<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 3, 1999
GERON CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
0-20859 75-2287752
- --------------------------------------------------------------------------------
(Commission File Number) (IRS Employer Identification No.)
230 Constitution Drive, Menlo Park, CA 94025
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 473-7700
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 3, 1999, Geron Corporation, a Delaware corporation (the
"Company") acquired Roslin Bio-Med Ltd., a company registered in Scotland
("Roslin"), by the purchase (the "Purchase") of all of the outstanding stock of
Roslin. The Purchase was accomplished pursuant to a Sale and Purchase Agreement
dated May 3, 1999 among the Company and each of Roslin's shareholders (the
"Purchase Agreement").
Pursuant to the Purchase Agreement, the Company purchased all of the
outstanding share capital of Roslin in exchange for the issuance of an aggregate
of 1,891,371 shares of the Company's Common Stock to the former Roslin
shareholders. The shares issued to the former Roslin shareholders were issued
pursuant to Section 506 of Regulation D of the Securities Act of 1933, as
amended. Additionally, options to purchase Roslin shares were assumed by the
Company and remain outstanding as fully vested options to purchase 208,629
shares of the Company's Common Stock in the aggregate.
Upon consummation of the acquisition, Roslin became a wholly owned
United Kingdom subsidiary of the Company, operating under the name Geron Bio-Med
Ltd. (the "Subsidiary"). Simon Best, the former chief executive officer of
Roslin, will become managing director of the Subsidiary. Additionally,
substantially all of Roslin's employees became employees of the Subsidiary.
Under the terms of the Purchase Agreement and a related Escrow
Agreement dated April 30, 1999 among the Company, a committee acting for and on
behalf of certain former Roslin shareholders, and U.S. Bank Trust National
Association, a total of 860,000 shares of the Company's Common Stock will be
held in escrow, including all of the shares of the Company's Common Stock
issuable from the exercise of assumed fully vested Roslin options, for the
purpose of protecting the Company against breaches of warranties made by certain
shareholders of Roslin (the "Warrantors"). Subject to claims against the shares
held in escrow, 545,000 of these shares will be released from escrow to the
former Roslin shareholders on November 3, 1999, and the remaining 315,000 shares
will be released from escrow to the former Roslin shareholders on May 3, 2000
assuming the exercise of the assumed fully vested options.
Additionally, the Company entered into to a Registration Rights
Agreement with the former Roslin shareholders under which the Company agreed to
register the shares acquired by the former Roslin shareholders under a
registration statement on Form S-3, which registration statement must be filed
no later than 120 days following May 3, 1999.
Simultaneous with the acquisition, the Company also formed a research
collaboration with the Roslin Institute, one of the shareholders of Roslin (the
"Institute"), under which the Company has committed approximately $20.0 million
in funding (based on an exchange rate of 1.6 U.S. dollars to 1.0 British pounds
sterling ("BPS") which equals the average daily exchange rate as of February 28,
1999) over six years. The research collaboration was formed pursuant to the
terms of a Research and License Agreement and a License Agreement, both among
the Company, Roslin and the Institute.
The amount of consideration paid, and other terms of the Purchase
Agreement, the Escrow Agreement, the Registration Rights Agreement, the Research
and License Agreement and the License Agreement were the result of arms-length
negotiation among the parties.
Roslin was established on the basis of an exclusive license from the
Institute to develop its nuclear transfer technology for all animal and
human-based biomedical applications excluding human reproductive cloning. The
Company intends to continue such business and the research relationship with the
Institute pursuant to the research collaboration with the Institute.
The share purchase also resulted in the Company's acquisition of
$112,000 (70,000 BPS) of general office equipment, computers, furniture and lab
equipment, all of which the Company expects to use in substantially the same
manner as it was used by Roslin.
-2-
<PAGE> 3
Further details regarding these transactions are found in the following
documents:
- the Company's press release dated May 4, 1999, which was filed as
an exhibit to the Company's Current Report on Form 8-K, filed with
the Securities and Exchange Commission ("Commission") on May 4,
1999; and
- the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999, filed with the Commission on May 14, 1999.
-3-
<PAGE> 4
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Audited financial statements of Roslin for the period from
October 1, 1997 (date of incorporation) until February 28, 1999 are attached
below and filed with this report. Also attached and filed with this report is a
report of the directors of Roslin for the period from incorporation until
February 28, 1999, and an auditors' report from Arthur Andersen.
Directors Report
The directors present their report on the affairs of the company, together with
the accounts and auditors' report, for the period from incorporation to 28
February 1999.
Business review
The company was incorporated on 1 October 1997 and commenced trading on 7 April
1998.
The company's purpose is to develop and exploit nuclear-transfer and molecular
targeting technology to develop farm-animals and human-cells as a source of
bio-medical products including but not limited to, organs, cells and tissues for
human transplantation, blood and blood fractions and antibodies.
Results and dividends
<TABLE>
<CAPTION>
L 000s
<S> <C>
Loss for the financial period 2,351
-------
Retained loss at 28 February 1999 2,351
=======
</TABLE>
The directors do not recommend payment of a dividend.
Directors and their interests
The directors who served during the period, together with their interests in the
share capital of the company, are as shown below:
<TABLE>
<CAPTION>
Number of ordinary shares
of L 1 each
--------------------------
<S> <C> <C>
Ian Biggs (appointed 11/1/99) --
Simon Best (appointed 1/6/98) 10,000
Dr John Brown (appointed 11/5/98) 2,000
Professor Grahame Bulfield (appointed 7/4/98) --
Professor Anthony Clark (appointed 7/4/98, resigned 1/6/98) 8,000
Ian Kent (appointed 11/5/98) 4,000
Professor Ian Wilmut (appointed 7/4/98) 12,000
Kenneth McCracken (appointed 1/10/97, resigned 7/4/98) --
</TABLE>
Details of directors share options are disclosed in note 11.
-4-
<PAGE> 5
Directors' responsibilities
Company law requires directors to prepare accounts for each financial year which
give a true and fair view of the state of affairs of the company and of its
profit or loss for that period. In preparing those accounts, the directors are
required to:
- - select suitable accounting policies and then apply them consistently;
- - make judgements and estimates that are reasonable and prudent;
- - state whether applicable accounting standards have been followed, subject to
any material departures disclosed and explained in the accounts; and
- - prepare the accounts on the going concern basis unless it is inappropriate
to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and enable them to ensure that the accounts comply with the Companies
Act 1985. They are also responsible for safeguarding the assets of the company
and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
Year 2000 compliance
The directors have performed an assessment of the potential impact of the Year
2000, including obtaining assurances from key suppliers. The directors believe
that the company is Year 2000 compliant.
By order of the Board,
Roslin Institute (Edinburgh)
Roslin
Midlothian
EH25 9PS
/s/ Ian Biggs
Ian Biggs
Director
15 April 1999
-5-
<PAGE> 6
Auditors' report
To the Directors of Roslin Bio-Med Limited:
We have audited the accounts on pages 4 to 16 which have been prepared under the
historical cost convention and the accounting policies set out in note 1.
Respective responsibilities of directors and auditors
As discussed on page 2 the accounts are the responsibility of the directors. It
is our responsibility to form an independent opinion, based on our audit, on
those accounts and to report our opinion to you.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the accounts. It also
includes an assessment of the significant estimates and judgements made by the
directors in the preparation of the accounts and of whether the accounting
policies are appropriate to the circumstances of the company, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the accounts are free from
material misstatement, whether caused by fraud or other irregularity or error.
In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the accounts.
Opinion
In our opinion the accounts give a true and fair view of the state of affairs of
the company at 28 February 1999 and of its loss and cash flows for the period
then ended and have been properly prepared in accordance with the provisions of
the Companies Act 1985.
Arthur Andersen
Chartered Accountants and Registered Auditors
/s/ Arthur Andersen
18 Charlotte Square
Edinburgh
EH2 4DF
15 April 1999
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<PAGE> 7
Profit and loss account
For the period ended 28 February 1999
<TABLE>
<CAPTION>
Notes 1999
17 months
L 000s
<S> <C> <C>
TURNOVER 4
Cost of sales --
------
GROSS PROFIT 4
Net operating expenses 2 (2,434)
------
OPERATING LOSS (2,430)
Interest income 3 79
------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION 4 (2,351)
Tax on loss on ordinary activities 6 -
------
RETAINED LOSS FOR THE FINANCIAL PERIOD 12 (2,351)
======
</TABLE>
A statement of movements on reserves is given in note 12.
The current period results have been derived wholly from continuing operations.
The loss for the period equates to the historical cost loss for the period.
There are no recognised gains or losses in the period other than the loss for
the period.
The accompanying notes are an integral part of this profit and loss account.
-7-
<PAGE> 8
Balance sheet
28 February 1999
<TABLE>
<CAPTION>
Notes 1999
L 000s
<S> <C> <C>
FIXED ASSETS
Intangible assets 7 1,090
Tangible assets 8 70
------
1,160
------
CURRENT ASSETS
Debtors 9 100
Cash at bank and in hand 1,926
------
2,026
CREDITORS: Amounts falling due within one year 10 (723)
------
NET CURRENT ASSETS 1,303
------
TOTAL ASSETS LESS CURRENT LIABILITIES 2,463
------
NET ASSETS 2,463
======
CAPITAL AND RESERVES
Called-up share capital 11 383
Share premium account 12 4,431
Profit and loss account 12 (2,351)
------
TOTAL CAPITAL EMPLOYED 13 2,463
======
SHAREHOLDERS' FUNDS
Equity interests 11 2,460
Non-equity interests 11 3
------
2,463
======
</TABLE>
Signed on behalf of the Board
/s/ Ian Biggs
Ian Biggs
Director
15 April 1999
The accompanying notes are an integral part of this balance sheet.
-8-
<PAGE> 9
Cash flow statement
For the period ended 28 February 1999
<TABLE>
<CAPTION>
Notes 1999
L 000s
<S> <C> <C>
Net cash outflow from operating activities 16a) (1,693)
Returns on investments and servicing of finance 16b) 79
Capital expenditure 16c) (74)
------
(1,688)
Financing 16d) 3,614
------
INCREASE IN CASH IN THE PERIOD 1,926
======
</TABLE>
The accompanying notes are an integral part of this cash flow statement.
-9-
<PAGE> 10
Notes to accounts
1 Accounting policies
A summary of the principal accounting policies, all of which have been applied
consistently throughout the period is set out below.
a) Basis of accounting
The accounts are prepared under the historical cost convention and in accordance
with applicable accounting standards.
b) Intangible fixed assets
Licences acquired from third parties are stated at cost, net of amortisation and
provision for impairment. Licences are amortised over the minimum term of the
licence agreement.
c) Tangible fixed assets
Fixed assets are shown at original historical cost, net of depreciation and any
provision for impairment.
Depreciation is provided at rates calculated to write off the cost or valuation,
less estimated residual value, of each asset over its expected useful life as
follows:
<TABLE>
<S> <C>
Lab equipment 5 years straight line
Computer equipment 5 years straight line
</TABLE>
d) Taxation
Corporation tax payable is provided on taxable profits at the current rate.
Provision is made for deferred taxation using the liability method, to take
account of all timing differences except those which, in the opinion of the
directors, will probably not reverse.
e) Turnover
Turnover represents net invoiced sales to customers excluding VAT.
f) Research and development
Research expenditure is written off as incurred. Development expenditure is also
written off, except where the directors are satisfied as to the technical,
commercial and financial viability of individual projects. In such cases, the
identifiable expenditure is deferred and amortised over the period during which
the company is expected to benefit.
-10-
<PAGE> 11
Notes to accounts (continued)
2 Net operating expenses
<TABLE>
<CAPTION>
1999
17 months
L 000s
<S> <C>
Administrative expenses 1,255
Research expenditure 1,179
------
2,434
======
</TABLE>
<TABLE>
3 Interest income
1999
17 months
L 000s
<S> <C>
Interest receivable 79
======
</TABLE>
4 Loss on ordinary activities before taxation
Loss on ordinary activities before taxation is stated after charging:
<TABLE>
<CAPTION>
1999
17 months
L 000s
<S> <C>
Depreciation and amounts written off
- - tangible fixed assets 9
Amortisation of licences 110
Auditors' remuneration 8
Staff costs (note 5) 232
====
</TABLE>
IN ADDITION TO THE AUDITORS' REMUNERATION SHOWN ABOVE THE COMPANY PAID L 6,500
FOR OTHER SERVICES PROVIDED BY THE AUDITORS.
5 Staff costs
Particulars of employees (including executive directors) are as shown below.
<TABLE>
<CAPTION>
1999
17 months
L 000s
<S> <C>
Employee costs during the period amounted to:
Wages and salaries 212
Social security costs 20
----
232
====
</TABLE>
-11-
<PAGE> 12
Notes to accounts (continued)
5 Staff costs (continued)
The average monthly number of persons employed by the company during the period
was as follows:
<TABLE>
<CAPTION>
1999
Number
<S> <C>
Administrative 5
========
Directors' remuneration
Remuneration
The remuneration of the directors was as follows:
1999
17 months
L 000s
Emoluments 199
========
</TABLE>
Pensions
No director was a member of a pension scheme.
6 Tax on loss on ordinary activities
No tax charge arose in the period due to trading losses.
7 Intangible fixed assets
<TABLE>
<CAPTION>
Licenses Total
L 000s L 000s
<S> <C> <C>
COST
Beginning of period -- --
Additions 1,200 1,200
-------- ------
End of period 1,200 1,200
======== ======
AMORTISATION
Beginning of period - -
Charge 110 110
-------- ------
End of period 110 110
======== ======
NET BOOK VALUE
Beginning of period - -
======== ======
End of period 1,090 1,090
======== ======
</TABLE>
-12-
<PAGE> 13
Notes to accounts (continued)
<TABLE>
8 Tangible fixed assets
Lab Computer
equipment equipment Total
L 000s L 000s L 000s
<S> <C> <C> <C>
COST OR VALUATION
Beginning of period -- -- --
Additions 63 16 79
--------- --------- ------
End of period 63 16 79
========= ========= ======
DEPRECIATION
Beginning of period -- -- -
Charge 8 1 9
--------- --------- ------
End of period 8 1 9
========= ========= ======
NET BOOK VALUE
========= ========= ======
End of period 55 15 70
========= ========= ======
</TABLE>
9 Debtors
The following are included in the net book value of debtors:
<TABLE>
<CAPTION>
1999
L 000s
<S> <C>
Amounts falling due within one year:
Prepayments and accrued income 5
VAT 95
------
100
======
</TABLE>
10 Creditors: Amounts falling due within one year
The following amounts are included in creditors falling due within one year:
<TABLE>
<CAPTION>
1999
L 000s
<S> <C>
Trade creditors 218
Social security and PAYE 19
Other creditors 486
------
723
======
</TABLE>
-13-
<PAGE> 14
Notes to accounts (continued)
11 Called-up share capital
<TABLE>
<CAPTION>
Issued,
called-up
and fully
Authorised paid
1999 1999
Number L
<S> <C> <C>
Equity shares:
`A' ordinary shares of L 1 172,000 172,000
`B' ordinary shares of L 1 248,000 188,000
`C' ordinary shares of L 1 20,000 20,000
--------- --------
Total equity share capital 440,000 380,000
--------- --------
Non-equity share capital
`D' ordinary shares of L 0.01 688,000 3,440
--------- --------
Total non-equity share capital 688,000 3,440
--------- --------
Total share capital 1,128,000 383,440
========= ========
</TABLE>
During the period the following shares were allotted:
<TABLE>
<CAPTION>
Date Shares Number Consideration Share premium
L 000s L 000s
<S> <C> <C> <C> <C>
7 April 1998 `A' ordinary 172,000 1,200 1,028
7 April 1998 `B' ordinary 172,000 -- 1,028
7 April 1998 `C' ordinary 20,000 20 --
17 December 1998 `D' ordinary 344,000 2,400 2,397
23 October 1998 `B' ordinary 16,000 64 48
</TABLE>
Details of the consideration for the `B' ordinary shares issued on 7 April 1998
are set out in note 18
a) Income
All classes of ordinary shares, other than `D' ordinary shares, rank equally for
dividends.
`D' ordinary shares are not entitled to a dividend.
b) Redemption
The company may redeem the `D' ordinary shares at any time in return for the
payment of an aggregate sum of L 1 to the registered holder.
-14-
<PAGE> 15
Notes to accounts (continued)
11 Called-up share capital (continued)
c) Capital
On the return of assets on liquidation or capital reduction, the repayment of
capital shall be in the following order:
First, in paying to the holders of the `A' ordinary shares, an amount per share
equal to the aggregate amount subscribed for all the issued `A' ordinary shares
and `D' ordinary shares together with a sum equal to any arrears or accruals of
the dividends on the `A' ordinary shares calculated to the date of the return on
capital;
Second, in paying to the holders of the `B' and `C' ordinary shares the sum per
share paid on each `A' ordinary share together with a sum equal to any arrears
or accruals of the dividends on the ordinary shares calculated to the date of
the return of capital; and
The balance of such assets shall be distributed amongst the holders of the
equity shares in proportion to the amounts paid up or credited as paid up on the
equity shares held by them respectively; and
After the equity shareholders have received L 1,000 per share the holders of
the `D' ordinary shares will receive L 0.01 per share.
d) Voting
Equity shares will carry one vote per share. `D' ordinary shares have no voting
rights.
e) Share options
Options have been granted to subscribe for `B' ordinary shares of the company as
follows:
<TABLE>
<CAPTION>
Option At 1 Granted At 28
exercise October 1999
price 1997 February
<S> <C> <C> <C> <C>
Simon Best L 4 -- 10,000 10,000
Ian Biggs L 8 -- 5,000 5,000
John Brown L 4 -- 5,000 5,000
Ian Kent L 4 -- 10,000 10,000
======== ====== ======= ========
</TABLE>
One quarter of the options granted to Messrs. Best, Brown and Kent are
exercisable immediately, with a further quarter becoming exercisable on each
subsequent anniversary of the date the options were granted until such time as
all options are exercisable.
The options granted to Mr Biggs are exercisable from January 2000.
In addition, options may also be exercised in advance of any transaction
involving the sale of the company or its assets.
-15-
<PAGE> 16
Notes to accounts (continued)
12 Reserves
Of total reserves shown in the balance sheet, the following amounts are regarded
as distributable or otherwise:
<TABLE>
<CAPTION>
1999
L 000s
<S> <C>
Distributable
- - profit and loss account (2,351)
Non-distributable
- - share premium account 4,431
------
Total reserves 2,080
======
</TABLE>
The movement in the period was as follows:
<TABLE>
<CAPTION>
Share Profit and
premium loss account Total
account L 000s L 000s L 000s
<S> <C> <C> <C>
Beginning of period -- -- --
Retained loss for the period -- (2,351) (2,351)
Share issues 4,431 -- 4,431
------ ------ ------
End of period 4,431 (2,351) 2,080
====== ====== ======
</TABLE>
13 Reconciliation of movements in shareholders' funds
<TABLE>
<CAPTION>
1999
L 000s
<S> <C>
Loss for the financial period (2,351)
New share capital subscribed 4,814
Opening shareholders' funds --
------
Closing shareholders' funds 2,463
======
</TABLE>
-16-
<PAGE> 17
Notes to accounts (continued)
14 Guarantees and other financial commitments
Capital commitments
At the end of the period, capital commitments were:
<TABLE>
<CAPTION>
1999
L 000s
<S> <C>
Contracted for but not provided for --
======
</TABLE>
15 Related party transactions
The company undertook transactions, all of which were on an arms length basis,
and had balances outstanding at 28 February 1999 with related parties as shown
below:
<TABLE>
<CAPTION>
Purchases Creditors Sales Debtors
RELATED PARTY L 000s L 000s L 000s L 000s
<S> <C> <C> <C> <C>
Roslin Institute 1,456 344 -- --
3i plc 108 29 -- --
===== ===== ===== =====
</TABLE>
Roslin Institute and 3i plc related parties by virtue of their significant
shareholdings in the company. Transactions with Roslin Institute relate to the
recharge of costs in respect of facilities and other services provided by Roslin
Institute. Transactions with 3i relate to set up and monitoring fees and the
recharge of legal fees incurred by 3i.
16 Cash flow statement
a) Reconciliation of operating loss to net cash outflow from
operating activities
<TABLE>
<CAPTION>
1999
L 000s
<S> <C>
Operating loss (2,430)
Depreciation charges 9
Amortisation charges 110
Increase in debtors (100)
Increase in creditors 718
------
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (1,693)
======
</TABLE>
b) Returns on investments and servicing of finance
<TABLE>
<CAPTION>
1999
L 000s
<S> <C>
Interest received 79
----
NET CASH INFLOW 79
====
</TABLE>
-17-
<PAGE> 18
Notes to accounts (continued)
16 Cash flow statement (continued)
c) Capital expenditure
<TABLE>
<CAPTION>
1999
L 000s
<S> <C>
Purchase of tangible fixed assets (74)
----
NET CASH OUTFLOW (74)
====
</TABLE>
d) Financing
<TABLE>
<CAPTION>
1999
L 000s
<S> <C>
Issue of share capital 3,684
Expenses paid in connection with share issues (70)
------
NET CASH INFLOW 3,614
======
</TABLE>
17 Analysis and reconciliation of net funds
<TABLE>
<CAPTION>
At 1 Other At 28
October Cash non- February
1997 flow charges 1999
L 000s L 000s L 000s L 000s
<S> <C> <C> <C> <C>
Cash in bank and in hand -- 1,926 -- 1,926
===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
1999
L 000s
<S> <C>
Increase in cash in the period 1,926
-----
Movement in net funds in period 1,926
Net funds at 1 October 1997 --
-----
Net funds at 28 February 1999 . 1,926
=====
</TABLE>
18 Major non-cash transactions
During the period the company issued 172,000 `B' ordinary shares of L 1 to
Roslin Institute in return for certain licences. Details of the licences
acquired are provided in note 7. The cost attributed to the licences is
L 1,200,000.
-18-
<PAGE> 19
Notes to accounts (continued)
19 Going concern
As at 28 February 1999, the company has L 1,926,000 of cash.
On the basis of current activity and the directors' current projections this
cash balance will be exhausted towards the end of 1999. The company has entered
into a funding arrangement with 3i that will result in a further L 2,400,000
being available for drawdown subject to the company attaining certain scientific
milestones.
The directors believe that progress towards these milestones is satisfactory
and, accordingly, further funds will be available which will allow the company
to remain a going concern for the foreseeable future. There are also a number of
other commercial opportunities open to the company. For these reasons, the
directors continue to adopt the going concern basis in preparing the accounts.
The accounts do not include any adjustments that would result if the directors
were unable to secure the additional funds referred to above.
-19-
<PAGE> 20
(b) Pro Forma Financial Information.
Pro-forma condensed combined financial statements are not included in
this Current Report on Form 8-K. Such financial statements are expected to be
filed by amendment within 60 days after May 18, 1999, as required by Item 7,
part (b)(2).
-20-
<PAGE> 21
(c) Exhibits.
2.1+ Sale and Purchase Agreement dated May 3, 1999, among
the Company and each of the shareholders of Roslin.
2.2 Escrow Agreement dated April 30, 1999, among the
Company, a committee acting for and on behalf of the
Warrantors, and U.S. Bank Trust National Association.
4.1 Registration Rights Agreement dated April 30, 1999,
among the Company and each of the shareholders of
Roslin.
10.42+ Research and License Agreement dated May 3, 1999,
among the Company, Roslin and the Institute.
10.43+ License Agreement dated April 30, 1999, among the
Company, Roslin and the Institute.
- ----------
+ Confidential Treatment Requested
-21-
<PAGE> 22
SIGNATURES
Pursuant to the requirements 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.
GERON CORPORATION
(Registrant)
Dated: May 18, 1999 By: /s/ David L Greenwood
---------------------------------
David L Greenwood
Chief Financial Officer,
Treasurer and Secretary
(Principal Financial and
Accounting Officer)
-22-
<PAGE> 23
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
2.1+ Sale and Purchase Agreement dated May 3, 1999, among the Company
and each of the shareholders of Roslin.
2.2 Escrow Agreement dated April 30, 1999, among the Company, a
committee acting for and on behalf of the Warrantors, and U.S.
Bank Trust National Association.
4.1 Registration Rights Agreement dated April 30, 1999, among the
Company and each of the shareholders of Roslin.
10.42+ Research and License Agreement dated May 3, 1999, among the
Company, Roslin and the Institute.
10.43+ License Agreement dated April 30, 1999, among the Company,
Roslin and the Institute.
</TABLE>
- ----------
+ Confidential Treatment Requested
-23-
<PAGE> 1
EXHIBIT 2.1
DATED MAY 3, 1999
ROSLIN INSTITUTE AND OTHERS
- and -
GERON CORPORATION
- --------------------------------------------------------------------------------
SALE AND PURCHASE AGREEMENT
- relating to -
the issued share capital of
Roslin Bio-Med Limited
- --------------------------------------------------------------------------------
TAYLOR JOYNSON GARRETT
Carmelite
50 Victoria Embankment
Blackfriars
London EC4Y 0DX
Tel No: 0171 353 1234
Fax No: 0171 936 2666
DX: 41 LONDON
Draft:4: 05/15/99
Ref: SXW/MXR
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
CLAUSE NO. PAGE NO.
<S> <C>
1. DEFINITIONS AND INTERPRETATION.......................... 1
2. SALE AND PURCHASE....................................... 9
3. CONSIDERATION........................................... 10
4. VENDORS' WARRANTIES..................................... 10
5. LIMITATIONS TO THE WARRANTIES........................... 12
6. PURCHASER'S WARRANTIES.................................. 19
7. COMPLETION.............................................. 19
8. COVENANTS OF THE PURCHASER AND THE VENDORS.............. 22
9. RESTRICTIONS............................................ 23
10. CONFIDENTIALITY........................................ 26
11. RESTRICTIVE TRADE PRACTICES ACT........................ 27
12. NOTICES................................................ 27
13. MISCELLANEOUS.......................................... 30
14.WARRANTORS' REPRESENTATIVE.............................. 28
15. LAW AND JURISDICTION................................... 36
</TABLE>
SCHEDULES
1. The Vendors and the Consideration Shares
2. The Company
3. The Company IPR
4. Representations and warranties of the Warrantors
5. Conditions to Completion
6. Representations and warranties of the Purchaser
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THIS AGREEMENT is made the 3rd day of May, 1999
BETWEEN
(1) THE PERSONS whose names and addresses are set out in columns 1 and 2 of
schedule 1 (collectively the "Vendors" and severally a "Vendor"); and
(2) GERON CORPORATION whose place of business is at 230 Constitution Drive,
Menlo Park, CA 94025 (the "Purchaser").
INTRODUCTION
(A) Roslin Bio-Med Limited is a private company limited by shares
incorporated in Scotland, further details of which are set out in
schedule 2 (the "Company").
(B) The Vendors are the registered shareholders of all of the issued share
capital of the Company in the proportions set out against their names
in column 3 of schedule 1.
(C) Subject to the terms and conditions of this agreement the Vendors have
agreed to sell and the Purchaser has agreed to purchase all of the
issued share capital of the Company.
