilities, losses, damages, costs,
or expenses in proportion to the relative fault of each of the Parties,
their Affiliates, sublicensees, or their respective employees and agents.
(d) Unless the Parties agree otherwise, all other liabilities, losses,
damages, costs, or expenses (including reasonable investigative and
attorneys' fees) under this Section 7.02 relating to or involving a Product
in a country, except as provided by the terms of Sections 7.02(a), (b) and
(c), shall be the responsibility of the Party marketing such Product in
such country. The Party marketing a Product in a country shall indemnify
the non-marketing Party in such country from and against any and all
liabilities, losses, damages, costs, or expenses (including reasonable
investigative and attorneys' fees) which such non-marketing Party may
incur, suffer or be required to pay resulting from or arising in connection
with any product liability or other claims (other than claims for patent
infringement) arising from the use by any person of such Product in
38
<PAGE>
such country. Section 3.02 sets forth the Parties' liability obligations
arising from claims for patent infringement.
(e) The aforesaid obligations of the indemnifying Party shall be
subject to the indemnified Party fulfilling the following obligations:
(i) The indemnified Party shall fully cooperate with the indemnifying
Party in the defense of any claims, actions, etc., which defense shall be
controlled by the indemnifying Party.
(ii) The indemnified Party shall not, except at its own cost,
voluntarily make any payment or incur any expense with respect to any claim
or suit without the prior written consent of the indemnifying Party, which
consent such Party shall not be required to give.
(iii) The indemnified Party shall notify the indemnifying Party
promptly after receipt of a notice of the commencement of any litigation or
threat thereof that may reasonably lead to a claim for indemnification.
(f) The Parties agree to maintain appropriate amounts of product
liability insurance coverage and to have the other Party included as an
additional insured on such policies.
Section 7.03 Dispute Resolution. In the event of any controversy or
claim arising out of or relating to any provision of this Agreement or any
term or condition hereof, or the performance by a Party of its obligations
hereunder, the Parties shall try to settle their differences amicably
between themselves. If the representatives of the Parties are unable to
reach agreement on any such issue, the issue shall be submitted for
consideration, in the case of Agouron, to a designee of its Chief Executive
Officer and, in the case of JE, to a designee of its Managing Director of
Pharmaceuticals and Biobusiness Division. If such designees are unable to
agree, then the issue shall be resolved, in the case of Agouron, by its
Chief Executive Officer and, in the case of JE, by its Managing Director of
Pharmaceuticals and Biobusiness Division. Any unresolved issues arising
between the Parties relating to, arising out of, or in any way connected
with this Agreement or any term or condition hereof, or the performance by
a Party of its obligations hereunder, whether before or after termination
of this Agreement, except as otherwise provided in this Agreement, shall be
finally resolved by binding arbitration. Whenever a Party shall decide to
institute arbitration proceedings, it shall give written notice to that
effect to the other Party. The Party giving such notice shall refrain from
instituting the arbitration proceedings for a period of sixty (60) days
following such notice. If JE is the Party initiating the arbitration, the
arbitration shall be held in San Diego, California, according to the rules
of the American Arbitration Association ("AAA"). If Agouron is the Party
initiating the arbitration, the arbitration shall be held in Tokyo, Japan,
according to the rules of the Japan Commercial Arbitration Association
"JCAA"). The arbitration shall be conducted by a single arbitrator
mutually chosen by the Parties. If the Parties cannot agree upon a single
arbitrator within fifteen (15) days after the institution of the
arbitration proceeding, then the arbitration shall be conducted by a panel
of three arbitrators appointed in accordance with applicable AAA or JCAA
39
<PAGE>
rules; provided, however, that each Party shall, within thirty (30) days
after the institution of the arbitration proceedings, appoint one
arbitrator with the third arbitrator being chosen by the other two
arbitrators. If only one Party appoints an arbitrator, then such arbitrator
shall be entitled to act as the sole arbitrator to resolve the controversy.
Any arbitration hereunder shall be conducted in the English language, to
the maximum extent possible. All arbitrator(s) eligible to conduct the
arbitration must agree to render their opinion(s) within thirty (30) days
of the final arbitration hearing. The arbitrator(s) shall have the
authority to grant injunctive relief and specific performance and to
allocate between the Parties the costs of arbitration in such equitable
manner as he/she determines; provided, however, that each Party shall bear
its own costs and attorneys' and witness' fees. Notwithstanding the terms
of this Section 7.03, a Party shall also have the right to obtain, prior to
the arbitrator(s) rendering the arbitration decision, provisional remedies,
including injunctive relief or specific performance, from a court having
jurisdiction thereof. The arbitrator(s) shall, upon the request of either
Party, issue a written opinion of the findings of fact and conclusions of
law and shall deliver a copy to each of the Parties. Decisions of the
arbitrator(s) shall be final and binding on all of the Parties. Judgment on
the award so rendered may be entered in any court having jurisdiction
thereof.
ARTICLE VIII - DISCLOSURE OF AGREEMENT
Section 8.01 Disclosure of Agreement Except as agreed to by the
Parties, and as required for the performance of its obligations
hereunder, neither JE nor Agouron shall release any information to any
third party with respect to any of the terms of this Agreement without
the prior written consent of the other Party, which consent shall not
unreasonably be withheld. This prohibition includes, but is not
limited to, press releases, educational and scientific conferences,
promotional materials and discussions with the media. The Parties
shall jointly prepare and release a public announcement regarding the
existence of this Agreement. If a Party determines that it is required
by law, including securities laws and regulations pertaining to
publicly traded companies, to release information to any third party
regarding the terms of this Agreement, it shall notify the other Party
of this fact prior to releasing the information. The notice to the
other Party shall include the text of the information proposed for
release. The other Party shall have the right to confer with the
notifying Party regarding the necessity for the disclosure and the
text of the information proposed for release, but the notifying Party
shall have the discretion to release the information as it deems
necessary to fulfill its requirements under law. Notwithstanding the
preceding, JE and Agouron shall each have the right to disclose the
terms of this Agreement to persons it proposes to enter into business
relationships with, if such persons are subject to confidentiality and
use obligations equivalent to those applicable to the disclosing Party
hereunder.