AGREED TERMS
1. DEFINITIONS AND INTERPRETATION
1.1 In this agreement:
"ACCOUNTING REQUIREMENTS" means the accounting requirements of the
Companies Act, SSAPs, FRSs, abstracts of the Urgent Issues Task Force,
any other requirement of a United Kingdom accounting body having
mandatory effect, FREDs and other generally accepted accounting
principles and practices in the United Kingdom to the extent applicable
and in force in relation to the Company as at the Completion Date;
"ACCOUNTS" means the audited accounts of the Company for the financial
year ended on the Accounts Date including the auditors' and directors'
reports, the audited balance sheet as at the Accounts Date, the audited
profit and loss account for such period and the notes to them;
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"ACCOUNTS DATE" means 28 February 1999;
"AFFILIATE" means, in respect of any person:
(a) any person connected with such person (and "connected with"
bears the meaning set out in section 839 of ICTA); and/or
(b) any company under the control of such person (and "control"
bears the meaning set out in section 840 of ICTA); and/or
(c) any associated company of such person (and "associated
company" bears the meaning set out in section 416 of ICTA);
"BUSINESS DAY" means any day other than a Saturday, Sunday or any day
which is a public holiday in any of the countries referred to in
sub-clause 12.2;
"BUSINESS HOURS" means the hours of 09.00 to 17.30 on a Business Day in
the place to which any notice or other written communication is sent
pursuant to this agreement;
"CAA" means the Capital Allowances Act 1990;
"COMPANY'S ACCOUNTANTS" means Arthur Andersen of 191 West George
Street, Glasgow, G2 5QD;
"COMPANIES ACT" means the Companies Act 1985;
"COMPANY IPR" means:
(a) the patents, applications and supplementary
certificates for patents listed in the Warrantors'
Disclosure Letter and any other patents, applications
and supplementary certificates for patents registered
or applied for in any part of the world in respect of
the same inventions as those patents, applications
and supplementary certificates set out in Part A of
schedule 3 (whether or not claiming priority from any
such patents and/or applications) (together
"PATENTS"); and
(b) the trademarks listed in Part B of schedule 3 and
all other business names, brand names, trade marks
(whether in fancy script or otherwise), devices,
logos, get up and signs (and whether or not
registered or applied for) owned by the Company
together with all goodwill associated with or
symbolised by any of the foregoing (together
"TRADEMARKS");
(c) all ideas, concepts, inventions, unpatented
drawings, designs, models, specifications, data,
formulae, processes and procedures, techniques and
any other technical information or documentation
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(including computer stored information and
documentation) owned or co-owned by or under the
control of the Company which is secret and
substantial ("KNOW-HOW"); and
(d) all database rights;
"COMPLETION" means completion of the sale and purchase of the Sale
Shares in accordance with the parties' respective obligations under
clause 7;
"COMPLETION DATE" means the date of Completion as set out in sub-clause
7.1;
"COMPUTER SYSTEM" means the computer systems, including all its
equipment, hardware, firmware, software and accessories used in the
business of the Company;
"CONDITIONS" means the conditions precedent to Completion contained in
schedule 5;
"CONFIDENTIAL INFORMATION" means all confidential technical, commercial
and other confidential information, know-how, experience, knowledge and
skill relating to the business of the Company as at the Completion Date
including (without prejudice to the generality of the foregoing) all
research and development drawings, formulae, processes, specifications,
trade secrets, test reports, operating and testing procedures,
practices, listings, instruction manuals, tables of operating
conditions, lists and particulars of customers and suppliers, marketing
methods, pricing, credit and payment policies, profit margins,
discounts and rebates (if any);
"CONSIDERATION SHARES" means 2,100,000 ordinary shares in the capital
of the Purchaser's common stock at $0.001 par value to be issued
credited as fully paid, being the 3i Consideration Shares and the
Escrow Shares;
"DAMAGES" means losses, damages, liabilities fees and costs (including
legal costs) and expenses reasonably and properly incurred;
"DISCLOSED" means disclosed with sufficient clarity and detail to
enable the Purchaser to assess the financial and commercial impact on
the Company of the matter disclosed;
"ENCUMBRANCE" means any mortgage, charge, lien, pledge, hypothecation,
assignment by way of security, equity, claim, right of pre-emption,
option, covenant, restriction, reservation, lease, trust, order,
decree, judgment, title defect (including retention of title claim),
valid and enforceable conflicting claim of ownership or any other third
party right or encumbrance of any nature whatsoever (whether or not
perfected);
"ESCROW AGENT" means U.S. Bank Trust National Association or such other
institution selected by unanimous agreement of the Warrantors'
Representative and the Purchaser to act as an escrow agent;
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"ESCROW AGREEMENT" means the escrow agreement in the agreed form;
"ESCROW FUND" means the escrow fund established pursuant to the Escrow
Agreement in respect of the Escrow Shares;
"ESCROW SHARES" means the First Escrow Shares and the Second Escrow
Shares;
"FINANCIAL YEAR" shall be construed in accordance with section 223 of
the Companies Act;
"FIRST ESCROW SHARES" means 860,000 of the Consideration Shares to be
issued to the Warrantors as shown in column 4.2(a) of schedule 1;
"FREDS" means the financial reporting exposure drafts issued by the
Accounting Standards Board Limited;
"FRSS" means the financial reporting standards established by the
Accounting Standards Board Limited;
"GOVERNMENT ENTITY" means any court, administrative agency, commission
or other governmental authority;
"HAZARDOUS MATERIALS" means wastes, pollutants, contaminants,
petroleum, petroleum products, dangerous, hazardous or toxic substances
and materials (including liquids, solids, gases, ions and noise and
substances prescribed in schedules 4, 5 and 6 of the Environmental
Protection (Prescribed Processes and Substances) Regulations 1991)
which may be harmful to human health or other life or the environment
or a nuisance to any person;
"ICTA" means the Income and Corporation Taxes Act 1988;
"IHTA" means the Inheritance Tax Act 1984;
"INTELLECTUAL PROPERTY" means all patents and supplementary
certificates, registered designs, know-how, rights in trade secrets and
confidential information; registered or unregistered trademarks,
service marks and applications therefor and all other business names,
brand names, devices, logos, (and whether or not registered or applied
for) with all the goodwill associated with or symbolised by any of the
foregoing; all other inventions (whether or not capable of protection
by patent or other form of registration); all copyright, rights in the
nature of copyright, sui generis rights, design rights, moral rights
and all other like rights in all parts of the world whether present or
vested future or contingent; all other intellectual property rights
throughout the world for the full term of the rights concerned and
including: all registrations and pending registrations relating to any
such rights and the benefit of any pending applications for any such
registrations; all reversions, extensions and renewals of such rights;
and all accrued rights of action in relation to such rights (including
the right to sue for and recover damages for past infringements);
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"LICENCES" means the licences, agreements, contracts, permissions
listed in part C of schedule 3 being legal arrangements pursuant to
which the Company is entitled to utilise any Intellectual Property
owned by any third party;
"LICENSORS" means the licensors under the Licences;
"LICENCE AGREEMENT" means the licence agreement in the agreed form;
"MATERIAL" means with respect to any event, change, condition or effect
any material event, change, condition or effect related to the
condition (financial or otherwise), properties, assets (including
intangible assets), liabilities, business, operations, results of
operations or prospects of an entity or group of entities;
"MATERIAL ADVERSE EFFECT" means with respect to any entity or group of
entities any event, change or effect that, when taken individually or
together with all other adverse changes and effects, is or is
reasonably likely to be materially adverse to the condition (financial
or otherwise), properties, assets, liabilities, business, operations,
results of or prospects of such entity and its subsidiaries, taken as a
whole, or to prevent or materially delay consummation of the
transactions contemplated under this agreement or otherwise to prevent
such entity and its subsidiaries from performing their obligations
under this agreement;
"NEW SHARES" means any of the Purchaser's shares or other equity issued
or distributed by the Purchaser (including shares issued in a stock
split) which may be issued on or after Completion to the Warrantors in
addition to the Escrow Shares;
"OPTION EXCHANGE AGREEMENT" means the option exchange agreement in the
agreed form;
"OPTION SHARES" means that those shares in the Company over which
options have been granted as set out in column 5 of schedule 1;
"PATENTS ACT" means the Patents Act 1977;
"PURCHASER'S ACCOUNTANTS" means Ernst & Young of 1451 California
Avenue, Palo Alto, CA 94304;
"PURCHASER'S DISCLOSURE LETTER" means the disclosure letter in the
agreed terms of even date given by the Purchaser to the Vendors;
"PURCHASER'S SOLICITORS" means Taylor Joynson Garrett of Carmelite, 50
Victoria Embankment, Blackfriars, London EC4Y 0DX;
"PURCHASER'S TRANSFER AGENTS" means US Stock Transfer Corporation;
"PURCHASER'S WARRANTIES" means the representations and warranties set
out in schedule 7;
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"REGISTRATION RIGHTS AGREEMENT" means the registration rights agreement
in the agreed form;
"RELEVANT DATE" means:
(a) in the case of the Warrantors other than the Roslin Institute
the Completion Date;
(b) in the case of the Roslin Institute the sixth anniversary of
the Completion Date or if earlier the date upon which the
Research Agreement terminates;
"RESEARCH AGREEMENT" means the research funding agreement in the agreed
form;
"RESTRICTED ACTIVITY" means:
(a) in the case of the Warrantors other than the Roslin Institute,
the business of the Company as at the Completion Date;
(b) in the case of the Roslin Institute, the Restricted Field;
"RESTRICTED FIELD" means activities relating to cell based systems for
the cloning of animal and human cells and non-human animals;
"ROSLIN INSTITUTE" means the Roslin Institute of Roslin Bio Technology
Centre, Roslin, Midlothian, EH25 9PS;
"SALE SHARES" means all of the issued A, B, C and D ordinary shares in
the Company, details of which are set out in column 3 of schedule 1;
"SECOND ESCROW SHARES" means 315,000 of the Consideration Shares issued
or allocated to the Warrantors as shown in column 4.2(b) of schedule 1;
"SECURITIES ACT" means the US Securities Act 1933, as amended;
"SOFTWARE" means all computer programs and all related object code and
source code and databases used by the Company in connection with its
business;
"SSAPS" means the statements of standard accounting practice adopted by
the Accounting Standards Board Limited;
"STOCK EXCHANGE" means London Stock Exchange Limited;
"SUBSIDIARY" means a subsidiary company as defined in section 736 of
the Companies Act;
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"3i" means 3i Group Plc (Reg No 1142830) of 91 Waterloo Road, London,
SE1 8XP, being one of the Vendors;
"3i CONSIDERATION SHARES" means 1,240,000 of the Consideration Shares
to be issued by the Purchaser in favour of 3i at Completion;
"TCGA" means the Taxation of Chargeable Gains Act 1992;
"TAXATION" means all forms of taxation, charges, duties, costs,
imposts, levies and rates whenever imposed and whether of the United
Kingdom or elsewhere and whether chargeable directly or primarily
against or attributable directly or primarily to the Company or to any
other person, including without limitation, income tax (including
income tax or amounts equivalent to or in respect of income tax
required to be deducted or withheld from or accounted for in respect of
any payment), withholding taxes, corporation tax, advance corporation
tax (including amounts corresponding to or representing advance
corporation tax), capital gains tax, capital transfer tax, inheritance
tax, value added tax, customs duties, excise duties, insurance premium
tax, landfill tax, stamp duty, stamp duty reserve tax, national
insurance, social security or other similar contributions, and
generally any tax, duty, impost or levy or other amount and any
interest, penalty or fine in connection therewith but expressly
excluding, for the avoidance of doubt, community charges and rates;
"TAXATION AUTHORITY" means any local, governmental, state, federal or
other fiscal, revenue or excise authority, body or official whether in
the UK or elsewhere including without limitation, the Inland Revenue
and HM Customs and Excise;
"UK PAYE" means any tax liability pursuant to regulations made by the
Board of Inland Revenue under section 203 ICTA 1988;
"VAT" means value added tax;
"VATA" means the Value Added Tax Act 1994;
"VENDORS' AFFILIATE" means an Affiliate of any Vendor but excludes the
Company;
"COMPANY'S SOLICITORS" means Dundas Wilson of Salture Court, 20 Castle
Terrace, Edinburgh, EH1 2EH;
"WARRANTORS' DISCLOSURE LETTER" means the disclosure letter in the
agreed form of even date given by the Warrantors to the Purchaser;
"WARRANTORS' REPRESENTATIVE" means a committee constituting the
following individuals Ian Kent and Grahame Bulfield;
"WARRANTIES" means the representations and warranties set out in
schedule 4;
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"WARRANTORS" means the Vendors other than 3i; and
"YEAR 2000 COMPLIANT" means, in relation to the Software each part of
the Computer System and any asset used in the business of the Company
which relies upon computer hardware, firmware, software or other
information technology, that neither its performance nor its
functionality is or will be affected by dates prior to, during or after
the year 2000, and in particular:
(a) no value for current date causes or will cause any
interruption in its operation;
[(b) no value for any date element in any data used as input by the
software cause or will cause any interruption in the operation
of the software, which will either correctly interpret the
date element (where it is a valid date) or else detect and
report it as an invalid date and continue processing
accordingly;]
(c) date-based functionality behaves and will behave consistently
for dates prior to, during and after year 2000 and produces
[and will produce correct results in accordance with the
software's specifications];
(d) in all interfaces and data storage, the century in any date is
and will be specified either explicitly or by unambiguous
algorithms or inferencing rules; and
(e) the year 2000 is and will be recognised as a leap year.
1.2 In this agreement references to:
(a) an enactment includes a reference to:
(i) that enactment as amended, extended
or applied by or under any other enactment
before the date of this agreement;
(ii) any enactment which that enactment
re-enacts (with or without modification);
and
(iii) any subordinate legislation made
before the date of this agreement under any
enactment, including an enactment referred
to in sub-clause 1.2(a) (i) or (ii) above;
(b) the singular includes a reference to the
plural and vice versa;
(c) any clause, sub-clause or schedule is to a
clause, sub-clause or schedule (as the case may be)
of or to this agreement;
(d) any gender includes a reference to all other
genders;
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(e) persons include any form and all forms of
legal entity including individuals, companies, bodies
corporate (wherever incorporated or established or
carrying on business), unincorporated associations,
governmental entities and partnerships and, in
relation to any party who is an individual, his legal
personal representative(s);
(f) the words "including", "include" and "in
particular" shall be construed as being by way of
illustration only and shall not be construed as
limiting the generality of any foregoing words; and
(g) documents "in the agreed form" are to
documents in the form of the draft agreed between the
parties to this agreement prior to Completion and
initialled by or on behalf of the parties for the
purposes of identification.
1.3 In part D of schedule 4 reference to a section only
is to a section of the ICTA, reference to a schedule with a
number is to a schedule of ICTA and reference to an Act
followed by a year is to the Finance Act of that year.
1.4 The introduction and schedules form part of this
agreement and shall have the same force and effect as if
expressly set out in the body of this agreement. Accordingly,
any reference to this agreement shall include the introduction
and schedules.
2. SALE AND PURCHASE
2.1 Subject to the satisfaction or waiver of the
provisions of schedule 5 and implementation of Clause 7, each
of the Vendors with full title guarantee shall sell the number
of Sale Shares set out against such Vendor's name in column 3
of schedule 1 and the Purchaser shall purchase all right,
title and interest in the Sale Shares with effect from
Completion.
2.2 Each of the Vendors shall sell the Sale Shares free
from all Encumbrances and together with all rights to
dividends and other distributions of whatsoever nature
declared after the date of this agreement in respect of such
Sale Shares and all other rights and advantages belonging to
or accruing on such Sale Shares as at and from that date.
2.3 Neither the Purchaser nor the Vendors shall be
obliged to complete the sale and purchase of any of the Sale
Shares unless the sale and purchase of all the Sale Shares is
completed simultaneously.
2.4 Each of the Vendors hereby irrevocably waives all or
any pre-emption or other rights which that Vendor may have
pursuant to the Company's articles of
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association or to any other agreement relating to the Sale
Shares or otherwise, so as to enable the sale of the Sale
Shares to the Purchaser to proceed free of any such
pre-emption or other rights.
3. CONSIDERATION
3.1 The total consideration for the sale of the Sale
Shares and the Option Shares shall be the issue of the
Consideration Shares to the Vendors as contemplated by this
agreement and the Option Exchange Agreements.
3.2 The 3i Consideration Shares shall be issued to 3i on
Completion.
3.3 The Escrow Shares shall be issued to the Warrantors
on Completion in the amounts shown against the respective
names of the Warrantors in column 4.2 of schedule 1 (other
than those to be issued in respect of the Option Shares) and
shall be subject to the provisions of the Escrow Agreement and
this agreement. For the avoidance of doubt, 3i shall not and
shall not be required to deposit any of the 3i Consideration
Shares issued to it in the Escrow Fund or otherwise grant any
Warranties in favour of the Purchaser other than as set out in
Part A of schedule 4.
3.4 The Consideration Shares to be issued pursuant to
this agreement shall not be registered as at Completion under
the Securities Act in reliance upon the exemption contained in
Regulation S and section 4(2) of the Securities Act and
Regulation D promulgated thereunder and in reliance upon the
Warranties.
3.5 The obligations of the Purchaser, the Company and the
Vendors with respect to the registration of the Consideration
Shares shall be governed by the Registration Rights Agreement.
4. VENDORS' WARRANTIES
4.1 Each of the Vendors on its own behalf severally
represents and warrants to the Purchaser in the knowledge that
the Purchaser is entering into this agreement in reliance upon
each of the Warranties contained in Part A of schedule 4 being
true and accurate.
4.2 The Warrantors severally represent and warrant to the
Purchaser in the knowledge that the Purchaser is entering into
this agreement in reliance upon each of the Warranties
(subject to the limitations contained in clause 5) set out in
Parts B, C and D of Schedule 4 being true and accurate.
4.3 Subject to the limitations contained in clause 5 if
there is a breach of any of the Warranties then, in respect of
each such breach and without prejudice to the right of the
Purchaser to calculate Damages on any basis available to it
but subject to the limitations contained in clause 5 and the
other provisions of this agreement, the Warrantors agree that
the Purchaser may retain such Escrow Shares and/or New
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Shares or such other property as is retained in the Escrow
Fund subject to and in accordance with the Escrow Agreement.
The Purchaser agrees with the Warrantors that retention as
aforesaid is the only remedy which the Purchaser has and may
take against the Warrantors in respect of a breach of this
agreement, including the Warranties.
4.4 Upon the sale of the Sale Shares by the Purchaser (or
any subsequent owner thereof) the benefit of the Warranties
may be assigned in whole or in part and without restriction by
the person for the time being entitled to them. For the
avoidance of doubt, any person to whom the benefit of the
Warranties is assigned shall be subject to the limitations set
out in clause 5 and the other applicable provisions of this
agreement.
4.5 Each of the Warranties shall be construed as a
separate and independent warranty and (subject to clause 5)
shall not be governed, limited or restricted by reference to
or inference from any other terms of this agreement or any
other Warranty.
4.6 Any payments or deemed payment made by the Vendors to
the Purchaser in respect of claims under the Warranties shall
so far as possible be treated by the parties as a reduction in
the consideration for the Sale Shares received by the Vendor
or Vendors which made the payment or deemed payment.
4.7 In this agreement any reference to a Warrantors
"knowledge", "awareness", "information" or "belief" means such
knowledge, awareness, information or belief as that party
would have after having made:-
(a) in the case of the Warrantors (other than
Ian Kent and John Brown) all due and diligent enquiry
of the Warrantors (other than Ian Kent and John Brown
and no other third party or person);
(b) in the case of Ian Kent and John Brown
reasonable enquiry of Ian Kent and John Brown (and no
other third party or person);
and if there is a reference to the "knowledge",
"awareness", "information" or "belief" of more than one
Warrantor all of the relevant Warrantors shall be deemed to
have knowledge, awareness, information or belief of each
other.
4.8 Each of the Warrantors hereby agrees with the
Purchaser (for itself and as trustee for the Company) to waive
any right which it may have in respect of any
misrepresentation, inaccuracy or omission in or from any
information or advice supplied or given by the Company or any
of its officers and employees or advisers in enabling the
Warrantors to give the Warranties, to prepare the Warrantors'
Disclosure Letter and to enter into this agreement and
undertakes not to make any claim in respect of such reliance.
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4.9 Subject to the provisions of paragraph (j) of
schedule 6, the rights and remedies of the Purchaser in
respect of any breach of this agreement shall not be affected
by any investigation made by or on behalf of the Purchaser
into the affairs of the Company or actual or constructive
knowledge on the part of the Purchaser or its agents or
advisers or by any other event or matter whatsoever, except a
specific and written waiver or release given by the Purchaser
and except as otherwise expressly provided in this agreement
in relation to the Warrantors' Disclosure Letter.
4.10 All sums payable by the Vendors or the Purchaser
under this agreement shall be paid free and clear of all
deductions or withholdings unless the deduction or withholding
is required by law, in which event the Vendors or the
Purchaser (as the case may be) shall pay such additional
amount as shall be required to ensure that the net amount
received by the Vendors or the Purchaser (as the case may be)
will equal the full sum which would have been received by them
or it had no such deduction or withholding been required to be
made.
4.11 Subject to clause 5 if any payment made by the
Warrantors in relation to a claim for breach of Warranty which
relates to Taxation will be or has been subject to Taxation in
the hands of the Purchaser, the Purchaser may demand in
writing from the Warrantors such sum (after taking into
account any Taxation payable in respect of such sum) as will
ensure that the Purchaser receives and retains a net sum equal
to the sum which it would have received had the payment not
been subject to Taxation. The Warrantors shall pay any such
sum which is demanded pursuant to this sub-clause 4.11 within
10 Business Days of receipt of a notice from the Purchaser
identifying that such Taxation is legally due for payment
within 20 Business Days from the date of such notice.
5. LIMITATIONS TO THE WARRANTIES
5.1 Notwithstanding any other provision of this agreement
(but save as acknowledged below), no limitations of any kind
whatsoever shall apply to any claim under this agreement or
any agreements contemplated hereby against a Vendor:
(a) which is (or the delay in discovery of which
is) the consequence of any fraud, dishonesty or
deliberate concealment on the part of that Vendor,
his or its agents or advisers; or
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<PAGE> 15
(b) which is the result of a breach of any
Warranty in Part A of schedule 4;
it being acknowledged and agreed that the limitation provisions shall
apply to any claim brought against any of the other Vendors who were
not a party to such fraud, dishonesty or concealment or to whose Sale
Shares the breach of Warranty in Part A of the schedule 4 did not
apply.
5.2 The following provisions of this clause 5.2 shall
operate to exclude and/or limit the liability of the
Warrantors under or in connection with this agreement (where
expressly stated) in sub-clauses 5.2 (m) and (s) and the
Warranties:
(a) the Warrantors shall not be liable under or
by virtue of the Warranties in respect of any matter
Disclosed in the Warrantors' Disclosure Letter;
provided, however, that any information Disclosed
with respect to a particular Warranty in the
Warrantors' Disclosure Letter shall be deemed to be
Disclosed and incorporated in any other section of
the Warrantors' Disclosure Letter where such
disclosure would be appropriate;
* (b) the Warrantors shall have no liability under
or by virtue of the Warranties unless and until the
aggregate amount of all valid claims by the Purchaser
under or by virtue of the Warranties shall exceed
[*] (subject always to the other provisions of
this clause 5.2) and in such case the Warrantors
shall be liable for the whole of such amount of that
claim and not just the excess;
(c) no single claim may be made against the
Warrantors under or by virtue of the Warranties
* unless the amount so claimed in respect of that claim
shall exceed [*] and any claim of less than that
amount shall be disregarded for all purposes but once
such amount has been exceeded, the Warrantors shall
be liable for the whole of such amount of that claim
and not just the excess;
(d) if, but for this clause 5.2(d), the
Warrantors would be liable in respect of the same
matter under or by virtue of more than one of the
Warranties and any sum in respect of that matter is
paid under one particular Warranty the liability of
the Warrantors (if any) under or in respect of
another Warranty in respect of that matter shall be
reduced by the amount of such sum;
(e) if the Warrantors pay an amount in respect
of any liability under or by virtue of the Warranties
and the Purchaser or the Company subsequently
recovers from a third party (including, for the
avoidance of doubt, any insurance company or any tax
authority) a sum which is received as a result of
that breach, the Purchaser shall promptly repay or
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-13-
<PAGE> 16
procure repayment to the Warrantors of so much of the
amount paid by them as, when added to the sum
recovered from such third party, exceeds the amount
due to the Purchaser or the Company in respect of
that breach;
(f) the amount of any claim under or by virtue
of the Warranties shall take into account any cash
relief from, or cash deductions realised by the
Company and the Purchaser in respect of Taxation;
(g) the Warrantors shall not be liable for any
claim which would not have arisen, or to the extent
that any claim would have been for a lesser amount,
except as a result of a voluntary act, default or
transaction of the Purchaser or of the Company (save
where pursuant to a legally binding obligation
existing prior to Completion or in the ordinary
course of business) or any permitted successor or
assignee of the Purchaser occurring on or after
Completion;
(h) the Warrantors shall be under no liability
under or by virtue of the Warranties in respect of
any matter arising from or connected with any change
of the accounting reference date of the Company or
any accounting policy or practice of the Company
adopted by the Purchaser or the Company after
Completion;
(i) the Warrantors shall not be liable in
respect of a claim under or by virtue of the
Warranties if such claim would not have arisen or
would have been made for a lesser amount but for a
change or changes in legislation made after
Completion;
(j) the amount of any successful claim against
the Warrantors under or by virtue of the Warranties
shall be deemed to constitute a reduction in the
price payable by the Purchaser for the Sale Shares;
(k) the Warrantors shall have no liability to
the Purchaser or the Company under or by virtue of
the Warranties:
(i) to the extent that allowance,
provision or reserve in respect of the
matter or thing which gave rise to any such
liability has been provided for in the
Accounts or to the extent that payment or
discharge of the relevant matter has been
taken into account therein; or
(ii) in respect of any allowance,
provision or reserve made in the Accounts
which is insufficient or inadequate only by
reason of any increase in any rate of
Taxation effective after the Accounts Date;
or
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<PAGE> 17
(iii) to the extent that such liability
would not have arisen or would have been
made for a lesser amount but for any
alteration, enactment or re-enactment of any
legislation, subordinate legislation or
quasi legislative act or any regulatory
requirement or any SSAP or FRS which takes
effect after Completion;
(l) nothing contained in this agreement shall or
shall be taken to relieve the Purchaser or the
Company of any duty and obligation to use reasonable
endeavours to (which shall not include making a claim
against the Purchaser's insurer but shall include
making a claim against the Company's insurer(s) as at
Completion where permitted under the relevant
insurance policy) mitigate any Damages which the
Purchaser or the Company may incur or suffer and the
Purchaser shall and shall procure that the Company
shall use reasonable endeavours (which shall not
include making a claim against the Purchaser's
insurer but shall include making a claim against the
Company's insurer(s) as at Completion where permitted
under the relevant insurance policy) to mitigate any
such Damages which the Purchaser or the Company may
incur or suffer in relation to any claim against the
Warrantors under or pursuant to the Warranties
subject to the Purchaser and/or the Company being
indemnified by the Warrantors against all costs and
expenses reasonably and properly incurred in
connection therewith;
(m) if the benefit of the Warranties or indeed
any other right of the Purchaser or the Company under
this agreement is assigned, the obligations and
liabilities of the Warrantors (if any) shall be no
greater than it would have been if the Purchaser had
remained the owner of the Sale Shares and had
retained the benefit of the Warranties and its other
rights under or pursuant to this agreement;
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<PAGE> 18
(n) the Purchaser irrevocably and
unconditionally waives any and all rights it may have
to rescind this agreement for any breach of the
Warranties or untrue representation, or undertaking
or statement of fact or opinion made to it in
relation to the subject matter or this agreement or
the Company which is not contained in this agreement
or the Warrantors' Disclosure Letter (including the
annexures thereto) and, save in the case of any
fraudulent misrepresentation, the Purchaser agrees
with the Warrantors that the Purchaser shall have no
remedy against the Warrantors, and the Warrantors
shall have no liability of whatever nature and
howsoever arising to the Purchaser, in respect of any
statement of fact or opinion whatsoever, including
any untrue or misleading statement, warranty or
representation (express or implied) made to the
Purchaser or its agents, officers or employees upon
which the Purchaser or its agents, officers or
employees relied or may have relied in entering into
this agreement which is not contained in this
agreement;
(o) for the purpose of enabling the Warrantors
to remedy a breach or to mitigate or otherwise
determine the amount of any claim for breach of the
Warranties or to decide what steps or proceedings
should be taken in order to mitigate any claim for
breach of the Warranties, the Purchaser shall:
(i) give notice to the Warrantors
within 14 days of any breach or
circumstances giving or likely to give rise
to a breach coming to its notice or to the
notice of any company;
(ii) pass to the Warrantors as soon as
reasonably possible, any further particulars
it receives relating to the breach or
circumstances referred to in paragraph (i)
above;
(iii) make or procure to be made
available to the Warrantors or their duly
authorised representatives all relevant
books of accounts, records and
correspondence of the Company and permit the
Warrantors to ascertain or extract any
relevant information therefrom;
(iv) at the request of the Warrantors,
allow the Warrantors to participate in the
sole conduct of any claim against the
Purchaser or the Company which has given
rise to a claim for breach of the Warranties
against the Warrantors under this agreement;
and
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<PAGE> 19
(v) make no admission of liability,
agreement, settlement or compromise in
respect of any claim with any third party
(including, for the avoidance of doubt, any
insurance company) without the prior written
approval of the Warrantors, which approval
shall not unreasonably be withheld;
(p) upon any claim being made, the Purchaser
shall and shall co-operate to procure that the
Company shall, make available to accountants and
others appointed by the Warrantors such relevant
records and information as the Warrantors reasonably
request in connection with such claim and the
Purchaser shall, and shall co-operate to procure that
the Company shall, use best endeavours to procure
that the auditors (both past and then current) of the
Company makes available to the Warrantors and to
accountants and others appointed by the Warrantors
their audit working papers in respect of audit of the
Company's accounts for any relevant accounting period
in connection with the claim. Such access shall be
required only at reasonable times and on reasonable
notice;
(q) the liability of the Warrantors under or in
connection with the Warranties shall be several and
not, for the avoidance of doubt, joint and several;
(r) notwithstanding any other provision of this
agreement (including, for the avoidance of doubt, the
Warranties), the Purchaser acknowledges to and agrees
with the Warrantors that no warranty, covenant,
representation, indemnity or undertaking (whether
express or implied) shall be deemed to be made nor
shall the Warrantors have any liability in respect of
any Warranty or any other provision of this agreement
in so far as it relates to the Company's IPR or any
person's or persons' Intellectual Property including,
for the avoidance of doubt, in relation to either the
Company's interest or interests in or title to titles
in and to the Company's IPR save to the extent
expressly set out in Warranties 12.1 to 12.19 set out
in Part B of schedule 4 respectively ("the IPR
Warranties");
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<PAGE> 20
(s) the maximum aggregate liability of the
Warrantors under or by virtue of this agreement
(including the Warranties) shall not exceed the
aggregate value of the Escrow Fund at the date of
payment of any such liability. Accordingly, the
maximum aggregate liability of each of the Warrantors
under this agreement (including the Warranties) shall
not exceed the value of the Escrow Shares set against
the name of the respective Warrantor in column 4.2 of
schedule 1 as at the date of payment of any such
liability. Any and all amounts to be paid by the
Warrantors for their share of any liability under
this agreement (including the Warranties) shall be
payable only out of the Escrow Fund (to the extent
then available).
(t) all liability of the Warrantors under or by
virtue of the Warranties shall cease and any claim
made thereunder or by virtue thereof against the
Warrantors shall be wholly barred and unenforceable:-
(i) in the case of liability under or by virtue of the
Warranties (other than the IPR Warranties), with
effect from 3 May 2000; and
(ii) in the case of liability under or by virtue of the
IPR Warranties, with effect from 3 November 1999.
unless notice of the relevant claims specifying the amount
claimed and with (i) reasonable details of the facts and
circumstances, in so far as then available, constituting or
giving rise to the alleged breach or the alleged liability and
(ii) the amount claimed in respect thereof (detailing (in so
far as possible) the amount of Damages suffered by the
Purchaser or the Company and the basis and method of
calculation of such Damages) shall have been given to the
Warrantors prior to the dates referred to in paragraphs (i)
and (ii) above. Any such claim under or by virtue of the
Warranties (other than the IPR Warranties) shall (if it has
not been previously satisfied, settled or withdrawn) be deemed
to have been withdrawn after 3 November 2000 unless
proceedings (whether by way of litigation, arbitration or
otherwise) in respect of it have commenced by being served on
the Warrantors prior to 3 November 2000. Any such claim under
or by virtue of the IPR Warranties shall (if it has not been
previously satisfied, settled or withdrawn) be deemed to have
been withdrawn on 3 May 2000 unless proceedings (whether by
way of litigation, arbitration or otherwise) in respect of it
have been commenced by being served on the Warrantors prior to
3 May 2000. Following the commencement of any claim under the
Warranties the Purchaser undertakes to proceed with such claim
or claims as quickly as reasonably possible (having regard to
all relevant circumstances).
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<PAGE> 21
5.3 Subject to this clause 5, all claims shall be made in
accordance with the provisions of the Escrow Agreement.
6. PURCHASER'S WARRANTIES
6.1 The Purchaser represents and warrants in the
knowledge that the Vendors are entering into this agreement in
reliance upon the accuracy of each of the Purchaser's
Warranties that the Purchaser's Warranties are true and
accurate.
6.2 Each of the Purchaser's Warranties shall be construed
as a separate and independent warranty and shall not be
governed, limited or restricted by reference to or inference
from any other terms of this agreement or any other
Purchaser's Warranty.
6.3 The rights and remedies of the Vendors in respect of
any breach of this agreement shall not be affected by any
investigation made by or on behalf of the Vendors into the
affairs of the Purchaser or actual or constructive knowledge
on the part of the Vendor or their agents or advisers or by
any other event or matter whatsoever, except a specific and
written waiver or release given by the Vendor and except as
otherwise expressly provided in this agreement in relation to
the Purchaser's Disclosure Letter.
6.4 If there is a breach of any of the Purchaser's
Warranties then, in respect of each such breach, the Vendors
shall be entitled to claim Damages from the Purchaser on any
basis which may be available to them.
7. COMPLETION
7.1 Subject to the provisions of schedule 5, the sale and
purchase of the Sale Shares shall be completed at the offices
of the Purchaser's Solicitors at 9.00 a.m. on 3 May 1999 (or
at such other time or place as the parties shall agree).
7.2 On Completion 3i shall deliver to the Purchaser a
duly executed stock transfer forms in respect of its Sale
Shares together with the related share certificates (such
stock transfer forms to be in favour of the Purchaser or its
nominees, as the Purchaser shall direct) to enable it or its
nominees to be registered as the holders of the Sale Shares
free from all encumbrances.
7.3 On Completion the Warrantors shall deliver or cause
to be delivered to the Purchaser:
(a) duly executed stock transfer forms in
respect of the Sale Shares together with the related
share certificates (such stock transfer forms to be
in favour of the Purchaser or its nominees, as the
Purchaser shall direct) to
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<PAGE> 22
enable it or its nominees to be registered as the
holders of the Sale Shares free from all
Encumbrances;
(b) an acknowledgement from each of the
Warrantors to the Purchaser and the Company executed
as a deed to the effect that save in relation to
remuneration or reimbursement of expenses incurred in
relation to his or her employment details of which
are specified in such deed, there is no outstanding
indebtedness owing at Completion from the Company to
such Warrantor or to any such Warrantor's Affiliate
or vice versa;
(c) letters of resignation in the agreed form
from Ian Kent, John Brown, Ian Biggs, Grahame
Bulfield and Ian Wilmut as directors of the Company;
(d) written confirmation to the Company and the
Purchaser that each of the aforementioned departing
directors of the Company (other than Ian Biggs and
Ian Wilmut) has returned or delivered to the Company
all property of the Company used, enjoyed or held by
them in their capacity as employees or officers of
the Company including without prejudice to the
generality of the foregoing books, records, papers
and information of the Company (on whatever medium
stored), motor vehicles, credit cards, keys, security
cards, personal computers, software, magnetic or
other discs on which information is stored;
(e) the written resignation of the auditors of
the Company together with a statement in accordance
with section 394 of the Companies Act that there are
no circumstances connected with such resignation
which they consider should be brought to the
attention of the members or creditors of the Company;
(f) the statutory books of the Company complete
and accurate up to Completion (but not including any
acts or transactions to take place at Completion) and
any company seal(s), certificates of incorporation,
certificates of incorporation on change of name and
all unused share certificates of the Company and all
cheque books of the Company;
(g) the Warrantors' Disclosure Letter;
(h) revised contracts in the agreed form between
the Purchaser and each of Simon Best and Piers
Lincoln duly executed by the parties.
(i) consultancy agreements in the agreed form
between the Purchaser and each of John Clark and Ian
Wilmut duly executed by the parties.
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<PAGE> 23
7.3 On Completion the Warrantors shall procure the
holding of a meeting of the directors of the Company at which
the directors of the Company shall:
(a) (subject to stamping) approve the transfers
to the Purchaser (or its nominees) of the Sale
Shares;
(b) appoint David Greenwood and Tom Okarma as
additional directors of the Company;
(c) accept the resignations referred to in
sub-clauses 7.2(c) and (e) relating to the Company;
(d) appoint Ernst & Young as the new auditors of
the Company;
(e) change the accounting reference date of the
Company to 31 December; and
(f) cancel the existing mandates to the
Company's bankers and replace them with new mandates
as requested by the Purchaser.
7.4 On Completion the Vendors shall pass a written
resolution changing the name of the Company to Geron Bio-Med
Limited.
7.5 On Completion the Purchaser shall deliver to the
Vendors or to the Company's Solicitors for and on behalf of
the Warrantors (whose receipt shall be a sufficient
discharge):
(a) a certified copy of the minutes of the board
of directors of the Purchaser authorising the
execution and performance by the Purchaser of its
obligations under this agreement;
(b) the Purchaser's Disclosure Letter;
(c) a certified copy of instructions to the
Purchaser's Transfer Agent to prepare Share Stock
Certificates in favour of the Vendors in respect of
the number of Consideration Shares set out against
their respective names in column 4 of schedule 1.
7.6 On or prior to Completion each of the following shall
be done:
(a) the Purchaser and Roslin Institute shall
enter into or have entered into the Research
Agreement;
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<PAGE> 24
(b) the Purchaser, the Company and Roslin
Institute shall enter into or have entered into the
Licence Agreement;
(c) the Purchaser, and the Warrantors'
Representative shall and shall ensure that the Escrow
Agent shall have entered into the Escrow Agreement;
(d) the Purchaser and each of the Vendors' shall
enter into or have entered into the Registration
Rights Agreement.
7.7 On or as soon as practicable after Completion, the
Consideration Shares which each Warrantor is entitled to
receive pursuant to clause 3 of this agreement (namely, in
aggregate 860,000 Consideration Shares) shall without any act
of such Warrantor be registered in the name of the Warrantor
and shall be deposited with the Escrow Agent and such deposit
or deposits shall constitute the Escrow Fund.
8. COVENANTS OF THE PURCHASER AND THE VENDORS
8.1 Each party shall execute and do all such lawful
documents acts and things as may be reasonably required
subsequent to Completion by the other parties for, in the case
of the Purchaser, securing to or vesting in the Purchaser the
legal and beneficial ownership of such party's Sale Shares and
in the case of the Vendors, the legal and beneficial ownership
of the relevant Consideration Shares (subject always to the
other provisions of this Agreement, the Escrow Agreement and
the Registration Rights Agreement).
8.2 All parties to this agreement agree that the
Purchaser and the Vendors will be jointly responsible for any
press release or publication with respect to the existence of
this agreement or the transactions contemplated hereby and
further agree to co-operate in good faith with respect to any
such press release or public statement and except as may be
required by law or by any regulatory authority to which the
parties are subject, further agree not to issue any such press
release or public statement without the prior written consent
of the Purchaser, 3i and the Warrantors' Representative (as
appropriate) (in the case of a publication proposed by the
Company and/or a Vendor). Each party agrees to provide any
such press release or public statement to the Company, 3i and
the Warrantors' Representative in advance of publication and
provide the Company, 3i and the Warrantors' Representative a
reasonable opportunity to review and comment on such
publication.
8.3 Each party will fully co-operate (in so far as it is
lawfully able so to do) with the other parties, their lawyers
and accountants in connection with any steps required to be
taken as part of its obligations under this agreement.
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<PAGE> 25
8.4 The Purchaser reserves the right to make an election
under Section 338(g) of the US Internal Revenue Code and any
comparable provisions of state, local or foreign law. The
Vendors acknowledge that the Purchaser shall control the
preparation and filing of such election and the Vendors agree
that they will reasonably co-operate with the Purchaser and
the Company with respect thereto.
8.5 All stamp duties or stamp duty reserve tax payable on
the transfer of the Sale Shares to the Purchaser or otherwise
arising from the transactions contemplated by this agreement
shall be borne by the Purchaser.
8.6 The Warrantors shall procure that the Company's
Accountants shall prepare the tax returns and computations of
the Company for the accounting period ending on or prior to 28
February 1999, save that the preparation and submission of the
same shall not be unreasonably delayed. Should the preparation
or submission of the tax returns and computations of the
Company for the accounting period ending on or prior to the 28
February 1999 in the reasonable opinion of the Purchaser be
unreasonably delayed by the Warrantors, then the Purchaser
shall prepare and submit the same.
8.7 The Purchaser shall procure that the returns and
computations mentioned in clause 8.6 shall be authorised,
signed and submitted to the appropriate Tax Authority without
amendment or with such amendments required by the Purchaser
and which the Warrantors shall reasonably agree and the
Purchaser shall give the Warrantors or their agents all such
assistance as may be reasonably required to prepare those
returns and computations for submission to the appropriate
Taxation Authorities provided that the Purchaser shall not be
obliged to take any such action as is mentioned in this clause
8.7 in relation to any return that is not full, true and
accurate in all material respects. Nor shall the Purchaser be
obliged to take any such action which in the reasonable
opinion of the Purchaser shall affect adversely either the
future tax liability of either the Purchaser or the Company
concerned or of any person connected with any of them, or in
any way materially prejudice the relationship of the Purchaser
or the Company with any Taxation Authority.
9. RESTRICTIONS
9.1 By way of further consideration of the Purchaser
agreeing to purchase the Sale Shares from the Vendors, each of
the Warrantors covenants with the Purchaser that he or it will
not whether alone or jointly with or as agent of any person or
persons directly or indirectly:
(a) for the period of two years after the
Relevant Date:
(i) take up or hold any office in or
with any business or undertaking; or
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<PAGE> 26
(ii) take up or hold any post or
position which enables or permits that
Warrantor to exercise a controlling
influence over any business or undertaking;
or
(iii) take up or hold any employment or
consultancy with any person which is engaged
in any business or undertaking
which results in that Warrantor being engaged in a Restricted
Activity, provided that the Warrantor shall not be precluded
from:-
(aa) in the case of the Warrantors (other than Roslin
Institute), complying with their obligations under
any contract of employment or consultancy agreement
with the Company or the Purchaser or being employed
or otherwise engaged in any such business or
undertaking whose activities include any business
which competes with the Company so long as that
Warrantor will not be directly or indirectly employed
or engaged in, or review materials produced by or
relating to that business or undertaking;
(bb) in the case of Roslin Institute:-
(A) receiving commercial funding of research in
the Restricted Field subject to the prior
written consent of the Purchaser;
(B) receiving non-commercial funding of research
in the Restricted Field provided that the
Purchaser shall, prior to any intellectual
property arising from such research being
made available to any third party for
commercial exploitation, have an exclusive
option exercisable within 45 days following
receipt of written notice from the Roslin
Institute to take an exclusive worldwide
licence to such intellectual property and if
it elects not to do so (for whatever reason)
or the terms of such licence cannot be
agreed within such period then such
intellectual property may be offered to
third parties on terms no more favourable
than the terms upon which it was offered to
the Purchaser;
(cc) holding as an investment not more than 5% of
the issued share capital of a company quoted on a
recognised stock exchange (as that expression is
defined in section 207 Financial Services Act 1986);
(b) for the period of two years after the
Relevant Date deal with any person who at any time
during the period of twelve months prior to the
Relevant Date is or was a collaborator or customer of
the Company in connection with any research,
development, products or services in competition with
the Restricted Activity provided that that each
Warrantor shall not be precluded from dealing with a
company whose
-24-
<PAGE> 27
activities compete with the Company so long as that
Warrantor does not either directly or indirectly deal
in any such research, development, products or
services which so compete;
(c) for the period of two years after the
Relevant Date canvass, solicit, approach or seek out
or cause to be canvassed, solicited, approached or
sought out or by any other means endeavour to entice
away from the Company any customer, orders,
instructions or other material in respect of any
products or services provided to or supplied by the
Company provided the Warrantor has transacted with
such person as a customer or as a supplier;
(d) for the period of two years after the
Relevant Date canvass, solicit, approach, seek out,
or cause to be canvassed, solicited, approached or
sought out or by any other means endeavour to entice
away from the Company, or employ or aid or assist any
other person or persons in employing or otherwise
retaining the services of anyone who is employed by
the Company or who is a consultant to or who is a
collaborator with the Company at the Relevant Date
but shall not include any person employed in a junior
administrative or secretarial capacity;
(e) after the Relevant Date either represent
himself or itself or hold himself or itself out to be
in any way connected with or interested in the
business of the Company.
9.2 The Warrantors hereby acknowledge and declare that
the restrictions in sub-clause 9.1 are reasonable in all the
circumstances as at the Completion Date; that such
restrictions are integral to the terms on which the Purchaser
has agreed to purchase the Sale Shares and that each of such
restrictions shall be construed and take effect independently
of the others.
9.3 If any breach or violation of the provisions of
sub-clause 9.1 occurs, the Warrantors and the Purchaser agree
that damages alone are likely not to be sufficient
compensation and that injunctive relief is reasonable and is
likely to be essential to safeguard the interests of the
Purchaser and of the Company and that injunctive relief (in
addition to any other remedies afforded by a court of equity)
may (subject to the discretion of the courts) be obtained. No
waiver of any such breach or violation of the provisions of
sub-clause 9.1 shall be implied from forbearance or failure by
the Purchaser to take action
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<PAGE> 28
10. CONFIDENTIALITY
10.1 Each Vendor acknowledges to the Purchaser that he or
it has been exposed to information about the Company which is
either a trade secret, confidential or commercially sensitive
and which may not be readily available to others engaged in a
similar business to that of the Company or to the general
public and which if disclosed may cause harm to the Company or
the Purchaser.
10.2 Subject to sub-clauses 10.3 and 10.4, each Vendor
undertakes to the Purchaser severally that he or it shall keep
secret and shall not at any time, for whatever reason, use,
communicate or reveal to any person for that Vendor's own or
another's benefit, any Confidential Information which shall
have come to his or its knowledge prior to Completion (except
in this context "use" shall not be construed to apply to the
use of such information in making and monitoring investments
by a Vendor in the ordinary course of business). Each Vendor
shall as soon as reasonably practicable inform the Purchaser
of any disclosure or use of any such information of which he
or it becomes actually aware knowing it to be Confidential
Information.
10.3 The restrictions contained in sub-clause 10.2 shall
not apply to:
(a) any disclosure authorised in writing by an
officer of the Purchaser or required in the ordinary
and proper course of the particular Vendor's service
agreement or consultancy agreement with the Purchaser
or the Company or in or as required by the order of a
court of competent jurisdiction or an appropriate
regulatory authority or Government Entity; or
(b) any information which was known to the
particular Vendor concerned prior to the commencement
of his employment or engagement by the Company or is
in or comes into the public domain otherwise than as
a result of a breach by such Vendor of this clause
10.
10.4 Except:
(a) as may be required by law or in the case of
the Purchaser or 3i the regulations of any recognised
investment exchange or recognised stock exchange (as
defined in the Financial Services Act 1986 and the
Companies Act respectively) or required by any
regulatory authority to which the parties are
subject; or
(b) as may be required in relation to any
registration of this agreement or any arrangement of
which it forms part under the Restrictive Trade
Practices Act 1976; or
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<PAGE> 29
(c) as may be required to vest the full benefit
of this agreement or any other agreements or
documents entered into and as contemplated hereby
(including, for the avoidance of doubt, enforcement
thereof) in the Purchaser and the Vendors
respectively;
the provisions of this agreement and all negotiations relating to this
agreement are strictly confidential and no announcement or disclosure
of or publicity relating to the sale and purchase hereunder and terms
of this agreement shall be made by the parties to any third party
(other than their professional advisers and bankers) without the
written agreement of the other parties save where expressly provided
otherwise in this agreement.
11. RESTRICTIVE TRADE PRACTICES ACT
Unless this agreement or any agreement or arrangement of which this
agreement forms part is a non-notifiable agreement for the purposes of
section 27A of the Restrictive Trade Practices Act 1976, if there is a
provision of this agreement, or of any such agreement or arrangement,
which causes or would cause this agreement or any such agreement or
arrangement to be subject to registration under the Restrictive Trade
Practices Act 1976, that provision shall not take effect until the day
after the day upon which particulars of this agreement (or of that
agreement or arrangement, as the case may be) have been furnished to
the Director General of Fair Trading pursuant to section 24 of the
Restrictive Trade Practices Act 1976 and if the agreement (or any other
such agreement or arrangement) is subject to registration under the
Restrictive Trade Practices Act 1976 the parties shall co-operate in
good faith and at the sole cost and expense of the Purchaser in order
to carry out such registration as soon as reasonably practicable
following the date of this agreement and in any event within three
months of the date of this agreement.
12. NOTICES
12.1 Any notice or other written communication given under
or in connection with this agreement may be delivered
personally or sent by prepaid recorded delivery or registered
post or by facsimile to the address or number and for the
attention of the relevant party set out in sub-clause 12.2 (or
such other address or number as is otherwise notified from
time to time).
12.2 The addresses of the parties for the purpose of
sub-clause 12.1 are as follows:
The Purchaser: David L Greenwood
Geron Corporation
230 Constitution Drive
Menlo Park, CA 1985 94025
USA
-27-
<PAGE> 30
Attention: Vice President of Corporate
Development and Chief Financial
Officer
Facsimile No: (650) 473 7701
Telephone No: (650) 473 7700
With copy to:
Joshua L Green
Venture Law Group
2800 Sand Hill Road
Menlo Park, CA 1985 94025
Facsimile No: (650) 233-8386
Telephone No: (650) 854-4488
and to:
Simon Walker
Taylor Joynson Garrett
Carmelite
50 Victoria Embankment
Blackfriars
London EC4Y 0DX
Facsimile No: 44171 936-2666
Telephone No: 44171 353-1234
The Vendors: Lawrence Ward
(on behalf of the Warrantors
Dundas & Wilson)
191 St Vincent Street
Glasgow
G2 2LB
Facsimile No: 0141 222 2201
Telephone No: 0141 222 2200
Ken McCracken (on behalf of Roslin
Institute)
Wright Johnson MacKenzie
302 Vincent Street
Glasgow G2 5RZ
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<PAGE> 31
Facsimile No: 0141 248 2326
Telephone No: 0141 248 3434
c/o Local Director
3i plc
227 West George Street
Glasgow G2 2ND
Facsimile No: 0141 248 3245
Telephone No: 0141 248 4456
12.3 Any such notice or other written communication shall
be deemed to have been served:
(a) if delivered personally, at the time of
delivery;
(b) if posted, at the expiry of two Business
Days after it was posted or 10 Business Days where it
was sent by airmail;
(c) if sent by facsimile message, at the time of
transmission (if sent during Business Hours) or (if
not sent during Business Hours) at the beginning of
Business Hours next following the time of
transmission in the place to which the facsimile was
sent.
12.4 In proving such service it shall be sufficient to
prove that personal delivery was made, or that such notice or
other written communication was properly addressed stamped and
posted or in the case of a facsimile message that an activity
or other report from the sender's facsimile machine can be
produced in respect of the notice or other written
communication showing the recipient's facsimile number and the
number of pages transmitted.
12.5 Any notice to be served upon the Vendors must be
given to each of them.
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<PAGE> 32
13. MISCELLANEOUS
13.1 The Purchaser shall be responsible for its own and
the advisory, legal and accounting fees and expenses of the
Company and its advisers related to the negotiation,
preparation, finalisation and completion of this agreement and
all other documentation contemplated thereby. Save as
aforesaid each party shall indemnify and hold harmless the
other party from any claims for broker's or finder's fees
arising from this transaction by any person claiming to have
been engaged by such party.
13.2 Subject to clause 5, this agreement shall so far as
it remains to be performed after execution continue in full
force and effect notwithstanding Completion.
13.3 No term or provision of this agreement shall be
varied or modified by any prior or subsequent statement,
conduct or act of any party, except that the parties may amend
or vary this agreement but only by letter or written
instrument signed by all of the parties.
13.4 Subject to the other provisions of this agreement, no
waiver by any of the parties to this agreement of any
requirements of this agreement or of any of such party's
rights under this agreement shall be valid unless such waiver
is in writing and signed by or on behalf of each of the
parties to this agreement.
13.5 Subject to the other provisions of this agreement, no
failure to exercise, and no delay in exercising, on the part
of the Purchaser any right or remedy under this agreement
shall operate as a waiver of such right or remedy nor shall
any single or partial exercise of any right or remedy preclude
the exercise of any other right or remedy.
13.6 Subject to the other provisions of this agreement,
the rights and remedies conferred on the Purchaser in this
agreement are cumulative.
13.7 The headings to the clauses in this agreement and in
the schedules are for ease of reference only and shall not
form any part of this agreement for the purposes of
construction.
13.8 This agreement and the documents to be delivered on
Completion as set out in clause 7:
(a) set out the entire agreement and
understanding between the parties in respect of the
sale and purchase of the Sale Shares; and
(b) (in relation to such subject matter)
supersede all prior discussions, understandings,
undertakings, promises, conditions, indemnities,
warranties, representations, covenants, undertakings
and agreements between the parties and their agents
(or any of them) and all prior
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<PAGE> 33
representations, warranties and expressions of
opinion by any party (or its agent) to any other
party (or its agent).