ARTICLE IX - GENERAL PROVISIONS
Section 9.01 No Implied Licenses Only the licenses granted
pursuant to the express terms of this Agreement shall be of any legal
force and effect. No license rights shall be created by implication or
estoppel.
40
<PAGE>
Section 9.02 No Waiver Any failure by a Party to enforce any
right which it may have hereunder in any instance shall not be deemed
to waive any right which it or the other Party may have in any other
instance with respect to any provision of this Agreement, including
the provision which such Party has failed to enforce.
Section 9.03 Severability; Government Acts. In the event that any
provision of this Agreement is judicially, or by a competent
authority, determined to be unenforceable, in part or in whole, with
regard to any or all of the countries in the Territory, the remaining
provisions or portions of this Agreement shall be valid and binding to
the fullest extent possible, and the Parties shall endeavor to
negotiate additional terms, as feasible, in a timely manner so as to
fully effectuate the original intent of the Parties, to the extent
possible, in the applicable countries. In the event that any act,
regulation, directive, or law of a country, including its departments,
agencies or courts should make impossible or prohibit, restrain,
modify or limit any material act or obligation of a Party under this
Agreement, and if any Party to this Agreement is materially adversely
affected thereby, the Parties shall attempt in good faith to negotiate
a lawful and enforceable modification to this Agreement that
substantially eliminates the material adverse effect; provided that,
failing any agreement in that regard, the Party who is materially
adversely affected shall have the right, at its option, to suspend or
terminate this Agreement as to such country.
Section 9.04 Ambiguities. Ambiguities, if any, in this Agreement
shall not be construed against any Party, irrespective of which Party
may be deemed to have authored the ambiguous provision.
Section 9.05 Notification and Governmental Approvals. After
execution of this Agreement, to the extent required by law, Agouron,
after consultation with JE, shall notify the appropriate authorities
in the Licensed Territory about the terms of this Agreement; JE, after
consultation with Agouron, shall notify the appropriate authorities in
the JE Territory about the terms of this Agreement. JE and Agouron
shall obtain any government approval(s) required to enable this
Agreement to become effective, or to enable any payment hereunder to
be made, or any other obligation hereunder to be observed or
performed. Third-party costs and expenses incurred in notifying
governmental authorities or obtaining governmental approval shall be
shared equally between the Parties. Each Party shall keep the other
Party informed of its progress in notifying such governmental
authorities and obtaining such government approval, and shall
cooperate with the other Party in any such efforts.
Section 9.06 U.S. Export Controls The Parties agree to comply
with the United States laws and regulations governing exports and
re-exports of the Compound, intermediates thereof, Products,
Development Program Technology, JE Technology or any other technology
or software developed or disclosed as a result of this Agreement. The
Parties acknowledge that any performance under this Agreement is
subject to any restrictions which may be imposed by the United States
laws and regulations governing exports and re-exports. Each Party
agrees to provide the other Party with any reasonable assistance,
including written assurances which may be required by a competent
governmental authority and by applicable laws and regulations as a
precondition for any disclosure of technology or software by the other
Party under the terms of
41
<PAGE>
this Agreement. The obligations of this Section 9.06 shall
survive termination or expiration of this Agreement.
Section 9.07 No Agency. JE and Agouron shall have the status of
independent contractors under this Agreement and, except as otherwise
explicitly provided in this Agreement, nothing in this Agreement shall
be construed as an authorization of a Party to act as an agent of the
other Party.
Section 9.08 Captions; Number; Official Language. The captions of
the articles and sections of this Agreement are for general
information and reference only, and this Agreement shall not be
construed by reference to such captions. Where applicable in this
Agreement, the singular includes the plural and vice versa. To the
extent appropriate, the meaning of terms whose first letters are
capitalized, but which are variations of terms that are defined
elsewhere in this Agreement, shall each have the same meaning as the
defined term. English shall be the official language of this Agreement
and any license agreement provided for hereunder, and all
communications between the Parties hereto shall be conducted in that
language.
Section 9.09 Force Majeure. A Party shall not be responsible to
the other Party for any failure, delay or interruption in the
performance of any of its obligations under this Agreement if such
failure, delay or interruption is caused by any act of God,
earthquake, fire, casualty, flood, war, epidemic, riot, insurrection,
or any act, exercise, assertion or requirement of a governmental
authority, or other cause beyond the reasonable control of the Party
affected if the Party affected shall have used its best efforts to
avoid such occurrence. If a Party believes that the performance of any
of its obligations under this Agreement shall be delayed or
interrupted as a result of any of the reasons stated in this Section
9.09, and provided such Party is able to do so, such Party shall
promptly notify the other Party of such delay or interruption and the
cause therefor, and shall provide such other Party with its estimate
of when the performance of its obligations shall recommence. When the
Party affected is able to recommence the performance of obligations
delayed or interrupted as a result of any of the reasons stated in
this Section 9.09, it shall so notify the other Party and, except as
otherwise provided in this Agreement, it shall promptly resume the
performance of such obligations.
Section 9.10 Amendment. This Agreement, including the
Attachments, Exhibits and Schedules, constitutes the full agreement of
the Parties with respect to the subject matter of this Agreement, and
incorporates any prior discussions between them with respect to such
subject matter. This Agreement supersedes the rights and obligations
of JE and Agouron under the Confidential Disclosure Agreement and the
Material Transfer Agreement between the Parties which were both
originally entered into on December 22, 1997. This Agreement,
including the attachments hereto, shall not be amended, supplemented
or otherwise modified, except by an instrument in writing signed by
duly authorized officers of the Parties.
Section 9.11 Applicable Law. This Agreement shall be construed
and the rights of the Parties shall be determined in accordance with
the laws of Japan; provided, however, that with regard to issues
concerning the validity and construction of patents, trademarks and
other
42
<PAGE>
intellectual property, the rights of the Parties shall be
determined in accordance with the laws of the country under which such
intellectual property rights were granted.under which such
intellectual property rights were granted.
Section 9.12 Notices. Any notice required or permitted to be
given under this Agreement shall be in writing and shall be given in
person, delivered by recognized overnight delivery service, sent by
mail (certified or registered, or air mail for addresses outside of
the continental U.S.), or by telefax (or other similar means of
electronic communication), whose receipt is confirmed by confirming
telefax, and addressed, in the case of JE, to its Managing Director of
Pharmaceuticals and Biobusiness Division and, in the case of Agouron,
to the Senior Vice President, Commercial Affairs (with a copy to the
Legal Department), at the addresses shown at the beginning of this
Agreement, or such other person and/or address as may have been
furnished in writing to the notifying Party in accordance with the
provisions of this Section 9.12. Except as otherwise provided herein,
any notice shall be deemed delivered upon the earliest of: (i) actual
receipt; (ii) four (4) business days after delivery to such recognized
overnight delivery service; (iii) eight (8) business days after
deposit in the mail; or (iv) the date of receipt of the confirming
telefax.
Section 9.13 Assignment. This Agreement shall be assignable by a
Party to its Affiliates; if this Agreement is assigned by a Party to
an Affiliate, the Party shall still be responsible for all of its
obligations as specified in this Agreement. This Agreement shall only
be assignable by a Party to a non-Affiliated third party with the
prior written consent of the other Party, which consent may be
withheld at the sole discretion of such other Party. Any such
assignment without the prior written consent of the other Party shall
be void. Notwithstanding the preceding, in the event of: (i) a sale or
transfer of all or substantially all of a Party's assets; or (ii) the
merger or consolidation of a Party with another company, this
Agreement shall be assignable to the transferee or successor company.
Section 9.14 Succession. This Agreement shall be binding upon all
successors in interest, assigns, trustees and other legal
representatives of the Parties.
43
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement at a formal signing ceremony on July 28, 1998, in duplicate
originals, by their respective officers thereunto duly authorized.
JAPAN ENERGY CORPORATION AGOURON PHARMACEUTICALS, INC.
By: /s/ Akihiko Nimoyama By: /s/ Peter Johnson
Name: Akihiko Nimoyama Name: Peter Johnson
Title: Representative Director and Title: Chief Executive Officer
President and President
By: /s/ Ken Irino By: /s/ Gary Friedman
Name: Ken Irino Name: Gary E. Friedman, Esq.
Title: Senior Management Director Title: Corporate V.P. and General Counsel
WITNESSED BY:
By: /s/ Toshinobu Miyake By: /s/ R. Kent Snyder
Name: Toshinobu Miyake Name: R. Kent Snyder
Title: Assoc. Dir., General Mgr. of Title: Senior Vice President
Coordination Business Development
Pharmaceuticals & Biobusines
Division
44
<PAGE>
S1-1
SCHEDULE 1
JE PATENTS AND PATENT APPLICATIONS
*
S1-1
<PAGE>
S2-1
SCHEDULE 2
*
S2-1
<PAGE>
*
SCHEDULE 7.01(c)
*
S7.01(c)-1
<PAGE>
*
EXHIBIT 1
DEVELOPMENT PROGRAM
*
E1-1
<PAGE>
ATTACHMENT 1
TRADEMARK LICENSE
*
A1-1
<PAGE>
PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED (DESIGNATED BY AN ASTERISK (*)
AND WHITE SPACE) AND FILED SEPARATELY WITH THE SECURITIES AND ECHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT DATED AUGUST 4, 1998;
FILE NO. 0-15609
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement ("Agreement") is made and entered
into as of June 11, 1998 by and between THE IMMUNE RESPONSE CORPORATION., a
Delaware corporation (hereinafter referred to as the Company) and AGOURON
PHARMACEUTICALS, INC., a California corporation ("Agouron"), which parties
hereby agree as follows:
1. Authorization; Commitment; Closing
1.01 Authorization. The Company proposes to authorize, issue and sell to
Agouron on or before January 15, 2000, certain amounts of its common stock,
$.0025 par value ("Common Stock"), as described and determined below.
1.02 Commitment. Subject to Paragraph 5.06 and the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, the Company agrees to issue and sell to Agouron, and Agouron agree to
purchase from the Company as of the dates and for the consideration set forth
below, the number of shares of the Company's Common Stock as determined below.