13.9 It is acknowledged and agreed that:
(a) no party has entered into this agreement in
reliance upon any representation, warranty, promise,
condition, representation, covenant, indemnity or
undertaking of any other party which is not expressly
set out in this agreement;
(b) no party shall have any claim or remedy in
respect of misrepresentation or breach of warranty
(whether negligent or otherwise) or any untrue
statement made by any other party save to the extent
set out in or expressly incorporated in this
agreement and each party irrevocably and
unconditionally waives any right which it may have to
claim damages for any misrepresentation (other than a
misrepresentation contained in this agreement) or for
breach of any express or implied warranties (other
than a warranty set out in or expressly incorporated
in this agreement).
13.10 This agreement may be entered into in any number of
counterparts and by the parties to it on separate
counterparts, each of which when so executed and delivered
shall be an original, but all the counterparts shall together
constitute one and the same instrument.
13.11 If at any time any term or provision in this
agreement shall be held to be illegal, invalid or
unenforceable, in whole or in part, under any rule of law or
enactment, such term or provision or part shall to that extent
be deemed not to form part of this agreement, but the
enforceability of the remainder of this agreement shall not be
affected.
13.12 Any notice, consent or agreement or other action to
be required to be taken by any of the Vendors pursuant to or
in connection with this agreement may only be given by each of
the Vendor on its own behalf.
13.14 This agreement shall be binding on and shall enure
for the benefit of the personal representatives and successors
of the parties.
14. WARRANTORS' REPRESENTATIVE
The following provisions of this clause 14 (other than clause
14.6) shall apply amongst the Warrantors alone to the
exclusion of the Purchaser (other than clause 14.6) and 3i:-
14.1 A committee comprising the Warrantors' Representative
shall be formed and shall at all times be comprised of not
more 2 members ("Committee"). Any member of the
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<PAGE> 34
Committee (each a "Member") may resign at any time by giving
30 days written notice thereof to the other Member. A Member
must be a Warrantor or the duly authorised representative of a
Warrantor. Any Member may be removed at any time by the
affirmative vote or written consent of Warrantors being
interested at least 75% of the Escrow Shares. If any Member
shall resign, be removed or become incapable of acting, or if
a vacancy in the membership of the Committee shall otherwise
occur, the holders of 75% of the Escrow Shares may appoint
another person to act as a member of the Committee. Such
successor Member (if not a Warrantor) shall execute a deed
agreeing to be bound by and adhere to the provisions of this
clause 15 and thereupon, without any further act, deed or
conveyance, shall become vested with all of the rights, power
and duties of the retiring Member. If both Members are
otherwise unable to act, or if the Warrantors elect to change
the Warrantors' Representative, then the Warrantors may
appoint a new Committee or another agent or body to act as
Warrantors' Representative by the affirmative vote or written
consent of Warrantors holding not less than 75% of the Escrow
Shares. No bond shall be required of the Warrantors'
Representative, and neither Member shall receive compensation
for his, her or its services. Notices or communications to or
from the Warrantors' Representative shall constitute notice to
or from each of the Warrantors. The Warrantors' Representative
shall be entitled to submit a claim and receive reimbursement
from the Escrow Fund for all reasonable, documented
out-of-pocket expenses incurred by the Warrantors'
Representative as a result of acting as the Warrantors'
Representative; subject to the terms of the Escrow Agreement.
Any such reimbursement shall be paid in Escrow Shares out of
the relevant Escrow Fund.
14.2 ACTION BY THE COMMITTEE AND THE SHAREHOLDERS'
REPRESENTATIVE.
The Members may act only through the Committee. However, the
Members may individually implement actions approved by the
Committee. Meetings of the Committee shall be held at such
times as may from time to time be fixed by resolution of the
Committee or called by any Member of the Committee. Meetings
of the Committee shall be held at such place as from time to
time may be fixed by resolution of the Committee.
Notice of meetings of the Committee fixed by resolution of the
Committee need not be given. Notice of each other meetings
shall be mailed to each Member by the Member calling the
meeting, addressed to each Member's residence or usual place
of business, at least three days before the day on which the
meetings is to be held, or shall be sent to the Member by
telegraph, cable, wireless, or similar means so addressed or
shall be delivered personally, by telephone or by facsimile
with confirmation received, at least twenty-four (24) hours
before the time the meeting is to be held. Each notice shall
state the time and place of the meeting but need not state the
purposes thereof. Notices of any such meeting need not be
given to any Member who submits a signed waiver of notice,
whether before or after the meeting, or who attends the
meeting without protesting, prior thereto or at its
commencement, the lack of notice.
At each meeting of the Committee the presence of 2 Members
shall constitute a quorum for the transaction of business, and
the vote of 2 Members present at the time of the vote
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<PAGE> 35
shall be the act of the Committee. In the event of deadlock,
the matter shall be referred as soon as reasonably practicable
to the Warrantors for resolution. The decision of Warrantors
holding at least 75% of the Escrow Shares shall be binding on
all of the Warrantors. Notwithstanding the foregoing, if there
is for any reason only one Member, such Member may act only
for the purpose of filling vacancies on the Committee or
making an objection to any claim made by the Purchaser against
the Escrow Shares in terms of the Escrow Agreement.
Any action required or permitted to be taken by the Committee
may be taken without a meeting if all Members consent in
writing to the adoption of a resolution authorizing the
action. The resolution and the written consents thereto by the
Members shall be filed with the minutes of the proceedings of
the Committee.
Any one or more Members may participate in a meeting of the
Committee by means of a conference telephone or similar
communications equipment allowing all person participating in
the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a
meeting.
In performing its duties hereunder and as contemplated hereby
by the Purchase Agreement and Escrow Agreement, the Committee
may, but need not, confer and consult with any or all of the
Warrantors. All decisions made and actions taken by the
Warrantors' Representative in connection with this Agreement
and the Purchase Agreement shall be final and binding on the
Warrantors, whether or not the Committee consulted with the
Warrantors in the course of making any such decision or taking
any such action.
The Warrantors' Representatives shall be entitled to rely upon
any order, judgment, award, certification, demand, notice,
instrument or other writing delivered to it under this
Agreement or the Purchase Agreement without being required to
determine the authenticity or the correctness of any fact
stated therein or the propriety or validity of the service
thereof. The Warrantors' Representative may act in reliance
upon any instrument or signature believed by it to be genuine
and may assume that any persons purporting to give notice or
receipt of advice or make any statement or execute any
document in connection with the provisions hereof has been
duly authorized to do so.
The Warrantors' Representative may engage such third parties
at such cost as the Warrantors' Representative shall in its
sole discretion deem necessary or appropriate for the adequate
performance of its duties hereunder and may rely on the advice
of such third parties with respect to matters within their
professional or expert competence.
14.3 ACTION BY THE WARRANTORS' REPRESENTATIVE
Meetings of the Warrantors may be called at any time by the
holders of twenty-five percent (25%) of the Escrow Shares or
by the Committee and shall be held on such day and at such
hour as is fixed in the call of the meeting. If all Members of
the Committee
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<PAGE> 36
have resigned or are otherwise unable to act, the holders of
ten percent (10%) of the Escrow Shares may call a meeting.
Meetings of the Warrantors shall be held at the Edinburgh
offices of the Company's Solicitors or at such other place, as
may be fixed by the Committee.
Notice of each meeting of Warrantors shall be in writing and
shall state the place, date, and hour of the meeting and shall
state the purpose or purposes for which the meeting is called
and who called the meeting. A copy of the notice of any
meeting shall be given by the Committee or the Warrantors
meeting, personally or by mail, not less than ten (10) nor
more than twenty (20) days before the date of the meeting, to
each Warrantor. If mailed, such notice is given when deposited
in the mail, with postage thereon prepaid, directed to the
Warrantor at such address as appears in schedule 1 to the
Purchase Agreement, or, if such Warrantor shall have filed
with the Committee a written request that notices be mailed to
some other address, then directed to the Warrantor at such
other address. Notice of meetings of Warrantors need not be
given to any Warrantor who submits a signed waiver of notice,
in person or by proxy, whether before or after the meeting.
The attendance of any Warrantor at a meeting, whether in
person or by proxy, without protesting prior to the conclusion
of the meeting the lack of notice of such meeting, shall
constitute a waiver of notice by him.
Every Warrantor may authorize another person or persons to act
for him by proxy. Every proxy shall be revocable at the
instance of the Warrantor executing it, except as otherwise
provided by law. The authority of the holder of a proxy to act
shall not be revoked by the incompetence or death of the
Warrantor who executed the proxy unless, before the authority
is exercised, written notice of an adjudication of such
incompetence or of such death is received by the Committee.
Proxies which contain a faxed signature shall be treated in
the same manner as proxies with original signatures.
Whenever Warrantors are required or permitted to take any
action by vote, such action may be taken without a meeting on
written consent, setting forth the action so taken, signed by
the holders of the holders of 75% of the Escrow Shares in
which they are interested to approve the action so taken.
14.4 Neither the Warrantors' Representative nor any Member
shall be liable for any act done or omitted hereunder as the
Warrantors' Representative or Member while acting in good
faith and in the exercise of reasonable judgment. The
Warrantors (other than any Warrantor who is a Member) shall
severally indemnify the Warrantors' Representative and each
Member and shall hold the Warrantors' Representative and each
Member harmless against any loss, liability or expense
incurred without gross negligence, bad faith or willful
misconduct on the part of the Warrantors' Representative or
such Member and arising out of or in connection with the
acceptance or administration of the Warrantors'
Representative's or such Member's duties hereunder, including
the reasonable fees and expenses of any legal counsel retained
by the Warrantors' Representative or such Member.
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<PAGE> 37
14.5 Neither the Warrantors' Representative nor any Member
shall be liable for any mistake of fact or of law or any error
of judgement. Each Member and the Warrantors' Representative
is authorised to comply with and obey laws, orders,
judgements, decrees, and regulations of any governmental
authority, court, tribunal or arbitrator. If the Warrantors'
Representative or any Member complies with any such law,
order, judgement, decree or regulation, such Warrantors'
Representative or Member shall not be liable to the Warrantors
or to any other person even if such law, order, judgement,
decree or regulation is subsequently reversed modified,
annulled, set aside, vacated, found to have been entered
without jurisdiction or found to be in violation or beyond the
scope of any constitution or law. If (i) a Member or the
Warrantors' Representative is uncertain as to the
Representative's duties or rights hereunder, (ii) has received
any notice, advice, direction or other document from any other
party with respect to this Agreement or the Purchase Agreement
which, in the Member's or the Warrantors' Representative's
opinion, is in conflict with any of the provisions of this
Agreement or the Purchase Agreement, or (iii) is aware that
dispute has arisen with respect to this Agreement or the
Purchase Agreement, each Member and the Warrantors'
Representative shall be entitled, without liability to the
Warrantors to use their best efforts to perform their duties
under this Agreement or the Purchase Agreement until the
Warrantors' Representative is directed otherwise in writing by
an order, decree or judgement of a court of competent
jurisdiction which has been finally affirmed on appeal or
which by lapse of time or otherwise is no longer subject to
appeal or by an accountants' or arbitrators' determination as
provided in the Purchase Agreement.
14.6 The aforesaid indemnities shall remain in full force
and effect against any of the parties for a period equal to
the applicable statute of limitation for such claim; provided,
however, that if prior to the expiration of such period any
claim for indemnification has been asserted but not fully
determined, such period will be extended as to such claim,
until it is finally concluded. All rights, protections and
indemnities contemplated herein shall be available to each
Member with respect to actions or omissions while a member of
the Committee despite such Member's resignation or removal
from the Committee.
14.7 If a Member or the Warrantors' Representative is
entitled to indemnification, the Warrantors shall each be
individually liable in an amount equal to the amount of
indemnification multiplied by a fraction, the numerator of
which is the number of Escrow Shares owned by a Warrantor and
the denominator of which is the number of Escrow Shares owned
by all of the Warrantors.
14.8 A decision, act, consent or instruction of the
Warrantors' Representative shall constitute a decision of all
Warrantors and shall be final, binding and conclusive upon
each of such Warrantors, and the Escrow Agent and the
Purchaser may rely upon any such decision, act, consent or
instruction of the Warrantors' Representative as being the
decision, act, consent or instruction of each and every such
Warrantor.
14.9 Each Warrantor shall have voting rights with respect
to that number of Escrow Shares and New Shares contributed to
the Escrow Fund on behalf of such Warrantor (and on any voting
securities added to the Escrow Fund in respect of such Escrow
Shares) so long as
-35-
<PAGE> 38
such Escrow Shares and New Shares or other voting securities
are held in the Escrow Fund. As the record holder of such
shares or securities accordingly the Purchaser shall ensure
that the Escrow Agent shall vote such shares in accordance
with the instructions of the Warrantors having the beneficial
interest therein and shall promptly deliver copies of all
proxy solicitation materials to such Warrantors. The Purchaser
shall show the Escrow Shares and the New Shares contributed to
the Escrow Fund (as such expressions are defined in this
Agreement or the Escrow Agreement) as issued and outstanding
on its balance sheet.
14.10 Each of the Warrantors acknowledges that the
Warrantors' Representative shall act for each Warrantor for
and on behalf of the Warrantors, to give and receive notices
and communications on behalf of the Warrantors, to enter into
and perform the Escrow Agreement, to authorise delivery to the
Purchaser of Escrow Shares and New Shares or other property
from the Escrow Fund in satisfaction of claims by the
Purchaser, to object to such deliveries, to agree to,
negotiate, enter into settlements and compromises of, and
demand arbitration and comply with orders of courts and awards
of arbitrators with respect to such claims, and to take all
actions necessary or appropriate in the judgement of the
Vendors' Representative for the accomplishment of the
foregoing. The Vendors' Representative shall act by vote or
written action or consent of a 75% of the members of the
Committee.
15. LAW AND JURISDICTION
15.1 This agreement shall be governed by and construed in
accordance with English law and each party to this agreement
submits to the non-exclusive jurisdiction of the English
courts.
15.2 The Vendors and the Purchaser agree that any legal
action or proceeding arising out of or in connection with this
agreement may be brought in the High Court of Justice in
England, and the Vendors and the Purchaser hereby irrevocably
submit to the exclusive jurisdiction of such court in
connection with any such legal action or proceedings.
15.3 The Warrantors irrevocably appoint the Company's
Solicitors as their agent to accept service of legal
proceedings in connection with all matters arising out of this
agreement and the transactions contemplated by this agreement
and agree that any writ, judgment or other notice of legal
process in connection with any such legal action or
proceedings shall be sufficiently served if delivered to the
Company's Solicitors.
15.4 The Purchaser irrevocably appoints the Purchaser's
Solicitors as its agent to accept service of legal proceedings
in connection with all matters arising out of this agreement
and the transactions contemplated by this agreement and agrees
that any writ, judgment or other notice of legal process in
connection with any such legal action or proceedings shall be
sufficiently served if delivered to the Purchaser's
Solicitors.
-36-
<PAGE> 39
The parties to this agreement have signed and entered into this agreement on the
date and year first written above.
-37-
<PAGE> 40
SCHEDULE 1
THE VENDORS AND THE CONSIDERATION SHARES
<TABLE>
<CAPTION>
1 2 3 5 4
NAME ADDRESS NUMBER OPTION SHARES CONSIDERATION SHARES
OF SALE
SHARES
----------------------------------
4.1 4.2
3I ESCROW
CONSIDERATION SHARES
SHARES
4.2(a) 4.2(b)
FIRST SECOND
ESCROW ESCROW
SHARES SHARES
- ------------ -------------------- --------- ------------- -------------- --------- ------
<S> <C> <C> <C> <C> <C> <C>
Simon Best 6B Wester Coates 10,000 B 10,000 Nil 94,931 54,869
Road ordinary
Edinburgh EH12 5LN shares
Ian Kent 9 Latham Road 4,000 B 7,500 Nil 63,245 36,555
Cambridge CB2 2EG ordinary
shares
Ian Wilmut 5 Old Manse Road 12,000 C Nil Nil 52,472 30,328
Eddleston ordinary
Peebleshire shares
John Brown 7 Cluny Drive 2,000 B 6,000 Nil 33,270 16,226
Edinburgh EH10 6DW ordinary
shares
Ian Biggs Warren Hill House Nil 5,000 Nil 28,074 11,281
Storrington Road
Washington
West Sussex RH20 4AQ
John Clark 29 Broomie Knowe, 8,000 C Nil Nil 19,519 19,230
Lasswade ordinary
Midlothian shares
Roslin Roslin 172,000 Nil Nil 253,488 146,512
Institute Biotechnology Centre B
Roslin ordinary
Midlothian EH25 9PS shares
3i Group plc 91 Waterloo Road 172,000 Nil 1,240,000 Nil Nil
London A
SE1 8XP ordinary
shares
630,667
D
ordinary
shares
545.000 315,000
</TABLE>
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<PAGE> 41
SCHEDULE 2
THE COMPANY
<TABLE>
<S> <C> <C> <C>
Name: Roslin Bio-Med
Former Names: None
Number: SC179263
Date of Incorporation: 1 October 1997
Registered Office: Roslin Biotechnology Centre
Roslin
Midlothian
Authorised Share Capital: L. 446,880 divided as follows:
A ordinary P. 1.00 shares x 172,000 = L. 172,000
B ordinary P. 1.00 shares x 248,000 = L.248,000
C ordinary P. 1.00 shares x 20,000 = L 20,000
D ordinary one pence shares x 630,667 = L.6,306
Issued Share Capital: L. 386,306.67
Shareholders: 3i plc 172,000 A ordinary shares
630,667 D ordinary shares
Roslin Institute 172,000 B ordinary shares
Simon Best 10,000 B ordinary shares
Ian Kent 4,000 B ordinary shares
John Brown 2,000 B ordinary shares
Ian Wilmut 12,000 C ordinary shares
John Clark 8,000 C ordinary shares
Directors: Simon Best
Ian Biggs
John Brown
Graham Bulfield
Ian Kent
Ian Wilmut
Secretary: Piers Lincoln
Accounting Reference Date: 28 February
Last Accounts: None filed
Last Annual Return: 9 November 1998
Charges: None
</TABLE>
-39-
<PAGE> 42
SCHEDULE 3
COMPANY IPR
PART A
PATENTS
SCHEDULE OF NUCLEAR TRANSFER PATENT APPLICATIONS
* [*]
- --------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-40-
<PAGE> 43
* [* 2 pages omitted]
- --------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-41-
<PAGE> 44
*[*]
PART B
TRADE MARKS
2 unregistered - see artwork attached as Annex A
PART C
LICENCES
1. License Agreement dated 7 April 1998 between Roslin Institute and the
Company.
2. Research Agreement dated 7 April 1998 between Roslin Institute and the
Company.
- --------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-42-
<PAGE> 45
SCHEDULE 4
REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS
Save where expressly provided, defined terms shall have the same meaning as in
clause 1 of this agreement.
PART A
TITLE AND INVESTMENT WARRANTIES
For the avoidance of doubt and notwithstanding any other provisions of this
agreement each of the following Warranties in this Part A of Schedule 4 is given
severally by each Vendor and accordingly it is agreed by the Purchaser that none
of the other Vendors should be liable or responsible for any breach of the
following Warranties by any of the other Vendors:-
1. The Vendor has all requisite legal and, to the extent applicable,
corporate power, and authority to enter into and perform its
obligations under this agreement and to consummate the transactions
contemplated hereby in so far as applicable to the Vendor. The
execution, delivery and performance of this agreement and the
consummation of the transactions contemplated hereby in so far as
applicable to the Vendor have been duly and validly approved and
authorised by all necessary action, including, if applicable, corporate
action, by or on behalf of such Vendor. This agreement has been duly
executed and delivered by such Vendor and constitutes a valid and
binding obligation of the Vendor, subject to the laws of general
application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive
relief and equitable remedies. No consent, approval, order or
authorisation of, or registration, declaration or filing with, any
Governmental Entity, which has not been obtained is required by or with
respect to the Vendor in connection with the execution and delivery of
this agreement by the Vendor or the consummation by the Vendor of the
transactions contemplated hereby in so far as applicable to the Vendor.
2. The Vendor is the sole owner of the Sale Shares reflected next to
such Vendor's name in column 3 of schedule 1 of this agreement and has
or will have, as at Completion, good and valid title to such Sale
Shares free and clear of all Encumbrances whatsoever. The Vendor
represents that he or it has or will have, as of the Completion, full
right, power and authority to sell, transfer and deliver such Sale
Shares to the Purchaser, and, upon delivery of the certificate or
certificates therefor duly endorsed for transfer to the Purchaser and
the Purchaser's payment for and acceptance thereof (subject, however to
any applicable stamp duty or other taxes, levies and duties being paid
thereon and amendment thereafter of the Register of Members of the
Company to reflect such transfer), will transfer to the Purchaser good
and valid title thereto free and clear of any
-43-
<PAGE> 46
Encumbrance. The Vendor is not party to any voting trust, agreement or
arrangement affecting the exercise of the voting rights of the Sale
Shares. There is no action, proceeding, claim or, to the Vendor's
knowledge, investigation against the Vendor or the Vendor's assets,
properties or, as applicable, any of the Vendor's respective officers
or directors, pending or, to the Vendor's knowledge, threatened, at law
or in equity, or before any court, arbitrator or other tribunal, or
before any administrative law judge, hearing officer or administrative
agency relating to or in any other manner impacting upon the Sale
Shares held by such Vendor.
3. The execution, delivery and performance of this agreement do not,
and the consummation of the purchase of Sale Shares and the other
transactions contemplated by this agreement will not conflict with or
result in a violation of the memorandum and articles of association,
bylaws, partnership agreement or other applicable charter document of
the Vendor, or conflict with, or (with or without notice or lapse of
time, or both) result in a termination, breach, impairment or violation
of, or constitute a default or result in the creation or imposition of
any lien, charge or encumbrance upon any of the Vendor's Sale Shares
under, (a) any instrument, indenture, lease, mortgage or other
agreement or contract to which the Vendor is a party or to which such
Vendor or any of such Vendor's assets or properties may be subject or
(b) any applicable federal, state, local or foreign judgement, writ,
decree, order, ordinance, statute, rule or regulation applicable to the
Vendor or the Vendor's assets or properties. The consummation of the
purchase of the Vendor's Sale Shares and the other transactions
contemplated by this agreement in so far as applicable to the Vendor
will not require the consent of any third person which has not been
obtained with respect to the rights, licenses, franchises, leases or
agreements of the Vendor.
4. The Vendor hereby acknowledges that the Vendor has read this
agreement, the Escrow Agreement, the Registration Rights Agreement and
the other documents to be delivered in connection with the consummation
of the transactions contemplated hereby in so far as applicable to him
or it and has made an independent examination of the transactions
contemplated hereby (including the tax consequences thereof) in so far
as applicable to him or it. The Vendor acknowledges that the Vendor has
been afforded an opportunity to consult with and has relied upon the
advice, if any, of the individual Vendor's relevant legal counsel,
financial advisors, or accountants with respect to the transactions
contemplated hereby to the extent that each Vendor has deemed necessary
and the Purchaser's Warranties and the other undertakings of the
Purchaser in this agreement and the other documentation contemplated
hereby, and has not been advised or directed by Purchaser, the Company
or their respective officers, employees, legal counsel or other
advisors in respect of any such matters and has not relied on any such
parties in connection with this agreement and the transactions
contemplated hereby in so far as applicable to him or it.
5. The Vendor hereby confirms, that the Consideration Shares to be
allocated or issued to him or it will be acquired for investment for
his or its own account, not as a nominee or agent, and not with a
present intention to resell or distribute any part thereof,
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and that the Vendor has no present intention of selling, granting any
participation in, or otherwise distributing the same. The Vendor
further represents that the Vendor does not presently have any
contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third
person, with respect to any of the Consideration Shares. The Vendor has
not been formed for the specific purpose of acquiring the Consideration
Shares.
6. The Vendor understands that the Consideration Shares have not been,
and will not be, registered under the Securities Act, by reason of a
specific exemption from the registration provisions of the Securities
Act which depends upon, among other things, the bona fide nature of the
investment intent and the accuracy of the Vendor's representations as
expressed herein. The Vendor understands that the Consideration Shares
are "restricted securities" under applicable U.S. federal and state
securities laws and that, pursuant to these laws, the Vendor must hold
the Consideration Shares indefinitely unless they are registered with
the Securities and Exchange Commission and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available. The Vendor acknowledges that the Purchaser
has no obligation to register or qualify the Consideration Shares for
resale except as set forth in this agreement and the Registration
Rights Agreement. The Vendor further acknowledges that if an exemption
from registration or qualification is available, it may be conditioned
on various requirements including, but not limited to, the time and
manner of sale, the holding period for the Consideration Shares, and on
requirements relating to the Purchaser which are outside of the
Vendor's control
7. The Vendor understands that the Consideration Shares and any
securities issued in respect of or exchange for the Consideration
Shares, may bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."
8. If the Vendor is not a United States person (as defined by Section
7701(a)(30) of the United States Internal Revenue Code of 1986, as
amended), such Vendor hereby represents that it has satisfied itself as
to the full observance of the applicable laws of its jurisdiction in
connection with any invitation to subscribe for the Consideration
Shares including (i) the legal requirements within its jurisdiction for
the purchase of the Consideration Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or
other consents that may need to be obtained, and (iv) the income tax
and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale, or transfer of the Consideration
Shares.
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PART B
COMMERCIAL WARRANTIES
The Company
1.1 The Company has since its inception carried on the
business of a research and development company.
2. The share capital
2.1 The Sale Shares constitute the whole of the issued and
allotted share capital of the Company. All of the Sale Shares
are fully paid or credited as fully paid.
2.2 There is not outstanding any loan capital of the Company.
2.3 Other than as set forth in clause 2.1 of this schedule and
in the Warrantors' Disclosure Letter, there are no other
outstanding shares of capital stock or voting securities of
the Company, and there are no other options, warrants, calls,
rights, commitments or agreements of any character to which
the Company is a party or by which it is legally bound
obligating the Company to issue, deliver, sell, repurchase or
redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of the capital stock of the Company or
obligating the Company to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement.
3. Information Provided
3.1 The facts set out in the specific disclosures set out in
the Warrantors' Disclosure Letter (but excluding any documents
annexed to the Warrantors' Disclosure Letter which are dealt
with in paragraphs 3.2 and 3.3 below) are true and accurate in
all material respects.
3.2 With regard to documents annexed to the Warrantors'
Disclosure Letter and which are the product of the Warrantors,
the facts (but expressly excluding any expressions of opinions
or matters relating to financial matters) are true and
accurate in all material respects.
3.3 With regard to any documents annexed to the Warrantors'
Disclosure Letter (other than those documents referred to in
paragraph 3.2 above), the Warrantors have provided such
documents to the Purchaser in good faith and, so far as the
Warrantors are aware, the facts (but expressly excluding any
expressions of opinion or matters relating to financial
matters) set out in such documents are not misleading in any
material respect.