The Common Stock which Agouron is acquiring pursuant to the terms of this
Agreement is hereinafter referred to as "Restricted Common Stock". Agouron is
hereinafter sometimes referred to as the "Purchaser." The purchases of the
Common Stock shall occur on the seven purchase dates set forth below. On each
purchase date, Agouron shall be entitled to acquire such number of shares of
Restricted Common Stock (rounded up to the nearest whole share) as may be
purchased for $2,000,000, at a purchase price equal to the stated premium set
forth opposite the applicable purchase date, over the then fair market value
("FMV") of the Common Stock on The NASDAQ Stock Market. FMV shall be defined as
the average closing price of the Common Stock on The NASDAQ Stock Market for the
five (5) trading days immediately preceding the referenced purchase date. In the
event the FMV is * on any purchase date, the premium
applicable to such purchase date shall be adjusted to *
<TABLE>
<CAPTION>
Purchase Date Purchase Price *
------------- --------------
<S> <C> <C>
June 11, 1998 $2,000,000 *
October 15, 1998 $2,000,000 *
January 15, 1999 $2,000,000 *
April 15, 1999 $2,000,000 *
July 15, 1999 $2,000,000 *
October 15, 1999 $2,000,000 *
January 15, 2000 $2,000,000 *
</TABLE>
1.03 Closing. Separate closings of the purchase and sale of the
Restricted Common Stock ("Closings") shall occur on each of the purchase dates
set forth above and shall take place at such time and place as the Company and
Purchaser shall agree. At each Closing the Company shall deliver to Purchaser
the number of shares of Restricted Common Stock required by Paragraph 1.02,
above, upon delivery to the Company by Purchaser of a certified check or wire
transfer of funds in the amount of $2,000,000. The Restricted Common Stock to be
delivered to Agouron hereunder at each Closing will be evidenced by a single
certificate
<PAGE>
registered in Agouron's name or in the name of such nominee as Agouron may
specify and, when issued in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly authorized, validly issued, fully
paid, nonassessable and free and clear of any liens or encumbrances caused or
created by the Company (except that such Restricted Common Stock of the Company
will be subject to restrictions on transfer under federal and applicable state
securities laws).
2. Representations
2.01 Representations of the Company. The Company represents and warrants
as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority which are
necessary to own and operate its business and properties and
to carry on its business as it is being conducted. The Company
is duly licensed and qualified and in good standing in the
State of California and in such other jurisdictions in which
the ownership or lease of property or the conduct of its
business makes such licensing or qualification necessary.
(b) There are no proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company in
any court or before any governmental authority or agency or
arbitration board or tribunal which involve the possibility of
materially and adversely affecting the properties, business,
prospects or condition (financial or otherwise) of the
Company.
(c) The issuance and sale of the Restricted Common Stock and
compliance by the Company with all of the provisions of this
Agreement are within the corporate powers of the Company and
have been duly authorized by all proper corporate action on
the part of the Company and will not (i) conflict with or
result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation of the Company or the Bylaws of the Company,
(ii) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default
under or give any party the right to terminate or accelerate
performance under any other agreement or instrument to which
the Company is a party (iii) require consent under any other
contract to which the Company is a party, (iv) result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to the terms of
any other contract to which the Company is a party or (v)
conflict with any provision of any applicable judgment,
decree, order, statute, rule, or regulation of any court or
any public, governmental or regulatory agency or body having
jurisdiction over the Company.
(d) This Agreement is a valid and binding agreement of the
Company and is enforceable against the Company in accordance
with the terms hereof, except as such enforceability may be
affected by applicable bankruptcy laws and equitable remedies.
2
<PAGE>
(e) The authorized capital stock of the Company consists of
5,000,000 shares of preferred stock (preferred stock) and
40,000,000 shares of common stock. As of the date hereof, 200
shares of its Series F Convertible Preferred Stock are
outstanding. This preferred stock is convertible into common
stock initially at a conversion price equivalent to $14.07 per
share of common stock. If the Company's common stock does not
trade at prices higher than $14.07 per share over a period of
time, the conversion price will be adjusted downward on April
24, 1999 (or sooner if the Company issues common stock at less
than $14.07 per share) and quarterly thereafter. As of June 9,
1998, 22,900,350 shares of voting common stock are
outstanding. As of the date hereof, 4,497,749 stock options
issued pursuant to the Company's stock option plans and two
(2) warrants to purchase a total of 2,051,281 shares of voting
stock are outstanding. Up to 6,180,000 shares of common stock
may be issued under the Company's stock option plans. Except
as set forth above, there are no other options, warrants,
conversion privileges, preemptive rights, or rights of first
refusal granted by the Company in favor of any other person
presently outstanding or in existence to purchase or acquire
any of the authorized but unissued Common Stock of the
Company, other than any of such items granted pursuant to this
Agreement. The Company has provided to Purchaser copies of its
currently in effect Articles of Incorporation and Bylaws, its
Form 10-K for the year ended December 31, 1997, its 1997
Annual Report, its Proxy statement dated April 27, 1998 and
its Form 10-Q for the quarter ended March 31, 1998. The
Company warrants that the information contained in such
documents as updated and supplemented prior to the date of the
Closing is true and correct and when taken as a whole does not
omit a fact necessary to make the information contained
therein in light of the circumstance under which the documents
were made (taking into account, without limitation, the type
of transaction contemplated by this Agreement and the
sophistication and nature of the Purchaser), not misleading.
The Company acknowledges that the Purchaser is relying on the
written documentation provided by the Company to Purchaser as
described above in making its decision to purchase the
Restricted Common Stock.
(f) Since March 31, 1998, except for the sale of 200 shares of
Series F Convertible Preferred Stock for $10 million, there
has not been any change in the assets, liabilities, financial
condition or operations of the Company other than changes in
the ordinary course of business, none of which individually or
in the aggregate have had a material adverse affect on such
assets, liabilities, financial condition or operations of the
Company.
2.02 Representations of the Purchaser. The Purchaser represents and
warrants as follows:
(a) It is the intent of the Purchaser that its purchase of the
Restricted Common Stock contemplated by this Agreement shall
constitute a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act") and
any applicable state securities laws.
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<PAGE>
(b) Purchaser will not offer or sell any Restricted Common
Stock except pursuant to an effective registration statement
under the Securities Act or in transactions which do not
require registration under the Securities Act.
(c) Purchaser is a corporation duly organized and validly
existing under the laws of the State of California is in good
standing under such laws and has all requisite corporate
powers and authority to enter into this Agreement.
(d) On or prior to the date of the initial Closing, Purchaser
will have taken all action necessary for the authorization,
execution, delivery and performance of this Agreement.
(e) Purchaser has (i) reviewed this Agreement, and the written
statements, and documents, delivered to Purchaser as described
in Section 2.01(e); and, (ii) received satisfactory response
from the Company as to matters about which Purchaser has
inquired relating to this Agreement, and other documents
described in Section 2.01(e) and relating to the Company's
business condition, prospects and plans as necessary to
evaluate the merits and risks of acquiring the Restricted
Common Stock. Purchaser has informed the Company that
Purchaser is relying on all such information and documents in
making its decision to purchase the Restricted Common Stock.
(f) Purchaser (i) has had the risks involved in the investment
represented by this Agreement explained; (ii) has knowledge
and experience in financial and business matters to evaluate
the merits and risks of the investment represented by this
Agreement; (iii) is able to bear the economic risk of the
investment represented by this Agreement (including a complete
loss of this investment); and (iv) has determined that this
investment is suitable for Purchaser in light of Purchaser's
financial circumstances and available investment
opportunities.
(g) Purchaser is acquiring the Restricted Common Stock for its
own account and with its general assets for the purpose of
investment and not with a view to the resale, transfer or
distribution thereof, and has no present intention of selling,
transferring, negotiating or otherwise disposing of any
Restricted Common Stock. Notwithstanding anything in this
Agreement to the contrary, it is agreed that the Purchaser
shall have the right to assign or transfer the Restricted
Common Stock to its Affiliates at any time without the consent
of the Company.
3. Non-Disclosure. Except as agreed to by the parties neither the Company nor
the Purchaser shall release any information to any third party with respect to
any of the terms of this Agreement without the prior written consent of the
other, which consent shall not unreasonably be withheld. This prohibition
includes, but is not limited to, press releases, promotional materials and
discussions with the media. If the Company determines that it is required by law
to release information to any third party regarding the terms of this Agreement,
it shall notify the Purchaser of this fact prior to releasing the information.
The notice to the Purchaser shall include the text of the information proposed
for release. The Purchaser shall
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<PAGE>
have the right to confer with the Company regarding the necessity for the
disclosure and the text of the information proposed for release.
4. Compliance with Securities Act
4.01 Certain Definitions. As used herein, the following terms shall have
the following respective meanings:
(a) Commission. Shall mean the Securities and Exchange
Commission, or any other Federal agency at the time
administering the Securities Act or the Trust Indenture Act,
as the case may be.
(b) Securities Act. Shall mean the Securities Act of 1933, as
amended, or any similar Federal statute, and the rules and
regulations of the Commission thereunder, all as the same
shall be in effect at the relevant time.
(c) Exchange Act. Shall mean the Securities Exchange Act of
1934, as amended, or any similar Federal statute, and the
rules and regulations of the Commission thereunder, all as the
same shall be in effect at the relevant time.
(d) Restricted Common Stock. Shall mean the Common Stock of
the Company issued and sold pursuant to this Agreement which
by the terms hereof is required to bear the legend specified
in Section 4.02 hereof.
4.02 Restriction of Transferability; Legend. Shares of Restricted Common
Stock shall not be resold or transferred unless registered under the Securities
Act or unless an exemption from registration is available for such sale or
transfer. The conditions specified below are intended to ensure compliance with
the provisions of the Securities Act in respect of any transfer of stock. Each
certificate for shares of Restricted Common Stock shall be stamped or otherwise
imprinted with a legend in substantially the following form:
The shares evidenced by this certificate have not
been registered under the Securities Act of 1933, as
amended, and may not be sold or transferred in the
absence of such registration or an exemption
therefrom under said Securities Act and the transfer
of such shares is subject to terms and conditions
specified in the Common Stock Purchase Agreement
dated as of June 11, 1998, between the Company and
Agouron Pharmaceuticals, Inc.
If shares of Restricted Common Stock evidenced by certificates bearing a legend
required by this Section 4.02 are sold in accordance with a registration
statement which has become effective under the Securities Act, or if the Company
shall receive an opinion of its counsel to the effect that any legend required
under this Section 4.02 is not, or is no longer, necessary or required with
respect to such shares (including, without limitation, because of the
availability of the exemption afforded by Rule 144 of the General Rules and
Regulations of the Commission), the Company shall, or shall instruct its
transfer agent and registrar to, remove such legend or issue new certificates
without such legend in lieu thereof.
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4.03 Information Requirements. The Company agrees to:
(a) Make and keep public information available, as such term
is understood and defined in Commission Rule 144 and Rule
144A, under the Securities Act;
(b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
(c) Furnish to any holder of Restricted Common Stock a copy of
the most recent annual or quarterly report of the Company, and
such other publicly available reports and documents of the
Company, so that such holder may avail itself of any rule or
regulation of the Commission allowing it to sell any such
securities without registration.