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3.4 So far as the Warrantors are aware every document annexed
to the Warrantors' Disclosure Letter is a true and complete
copy of the originaL
4. The Accounts
4.1 A true, complete and accurate copy of the Accounts is
annexed to the Warrantors' Disclosure Letter.
4.2 The Accounts were prepared by the Company's Accountants
under the historical cost convention and complied with and
were prepared in accordance with all applicable Accounting
Requirements.
4.3 The Accounts:
(a) give a true and fair view of the assets and
liabilities of the Company as at the Accounts Date
and of its losses for the Financial Year ended on the
Accounts Date;
(b) make appropriate provision for, reserve for or
disclose, as appropriate and to the extent required
by relevant Accounting Requirements, all liabilities,
whether actual, contingent, unquantified or disputed,
all capital commitments, whether actual or
contingent, and all bad or doubtful debts of the
Company as at the Accounts Date in each case, in
accordance with all applicable Accounting
Requirements; and
(c) make appropriate provision for or reserve for
deferred Taxation in accordance with all applicable
Accounting Requirements.
4.4 In the Accounts fixed assets have been depreciated in
accordance with SSAP 12 as amended by FRS 3.
4.5 No amount included in the Accounts in respect of any
asset, whether fixed or current, exceeds its purchase price or
its production cost (as defined in the Companies Act) or (in
the case of current assets) its estimated net realisable value
as at the Accounts Date.
4.6 The values attributed to the assets of the Company in the
Accounts as at the Accounts Date are such that if sold or
realised at that value:
(a) no claim for corporation tax in respect of any
chargeable gain would be made; and
(b) no liability to Taxation would arise as a result
of any claim in respect of a balancing charge,
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and, so far as the Warrantors are aware, none of such assets has been
acquired for any consideration in excess of its net realisable value as
at the date of such acquisition or otherwise than by way of a bargain
at arm's length.
5.
There is no paragraph 5
6. Position since the Accounts Date
6.1 Save as disclosed in the Warrantors' Disclosure Letter,
since the Accounts Date:
(a) no dividend or other distribution (within the
meaning of that expression as contained in section
209 or 210 or 418 of ICTA) has been declared, paid or
made by the Company;
(b) the Company has carried on its business in the
ordinary and usual course without any interruption in
its nature, scope or manner and so as to maintain the
same as a going concern;
(c) the Company has not written off any debt in
excess of L 10,000 and no debt has been released by
the Company on terms that the debtor pays less than
the book value of its debt:
(d) the Company has not entered into any contract
involving expenditure on capital account or the
purchase of any capital equipment or other items of a
capital nature of a value in excess of L 10,000;
(e) the Company has not made any disposal or deemed
disposal which might give rise to a liability for
corporation tax on chargeable gains otherwise than in
the ordinary course of trade;
(f) the Company has not acquired or disposed of or
agreed to acquire or dispose of any business or any
material asset or assumed or acquired any material
liability (including any contingent liability)
otherwise than in the ordinary course of business;
(g) there has been no material adverse change in the
assets, liabilities or financial position of the
Company and no event, fact or matter has occurred
which will or is likely to give rise to any such
change;
(h) the Company has not disposed of or agreed to
dispose of any asset for a consideration payable by
instalments where any instalment remains unpaid;
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<PAGE> 51
(i) the Company has paid its creditors in accordance
with normal payment procedures of the Company,
details of such procedures being disclosed in the
Warrantors' Disclosure Letter;
(j) none of the assets of the Company has been
diminished by any negligent, unlawful or fraudulent
act of the Warrantors; and
(k) no provision in the accounting records of the
Company (within the meaning of Section 221 of the
Companies Act) has been released; and
7. Accounting and Other Records
7.1 All the accounting records of the Company (as defined in
Section 221 of the Companies Act) have been properly kept in
accordance with sections 221 and 222 of the Companies Act, are
within the Company's possession and control and all
transactions relating to its business have been duly and
correctly recorded in all material respects therein and such
accounting records taken together disclose with reasonable
accuracy, at the date of this agreement, the financial
position of the Company at such time.
7.2 A copy of all written agreements, deeds and other
instruments entered into by the Company are in its possession
and controL
8. Constitution
8.1 A true, complete and accurate copy of the memorandum and
articles of association of the Company having embodied within
it or annexed to it a copy of each resolution or agreement
referred to in section 380 of the Companies Act is annexed to
the Warrantors' Disclosure Letter. Such documents contain full
details of the rights and restrictions attached to the share
capital of the Company, and all such resolutions have been
properly passed as resolutions of the Company and filed with
the Registrar of Companies within the period for filing
required under the Companies Act.
8.2 The register of members and statutory books of the Company
contains a complete, true and accurate record of the members
of the Company and all the other information which they are
required to contain under the Companies Act and comply with
all the requirements of the Companies Act and all returns
particulars resolutions and other documents required to be
delivered by the Company to the Registrar of Companies have
been duly delivered within the time limits required under the
Companies Acts and, so far as the Warrantors are aware, no
fines or penalties are outstanding or known to be due.
8.3 The Company has not received any written notice of any
application or intended application for the rectification of
its register of members.
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8.4 The only directors of the Company immediately prior to
Completion are the persons whose names are listed in the
Warrantors' Disclosure Letter and the Company has no alternate
or shadow directors.
8.5 The Company has not provided any financial assistance
within section 151 of the Companies Act or otherwise directly
or indirectly for the purchase or the proposed purchase of its
own shares.
8.6 The Company has not purchased any of its own shares.
8.7 The Company has no assets outside the United Kingdom nor
does it have a branch, agency or place of business or any
permanent establishment (as that expression is defined in the
relevant double taxation relief orders current at the
Completion Date) outside the United Kingdom.
8.8 The Company has no shares or other securities in any other
company and has not agreed to acquire any such shares or
securities or held any such shares or securities at any time.
The Company does not take part in the management of any other
company, firm, association or business organisation.
8.9 No share in the capital of the Company has been issued or
transferred otherwise than in accordance with the memorandum
and articles of association of the Company from time to time
in force.
9. Bank Accounts and Indebtedness
9.1 A statement of all the bank accounts and the building
society accounts and other investment accounts and of the
credit or debit balances thereon of the Company as at no later
than the 5th business day prior to the Completion Date is
annexed to the Warrantors' Disclosure Letter and since such
statement there have been no payments out of any such accounts
otherwise than in the ordinary course of trade; and there are
no unpresented cheques drawn by the Company for sums exceeding
in the aggregate L 10,000.
9.2 The Company has not incurred any indebtedness in the
nature of borrowings which it has not repaid in full or
satisfied.
9.3 The amounts borrowed by the Company do not exceed any
limitation on its borrowing contained in its articles or
association or in any debenture or other deed or document
legally binding upon the Company and the Company has not
incurred any indebtedness except indebtedness arising in the
ordinary course of business
9.4 The Company has never had and has no bank overdraft
facilities or agreements, acceptance credits or other
financial facilities outstanding or available
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to it under any existing arrangements between the Company and
any lender in place on the Completion Date.
9.5 Since the Accounts Date, the Company has not engaged in
financing of a type which would not require by law or
Accounting Requirements to be shown or reflected in the
Accounts, had such arrangement or financing been entered into
prior to the Accounts Date.
9.6 The Company has not entered into or agreed to enter into
any performance or other bonds and no such bonds have been
given by any other person on behalf of the Company or in
relation to any of its obligations.
9.7 There is not, except for the registered charges material
details of which are set out in the Warrantors' Disclosure
Letter or retention of title provisions arising through the
ordinary course of trade, any Encumbrance of any nature
(including a conditional obligation) on or affecting the
assets or property or any part of the assets or property of
the Company nor any debenture whether secured or otherwise or
floating charge.
9.8 All charges by or in favour of the Company have been
registered in accordance with the provisions of the Companies
Act or comply with all necessary formalities as to
registration or otherwise in any other relevant jurisdiction;
and the registered particulars of all charges over any assets
of the Company are complete and accurate in all material
respects.
10. Debts/Unpaid Liabilities
10.1 No part of the sum shown in the Accounts in respect of
debtors is represented by debts which were then more than 90
days overdue for payment and not provided for therein.
10.2 Except to the extent to which provision or reserve is
made in the Accounts the Warrantors are not aware of any
reason why all debts owed to the Company and reflected in the
Accounts will not realise their full value and be good and
collectable within 90 days of their due date for payment in
the normal course of business, and, so far as the Warrantors
are aware, none of such debts is subject to any counterclaim
or set-off.
10.3 The Company is not owed any sums other than debts
incurred in the ordinary course of trading.
10.4 The Company does not have any unpaid liability where the
relevant bill or account was received more than 90 days prior
to the Completion Date.
10.5 The Company is not the guarantor of any debt or unpaid
liability of any other party.
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11. Assets
11.1 The Company has no plant and machinery.
11.2 All vehicles and office furniture and equipment used by
the Company are its property both legally and beneficially and
the Company has a good and valid title thereto and none is the
subject of any Encumbrance.
11.3 All office furniture and equipment owned and/or used by
the Company are in its possession and control and are in
reasonable repair and condition fair wear and tear excepted
having regard to their age; are regularly maintained in
accordance with applicable technical standards, safety
regulations and the provisions of any applicable agreement and
are in satisfactory working order.
11.4 Copies of maintenance contracts for the assets of the
Company (except for the Computer System) which have maintained
by independent or specialist contractors are annexed to the
Warrantors' Disclosure Letter.
11.5 The list of assets of the Company annexed to the
Warrantors' Disclosure Letter comprises a record of all the
vehicles, equipment, furniture and other assets owned or
possessed by the Company and such list is true and complete in
all material respects.
11.6 Save as disclosed in the Warrantors' Disclosure Letter,
the Company has not entered into any leasing or hiring
agreement, hire purchase agreement, conditional sale or credit
sale agreement, agreement for payment on deferred terms or any
similar agreement or arrangement and is not in material breach
of such agreements.
12. Intellectual Property
(The warranties in this Section 12 do not apply to the Software which
is dealt with in Section 14).
12.1 The Company is the sole legal and beneficial owner of all
the Company IPR (save for the Intellectual Property which is
the subject of the Licenses) and all Company IPR is
subsisting.
12.2 The Company has not entered into any agreements, licenses
or created any Encumbrances affecting to the Company IPR or
restricting its use by the Company in any way and for the
purposes of this Warranty, Encumbrance shall be defined as any
mortgage, security, interest, lien, pledge, hypothecation,
assignment by way of security, right of pre-exemption, option,
charge, covenant or restriction.
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12.3 In so far as any of the Patents are registrable within
the territories specified in schedule 3 and save as disclosed
in the Warrantors' Letter:
(a) all relevant registrations and applications
therefor have been made or are in the name of the
Company or (in the case of the Intellectual Property
which is the subject of the License Agreement) the
Roslin Institute (Edinburgh), Biotechnology and
Biological Sciences Research Council and Ministry of
Agriculture, Fisheries and Food ("the Patent
Proprietors");
(b) all application and renewal fees due to date have
been duly paid; and
(c) The Company (and in relation to the Intellectual
Property which is the subject of the License
Agreement, the Patent Proprietors) has done
everything necessary to date in relation to such
applications for registrations and all such
applications are proceeding normally and there are no
material facts of which the Warrantors are aware
which could significantly undermine those
applications or reduce to a significant extent the
scope of protection of any patents arising from such
applications.
12.4 There are no circumstances which could entitle a third
party (including any of the Warrantors) to a license,
permission, consent or assignment of or in respect of any of
the Company IPR or to call for or exercise any right to use or
work under any of the Company IPR or which could provide a
third party with a defence to patent infringement proceedings
under section 44 Patents Act or any provision having an
equivalent effect in any jurisdiction.
12.5 Except for matters done in the course of applying for and
prosecuting the Patents, nothing has been done or omitted to
be done by the Company or the Patent Proprietors whereby any
person is able to obtain cancellation or rectification or any
other modifications of any registration of any of the Patents
in any jurisdiction in which they are currently applied for.
12.6 As far as the Warrantors are aware the Company does not
own or use either individually or with any person any
Intellectual Property other than the Company IPR.
12.7 There is no impediment or restriction on the Company's
use and exercise of any of the Company IPR and so far as the
Warrantors are aware the use and exercise does not constitute
an infringement of any intellectual property owned by any
third party.
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12.8 Neither the Company nor any of the directors or employees
or consultants of the Company are party to or bound by an
agreement for sharing, exchanging, passing or otherwise
transferring Company IPR to any third party.
12.9 No notice of any actions, claims, counterclaims,
applications or allegations impugning the validity or
enforceability of any of the Patents Agreements or (save in
relation to Intellectual Property which is the subject of the
License) the Company's ownership thereof has been received by
the Company and all material facts of which the Warrantors are
aware that such a claim is going to be made by any third party
has been Disclosed.
12.10 The Company has put in place procedures set out in the
Warrantors' Disclosure Letter designed to ensure that no act
is done or omitted to be done which has resulted or which may
result or is capable of resulting in any breach or
infringement of any third party's Intellectual Property.
12.11 The Warrantors Disclosure Letter comprises a complete
list of all licenses (other than implied licences) and
agreements pursuant to which the Company uses any Intellectual
Property owned by any third party. No notice to terminate, or
of any breach or material dispute of, any of the Licenses or
agreements so disclosed has been served by or received by the
Company and so far as the Warrantors are aware the Company has
not done or omitted to do any act which could amount or result
in any such breach.
12.12 As far as the Warrantors are aware, the Licensors have
at all times performed and observed the terms of the Licenses
in all material respects.
12.13 The Company has not made any claim or allegation against
any third party alleging infringement of any of the Company
IPR and so far as the Warrantors are aware, there are no
facts, matters or circumstances which could give rise to any
such action, claim or allegation.
12.14 The Company has not received notice of any claims
against the Company under any contract or under the Patents
Acts (or otherwise) for employee compensation in respect of
any Company IPR or any other like claim by a self-employed
contractor.
12.15 The Company IPR includes a list of all registered
intellectual property rights held by the Company which is
complete in all material respects.
12.16 The trade marks listed in Part 3 of the schedule
comprise all the trademarks used by the Company in connection
with its business.
12.17 The Company does not own or use any brand, trade or
business name in connection with its business other than the
trade marks listed in Part 3 of the Schedule.
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12.18 The Confidential Information has at all times been
maintained by the Company so as to endeavour to preserve its
confidentiality. In so far as the Confidential Information or
any part thereof has been disclosed to any third parties it
has been disclosed under the terms of the confidentiality
agreements listed in the Warrantors' Disclosure Letter.
12.19 The Company has not registered any trade marks or design
rights.
13. Employees and Consultants
13.1 The particulars of the name, job title, date of
commencement of employment and/or appointment to office, age,
notice period, salary, benefits (pecuniary or otherwise),
confidentiality obligations and all other written terms and
conditions of employment or engagement of each director,
consultant or employee of the Company set out in the
Warrantors' Disclosure Letter are true and accurate in all
material respects.
13.2 There are no outstanding offers of employment or
engagement made to any person by the Company and there is no
one who has accepted an offer of employment or engagement made
by the Company but who has not yet taken up that employment or
engagement.
13.3 All service and employment agreements entered into by the
Company and in force may be terminated by not more than six
months' notice and without payment of compensation or damages
(other than any payments arising under statute or payment for
wrongful dismissal). All consultancy agreements entered into
by the Company may be terminated by not more than six months'
notice without giving rise to any claim for damages or
compensation.
13.4 No director, employee or, so far as the Warrantors are
aware, consultant of the Company:
(a) has given or received notice terminating his
employment or engagement or altering its terms, and
no such person will be entitled as a result of the
entering into of this agreement to give notice of
termination or to claim for any payment or benefit or
to treat himself as being released from any
obligation; or
(b) is currently on sick leave which (as of the
Completion Date) has been continuing for more than 14
consecutive days; or
(c) is currently on maternity leave.
13.5 There are no outstanding arrears of salary, wages,
holiday pay or other remuneration due to any of the Company's
directors, consultants or employees.
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13.6 Save as disclosed in the Warrantors' Disclosure Letter,
since the Accounts Date:
(a) no change has been made in the rate or basis of
remuneration, fee or the pension or other benefits
paid to or provided for any director, consultant or
employee of the Company; and
(b) no change has been made in any other terms of
employment or engagement of any such director,
consultant or employee.
13.7 The Company has not entered into any agreement or given
any assurance (whether legally binding or not) or created any
expectation regarding any future variation in any contract of
employment or so far as the Warrantors are aware in any
consultancy agreement in respect of any of its directors,
employees or consultants or any agreement imposing an
obligation on the Company or any expectation on the part of
any director, employee or, so far as the Warrantors are aware,
consultant to increase the basis and/or rates of remuneration
or payment and/or the provision of other benefits to or on
behalf of any of its directors, employees or consultants at
any future date.
13.8 The Company does not operate any share option scheme,
employee trust, cash bonus scheme or other employee incentive
arrangement.
13.9 The Company has not entered into any union membership,
security of employment, redundancy, recognition or other
collective agreement (whether legally binding or not) with a
trade union, association of trade unions, works council, staff
association or other organisation or body of employees, nor
has the Company done any act which might be construed as
recognition, nor has the Company in respect of any employee
entered into any agreement with any trade union or other
employee body representing employees concerning the
introduction of new equipment or technology.
13.10 The Company is not involved in any industrial or trade
dispute or any dispute or negotiation regarding a claim of
material importance or the dismissal or varying of the terms
and conditions of employment of any present or former employee
and there are no facts known to the Warrantors which indicate
that there may be any such dispute or negotiation.
13.11 No disciplinary action, whether formal or informal, has
been taken against and no grievance or complaint of sex, race
or disability discrimination, whether formal or informal, has
been raised with the Company by any employee since the
Company's inception.
13.12 The Warrantors are not aware of any facts or matters
affecting any of the employees of the Company which might
reasonably be considered grounds for
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<PAGE> 59
dismissing such employee or for warning such employee that the
continuation of any conduct or behaviour might lead to
dismissal and no warning (whether formal or informal) has been
given to any employee and no notice of termination of
employment has been given to or received from any such
employee.
13.13 Insofar as the Warrantors are aware, no past or present
director, employee or consultant has asserted any claim
against the Company for loss of office or arising out of the
termination of his office or employment or in respect of any
accident or injury which does not fall within the Company's
insurances and so far as the Warrantors are aware there is no
event which would or might reasonably be expected to give rise
to any such claim.
13.14 Insofar as the Warrantors are aware, no liability has
been or may be incurred by the Company for breach of any
contract of service or for services, for redundancy payments,
protective awards or for compensation for wrongful dismissal
or unfair dismissal or for failure to comply with any order
for the reinstatement or re-engagement of any employee or for
any other liability accruing from the actual or proposed
termination or variation of any contract of employment or for
services.
13.15 No gratuitous payment has been made or promised by the
Company:
(a) in respect of or contingent upon the sale of the
Sale Shares; or
(b) in connection with the actual or proposed
termination or suspension of employment or engagement
or variation of any contract of employment or
engagement of any present or former director,
consultant or employee.
13.16 So far as the Warrantors are aware, all monies paid or
goods or services provided directly or indirectly or made
available (whether by way of the provision of a credit card or
otherwise howsoever) by the Company whether as principal or
surety to any of its directors or employees whether in respect
of emoluments of employment or reimbursement or otherwise
howsoever have been expenditures properly incurred by the
Company so as to be deductible in computing its taxable
profits and have been declared to the Inland Revenue.
13.17 There is no person previously employed by the Company
who now has right to return to his work or in respect of whom
the Company has been ordered by an Employment Tribunal that he
be reinstated by the Company under the provisions of the
Employment Rights Act 1996.
13.18 The Company has not made any loans or quasi loans (as
defined in the Companies Act) to or entered into any credit
transaction (as so defined) with any of its directors or
employees.
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13.19 No person has been employed since the inception of the
Company who requires a work permit without such a permit being
in force.
13.20 Since its inception, the Company has not been a party to
any relevant transfer as defined in the Transfer of
Undertakings (Protection of Employment) Regulations 1981 nor
has the Company failed to comply with any duty to inform and
consult any independent trade union under such Regulations.
13.21 So far as the Warrantors are aware save as provided or
contemplated by this agreement, no director, consultant or
employee will leave the employment or engagement of the
Company as a result of the signing of this agreement or the
matters or transactions effected by it.
13.22 So far as the Warrantors are aware the Company has in
relation to each of its directors and employees (and so far as
relevant to each of its former directors and employees)
complied with all obligations imposed on it by Article 119 of
the Treaty of Rome, the Trade Union and Labour Relations
(Consolidation) Act 1992, the Employment Rights Act 1996 and
all other statutes, regulations, codes of conduct and
practices relevant to relations between the Company and its
directors and employees and the Company has maintained
adequate and suitable records regarding their services.
13.23 The Company's only employees are Simon Best, Piers
Lincoln and Ian Biggs.
13.24 The Company's only consultants are as set out in the
Warrantors' Disclosure Letter.
13.25 I Biggs is not entitled to any payments under his
contract of employment other than in respect of his notice
period.
14. Transaction with Warrantor's Affiliates and Computer
Systems
14.1 There are no:
(a) loans made by the Company to any of the
Warrantors and/or to any director of the Company
and/or to any Warrantor's Affiliate of any of the
Warrantors or of any such director;
(b) debts owing to the Company by any of the
Warrantors and/or any director of the Company and/or
by any Warrantor's Affiliate of any of the Warrantors
or of any such director.
14.2 there are no existing legally binding contracts,
transactions or arrangements to which the Company is a party
or under which it may be liable and in which any of the
Warrantors and/or any director of the Company and/or any
Warrantor's
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Affiliate of any Warrantor's and/or any Warrantor's Affiliate
of any director is interested whether directly or indirectly
to any material extent, and, so far as the Warrantors are
aware, the Company has not been a party to any such contracts,
transactions or arrangements since its inception.
14.3 None of the Warrantors nor any director of the Company is
engaged or concerned or interested in any way whatsoever (and
whether by a holding of shares or otherwise other than any
company quoted on a recognised stock exchange, as defined in
the Companies Act) in any other business of a similar nature
to or competitive with that carried on by the Company.
14.4 Save in relation to services provided to the Company
pursuant to a Warrantor's employment contract with the Company
the Company does not depend in any material respect upon the
use of any property, right, asset owned by, or facilities or
services provided by any Warrantor or any Warrantor's
Affiliate.
14.5 The Company has experienced no material or significant
mechanical or software failure in respect of the Computer
System at any time and the Computer System is effective and
operational in all material respects.
14.6 The Company has disaster recovery protection for its
Computer System and all data has been backed up periodically.
14.7 The Company is the beneficial owner free from
Encumbrances of all the items of equipment, hardware, firmware
and accessories relating to the Computer System and no other
person has any claims or rights in respect thereof.
14.8 The Company has all the necessary licences to use the
Software in the conduct of its business.
14.9 Insofar as any Software has been licensed by the Company
from any third parties the Company is not in dispute with any
licensor and has not done, or omitted to do, any act which
might entitle such licensor to terminate that license.
14.10 All information and data held by the Company on the
Computer System is beneficially owned by the Company free from
Encumbrances, and the Company is not subject to any
restriction with regard to the use thereof and no third party
enjoys any right or permission to copy or hold any such
information or data.
14.11 There are in existence maintenance and support
agreements in respect of all equipment, hardware, firmware,
Software and accessories used in the Computer System, and the
Company has not done, or omitted to do, any act which might
entitle the provider of the maintenance and support services
to terminate such agreements or to withhold or refuse to
supply any services thereunder; and the
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Company is not in dispute with such provider regarding its
maintenance and support obligations.
14.12 The Computer System comprises all equipment, hardware,
firmware, software, including object code, supporting
materials and accessories which are reasonably necessary to
enable the Company to carry on its business in the same manner
and to the same extent as it has been carried on prior to the
Completion Date and the rights to use the Computer System or
any part thereof will not be adversely affected by the
transactions effected by this agreement.
14.13 The Company has put in hand all necessary steps to
ensure that prior to 31 December 1999 the Computer System and
all Software will be Year 2000 Compliant and will comply with
all updates of the BSI-DISC PD 2000-1 standard which have been
published prior to the Completion Date and the Warrantors have
no reason to believe that such steps will not be successful by
that date.
15. Material Contracts
15.1 There is not outstanding any agreement or arrangement to
which the Company is a party:
(a) which was entered into otherwise than at arm's
length;
(b) which requires (or confers any right to require)
the allotment or issue of any shares, debentures or
other securities of the Company now or at any time in
the future;
(c) which establishes any guarantee, indemnity,
suretyship or legally binding comfort arrangement
given by the Company in respect of the obligations or
solvency of any third party;
(d) which establishes any joint venture, co-operation
agreement or arrangement, consortium or profit (or
loss) sharing agreement or arrangement;
(e) which involves future capital expenditure by the
Company in excess of L 10,000;
(f) which, by virtue of the execution of this
agreement or acquisition of the Sale Shares by the
Purchaser or other performance of the terms of this
agreement will or may result in: (i) any third party
being relieved of any material obligation or becoming
entitled to exercise any right (including a right of
termination or any right of pre-emption or other
option); or (ii) the Company being in material
default under any such agreement or arrangement or
losing any benefit, right or license which it
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currently enjoys or (iii) a liability or obligation
of the Company being created or increased to any
material extent;
(g) which will result in the Company becoming liable
for any finder's fee, brokerage or other commission
in connection with the acquisition of the Sale Shares
by the Purchaser;
(h) to which any of the provisions of section 317,
320 or 330 of the Companies Act apply;
(i) pursuant to which the Company has sold or
otherwise disposed of any assets or undertaking in
circumstances such that it remains subject to any
liability (whether contingent or otherwise) which
would not normally be retained by a vendor of any
assets or undertaking and which is not adequately
provided for in the Accounts;
(j) which is a power of attorney given by the Company
or any other authority other than authority given to
a director of the Company which would enable any
person to enter into any legally binding contract or
commitment on behalf of the Company;
(k) which establishes any agency, distributorship,
OEM, marketing, purchasing, licensing, management or
administration agreement or arrangement of a material
nature;
(l) which involves payment by reference to
fluctuations in the index of retail prices, or any
other index, or in the rate of exchange of any
currency or any interest rate;
(m) which save for service, consultancy and
employment agreements has more than three months left
to run and is not capable of being terminated by
three months' notice or less without payment of
compensation or damages;
(n) which is a sale or purchase option or similar
agreement or arrangement affecting any assets owned
or used by the Company; or
(o) save to the extent relating to Company IPR,
restricting the freedom of the Company to provide and
take goods and services by such means and from and to
such persons as it may from time to time think fit.
15.2 Disclosure is made in the Warrantors' Disclosure Letter
of any negotiations or offers or the like which are capable or
likely to result in the Company entering into any agreement or
arrangement of a kind described in paragraphs 15.1(a) to (o)
above.
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15.3 The Company has not assigned or sublet any of its rights
under and so far as the Warrantors are aware is not in default
under any agreement or arrangement of a kind described in
clause 15.1(a) to (o) above to which it is a party and so far
as the Warrantors are aware there are no circumstances likely
to give rise to any such default, and no other party thereto
is in default of any such agreement or arrangement and there
are no circumstances expected to give rise to any such
default.