4.04 Piggy-Back Registration Rights. If the Company before January 15,
2001 contemplates a public offering of shares of its Common Stock to be
registered under the Securities Act, the Company shall so notify the Purchaser
in writing of its intention to do so, at least twenty (20) days prior to the
filing of a registration statement for such offering. If Purchaser gives written
notice to the Company, within ten (10) days of receipt of the notice from the
Company, of Purchaser's desire to have its Restricted Common Stock included in
such registration statement, Purchaser may, subject to the provisions of this
Section 4.04, have its Restricted Common Stock included in such registration
statement. The Company shall bear all expenses in connection with the
registration and sale of any such Restricted Common Stock, other than the fees
or disbursements of any special counsel which the Purchaser may retain in
connection with the registration of its Restricted Common Stock or any portion
of the underwriter's commission, discounts and expenses attributable to the
Restricted Common Stock being offered and sold by the Purchaser. Notwithstanding
the foregoing, if the managing underwriter of any such offering determines that
the number of shares proposed to be sold by the Company, by other shareholders
having piggy-back rights, and/or by the Purchaser is greater than the number of
shares which the underwriter believes feasible to sell at the time, at the price
and upon the terms approved by the Company, then the number of shares which the
underwriter believes may be sold shall be allocated for inclusion in the
registration statement in the following order of priority: (i) shares being
offered by the Company; and (ii) pro rata among the other shareholders and the
Purchaser, based on the number of shares of Common Stock each shareholder
requested to be registered. The Company shall have the right to designate the
managing underwriter in respect of a public offering pursuant to this
Section 4.04.
4.05 Additional Covenants Concerning Sale of Shares.
(a) The Company will notify the Purchaser of the effectiveness
of any registration statement in which Purchaser has exercised
registration rights granted pursuant to the terms of Section
4.04, together with a list of the jurisdictions where the
Company has qualified or is exempt from registration under
applicable state securities laws.
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<PAGE>
(b) The Company will prepare and file with the Commission such
amendments and supplements to any registration statement filed
pursuant to the terms of Section 4.04 (and any prospectus used
in connection with such registration statement) as may be
necessary to comply with the provisions of the Securities Act
with respect to the sale of Restricted Common Stock by the
Purchaser.
(c) The Company will furnish to the Purchaser a reasonable
number of copies of the prospectus used in connection with a
registration statement filed pursuant to the terms of Section
4.04, including a preliminary prospectus, which prospectus
conforms to the requirements of the Securities Act, and such
other documents as the Purchaser may reasonably request, in
order to facilitate the disposition of the Purchaser's
Restricted Common Stock.
(d) In connection with any registration statement referred to
in Section 4.04 of this Agreement, Purchaser will furnish to
the Company such information as the Company may reasonably
require from Purchaser for inclusion in the registration
statement (and the prospectus included therein).
(e) The Company's obligations under Section 4.04 shall be
conditioned upon Purchaser executing and delivering to the
Company its agreement, in a form satisfactory to counsel for
the Company, that it will comply with all applicable
provisions of the Securities Act, the Exchange Act, the
securities acts of applicable states and any rules and
regulations promulgated under such acts and will furnish to
the Company information about sales made in such public
offering.
4.06 Indemnification
In the event any of the Restricted Common Stock of Purchaser is
included in a registration statement under Section 4.04 of this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless the Purchaser and its Affiliates and their
respective officers, directors and employees, against any
losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following
statements, omissions or violations (hereinafter sometimes
collectively referred to as a "Violation(s)"): (i) any untrue
statement or alleged untrue statement of a material fact
contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto; (ii) the omission or
alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein
not misleading; or (iii) any violation or alleged violation by
the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law;
and the Company will
7
<PAGE>
reimburse each such indemnified party for any legal or other
expenses reasonably incurred by it in connection
with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 4.06 shall
not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is
effected without the consent of the Company (which consent
shall not be unreasonably withheld or delayed), nor shall the
Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of
or is based upon a Violation which occurs in reliance upon,
and in conformity with, written information furnished
expressly for use in connection with such registration, by any
such indemnified party.
(b) To the extent permitted by law, the Purchaser will
indemnify and hold harmless the Company and its Affiliates and
their respective officers, directors and employees against any
losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any Violations, in
each case to the extent (and only to the extent) that such
Violation occurs in reliance upon, and in conformity with,
written information furnished by the Purchaser and its
Affiliates and their respective officers, directors and
employees to the Company expressly for use in connection with
such registration; and the Purchaser will reimburse each such
indemnified party for any legal or other expenses reasonably
incurred by it in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this
Section 4.06 shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Purchaser,
which consent shall not be unreasonably withheld or delayed.
(c) Promptly after receipt by an indemnified party under this
Section 4.06 of notice of the commencement of any action
(including any governmental action), such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 4.06, notify the
indemnifying party in writing of the commencement thereof and
the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, to
assume the defense thereof with counsel mutually satisfactory
to the parties.
5. Miscellaneous
5.01 Expenses; Finders Fees. Neither party shall pay expenses and finder
fees for or to the other in connection with this transaction. Each party agrees
to indemnify and hold the other party harmless from any liability for any
commission or compensation in the nature of a finder's fee to any broker or
other person (and the costs and expenses of defending against such liability or
asserted liability) claiming to have been hired or engaged by the party.
5.02 Replacement of Certificates for Restricted Common Stock. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of
8
<PAGE>
any certificate evidencing any Restricted Common Stock, the Company will
execute, register and deliver, in lieu thereof, a new certificate for an equal
number of shares of Restricted Common Stock. In the case of loss, theft or
destruction of a certificate, at the election of the Company, the Purchaser may
be required to provide an indemnity reasonably satisfactory to the Company or to
post a surety bond in an amount equal to the value of the shares represented by
the new certificate.
5.03 Notice. Any notice required to be given under the terms of this
Agreement shall be in writing, and shall be given in person, transmitted by
telecopier, e-mail or similar electronic communication, delivered by a
recognized overnight delivery service such as Federal Express or sent by mail
(certified or registered or air mail for addresses outside of the country of
origin), return receipt requested, postage prepaid and addressed to the Company
at 5935 Darwin Court, Carlsbad, California 92008, or such other address as the
Company may designate to Purchaser in writing and to the Purchaser, at the
address appearing at the beginning of this Agreement or such other address as
Purchaser may designate to the Company in writing. Except as otherwise provided
herein, any notice so given shall be deemed delivered upon the earlier of (i)
actual receipt; (ii) receipt by sender of confirmation if telecopied or sent by
e-mail or similar electronic communication; (iii) two business days after
delivery to such overnight delivery service; or (iv) five business days after
deposit in the mail.
5.04 Successors and Assigns. This Agreement shall be binding upon the
parties and their respective successors and assigns.
5.05 Survival of Representations, Etc. All covenants, representations and
warranties made by the parties herein shall survive the Closings and the
delivery of this Agreement and the shares of Restricted Common Stock purchased
hereunder.
5.06 Termination. Purchaser's obligation to purchase Restricted Common
Stock under this Agreement shall terminate with respect to any purchase
obligations whose purchase dates under Paragraph 1.02 occur after Purchaser has
elected to terminate, in its entirety, all of Purchaser's rights and obligations
under the Letter of Intent ("LOI") dated June 11, 1998 and the Definitive
Agreement (as defined in the LOI) between the parties.
5.07 Severability. Should any part of this Agreement for any reason be
declared invalid, such decision shall not affect the validity of any remaining
portion, which remaining portion shall remain in force and effect as if this
Agreement had been executed with the invalid portion thereof eliminated and it
is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein any
such part, parts, or portion which may, for any reason, be hereafter declared
invalid.
5.08 Governing Law. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of California without
regard to its conflict of law provisions.
5.09 Captions, Form of Pronouns. The descriptive headings of the various
sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof. All pronouns
used in this Agreement shall be deemed to include masculine, feminine and neuter
forms.
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5.10 Agreement is Entire Contract. This Agreement constitutes the entire
contract between the parties hereto related to the purchase and sale of
Restricted Common Stock and no party shall be liable or bound to the other in
any manner by any warranties, representations or covenants except as
specifically set forth herein.
5.11 Third Parties. Nothing in this Agreement is intended to confer upon
any party, other than the parties hereto, and their respective permitted
successors and assigns, any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided herein.
5.12 Amendment and Waiver. Any provision of this Agreement may be amended
and the observance of any term hereof may be waived (either prospectively or
retroactively and either generally or in a particular instance) only with the
written consent of the Company and the Purchaser.
5.13 Affiliates. References to Purchaser in this Agreement shall be
deemed to include direct or indirect subsidiaries of Purchaser. The term
"Affiliate" shall have the meaning defined in the LOI.
5.14 Dispute Resolution. In the event of any controversy or claim arising
out of or relating to any provision of this Agreement, the parties shall try to
settle their differences amicably between themselves. Any unresolved disputes
arising between the parties relating to, arising out of or in any way connected
with this Agreement or any term or condition hereof, or the performance by
either party of its obligations hereunder, whether before or after termination
of this Agreement, shall be finally resolved by binding arbitration. Whenever a
party shall decide to institute arbitration proceedings, it shall give written
notice to that effect to the other party. The party giving such notice shall
refrain from instituting the arbitration proceedings for a period of sixty (60)
days following such notice The arbitration shall be held in San Diego,
California according to the rules of the American Arbitration Association
("AAA") applicable to commercial securities matters of this nature. The
arbitration shall be conducted by a panel of three arbitrators appointed in
accordance with AAA rules; provided, however, that each party shall within
thirty (30) days after the institution of the arbitration proceedings appoint
one arbitrator with the third arbitrator being chosen by the other two
arbitrators. If only one party appoints an arbitrator, then such arbitrator
shall be entitled to act as the sole arbitrator to resolve the controversy. Any
arbitration hereunder shall be conducted in the English language and the
arbitrator(s) shall apply the law set forth in SectionE5.08. All arbitrator(s)
eligible to conduct the arbitration must agree to render their opinion(s) within
thirty (30) days of the final arbitration hearing. The arbitrator(s) shall have
the authority to grant injunctive relief and specific performance, and to
allocate between the parties the costs of arbitration in such equitable manner
as he determines; provided, however, that each party shall bear its own costs
and attorney's and witness' fees. Notwithstanding the terms of this Section
5.14, a party shall also have the right to obtain prior to the arbitrator(s)
rendering the arbitration decision, provisional remedies including injunctive
relief or specific performance from a court having jurisdiction thereof. The
arbitrator(s) will, upon the request of either party, issue a written opinion of
the findings of fact and conclusions of law and shall deliver a copy to each of
the parties. Decisions of the arbitrator(s) shall be final and binding on all of
the parties. Judgment on the award so rendered may be entered in any court
having jurisdiction thereof.
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The execution hereof by Purchaser shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this Agreement may be
executed in any number of counterparts, each executed counterpart constituting
an original but all together only one agreement.
THE IMMUNE RESPONSE CORPORATION
By /s/ Dennis J. Carlo
By /s/ Charles J. Cashion
ACCEPTED AND AGREED TO AS OF THE DAY AND YEAR AFORESAID.