15.4 So far as the Warrantors are aware, no agreement or
transaction to which the Company is a party is invalid or
ultra vires and, so far as the Warrantors are aware, there are
no grounds for rescission, breach, avoidance or repudiation of
any agreement or other transaction to which the Company is a
party.
16. Investment Grants
16.1 The Company has not received any investment grant,
building grant, grant under any Local Employment Act or under
the Industry Acts or any other grant or allowance or loan
subsidy or financial assistance
17. Insolvency
17.1 No resolution has been passed or meeting convened for the
winding up of the Company or so far as the Warrantors are
aware for an administration order in respect of the Company;
so far as the Warrantors are aware, no administrative receiver
has been appointed of the business or the whole or any part of
the assets or undertaking of the Company; and so far as the
Warrantors are aware, there are no circumstances likely to
give rise to the appointment of any such administrative
receiver or liquidator.
17.2 There are no unfulfilled or unsatisfied judgements or
court orders outstanding against the Company.
17.3 No distress, distraint, charging order, garnishee order,
execution or other process which a court or a similar body may
use to enforce payment of a debt has been levied or, so far as
the Warrantors are aware, applied for in respect of the whole
or any part of the property, assets or undertaking of the
Company.
17.4 In relation to any property or assets held by the Company
under any hire, hire purchase, conditional or credit sale,
leasing or retention of title agreement or otherwise belonging
to a third party, so far as the Warrantors are aware no event
has occurred which entitles, or which upon intervention or
notice by the third party may entitle, the third party to
repossess the property or assets concerned or to terminate the
agreement or any license in respect thereof.
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17.5 The Company has not stopped payment nor is it insolvent
or unable to pay its debts for the purposes of section 123 of
the Insolvency Act 1986.
17.6 So far as the Warrantors are aware, the Company has not
been a party to any transaction with any third party which, in
the event of such third party going into liquidation or an
administration order or a bankruptcy order being made in
relation to it or to him, would constitute (in whole or in
part) a transaction at an undervalue, a preference, an invalid
floating charge or an extortionate credit transaction or part
of a general assignment of debts, under sections 238 to 245
and sections 339 to 344 of the Insolvency Act 1986.
17.7 No person who at present is, or who any time since the
Company's inception was, a director or officer of the Company
is, or at any material time was , subject to any
disqualification order under the Companies Act 1985 or under
any other legislation relating to the disqualification of
directors and officers or so far as the Warrantors are aware
was the subject of any investigation or proceedings capable of
leading to a disqualification order being made.
18. Regulatory Matters
18.1 There are now in force and effect all approvals, permits,
authorities, consents and licenses of a regulatory nature
which the Warrantors believe are necessary for the proper
carrying on of the Company's business in the places and in the
manner in which such business is now carried on.
18.2 The approvals, permits, authorities, consents and
licenses referred to in clause 18.1 above are not subject to
any unusual or onerous conditions having regard to the
conditions which are or may be imposed on approvals, permits,
authorities, consents and licenses granted to the third
parties carrying on a similar business and the nature of the
Company's business and the Company has complied in all
material respects with all conditions attached to such
approvals, permits, authorities, consents and licenses in so
far as applicable to the Company. So far as the Warrantors are
aware, there are no investigations, proceedings, enquiries,
communications or other circumstances which mean that any such
approvals, permits, authorities, consents and licenses would
be revoked, cancelled, suspended, modified or not renewed.
18.3 The Company has at all times carried on its business in
all material respects in accordance with its memorandum and
articles of association and, so far as the Warrantors are
aware, all applicable laws and regulations (whether in the
United Kingdom or any other jurisdiction).
18.4 The Company has registered as a data user under Data
Protection Act 1984 for all purposes and activities of the
Company for which registration is required and, so far as the
Warrantors are aware, has complied in all material respects
with all other applicable requirements of such Act.
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18.5 No outstanding written notices in relation to any
statutory obligation have been served on the Company by any
competent regulatory or governmental authority in respect of
any of its assets or in respect of any contravention or
non-compliance with or alleged contravention or non-compliance
with any applicable statutory or regulatory obligation.
18.6 The Company is not a party to any agreement, arrangement
or concerted practice and is not carrying on any practice
which in whole or in part:
(a) is or requires to be registered under the
Restrictive Trade Practices Act 1976 (whether or not
such agreement, arrangement or concerted practice is
a non notifiable agreement for the purposes of
section 27a of the Restrictive Practices Act 1976);
(b) contravenes Articles 85 or 86 of the Treaty of
Rome or Articles 53 or 54 of the agreement
constituting the European Economic Area or which has
been notified to the European Commission or the EFTA
Surveillance Authority for a negative clearance or
exemption or which ought to have been so notified
(other than falling under the Commission's Notice on
agreements of minor importance);
(c) has been notified by the Company to the Office of
Fair Trading for "early guidance" pursuant to
schedule 13, paragraph 7 of the Competition Act 1998;
(d) so far as the Warrantors are aware, contravenes
or is invalidated by any competition, anti-trust,
regulatory, monopoly, fair trading, consumer
protection or similar legislation in any jurisdiction
where the Company has any assets or carries on
business.
18.7 The Company has not received any process, notice or
communication (formal or informal) by or on behalf of the
Office of Fair Trading, the Monopolies and Mergers Commission,
the Secretary of State for Trade and Industry, any regulator
within the meaning of section 54 of the Competition Act 1998,
the Commission of the European Communities or the EFTA
Surveillance Authority or any authority having jurisdiction in
competition, anti-trust, regulatory, monopoly, fair trading or
consumer protection matters of an adverse nature in relation
to any aspect of the business of the Company or any agreement
or arrangement to which it is or is alleged to be a party, and
so far as the Warrantors are aware no circumstances exist
which might give rise to the Company receiving any such
process, notice or communication.
18.8 Save in relation to Taxation which is dealt with in Part
D of schedule 4, there have not been and so far as the
Warrantors are aware are not pending, or in
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existence, any investigations or enquiries by, or on behalf
of, any governmental or administrative or other body in
respect of any of the affairs of the Company
19. Litigation
19.1 The Company is not a party (whether as plaintiff or
defendant or otherwise) to any claim, litigation, arbitration,
prosecution or other legal or quasi legal proceedings or
enquiry and has not been engaged in any such claim,
proceedings or enquiry since the Company's inception and, so
far as the Warrantors are aware, there are no claims or
actions (whether criminal or civil) pending or threatened or
anticipated by or against the Company or any of its directors,
employees or consultants in relation to the Company or its
business or in respect whereof the Company is liable to
indemnify any party concerned or may be vicariously liable.
19.2 So far as the Warrantors are aware, there are no
investigations, disciplinary proceedings or other material
facts or circumstances likely to lead to any claim, action,
proceeding, suit, litigation, prosecution, investigation,
enquiry or arbitration involving the Company.
20. Insurance
20.1 The Company and its assets are insured against such risks
and in such sums as are disclosed in the Warrantors'
Disclosure Letter and, so far as the Warrantors are aware,
none of the transactions contemplated by this agreement will
directly or indirectly alter, invalidate or otherwise affect
such insurance. All premiums due in respect of such insurance
have been fully paid; and the next renewal date for each of
such insurance is a date at least 30 days after the Completion
Date. So far as the Warrantors are aware, all such insurance
is currently in full force and effect, and so far as the
Warrantors are aware, nothing has been done or omitted to be
done which could make any policy of insurance void or
voidable.
20.2 So far as the Warrantors are aware, no claim is
outstanding or is likely to be made under any of such
insurance and so far as the Warrantors are aware no
circumstances exist which are likely to give rise to any such
claim.
20.3 So far as the Warrantors are aware, there are no claims
capable of arising against the Company by an employee, a
workman or any other third party, in respect of any accident
or injury, which do not fall within the insurances effected by
the Company.
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PART C
PROPERTY AND ENVIRONMENTAL WARRANTIES
1. The Company has no legal or beneficial interest in any property or
premises.
2. So far as the Warrantors are aware no Hazardous Materials have
migrated from the premises occupied by the Company onto or beneath
other properties or are likely to do so.
3. The Company has not illegally managed or illegally allowed to escape
from its control or transferred to an unauthorised person in breach of
the Environmental Protection Act 1990 any controlled waste as defined
in the said Act.
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PART D
TAX WARRANTIES
1. Reserve for Taxation in the Accounts
1.1 The Accounts make adequate reserve or provide for all
Taxation to the extent required by the Accounting Requirements
for which the Company was in respect of the period ending on the
Accounts Date liable and the Accounts make proper reserve for or
contain a note regarding any contingent liability or possible
deferred liability to Taxation to the extent required by the
Accounting Requirements.
2. Returns and Payment of Taxation
2.1 Other than in respect of VAT which is dealt with in clause
14 below all returns, computations and notices or information
which should have been made by law by the Company for the
purposes of Taxation in respect of any accounting period up to
the Accounts Date (i) have been made punctually and are correct
in all material respects, (ii) contain all information required
by law for all the purposes of Taxation and (iii) are not the
subject of any dispute with the Inland Revenue or H M Customs &
Excise or the Department of Employment or other relevant or
appropriate authority as of the Completion Date; and the Company
is not involved in any material dispute with the Inland Revenue
or other relevant or appropriate authority concerning any matter
likely to affect in any way the liability (whether accrued,
contingent or future) of the Company to Taxation and is under no
liability to pay any penalty or interest in connection with any
claim for Taxation.
2.2 No corporation taxation computations of the profits and
losses of the Company and of its liability to such Taxation for
the accounting periods ending since the Company's inception have
not been agreed with the Inland Revenue or other appropriate
authority.
2.3 Other than in respect of VAT which is dealt with in clause
14 below the Company has duly and punctually paid to the Inland
Revenue or other appropriate authority all Taxation (if any) for
which it is legally liable as a result of any act or omission of
the Company prior to the Completion.
2.4 Other than in respect of VAT which is dealt with in clause
14 below the Company has duly and punctually deducted, withheld,
or collected for payment (as appropriate) all Taxation (if any)
which it has become legally liable to deduct, withhold or
collect for payment and has paid all such Taxation to the Inland
Revenue or other appropriate authority.
2.5 There are set out in the Warrantors' Disclosure Letter
particulars of all notifications and notices received by the
Company under section 166 of ICTA.
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2.6 No material failures have occurred in operating the PAYE and
National Insurance Contributions systems and the Company has
kept and maintained records which are correct and up-to-date in
all material respects for the purposes of the legislation
relating thereto.
2.7 The Company has not, since its inception, paid or become
liable to pay any fine, penalty or interest charged by virtue of
the provisions of the Taxes Management Act of 1970 or similar
provisions in other countries.
2.8 The Company has not, since its inception, been the subject
of a PAYE audit and no formal notification has been received
from the Inland Revenue that an investigation by the Inland
Revenue is underway.
2.9 Other than in respect of VAT which is dealt with in clause
14 below, no transaction has been entered into by the Company
since the Accounts Date in respect of which the Company is
required to make a specific return or to provide information to
a relevant Taxation Authority and in respect of which the time
for making such return or providing such information will expire
on or after the Completion.
3. Tax Clearances
3.1 Since the date of inception of the Company, no transaction
has been entered into by the Company in respect of which any
consent or clearance from the Inland Revenue or other
appropriate Taxation or governmental authority was required.
4. Base Values and Acquisition Costs
4.1 Save as disclosed in the Warrantors' Disclosure Letter the
aggregate book value (exclusive of any value attributable to an
asset in excess of its cost) of each of the assets of the
Company in or adopted for the purposes of the Accounts does not
exceed the aggregate written-down value of such asset for the
purposes of CAA.
4.2 Save as disclosed in the Warrantors' Disclosure Letter if
each of the capital assets of the Company (excluding, for the
avoidance of doubt, trading stock) were disposed of for a
consideration equal to the book value of that asset in, or
adopted for the purposes of, the Accounts, no liability to
corporation tax on chargeable gains or balancing charge would
arise.
4.3 The Company does not own and has not agreed to acquire or
dispose of any asset, nor has it received or agreed to receive
any services or facilities (including without limitation the
benefit of any licenses or agreements), the consideration for
the acquisition or provision of which was or will be in excess
of its market value or otherwise than on an arm's length basis.
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5. Distributions and Payments
5.1 No security issued by the Company and remaining in issue as
of the Completion was issued in such circumstances that the
interest payable thereon falls to be treated as a distribution
under section 209 of ICTA or section 418 of ICTA.
5.2 The Company has not, since its inception, repaid, or agreed
to repay, or redeemed, or agreed to redeem, or purchased or
agreed to purchase any of its share capital, or capitalised or
agreed to capitalise, in the form of debentures or redeemable
shares, any profits or reserves of any class or description;
5.3 The Company has not issued any share capital to which the
provisions of section 249 of ICTA could apply nor does it own
any such share capital.
6. Taxation Claims, Liabilities and Reliefs
6.1 There are set out in the Warrantors' Disclosure Letter
material details of all matters relating to Taxation in respect
of which the Company (either alone or jointly with any other
person) at the Completion will have, on the basis of current law
and practice as at the Completion Date an outstanding
entitlement:
(a) to make any claim for relief under ICTA or any other
statute relating to Taxation;
(b) to make any election for one type of relief, on one
basis, system or method of Taxation, as opposed to
another;
(c) to make an appeal (including a further appeal)
against an assessment to Taxation;
(d) to make an application for the postponement of, or
the payment by instalments of, any Taxation; or
(e) to disclaim or require the postponement of any
allowance or relief.
6.2 The Company is not, nor will it become, liable to pay, or
make any reimbursement or give any indemnity in respect of, any
Taxation (or any amounts corresponding thereto) in consequence
of the failure of any person to discharge that Taxation within
any specified period, where such Taxation relates to a profit,
income or gain, transaction, event, omission or circumstance
arising, occurring or deemed to arise or occur (whether wholly
or partly) prior to the Completion.
7. Tax Residence and Status
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7.1 The Company has been resident for tax purposes in the United
Kingdom at all times since its incorporation and the Company has
never been resident in any other jurisdiction.
7.2 The Company has not at any time been a trustee of any
settlement for the purposes of Section 260 of TCGA.
8. Disallowance of Deductions
No rents, interest, annual payments, emoluments, management or service
fees or charges or other sums of an income nature (including benefits in
kind) paid or provided by the Company since the Accounts Date or which
the Company is under an obligation to pay or provide in the future are
or may under the law currently in force be wholly or partially
disallowable as deductions or charges in computing profits or against
profits for the purposes of corporation tax by reason of any statutory
provision relating to Taxation.
9. Corporation Tax on Chargeable Gains
9.1 Neither the signing of this agreement nor Completion will
result in any profit or gain being deemed to accrue to the
Company for the purposes of Taxation whether pursuant to section
179 of TCGA or otherwise.
9.2 The Company has not disposed of or acquired any asset in
such circumstances that the provisions of section 17 of TCGA did
or could apply thereto.
9.3 No Taxation is or may become payable by the Company pursuant
to section 189 or 190 of TCGA in respect of any transaction or
event occurring on or prior to the Completion.
9.4 The Company has not at any time made any claim under
sections 152 to 156 or 175 or 247 of TCGA or under any other
analogous provision under UK Taxation legislation which could
affect the amount of any gain accruing or treated as accruing on
a disposal of any asset by the Company; and no claim has been
made by the Company or, so far as the Warrantors are aware, is
capable of being made by any other company which affects or
could affect the amount or value of the consideration for the
acquisition of any asset by the Company which is to be taken
into account in calculating any gain on subsequent disposal.
9.5 The Company has not made any claim under any of the
following:
(a) section 279 of TCGA (assets situated outside the
United Kingdom);
(b) sections 48 or 280 of TCGA (tax on chargeable gains
payable by instalments);
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(c) section 24 of TCGA (assets of negligible value).
9.6 The Company is not liable to be assessed to corporation tax
on chargeable gains or to capital transfer tax or inheritance
tax as donor or donee of any gift or transferor or transferee of
value.
9.7 In the period from the last Accounts Date to Completion,
there has not accrued any gain in respect of which the Company
may be liable to corporation tax on chargeable gains by virtue
of the provisions of section 13 of TCGA.
9.8 No consideration due to the Company after disposal has, so
far as the Warrantors are aware, become irrecoverable within the
meaning of section 48 of TCGA so as to entitle the Company to an
adjustment.
10. Close Companies
10.1 No distribution within section 418 of ICTA, so far as the
Warrantors are aware, has ever been made by the Company, and no
such distribution will be made prior to the Completion.
10.2 No loan or advance within sections 419 to 422 (inclusive)
of ICTA has ever been made by the Company.
11. Inheritance Tax
11.1 The Company has not made any transfers of value for the
purposes of section 94 of IHTA.
11.2 The Company has not been a party to associated operations
in relation to a transfer of value within the meaning of section
268 of IHTA.
11.3 No asset owned by, or shares or securities in, the Company
is liable to be subject to any sale, mortgage or charge by
virtue of section 212 of IHTA.
11.4 There is not outstanding any Inland Revenue charge (as
defined in section 237 of IHTA) over any asset of the Company or
in relation to any shares in the capital of the Company.
12. Tax Avoidance
12.1 The Company has not entered into or been party to any
transaction, scheme or arrangement designed wholly or partly for
the purpose of avoiding Taxation, which may result in a
liability to Taxation on the Company pursuant to any of the
following sections, namely sections 56, 56A, 116, 395 and 399;
sections 703-746 (inclusive); section 767A; section 770;
sections 774, 775 and 776, all ICTA;
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section 106 of TCGA; sections 29 and 30 of TCGA; sections 61, 75
and 142 of CAA.
12.2 The Company has not received any formal notification from
the Inland Revenue or its equivalent in other countries that it
has commenced a formal investigation in respect of any
transactions or arrangements involving the Company with a view
to applying section 770 of ICTA, or equivalent legislation in
other countries.
12.3 The Company has not entered as lessor into any leasing
transactions in respect of which capital allowances may be
restricted or disallowed under section 22 or 47 of CAA.
12.4 The Company has not without the prior consent of the
Treasury entered into any of the transactions specified in
sections 765 to 767 (inclusive) of ICTA.
13. Miscellaneous
13.1 The Company has not entered into any loan relationship
which is for an unallowable purpose as described in paragraph 13
of schedule 9 to the Finance Act 1996.
13.2 The Company has not entered into any loan relationships or
related transactions which are not at arm's length for the
purposes of paragraph 11 of schedule 9 to the Finance Act 1996.
13.3 The Company has not entered into any loan relationship with
a connected person such that section 87 of the Finance Act 1986
could apply to that relationship and the Company has complied
with all relevant provisions contained in Chapter II of Part IV
of the Finance Act 1996 in respect of any loan relationships to
which the Company is a party.
13.4 No loan relationship to which the Company is a party is a
convertible security for the purposes of section 92 of the
Finance Act 1996 or linked to the value of chargeable assets for
the purposes of section 93 of the Finance Act 1996.
13.5 The Company has made no claim in respect of bad debts for
the purposes of paragraph 5 of schedule 9 to the Finance Act
1996.
13.6 The Company has not capitalised any debit in respect of a
loan relationship in its accounts other than in relation to a
fixed capital asset or project as referred to in paragraph 14 of
schedule 9 to the Finance Act 1996.
14. Value Added Tax
14.1 The Company:
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(a) is duly registered for the purposes of VAT and has
been so registered at all times when it has been legally
required to be registered by the relevant legislation;
(b) has complied in all material respects with all
statutory requirements, orders, provisions, directions
or conditions relating to VAT, including (for the
avoidance of doubt) the terms of any agreement reached
with HM Customs and Excise;
(c) maintains and has at all times maintained records
which are correct and up-to-date in all material
respects for the purposes of the legislation relating to
VAT and has preserved such records materially in such
form and for such periods as are required by such
legislation;
(d) is not in arrears with any payment or returns
required under any legislation relating to VAT, or
legally liable to any abnormal or non-routine payment,
or any forfeiture or penalty or fine or default
surcharge, or to the operation of any penal provision
relating to VAT or to pay any interest or fine as a
result of making late VAT returns; and
(e) has not been required by Customs and Excise to give
security.
14.2 The Company has not at any time been legally regarded as a
member of a group of companies for VAT purposes and no
application for it to be so treated has at any time been made.
14.3 So far as the Warrantors are aware, no act or transaction
has been effected in consequence whereof the Company is or may
be held legally liable for any VAT chargeable against any other
company; and the Company is not, and has not agreed to become an
agent, manager or factor for the purposes of section 47 of VATA
of any person who is not resident in the United Kingdom.
14.4 All supplies made by the Company are taxable supplies and
the Company is not and, so far as the Warrantors are aware, will
not be denied credit for any input tax by reason of the
operation of any provisions of VATA and the regulations made
thereunder; and all input tax for which the Company has claimed
credit has been or will be paid by the Company timeously in
respect of supplies made to it relating to goods or services
used or to be used for the purpose of the Company's business.
14.5 No supplies have been made to the Company to which the
provisions of section 8 to VATA might apply.
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14.6 No claims have been made by the Company since its inception
in respect of which a refund of VAT has been received by the
Company under section 36 of VATA.
14.7 The Company does not have an interest in any land in
relation to which an election has been made either by the
Company or by any other person to an exemption from VAT pursuant
to the provisions of schedule 10 of VATA.
14.8 The Company does not use in the course or furtherance of
its business any item to which Part XV of the VAT Regulations
1995 applies and in respect of which the period of adjustment
will not have expired on or before the Completion.
14.9 With regard to VAT, no transaction has been entered into by
the Company since the Accounts Date in respect of which the
Company is required to make a specific return or to provide
information to a relevant Taxation Authority and in respect of
which the time for making such return or providing such
information will expire on or after the Completion.
14.10 With regard to VAT, the returns submitted by the Company
are not the subject of any dispute with HM Customs & Excise or
other relevant or appropriate authority as of the Completion
Date and the Company is not involved in any material dispute
with HM Customs & Excise or other relevant or appropriate
authority concerning any matter likely to affect in any way the
liability (whether accrued, contingent or future) of the Company
to account for VAT and is under no liability to pay any penalty
or interest in connection with any claim for VAT.
15. Pension Schemes
The Company has not since the Accounts Date received any payment to
which section 601 of ICTA applies.
16. Share Schemes
16.1 The Company is not a participating company in any scheme
approved under section 185 or 186 of ICTA.
16.2 The Company has not established or contributed to a
qualifying employees share ownership trust as defined in
schedule 5 of the Finance Act 1989.
17. Capital Allowances
17.1 The Company has not since the Accounts Date done or omitted
to do, or agreed to do or permitted to be done, any act (other
than the sale of an asset at a price equal to its market value),
nor has the Company suffered any occurrence, as a result of
which any disposal value has been or may be required to be
brought into
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account under section 24 of CAA, nor has there been, nor may
there be, any recovery from the Company of excess relief within
section 42 or 47 of CAA.
17.2 Since the Accounts Date the Company has not done, nor has
it omitted to do, nor agreed to do, nor permitted to be done,
any act, nor, so far as the Warrantors are aware, has it
suffered any occurrence, as a result of which any balancing
charge has arisen or may arise under section 4 of CAA.
17.3 The Company has not made any election under section 37 of
CAA or engaged in any short-term leasing within section 40 of
CAA.
17.4 The Company has not taken or granted a lease of any assets
in respect of which an election has been made under section 53
or 55 of CAA.
18. Stamp Duty and Stamp Duty Reserve Tax
18.1 The Company has duly paid all stamp duty and all stamp duty
reserve tax for which it has at any time been legally liable,
and all documents which require to be stamped and which form
part of the Company's title to any asset or which the Company
may need to produce in court in evidence have been duly stamped.
18.2 Since inception, the Company has not made any claim for
relief or exemption under section 42 of the 1930 Act or sections
75 to 77 of the 1986 Act.
19. General
19.1 No act or transaction has been effected to which the
Company is a party in consequence whereof the Company has is or
may be held legally liable for any Taxation primarily chargeable
against some other person.
19.2 The Company does not operate any scheme approved under
section 202 of ICTA (payroll deduction scheme in respect of
donations to charity) or under sections 169 to 184 of ICTA
(profit related pay).
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SCHEDULE 5
CONDITIONS TO COMPLETION
1. The respective obligations under this agreement of each party hereto shall be
subject to the satisfaction on or prior to Completion of each of the following
conditions, any of which may be waived, in writing, by agreement of all the
parties:
(a) No temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other
legal or regulatory restraint or prohibition preventing the consummation
of the transactions contemplated hereby shall be in effect, nor shall
any proceeding brought by an administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign,
seeking any of the foregoing be pending; nor shall there be any action
taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the transactions contemplated hereby,
which makes the consummation of such transactions illegal.
(b) The Purchaser, the Company and the Vendors shall have timely
obtained from each Governmental Entity all approvals, waivers,
clearances and consents, if any, necessary for consummation of or in
connection with the transactions contemplated hereby, including, without
limitation, such approvals, waivers and consents as may be required from
the Biotechnology and Biological Sciences Research Council and Ministry
of Agricultural, Fisheries and Food, and under the Securities Act and
under any state securities laws.
(c) The relevant Vendors shall have received a letter dated prior to
Completion, from HM Inland Revenue, giving clearance for the
transactions contemplated by this agreement pursuant to Section 138 of
the TCGA and Section 707 of the ICTA.
(d) The boards of directors of the Purchaser and the Company shall have
approved the transactions contemplated herein.
(e) That 3i's payment of L 2,000,000 for D ordinary shares in the
Company is received by the Company's Solicitors and is in cleared funds.
(f) That the Purchaser receives confirmation from 3i and Roslin
Institute that there are no outstanding sums owed to each or any of them
by the Company.
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(g) That the sum of L 26,000 has been paid by the Company to 3i.
2. The obligations of the Vendors under this agreement shall be subject to the
satisfaction at or prior to Completion of each of the following conditions, any
of which may be waived, in writing, by the Warrantors' Representative and 3i:
(a) The Vendors shall have been provided with a certificate executed by
the secretary or assistant secretary of the Purchaser certifying:
(i) resolutions duly adopted by the board of directors of the
Purchaser authorising the execution of this agreement and the
execution, performance and delivery of all agreements, documents
and transactions contemplated hereby; and
(ii) the incumbency of the officers of the Purchaser executing
this agreement and all agreements and documents contemplated
hereby.
(b) The Company shall have received a certificate or certificates of the
Secretary of State of the State of Delaware and any applicable franchise
tax authority of such state, certifying as of a date no greater than
three business days prior Completion that Purchaser has filed all
required reports, paid all required fees and taxes and is, as of such
date, in good standing and authorised to transact business as a domestic
corporation.
3.
(a) The Purchaser shall have been provided with a certificate executed
by the Secretary of the Company certifying:
(i) resolutions duly adopted by the board of directors and where
relevant the Vendors of the Company authorising the execution of
this agreement and the execution, performance and delivery of
all agreements, documents and transactions contemplated hereby;
(ii) the memorandum and articles of association of the Company,
as in effect immediately prior to Completion, including all
amendments thereto; and
(iii) the incumbency of the officers of the Company executing
all agreements and documents contemplated hereby to be executed
by the Company.
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<PAGE> 80
(b) The Company shall have taken or caused to be taken such action as
may be required under each outstanding option to enable the Purchaser to
acquire shares in the Company granted to employees or consultants of the
Company under any share option of the Company (each a "Company Option")
and to cause each holder of a Company Option to enter into an Option
Exchange Agreement.
(c) The Purchaser shall have received an opinion from its financial
advisor, J. P. Morgan, stating that in the opinion of such financial
advisor, the terms of the transactions contemplated hereby are fair to
the stockholders of the Purchaser from a financial point of view.
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SCHEDULE 6
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Except as disclosed in the Purchaser's Disclosure Letter, the Purchaser hereby
represents and warrants to the Vendors as follows:
(a) The Purchaser is a corporation duly organised, validly existing and
in good standing under the laws of its jurisdiction of organisation. The
Purchaser has the corporate power to own its properties and to carry on
its business as now being conducted and as proposed to be conducted and
is duly qualified to do business and is in good standing in each
jurisdiction in which the failure to be so qualified and in good
standing would have a Material Adverse Effect on the Purchaser. The
Purchaser does not have any subsidiaries or ownership interest in any
other person including, for the avoidance of doubt, any company or
corporation.
(b) The authorised, issued and outstanding capital stock of Purchaser is
as set forth on the Purchaser's Disclosure Letter. Other than as set
forth in the Purchaser's Disclosure Letter and as contemplated under
this Agreement, there are no other outstanding shares of capital stock
or voting securities of Purchaser, and there are no other options,
warrants, calls, rights, commitments or agreements of any character to
which Purchaser is a party or by which it is bound obligating the
Purchaser to issue, deliver, sell, repurchase or redeem, or cause to be
issued, delivered, sold, repurchased or redeemed, any shares of the
capital stock of the Purchaser or obligating the Purchaser to grant,
extend or enter into any such option, warrant, call right, commitment or
agreement. All of the issued and outstanding shares of capital stock of
the Purchaser are duly authorised, validly issued, fully paid,
non-assessable and free of pre-emptive rights or option. The
Consideration Shares when issued pursuant to this agreement will be duly
authorised, validly issued, fully paid, non-assessable and free of
pre-emptive rights or options.
(c)The Purchaser has all requisite legal and corporate power and
authority to enter into this agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
agreement and the consummation of the transactions contemplated hereby
have been duly authorised by all necessary corporate action on the part
of the Purchaser. This agreement has been duly executed and delivered by
the Purchaser and constitutes the valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its
terms.
(d)
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(i) The execution and delivery of this agreement do not, and the
consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or default under
(with or without notice or lapse of time, or both), or give rise
to a right of termination, cancellation or acceleration of any
obligation or loss of a benefit under (i) any provision of the
Certificate of Incorporation or Bylaws of the Purchaser, as
amended, or (ii) any material mortgage, indenture, lease,
contract or other agreement or instrument, permit, concession,
franchise, license, judgement, order, decree, statute, law,
ordinance, rule or regulation applicable to the Purchaser or its
properties or assets.
(ii) No consent, approval, order or authorisation of, or
registration, declaration or filing with, any Governmental
Entity, is required by or with respect to the Purchaser in
connection with the execution and delivery of this agreement by
the Purchaser or the consummation by the Purchaser of the
transactions contemplated hereby, except for (i) the filing of a
Form 8-K with the Securities and Exchange Commission ("SEC") and
National Association of Securities Dealers ("NASD") within 15
days after Completion, (ii) any filings as may be required under
applicable state securities laws and the securities laws of any
foreign country, (iii) the filing with the Nasdaq National
Market of a Notification Form for Listing of Additional Shares
with respect to the Consideration Shares issuable pursuant to
this agreement and (iv) consents, authorisations, filings,
approvals and registrations which, if not obtained or made,
would not have a Material Adverse Effect on the Purchaser and
would not prevent, materially alter or delay any of the
transactions contemplated by this agreement.
(e)
(i) The Purchaser has filed all forms, reports and documents
required to be filed by the Purchaser with the SEC since July
30, 1996, and heretofore has made available to counsel for the
Vendors copies, in the form filed with the SEC, of (i) its
Annual Report on Form 10-K for the fiscal years ended December
31, 1996, 1997 and 1998, its Quarterly Reports on Form 10-Q for
the periods ended March 31, 1998, June 30, 1998 and September
30, 1998, (iii) all definitive proxy statements relating to
Purchaser's meetings of stockholders (whether annual or special)
held since July 30, 1996 and (iv) all other forms, reports and
registration statements (other than Quarterly Reports on Form
10-Q not referred to in clause (ii) above and excluding exhibits
to registration statements and materials relating to stock
option and compensation plans)
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filed with the SEC by the Purchaser since June 30, 1996 and
prior to the date hereof (collectively, the "Purchaser SEC
Documents"). As of their respective filing dates, the Purchaser
SEC Documents complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and the Securities Act, and none of the
Purchaser SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein,
in light of the circumstances in which they were made, not
misleading, except to the extent corrected by a subsequent
Purchaser SEC Document filed prior to the date of this
agreement.
(ii) The financial statements of Purchaser, including the notes
thereto, included in the Purchaser SEC Documents (the "Purchaser
Financial Statements") were complete and correct in all material
respects as of their respective filing dates, complied as to
form in all material respects with applicable accounting
requirements and with the published rules and regulations of the
SEC with respect thereto as of their respective dates, and have
been prepared in accordance with generally accepted accounting
principles applied on a basis consistent throughout the periods
indicated and consistent with each other (except as may be
indicated in the notes thereto or, in the case of unaudited
statements, included in Quarterly Reports on Forms 10-Q). The
Purchaser Financial Statements fairly present the consolidated
financial condition and operating results of Purchaser and its
subsidiaries at the dates and during the periods indicated
therein (subject, in the case of unaudited statements, to
normal, recurring year-end adjustments). There has been no
change in Purchaser accounting policies except as described in
the notes to the Purchaser Financial Statements.
(f) Since December 31, 1998 (the "Purchaser Balance Sheet Date"), the
Purchaser has conducted its business in the ordinary course in a manner
consistent with past practice and there has not occurred: (i) any
change, event or condition (whether or not covered by insurance) that
has resulted in, or might reasonably be expected to result in, a
Material Adverse Effect to the Purchaser; (ii) any declaration, setting
aside, or payment of a dividend or other distribution with respect to
the shares of the Purchaser, or any direct or indirect redemption,
purchase or other acquisition by Purchaser of any of its shares of
capital stock; (iii) any material amendment or change to the Purchaser's
Certificate of Incorporation or Bylaws; or (iv) any negotiation or
agreement by the Purchaser to do any of the things described in the
preceding clauses (i) through (iii) (other than negotiations with the
Company, the Vendors and
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their representatives regarding the transactions contemplated by this
agreement).
(g) There is no private or governmental action, suit, proceeding, claim,
arbitration or investigation pending before any agency, court or
tribunal, foreign or domestic, or, to the knowledge of the Purchaser,
threatened against the Purchaser or any of its properties or any of its
officers or directors (in their capacities as such) that, individually
or in the aggregate, could reasonably be expected to have a Material
Adverse Effect on the Purchaser. There is no judgement, decree or order
against the Purchaser or, to the knowledge of the Purchaser, any of its
directors or officers (in their capacities as such) that could prevent,
enjoin, or materially alter or delay any of the transactions
contemplated by this agreement, or that could reasonably be expected to
have a Material Adverse Effect on the Purchaser.
(h) The Purchaser has obtained each federal, state, county, local or
foreign governmental consent, license, permit, grant, or other
authorisation of a Governmental Entity that is required for the
operation of the Purchaser's business ("Purchaser Authorisations"), and
all of such Purchaser Authorisations are in full force and effect,
except where the failure to obtain or have any of such Purchaser
Authorisations could not reasonably be expected to have a Material
Adverse Effect on the Purchaser.
(i) The Purchaser is purchasing the Sale Shares as principal and not as
a nominee or agent on behalf of any other person.
(j) The Purchaser acknowledges, without making any warranty or
representation to the Warrantors that, as at the date of this agreement
and except as set forth in the Warrantors' Disclosure Letter, there are
no facts, matters or circumstances known to the Purchaser which would
constitute a breach of the Warranties and accordingly is not entering
into this agreement with a view to making any claim under the Warranties
on the basis of the facts, matters and circumstances known to it.
(k) The facts set out in the specific disclosures set out in the
Purchaser's Disclosure Letter are true and accurate in all material
respects.
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SIGNED by SIMON BEST in the )
presence of: )
SIGNED by JOHN CLARK in the )
presence of: )
SIGNED by IAN KENT in the )
presence of: )
SIGNED by IAN BIGGS in the )
presence of: )
SIGNED by IAN WILMUT in the )
presence of: )
SIGNED by )
for and on behalf of GERON )
CORPORATION in the presence of: )
SIGNED by )
for and on behalf of ROSLIN )
INSTITUTE in the presence of: )
[Roslin to confirm method of signing]
SIGNED by )
for and on behalf of 3I GROUP PLC )
in the presence of: )
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ANNEX A
Unregistered Trademarks
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EXHIBIT 2.2
ESCROW AGREEMENT
This Escrow Agreement (the "Agreement") is entered into as of April 30,
1999, by and among Geron Corporation, a Delaware corporation (the
"Purchaser"), a committee (the "Committee") acting for and on behalf of the
Warrantors initially comprising Ian Kent and Grahame Bulfield (collectively, the
"Warrantors' Representative") and U.S. Bank Trust National Association (the
"Escrow Agent").
RECITALS
Purchaser and the Vendors of all of the issued shares of Roslin Bio-Med
Limited, a company registered in Scotland (the "Company"), have entered into a
Sale and Purchase Agreement of today's date (the "Purchase Agreement"), pursuant
to which Purchaser will acquire all of the issued shares of the Company from the
Vendors (the "Purchase"). The Purchase Agreement provides that the Escrow Fund
(as defined below) will secure the obligations of the Warrantors in relation to
the Warranties to Purchaser under the Purchase Agreement, on the terms and
conditions set forth herein and in the Purchase Agreement. Pursuant to the
Purchase Agreement, the Warrantors will receive in aggregate 860,000 shares of
common stock of Purchaser ("Purchaser Stock") and all of the Warrantors'
Purchaser Stock shall be deposited in the Escrow Fund (as defined below) in
accordance with the terms of this Agreement and in the Purchase Agreement. The
parties desire to establish the terms and conditions pursuant to which the
Escrow Fund will be established and maintained.
AGREEMENT
The parties agree as follows:
1. DEFINED TERMS.
(a) Capitalized terms used in this Agreement and not
otherwise defined shall have the meanings given them in
the Purchase Agreement.
(b) "First Escrow Termination Date" means 3 November 1999.
(c) "Second Termination Date" means 3 May 2000.
2. CONSENT OF VENDORS. The Vendors have consented to: (a) the
establishment of the Escrow Fund (as defined below) to secure in full the
obligations of the Warrantors under the Purchase Agreement (subject to the terms
of the Purchase Agreement), (b) the appointment of the Warrantors'
Representative as their representative for purposes of this Agreement and as
attorney-in-fact and agent for and on behalf of each Warrantor solely with
respect to the subject matter of this Agreement and clause 14 of the Purchase
Agreement, and the taking by the Warrantors' Representative of any and all
actions and the making of any decisions required or
<PAGE> 2
permitted to be taken or made by them under this Agreement and clause 14 of the
Purchase Agreement and (c) all of the other terms, conditions and limitations
set forth in this Agreement.
3. ESCROW AND INDEMNIFICATION.
(a) ESCROW FUND. On or as soon as practicable after the
Completion Date the Purchaser shall deposit with the Escrow Agent 860,000 shares
of Purchaser Stock (the "Escrow Shares") registered in the names of the
Warrantors which shall represent the aggregate of all of the shares of the
Purchaser's Stock due to each of the Warrantors pursuant to clause 3 of the
Purchase Agreement or pursuant to the Option Exchange Agreements. The Escrow
Shares were issued to the Warrantors in the numbers set opposite the respective
names of the Warrantors in column 4.2 Part 1 of schedule 1 to the Purchase
Agreement. The Escrow Shares shall be divided into two separate and distinct
portions and held in two escrow accounts, one escrow account containing 545,000
Escrow Shares (the "First Escrow Shares"), the second escrow account containing
the remaining balance of the Escrow Shares, namely 315,000 Escrow Shares (the
"Second Escrow Shares"). The First Escrow Shares together with any New Shares or
any cash dividends or property allotted or deposited therein prior to the First
Escrow Termination Date shall be called the First Escrow Fund. The Second Escrow
Shares together with any New Shares or any cash dividends property allotted or
deposited therein prior to the Second Escrow Termination Date shall be called
the Second Escrow Fund. The First Escrow Fund and the Second Escrow Fund shall
together be called the Escrow Fund. Schedule 1 of the Purchase Agreement sets
forth the name of each Warrantor and the number of Escrow Shares contributed to
the First Escrow Fund and the Second Escrow Fund respectively on behalf of each
such Warrantor pursuant to clause 3.3 of the Purchase Agreement. The Escrow Fund
shall be held as a trust fund and shall not be subject to any lien, attachment,
trustee process or any other judicial process of any creditor of any party
hereto. The Escrow Agent agrees to accept delivery of the Escrow Fund and to
hold such Escrow Fund in escrow subject to the terms and conditions of this
Agreement and the Purchase Agreement.
3. DAMAGES. The Escrow Fund shall be available to compensate the
Purchaser for Damages that the Purchaser incurs by reason of or in connection
with any claim, demand, action or cause of action alleging misrepresentation,
breach of, or default in connection with any of the representations, the
Warranties, covenants or agreements of the Warrantors contained in the Purchase
Agreement, which becomes known to the Purchaser during the First Escrow Period
or Second Escrow Period as the case may be. Damages in each case shall be net of
the amount of any insurance proceeds and indemnity and contribution actually
recovered by the Purchaser. The Purchaser and the Escrow Agent undertakes to
operate the Escrow Fund so that retentions against and deliveries of the First
Escrow Shares and the Second Escrow Shares (as the case may be) (to the extent
then available) shall be made to the Warrantors in proportion to their original
contributions to the First Escrow Fund and the Second Escrow Fund subject to any
adjustment necessary to take account of any Escrow Shares, New Shares, cash
dividends or other property previously released with the consent of the
Purchaser or as permitted in terms of the Registration Rights Agreement.
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<PAGE> 3
4. ADMINISTRATION OF ESCROW FUND. The Escrow Agent shall administer the
Escrow Fund as follows:
(a) The Escrow Agent shall hold and safeguard the First Escrow
Shares in the First Escrow Fund up to the First Escrow Termination Date and the
Second Escrow Shares in the Second Escrow Fund until the Second Escrow
Termination Date. The Escrow Agent shall treat each of the First Escrow Fund and
the Second Escrow Fund as separate trust funds in accordance with the terms of
this Agreement and the Purchase Agreement and not as the property of Purchaser
and shall hold and dispose of the First Escrow Fund and the Second Escrow Fund
only in accordance with the terms hereof.
(b) Upon receipt by the Escrow Agent at any time on or before
the last day of the First Escrow Period and the Second Escrow Period (as the
case may be) of a certificate signed by the Chief Financial Officer of Purchaser
(an "Officer's Certificate"):
(i) stating that Purchaser has paid or reasonably
anticipates that it will have to pay or incur Damages, and
(ii) specifying in reasonable detail the individual
items of Damages included in the amount so stated, the date each such item was
paid or incurred, and the nature of the misrepresentation, breach of warranty or
claim to which such item is related, the Escrow Agent shall, subject to the
provisions of Section 4(c) below and the other provisions of this Agreement and
the Purchase Agreement, deliver to Purchaser out of the First Escrow Fund or the
Second Escrow Fund (as appropriate) (to the extent then available), as promptly
as practicable, First Escrow Shares or the Second Escrow Shares or other assets
held in the Escrow Fund (as the case may be) (to the extent then available) in
an amount equal to such Damages. The number of Escrow Shares or New Shares of
each Warrantor to be so delivered to Purchaser shall be determined pro rata
according to the percentages that their respective values bear to the total
value of the Escrow Shares in the relevant Escrow Fund.
(iii) For the purposes of determining the number of
shares to be delivered to Purchaser out of either the First Escrow Fund or
Second Escrow Fund pursuant to Section 4(b), the shares of Purchaser Stock shall
be valued at the average of the closing prices of Purchaser's Common Stock on
the Nasdaq National Market over the thirty-day period ending three (3) days
prior to the delivery date.
The Escrow Agent shall effect such payment of the First
Escrow Shares or the Second Escrow Shares (as the case may be) to Purchaser by
surrendering such First Escrow Shares or Second Escrow Shares (as the case may
be) to Purchaser's transfer agent (US Stock Transfer Corporation) for
cancellation upon receipt by the Escrow Agent of a copy of a letter from
Purchaser to its transfer agent irrevocably instructing such transfer agent to
issue new certificates to the Escrow Agent for the remaining Escrow Shares,
after giving effect to such payment.
(c) OBJECTIONS TO CLAIMS. At the time of delivery of any
Officer's Certificate to Escrow Agent, a duplicate copy of such certificate
shall be delivered to the Warrantors'
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<PAGE> 4
Representative. Save as provided below, the Escrow Agent shall make no delivery
to Purchaser from the Escrow Fund pursuant to Section 4(b) hereof until the
earlier of (i) the Escrow Agent shall have received written authorization from
the Warrantors' Representative to make such delivery or (ii) 30 days provided
that no such payment or delivery may be made if the Warrantors' Representative
shall object in a written statement to the claim made in the Officer's
Certificate, and such statement shall have been delivered to the Escrow Agent
and Purchaser prior to the expiration of such 30 day period (such written
statement shall identify the Officer's Certificate to which the objection
relates but need not specify the basis for the objection or any other details of
the disputed matters).
(d) RESOLUTION OF CONFLICTS; ARBITRATION.
Without prejudice to clause 5 of the Purchase Agreement:-
(i) in case the Warrantors' Representative shall so
object in writing to any claim or claims made in any Officer's Certificate, the
Warrantors' Representative and Purchaser shall attempt in good faith to agree
upon the rights of the Purchaser and the Warrantors with respect to each of such
claims within 30 days after the Escrow Agent's receipt of the Warrantors'
Representative's written objection to the claim pursuant to Section 4(c) (the
"Negotiation Period"). If the Warrantors' Representative and Purchaser should so
agree during the Negotiation Period, a memorandum setting forth such agreement
shall be prepared and signed by both parties and shall be furnished to the
Escrow Agent. The Escrow Agent shall be entitled to rely on any such memorandum
and distribute the relevant Escrow Shares and/or other property from either the
First Escrow Fund or Second Escrow Fund as the case may be (to the extent then
available) in accordance with the terms thereof; and
(ii) if no such agreement has been reached by the end of
the Negotiation Period, either Purchaser or the Warrantors' Representative may
demand arbitration of the matter unless the amount of the Damages is at issue in
pending litigation with a third party, in which event arbitration shall not be
commenced until such amount is ascertained by settlement or a non-appealable
decision of a court of competent jurisdiction or both parties agree to
arbitration; and in either such event the matter shall be settled by arbitration
conducted by a single arbitrator, selected by mutual agreement of the parties or
otherwise in accordance with the then prevailing rules of the American
Arbitration Association as adopted by the State of New York. The arbitration
shall be conducted in New York, New York. The written decision of the arbitrator
as to the validity and amount of any claim in such Officer's Certificate shall
be binding and conclusive upon the parties to this Agreement, and
notwithstanding anything in Section 4(c) hereof, the Escrow Agent shall be
entitled to act in accordance with such decision and make or withhold payments
out of either the First Escrow Fund or Second Escrow Fund as the case may be (to
the extent then available) in accordance therewith. The arbitrator shall award
reimbursement to the prevailing party in the arbitration of its reasonable
expenses of the arbitration (including costs and reasonable attorneys' fees).
The award of the arbitrator shall be the sole and exclusive monetary remedy of
the parties and the parties shall be entitled to attempt to enforce such award
in any court of competent jurisdiction. Notwithstanding the foregoing,
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<PAGE> 5
any party shall be entitled to seek injunctive relief or other equitable
remedies to enforce the provisions of this Agreement in any court of competent
jurisdiction.
5. RELEASE OF ESCROW FUND. Subject to the following requirements, the
Escrow Fund shall remain in existence from the Completion Date until in the case
of the First Escrow Shares the First Escrow Termination Date and in the case of
the Second Escrow Shares, the Second Escrow Termination Date.
(i) FIRST ESCROW PERIOD. Upon the expiration of the First Escrow Period,
the First Escrow Fund shall terminate automatically and without further notice
or action on the part of any party and all First Escrow Shares, New Shares, cash
dividends or other property attributable thereto and which have not been
released from the First Escrow Fund pursuant to this Agreement shall be
delivered to the Warrantors in accordance with this Agreement; provided,
however, that a number of First Escrow Shares, which, in the reasonable judgment
of Purchaser is necessary to satisfy any unsatisfied claims specified in any
Officer's Certificate delivered to the Escrow Agent prior to the expiration of
the First Escrow Period with respect to facts and circumstances existing on or
prior to the First Escrow Termination Date shall remain in the First Escrow Fund
(and the First Escrow Fund shall remain in existence) until such claims have
been resolved; provided further, that Purchaser agrees to notify the Escrow
Agent in writing of the expiration of the First Escrow Period.
(ii) SECOND ESCROW PERIOD. Upon the expiration of the Second Escrow
Period the Second Escrow Fund shall terminate automatically and without further
notice or action on the part of any party and all Second Escrow Shares, New
Shares, cash dividends or other property attributable thereto and which have not
been released from the Second Escrow Fund pursuant to this Agreement shall be
delivered to the Warrantors in accordance with this Agreement; provided,
however, that a number of Second Escrow Shares, which, in the reasonable
judgment of Purchaser is necessary to satisfy any unsatisfied claims specified
in any Officer's Certificate delivered to the Escrow Agent after the First
Escrow Termination Date but prior to the expiration of the Second Escrow Period
with respect to facts and circumstances existing on or prior to the Second
Escrow Termination Date shall remain in the Second Escrow Fund (and the Second
Escrow Fund shall remain in existence) until such claims have been resolved;
provided further, that Purchaser agrees to notify the Escrow Agent in writing of
the expiration of the Second Escrow Period.
7. WARRANTORS' REPRESENTATIVE.
(a) The Warrantors' Representative may be changed by the
Warrantors from time to time in accordance with the terms of the Purchase
Agreement. No bond shall be required of the Warrantors' Representative, and the
Warrantors' Representative shall not receive compensation for his or her
services. Notices or communications to or from the Warrantors' Representative
shall constitute notice to or from each of the Warrantors. The Warrantors'
Representative shall be entitled to submit a claim and receive reimbursement
from the Escrow Fund for all reasonable, documented out-of-pocket expenses
incurred by the Warrantors' Representative as a result of acting as the
Warrantors' Representative in a claim proceeding;
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<PAGE> 6
provided, however, that such right to reimbursement shall be subordinate to
Purchaser's claims on the Escrow Fund, if any, and shall be paid only after all
such claims have been satisfied. For the avoidance of doubt, expenses incurred
prior to the First Escrow Termination Date shall be paid out of the amounts
distributable to the Warrantors from the First Escrow Fund. For the avoidance of
doubt, expenses incurred prior to the Second Escrow Termination Date shall be
paid out of the amounts distributable to the Warrantors from the Second Escrow
Fund. In the event of the Purchaser's claim being successful, any such
reimbursement shall be paid in Escrow Shares out of the Escrow Fund otherwise
shall be payable by the Purchaser. For purposes of such reimbursement of the
Warrantors' Representative, Escrow Shares shall be valued at the average of the
closing prices of Purchaser's Common Stock on the Nasdaq National Market over
the thirty-day period ending three (3) days prior to the payment date.
(b) The Warrantors' Representative shall not be liable for any
act done or omitted hereunder as the Warrantors' Representative while acting in
good faith and in the exercise of reasonable judgment.
(c) A decision, act, consent or instruction of the Warrantors'
Representative shall constitute a decision of all Warrantors and shall be final,
binding and conclusive upon each of such Warrantors, and the Escrow Agent and
the Purchaser may rely upon any such decision, act, consent or instruction of
the Warrantors' Representative as being the decision, act, consent or
instruction of each and every such Warrantor. The Escrow Agent and Purchaser are
hereby relieved from any liability to any person for any acts done by them in
accordance with such decision, act, consent or instruction of the Warrantors'
Representative.
8. ESCROW AGENT'S DUTIES.
(a) Purchaser and the Warrantors' Representative acknowledge and
agree that the Escrow Agent (i) shall not be responsible for any of the
agreements referred to herein but shall be obligated only for the performance of
such duties as are specifically set forth in this Agreement and as set forth in
any additional written escrow instructions which the Escrow Agent may receive
after the date of this Agreement that are signed by an officer of Purchaser and
the Warrantors' Representative; (ii) shall not be obligated to take any legal or
other action hereunder which might in its reasonable judgment involve expense or
liability unless it shall have been furnished with indemnity reasonably
acceptable to it; and (iii) may rely on and shall be protected in acting or
refraining from acting upon any written notice, instruction, instrument,
statement, request or document furnished to it hereunder and reasonably believed
by it to be genuine and to have been signed or presented by the proper person,
and shall have no responsibility for determining the accuracy thereof.
(b) The Escrow Agent is hereby expressly authorized to disregard
any and all warnings given by any of the parties hereto or by any other person,
excepting only orders or process of courts of law or written decision of the
arbitrator pursuant to Section 4(d), and is hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court or written
decision of the arbitrator. In case the Escrow Agent obeys or complies with any
such order, judgment or decree of any court or written decision of the
arbitrator, the Escrow Agent
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<PAGE> 7
shall not be liable to any of the parties hereto or to any other person by
reason of such compliance, notwithstanding any such order, judgment or decree
being subsequently reversed, modified, annulled, set aside, vacated or found to
have been entered without jurisdiction.
(c) The Escrow Agent shall not be liable in any respect on
account of the identity, authority or rights of the parties executing or
delivering or purporting to execute or deliver this Agreement or any documents
or papers deposited or called for hereunder.
(d) The Escrow Agent shall not be liable for the expiration of
any rights under any statute of limitations with respect to this Agreement or
any documents deposited with the Escrow Agent.
(e) Neither the Escrow Agent nor any of its directors, officers
or employees shall be liable to anyone for any action taken or omitted to be
taken by it or any of its directors, officers or employees hereunder except in
the case of gross negligence, bad faith or willful misconduct. Subject to
Section 8(g) below, Purchaser and the Warrantors (collectively, the
"Indemnifying Parties") covenant and agree to jointly and severally indemnify
the Escrow Agent and hold it harmless from and against any fee, loss, liability
or expense (including reasonable attorney's fees and expenses) (a "Loss")
incurred by the Escrow Agent arising out of or in connection with the
performance of its obligations in accordance with the provisions of this
Agreement or with the administration of its duties hereunder, unless such Loss
shall arise out of or be caused by the Escrow Agent's gross negligence, bad
faith or willful misconduct; provided, however, that indemnification for the
Escrow Agent's standard fees and expenses set forth on the fee schedule attached
hereto as Exhibit A shall be borne exclusively by Purchaser, and provided
further that the indemnity agreement contained in this Section 8(e) shall not
apply to amounts paid in settlement of any Loss if such settlement is effected
without the consent of Purchaser and the Warrantors' Representative.