PURCHASER:
AGOURON PHARMACEUTICALS, INC
By /s/ Peter Johnson
Peter Johnson
President and Chief Executive Officer
By /s/ Gary Friedman
Gary Friedman
Secretary
11
<PAGE>
PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED (DESIGNATED BY AN ASTERISK (*)
AND WHITE SPACE) AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
DATED AUGUST 4, 1998; FILE NO. 0-15609
AMENDMENT TO THE VIRACEPT (Nelfinavir Mesylate) LICENSE AGREEMENT
This Amendment ("Amendment") to the VIRACEPT (Nelfinavir Mesylate) License
Agreement ("the Agreement"), effective as of this 1st day of May, 1998
("Effective Date"), is between Agouron Pharmaceuticals, Inc., a corporation duly
organized and existing under the laws of the state of California, having a
principal place of business at 10350 North Torrey Pines Road, La Jolla,
California, United States of America (hereinafter referred to as "Agouron"),
Japan Tobacco Inc., a corporation duly organized and existing under the laws of
Japan, having its principal place of business at JT Building, 2-1, Toranomon
2-chome, Minato-ku, Tokyo, Japan (hereinafter referred to as "JT"), and
F. Hoffmann-La Roche Ltd, a corporation duly organized and existing under the
laws of Switzerland, having its principal place of business at CH-4002-Basel,
Switzerland (hereinafter referred to as "Roche"). Agouron, JT and Roche are each
sometimes hereinafter referred to as a party (collectively "parties"). The
parties for good and valuable consideration hereby agree as follows:
RECITALS
1. Background
1.01 All capitalized terms, except as expressly otherwise defined herein,
shall have the meanings set forth in the Agreement.
1.02 Agouron, JT and Roche entered into a Letter of Intent on January 17,
1997 and the VIRACEPT (nelfinavir mesylate) License Agreement dated for
reference purposes only June 30, 1997, under which Agouron and JT granted, and
Roche received, a license in the Licensed Territory to use, offer for sale, sell
and/or import Products in the Field under applicable Agouron/JT Patent Rights
and Development Program Patent Rights and using applicable Agouron/JT
Technology, Roche Technology and Development Program Technology.
1.03 Roche has certain capacities to manufacture Compound as well as
formulate Product. Roche has informed Agouron and JT of its desire to
manufacture Compound and formulate Product to be sold and/or distributed in the
Licensed Territory with such Roche manufacturing and formulating
responsibilities to be phased-in over an agreed-to period of time.
1.04 The parties, in accordance with the provisions of Section 4.04(f) of
the Agreement, have discussed in good faith an arrangement under which Roche
could be the manufacturer of Compound and the formulator of Product to be sold
and/or distributed in the Licensed Territory.
1.05 Agouron and JT under certain conditions are willing to grant Roche
certain rights to manufacture Compound and formulate Product to be sold and/or
distributed in the Licensed Territory.
1.06 *
<PAGE>
1.07 *
1.08 To effect the preceding and clarify the parties' rights and
obligations under the Agreement, the parties wish to amend the Agreement as
provided below.
AMENDMENT
2. Grant of Rights to Roche
2.01 *
2.02 *
2.03 *
2
<PAGE>
2.04 Except as otherwise specifically provided in the Agreement, *
2.05 All licenses granted Roche in this Amendment in a country shall become
*
2.06 Roche shall not have the right to use *
3. Limitations
3.01 Roche's rights to manufacture Compound and formulate Product shall *
3.02 *
3
<PAGE>
(a) *
(b) *
(c) *
(d) *
4
<PAGE>
3.03 *
5
<PAGE>
4. Markup
4.01 For the rights granted pursuant to the provisions of Paragraphs
2.01-2.04, *
5. License grant to Agouron and JT
5.01 Roche grants Agouron and JT *
5.02 For the rights granted pursuant to the provisions of Paragraph 5.01, *
5.03 *
6
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6. Exchange of Information
6.01 Immediately after execution of this Amendment by the parties, and
on an ongoing basis thereafter, *
7. Supply obligations
7.01 *
7.02 *
7.03 *
(a) *
(b) *
7
<PAGE>
(c) *
(d) *
(e) *
(f) *
7.04 *
8
<PAGE>
7.05 *
8. Schedule 2 of Agreement
8.01 *
9. Trademark/Labeling
9.01 The labeling for any Product to be sold and/or distributed by Roche, *
9
<PAGE>
10. Remaining Agreement Terms
10.01 Except as expressly amended by the terms contained in this
Amendment, the provisions of the Agreement, as previously amended, shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to enter into this Amendment to the VIRACEPT(TM)(Nelfinavir
Mesylate) License Agreement, effective as of the Effective Date.
AGOURON PHARMACEUTICALS, INC. JAPAN TOBACCO INC.
By: /s/ Gary Friedman By: /s/ Masakazu Kakei
Name: Gary Friedman Name: Masakazu Kakei
Title: Corp. Vice President Title: Executive Director
By:/s/ R. Kent Snyder By: /s/ Tatsuya Yoneyama
Name: R. Kent Snyder Name: Tatsuya Yoneyama
Title: Sr. Vice President Title: Vice President, Business Devel.,
Pharmaceuticals Division
F. HOFFMANN-LA ROCHE LTD
By /s/ St. Arnold
Name: St. Arnold
Title: Vice Director
By: /s/ B. Scholl
Name: B. Scholl
Title: Vice Director
10
<PAGE>
SCHEDULE 1
*
S1-1
<PAGE>
SCHEDULE 2
ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT
*
S2-1
<PAGE>
SCHEDULE 2
ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT
*
S2-2
<PAGE>
SCHEDULE 2
ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT
*
S2-3
<PAGE>
SCHEDULE 2
ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT
*
SCHEDULE 2
ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT
*
S2-4
<PAGE>
SCHEDULE 2
ROCHE DEMAND SCHEDULE FOR VIRACEPT PRODUCT
*
S2-5
<PAGE>
ATTACHMENT 1
1. *
2. *
3. *
4. *
5. *
6. *