(f) To the extent that the Escrow Agent becomes liable for the
payment of any taxes in respect of income derived from payments made hereunder,
the Escrow Agent shall satisfy such liability to the extent possible from the
Escrow Fund. Subject to Section 8(g) below, the Indemnifying Parties agree to
jointly and severally indemnify and hold the Escrow Agent harmless from and
against any taxes, additions for late payment, interest, penalties and other
expenses, that may be assessed against the Escrow Agent on any payment or other
activities under this Agreement unless any such tax, addition for late payment,
interest, penalty or other expense shall arise out of or be caused by the
actions of, or a failure to act by, the Escrow Agent. No distributions will be
made to the Warrantors unless the Escrow Agent is supplied with an original,
signed Form W-9 or its equivalent prior to distribution.
(g) Notwithstanding the joint and several nature of the
obligations of the Indemnifying Parties under Section 8(e) and 8(f), the
Warrantors' total collective share of the liability for indemnification of the
Escrow Agent under Sections 8(e) and 8(f) hereof (the "Indemnification
Liability") shall in no event exceed the value of the Escrow Fund then available
to pay such liability. Accordingly the total liability of each Warrantor shall
in no event exceed the value of the Escrow Fund (to the extent remaining and
available) attributable to each
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<PAGE> 8
Warrantor. Any and all amounts to be paid by the Warrantors for their share of
the Indemnification Liability shall be payable only out of the Escrow Fund.
Subject to the foregoing, each of the Indemnifying Parties shall contribute to
the Indemnification Liability in such proportion as is appropriate to reflect
the relative fault of each individual Indemnifying Party, including up to all
such Indemnification Liability in the case of any tax liability arising from
failure to provide correct information with respect to any taxes pursuant to
Section 8(f) above. In all cases where there is no such basis for allocating
contribution for such Indemnification Liability or except as otherwise provided
in Section 8(e), one half of the total Indemnification Liability shall be paid
out of the Escrow Fund and allocated pro rata among each of the Warrantors
according to their respective percentage ownership of the Escrow Fund, and one
half of the total Indemnification Liability shall be paid by Purchaser.
(h) The Escrow Agent may resign at any time upon giving at least
30 days' written notice to Purchaser and the Warrantors' Representative;
provided, however, that no such resignation shall become effective until the
appointment of a successor escrow agent, which shall be accomplished as follows:
Purchaser and the Warrantors' Representative shall use their best efforts to
mutually agree upon a successor agent within 30 days after receiving such
notice. If the parties fail to agree upon a successor escrow agent within such
time, the Warrantors' Representative with the consent of Purchaser, which shall
not be unreasonably withheld, shall have the right to appoint a successor escrow
agent. The successor escrow agent selected in the preceding manner shall execute
and deliver an instrument accepting such appointment and it shall thereupon be
deemed the Escrow Agent hereunder and it shall without further acts be vested
with all the estates, properties, rights, powers, and duties of the predecessor
Escrow Agent as if originally named as Escrow Agent. If no successor escrow
agent is named, the Escrow Agent may apply to a court of competent jurisdiction
for the appointment of a successor escrow agent. Thereafter, the predecessor
Escrow Agent shall be discharged from any further duties and liabilities under
this Agreement. The provisions of paragraphs 8(e) and 8(f) shall survive the
resignation or removal of the Escrow Agent or the termination of this Agreement.
9. FEES, EXPENSES AND TAXES. Purchaser agrees to pay or reimburse the
Escrow Agent for its normal services hereunder in accordance with the fee
schedule attached hereto as Exhibit A. The Escrow Agent shall be entitled to
reimbursement upon 30 days' written notice for all expenses incurred in
connection with Sections 8(e) and 8(f) above, and payment of any legal fees and
expenses incurred by the Escrow Agent in connection with the resolution of any
claim by any party hereunder. Taxes incurred with respect to payments made
hereunder shall be borne by the party to whom such payment is made.
10. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived with the written consent of the parties or their respective
successors and assigns. Any amendment or waiver effected in accordance with this
Section 10(a) shall be binding upon the parties and their respective successors
and assigns.
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<PAGE> 9
(b) SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
(c) GOVERNING LAW; JURISDICTION. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of New York, without giving effect to principles of conflicts of
law.
(d) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(e) TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(f) NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or
forty-eight (48) hours after being deposited in the regular mail as certified or
registered mail (airmail if sent internationally) with postage prepaid, if such
notice is addressed to the party to be notified at such party's address or
facsimile number as set forth below, or as subsequently modified by written
notice.
If to the Purchaser:
David L. Greenwood
Geron Corporation
230 Constitution Drive
Menlo Park, CA 94025
Facsimile No.: (650) 473-7701
with a copy to:
Joshua L. Green
Venture Law Group,
A Professional Corporation
2800 Sand Hill Road
Menlo Park, CA 94025
Facsimile No.: (650) 233-8386
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<PAGE> 10
If to Company:
Roslin Biotechnology Centre
Roslin
Midlothian
with a copy to:
Kenneth McCracher
Wright Johnston MacKenzie
If to Warrantors' Representative:
(i) Ian Kent
9 Latham Road
Cambridge; and
(ii) Grahame Bulfield
9 Dewarton
Gorebridge
Midlothian EH23 4NX
If to Escrow Agent:
U.S. Bank Trust National Association
1 California Street
San Francisco, CA 94111
Attention: Ann Gadsby
(g) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith, in order to maintain the economic
position enjoyed by each party as close as possible to that under the provision
rendered unenforceable. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of this
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of this Agreement shall be enforceable in accordance with its terms.
(h) ENTIRE AGREEMENT. Except as set forth in the Purchase
Agreement, this Agreement is the product of all of the parties hereto, and
constitutes the entire agreement between such parties pertaining to the subject
matter hereof, and merges all prior negotiations and drafts of the parties with
regard to the transactions contemplated herein. Any and all other written or
oral agreements existing between the parties hereto regarding such transactions
are expressly canceled.
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<PAGE> 11
(i) ADVICE OF LEGAL COUNSEL. Each party acknowledges and
represents that, in executing this Agreement, it has had the opportunity to seek
advice as to its legal rights from legal counsel and that the person signing on
its behalf has read and understood all of the terms and provisions of this
Agreement. This Agreement shall not be construed against any party by reason of
the drafting or preparation thereof.
(j) LIMITATIONS. Notwithstanding any provisions of this
Agreement, the provisions of the Purchase Agreement and, in particular, the
provision of clause 5 of the Purchase Agreement shall apply mutatis mutandis as
if its terms were set out in this Agreement so as to qualify, limit or restrict
any claim which the Purchaser may have against the Warrantor under or pursuant
to the terms of the Purchase Agreement.
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<PAGE> 12
The parties have executed this Agreement as of the date first above
written.
PURCHASER:
GERON CORPORATION
By:_________________________________
Name:_______________________________
(print)
Title:______________________________
ESCROW AGENT:
U.S. BANK TRUST NATIONAL ASSOCIATION
By:_________________________________
Name:_______________________________
(print)
Title:______________________________
WARRANTORS' REPRESENTATIVE
____________________________________
IAN KENT
____________________________________
GRAHAME BULFIELD
____________________________________
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EXHIBIT A
FEE SCHEDULE
<PAGE> 1
EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as
of April 30, 1999, by and among Geron Corporation, a Delaware corporation (the
"Purchaser"), and the shareholders of Roslin Bio-Med Ltd. (the "Company"), a
company registered in Scotland (each individually, a "Shareholder" and
collectively, the "Shareholders").
RECITALS
The Purchaser and the Shareholders have entered into a Share Purchase
Agreement of even date with this Agreement (the "Purchase Agreement") pursuant
to which Purchaser will acquire all of the issued shares of the Company from the
Shareholders (the "Purchase"), and the Shareholders will receive shares of
common stock of Purchaser ("Purchaser Stock"). As a condition to the closing of
the Purchase, the Shareholders desire to obtain and the Purchaser has agreed to
grant certain registration rights to the Shareholders with respect to the
Purchaser Stock.
In consideration of the mutual promises and covenants set forth in this
Agreement, the parties agree as follows:
1. DEFINITIONS
Capitalized terms used and not otherwise defined herein shall
have the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"Advice" has the meaning set forth in Section 3(l) hereof.
"Affiliate" means, with respect to any Person, any other Person
that directly or indirectly controls or is controlled by or under common control
with such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated," controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York generally are authorized or required by law or other
government actions to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means Purchaser's Common Stock, par value $.001
per share.
<PAGE> 2
"Effectiveness Period" has the meaning set forth in Section 2(a)
hereof, subject to extension in accordance with Section 4(l) hereof.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
"Filing Date" means on or before the 120th day following the
Closing Date.
"Holder" or "Holders" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"Indemnified Party" has the meaning set forth in Section 5(c)
hereof.
"Indemnifying Party" has the meaning set forth in Section 5(c)
hereof.
"Losses" has the meaning set forth in Section 5(a) hereof.
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
"Registrable Securities" means (i) the shares of Purchaser Stock
issued or issuable to the Shareholders pursuant to the Purchase Agreement
(including all shares issued and deposited into the Escrow Fund) and (ii) any
shares of Purchaser's capital stock issued with respect to the shares of
Purchaser Stock described in clause (i) as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise.
"Registration Statement" means the registration statement and
any additional registration statements contemplated by Section 2(a), including
(in each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and
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<PAGE> 3
post-effective amendments, all exhibits thereto, and all material incorporated
by reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the United States Securities Act of 1933,
as amended.
"Special Counsel" means one special counsel to the Holders, for
which the Holders will be reimbursed by Purchaser pursuant to Section 4.
2. SHELF REGISTRATION
(a) Purchaser shall prepare and file with the Commission, on or
prior to the Filing Date, the Registration Statement covering all Registrable
Securities for an offering to be made on a continuous basis pursuant to a
"shelf" registration statement under Rule 415. The Registration Statement shall
be on Form S-3 or any successor form (except if Purchaser is not then eligible
to register for resale the Registrable Securities on Form S-3, in which case
such registration shall be on another appropriate form in accordance herewith,
subject to the reasonable consent of the original Holders of the Registrable
Securities). Purchaser shall (i) not permit any securities other than the
Registrable Securities to be included in the Registration Statement and (ii) use
its best efforts to cause the Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof
(provided, however, that Purchaser shall have no obligation to cause the
Registration Statement to be declared effective prior to the 180th day following
the Closing Date) and to keep such Registration Statement continuously effective
under the Securities Act until the date which is two years after the date that
such Registration Statement is declared effective by the Commission or such
earlier date when all Registrable Securities covered by such Registration
Statement have been sold or may be sold without volume restrictions pursuant to
Rule 144 as determined by counsel to Purchaser pursuant to a written opinion
letter, addressed to Purchaser's transfer agent to such effect (the
"Effectiveness Period").
(b) Purchaser represents and warrants that it meets the
registrant eligibility and transaction requirements for the use of Form S-3 (for
secondary offerings) for the registration of the sale of Registrable Securities
by the Shareholders and any other Holders, and Purchaser shall file all reports
required to be filed by Purchaser with the Commission in a timely manner so as
to maintain such eligibility for the use of Form S-3.
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<PAGE> 4
3. REGISTRATION PROCEDURES
In connection with Purchaser's registration obligations
hereunder, Purchaser shall:
(a) Prepare and file with the Commission on or prior to the
Filing Date a Registration Statement on Form S-3 or its successor form (or if
Purchaser is not then eligible to register for resale the Registrable Securities
on Form S-3 such registration shall be on another appropriate form in accordance
herewith or in accordance with the method or methods of distribution thereof as
specified by the Holders (except if otherwise directed by the Holders)), and use
its best efforts to cause the Registration Statement to become effective and
remain effective as provided herein.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective for the
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424 (or any similar
provisions then in force) promulgated under the Securities Act; (iii) respond as
promptly as possible to any comments received from the Commission with respect
to the Registration Statement or any amendment thereto; and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by the
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Holders thereof set forth in the
Registration Statement as so amended or in such Prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities to be sold and
their Special Counsel as promptly as possible (i) with respect to the
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iii) if at any time any of the representations and warranties of Purchaser
contained in any agreement (including any underwriting agreement) contemplated
hereby ceases to be true and correct in all material respects; (iv) of the
receipt by Purchaser of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and (v) of the occurrence of any event that makes
any statement made in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to the Registration Statement,
Prospectus or other documents so that, in the case of the Registration Statement
or the Prospectus, as the case may be, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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(d) Use its best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of
the Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
(e) Upon request, furnish to each Holder, their Special Counsel
and any managing underwriters, without charge, at least one conformed copy of
each Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested by
such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.
(f) Promptly deliver to each Holder, their Special Counsel, and
any underwriters, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and Purchaser hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders and any underwriters in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.
(g) Prior to any public offering of Registrable Securities, use
its best efforts to register or qualify or cooperate with the selling Holders,
and their Special Counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder requests in writing, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, however,
that Purchaser shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or subject Purchaser to any material tax in any such
jurisdiction where it is not then so subject.
(h) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold pursuant to a Registration Statement, which certificates shall be free,
to the extent permitted by applicable law, of all restrictive legends, and to
enable such Registrable Securities to be in such denominations and registered in
such names as any such managing underwriters or Holders may request.
(i) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact
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<PAGE> 6
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(j) Use its best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on the Nasdaq National
Market prior to the date the Registration Statement becomes effective and any
other securities exchange, quotation system, market or over-the-counter bulletin
board, if any, on which similar securities issued by Purchaser are then listed.
(k) Make available for inspection by the selling Holders, any
representative of such Holders, any underwriter participating in any disposition
of Registrable Securities, and any attorney or accountant retained by such
selling Holders or underwriters, at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent corporate
documents and properties of Purchaser and its subsidiaries, and cause the
officers, directors, agents and employees of Purchaser and its subsidiaries to
supply all information in each case reasonably requested by any such Holder,
representative, underwriter, attorney or accountant in connection with the
Registration Statement; provided, however, that if any information is determined
in good faith by Purchaser in writing to be of a confidential nature at the time
of delivery of such information, then prior to delivery of such information,
Purchaser and the Holders shall enter into a confidentiality agreement
reasonably acceptable to Purchaser and the Holders providing that such
information shall be kept confidential, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities (provided, however, that
Purchaser shall be given notice of any such pending disclosure so that Purchaser
may seek a protective order); (ii) disclosure of such information, in the
opinion of counsel to such Person, is required by law; (iii) such information
becomes generally available to the public other than as a result of a disclosure
or failure to safeguard by such Person; or (iv) such information becomes
available to such Person from a source other than Purchaser and such source is
not known by such Person to be bound by a confidentiality agreement with
Purchaser.
(l) Purchaser may require each selling Holder to furnish to
Purchaser information regarding such Holder and the distribution of such
Registrable Securities as is required by law to be disclosed in the Registration
Statement, and Purchaser may exclude from such registration the Registrable
Securities of any such Holder who unreasonably fails to furnish such information
within a reasonable time after receiving such request.
Each Holder covenants and agrees that, subject to
Section 7 of this Agreement, (i) it will not sell any Registrable Securities
under the Registration Statement until it has received copies of the Prospectus
as then amended or supplemented as contemplated in Section 3(f) and notice from
Purchaser that such Registration Statement and any post-effective amendments
thereto have become effective as contemplated by Section 3(c) and (ii) it and
its officers, directors or Affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to them in connection
with sales of Registrable Securities pursuant to the Registration Statement.
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<PAGE> 7
Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from Purchaser of the
occurrence of any event of the kind described in Section 3(c)(ii), 3(c)(iii),
3(c)(iv) or 3(c)(v), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until the earlier of (i)
the expiration of 90 days from the date of receipt of such notice, (ii) such
Holder's receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement contemplated by Section 3(f), or (iii) it is advised in
writing (the "Advice") by Purchaser that the use of the applicable Prospectus
may be resumed, and, in the case of either (ii) or (iii) above, has received
copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus or Registration Statement;
provided, however, that the Purchaser may not utilize this right more than once
in any twelve-month period; and provided further, however, that the
Effectiveness Period shall be extended automatically by a number of days equal
to the period of time that the Holders discontinue the disposition of
Registrable Securities pursuant to this Section 4(l).
4. REGISTRATION EXPENSES
All fees and expenses incident to the performance of or
compliance with this Agreement by Purchaser shall be borne by Purchaser whether
or not pursuant to an underwritten offering and whether or not the Registration
Statement is filed or becomes effective and whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
Nasdaq National Market and each other securities exchange or market on which
Registrable Securities are required hereunder to be listed and (B) in compliance
with state securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel for the Holders in connection with Blue Sky
qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the managing underwriters, if any, or the Holders of a majority
of Registrable Securities may designate)), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
and of printing prospectuses if the printing of prospectuses is requested by the
managing underwriters, if any, or by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for
Purchaser and Special Counsel for the Holders, (v) Securities Act liability
insurance, if Purchaser so desires such insurance, and (vi) fees and expenses of
all other Persons retained by Purchaser in connection with the consummation of
the transactions contemplated by this Agreement (including the fees of
accountants retained to conduct any audit of the Company's financial
statements). In addition, Purchaser shall be responsible for all of its internal
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit, and the fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange as required hereunder.
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<PAGE> 8
5. INDEMNIFICATION
(a) INDEMNIFICATION BY PURCHASER. Purchaser shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents (including any underwriters
retained by such Holder in connection with the offer and sale of Registrable
Securities), brokers (including brokers who offer and sell Registrable
Securities as principal as a result of a pledge or any failure to perform under
a margin call of Common Stock), investment advisors and employees of each of
them, each Person who controls any such Holder (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, costs of preparation
and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising
out of or relating to any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that such untrue
statements or omissions are based solely upon information regarding such Holder
furnished in writing to Purchaser by such Holder expressly for use therein,
which information was reasonably relied on by Purchaser for use therein or to
the extent that such information relates to such Holder or such Holder's
proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in the
Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (provided that Purchaser amended any disclosure
with respect to the method of distribution upon written notice from the Holders
that such section of the Prospectus should be revised in any way). In addition,
Purchaser shall not be liable for any Losses to any Holder with respect to any
untrue or alleged untrue statement or omission or alleged omission if such
statement or omission was made in a preliminary Prospectus that is corrected in
a final Prospectus (or any amendment or supplement thereto) if the person
asserting such Losses purchased Common Stock from a Holder in reliance upon such
preliminary Prospectus (or a Prospectus which was subsequently amended or
supplemented) or the Prospectus, as subsequently amended or supplemented, that
was delivered by Purchaser to such Holder prior to written confirmation of the
sale of the Common Stock to such person in any case where such delivery of such
Prospectus to the purchaser of the Common Stock (as amended or supplemented) is
required, unless such failure to deliver such final Prospectus to the purchaser
of the Common Stock (as amended or supplemented) was a result of noncompliance
by Purchaser with Section 3(f) of this Agreement. Purchaser shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding of
which Purchaser is aware in connection with the transactions contemplated by
this Agreement.
(b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally and
not jointly, indemnify and hold harmless Purchaser, the directors, officers,
agents and employees, each Person who controls Purchaser (within the meaning of
Section 15 of the Securities Act and
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<PAGE> 9
Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, arising solely out of
or based solely upon any untrue statement of a material fact contained in the
Registration Statement, any Prospectus, or any form of prospectus, or arising
solely out of or based solely upon any omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading to
the extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Holder to Purchaser
specifically for inclusion in the Registration Statement or such Prospectus and
that such information was reasonably relied upon by Purchaser for use in the
Registration Statement, such Prospectus or such form of prospectus or to the
extent that such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities and was reviewed and expressly
approved in writing by such Holder expressly for use in the Registration
Statement, such Prospectus or such form of prospectus. In no event shall the
aggregate liability of any selling Holder hereunder together with any liability
of such selling Holder under Section 5(d) hereof be greater in amount than the
dollar amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "Indemnified Party"), such Indemnified Party promptly shall notify the
Person from whom indemnity is sought (the "Indemnifying Party") in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, however, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; or (2) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior
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<PAGE> 10
written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within 10 Business Days of written notice thereof to the Indemnifying
Party (regardless of whether it is ultimately determined that an Indemnified
Party is not entitled to indemnification hereunder; provided, that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).
(d) CONTRIBUTION. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party because of a failure or
refusal of a governmental authority to enforce such indemnification in
accordance with its terms (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms. In no event shall the aggregate liability of any
selling Holder hereunder together with any liability of such selling Holder
under Section 5(b) hereof be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
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6. RULE 144
As long as any Holder owns Registrable Securities, Purchaser
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by
Purchaser after the date hereof pursuant to Section 13(a) or l5(d) of the
Exchange Act and to promptly furnish the Holders with true and complete copies
of all such filings. As long as any Holder owns Registrable Securities, if
Purchaser is not required to file reports pursuant to Section 13(a) or l5(d) of
the Exchange Act, it will prepare and furnish to the Holders and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. Purchaser further
covenants that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Person to
sell Purchaser Stock without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act. Upon the request of any Holder, Purchaser shall deliver to such
Holder a written certification of a duly authorized officer as to whether it has
complied with such requirements.
7. RESTRICTIONS ON SALES
(a) The Ruby Institute (the "Institute") agrees not to directly
or indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of (other than to Affiliates who agree to be similarly bound)
(collectively, "Institute Transfer Restrictions") the Purchaser Stock issued to
the Institute pursuant to the Purchase Agreement prior to the expiration of one
year following the Closing Date.
(b) The Institute and Purchaser agree and acknowledge that it is
in their mutual interest that disposition of Purchaser Stock be accomplished in
a manner that does not disrupt or undermine the trading market for Purchaser's
Common Stock on the Nasdaq National Market. Therefore, the Institute shall not
sell or otherwise transfer more than 35,000 shares of Common Stock during any
three-month period following the expiration of the Institute Transfer
Restrictions set forth in Section 7(a) above without the prior written approval
of Purchaser. Subject to the foregoing, all sales of Common Stock by the
Institute shall be subject to all applicable policies of Purchaser relating to
insider trading.
(c) 3i Group plc ("3i") agrees not to directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to Affiliates who agree to be similarly bound) (collectively, "3i Transfer
Restrictions") the Purchaser Stock issued to 3i pursuant to the Purchase
Agreement prior to the expiration of 180 days following the Closing Date.
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<PAGE> 12
(d) Each of John Brown and Ian Kent (the "Directors") agrees not
to directly or indirectly sell, offer to sell, contract to sell (including,
without limitation, any short sale), grant any option to purchase or otherwise
transfer or dispose of (other than to Affiliates who agree to be similarly
bound) (collectively, "Director Transfer Restrictions") the Purchaser Stock
issued to the Directors pursuant to the Purchase Agreement prior to the
expiration of 180 days following the Closing Date; provided, however, that
notwithstanding the foregoing, each Director may sell at any time permitted
under U.S. securities laws a number of shares of Purchaser Stock that would
yield proceeds sufficient to cover any tax obligations or exercise and
transaction costs incurred by such Director as a result of exercise of his
Company stock options prior to the Closing.
(e) The Directors and Purchaser agree and acknowledge that it is
in their mutual interest that disposition of Purchaser Stock be accomplished in
a manner that does not disrupt or undermine the trading market for Purchaser's
Common Stock on the Nasdaq National Market. Therefore, neither Director shall
sell or otherwise transfer more than 25% of the number of shares of Purchaser
Common Stock allocated to such Person pursuant to the Purchase Agreement (as
adjusted for stock splits, stock dividends and similar transactions) during any
three-month period following the expiration of the Director Transfer
Restrictions set forth in Section 7(d) above without the prior written approval
of Purchaser; provided, however, that notwithstanding the foregoing, each
Director may sell at any time permitted under U.S. securities laws a number of
shares of Purchaser Stock that would yield proceeds sufficient to cover any tax
obligations or exercise and transaction costs incurred by such Director as a
result of exercise of his Company stock options prior to the Closing. Subject to
the foregoing, all sales of Common Stock by the Directors shall be subject to
all applicable policies of Purchaser relating to insider trading for so long as
the Director remains an employee of or consultant to the Purchaser, the Company
or the Institute and for a period of 180 days following termination of any such
employment or consulting relationship.
(f) Each of the Shareholders other than the Institute, 3i and
the Directors (each, a "Remaining Shareholder") agrees not to directly or
indirectly sell, offer to sell, contract to sell (including, without limitation,
any short sale), grant any option to purchase or otherwise transfer or dispose
of (other than to Affiliates who agree to be similarly bound) (collectively,
"Remaining Shareholder Transfer Restrictions") the Purchaser Stock issued to
such Remaining Shareholder pursuant to the Purchase Agreement prior to the
expiration of one year following the Closing Date; provided, however, that
notwithstanding the foregoing, each Remaining Shareholder may sell at any time
permitted under U.S. securities laws a number of shares of Purchaser Stock that
would yield proceeds sufficient to cover any tax obligations or exercise and
transaction costs incurred by such Remaining Shareholder as a result of exercise
of his Company stock options prior to the Closing.
(g) Each Remaining Shareholder and Purchaser agree and
acknowledge that it is in their mutual interest that disposition of Purchaser
Stock be accomplished in a manner that does not disrupt or undermine the trading
market for Purchaser's Common Stock on the Nasdaq National Market. Therefore, no
Remaining Shareholder shall sell or otherwise transfer more than 25% of the
number of shares of Purchaser Common Stock allocated to such Person pursuant to
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<PAGE> 13
the Purchase Agreement (as adjusted for stock splits, stock dividends and
similar transactions) during any three-month period following the expiration of
the Remaining Shareholder Transfer Restrictions set forth in Section 7(f) above
without the prior written approval of Purchaser; provided, however, that
notwithstanding the foregoing, each Remaining Shareholder may sell at any time
permitted under U.S. securities laws a number of shares of Purchaser Stock that
would yield proceeds sufficient to cover any tax obligations or exercise and
transaction costs incurred by such Remaining Shareholder as a result of exercise
of his Company stock options prior to the Closing. Subject to the foregoing, all
sales of Common Stock by the Remaining Shareholders shall be subject to all
applicable policies of Purchaser relating to insider trading for so long as the
Remaining Shareholder remains an employee of or consultant to the Purchaser, the
Company or the Institute and for a period of 180 days following termination of
any such employment or consulting relationship.
8. MISCELLANEOUS
(a) REMEDIES. In the event of a breach by Purchaser or by a
Holder of any of their obligations under this Agreement, each Holder, or
Purchaser, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement.
Purchaser and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement, contains the entire understanding of the parities with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral or written, with respect to such matters.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by Purchaser
and the Holders of at least a majority of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of at least a majority of the Registrable
Securities to which such waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence.
(d) NOTICES. The notice provisions set forth in Section 9.1 of
the Purchase Agreement shall apply to all notices given or required to be given
under this Agreement.
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<PAGE> 14
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder.
(f) ASSIGNMENT OF REGISTRATION RIGHTS. The rights of each Holder
hereunder, including the right to have Purchaser register for resale Registrable
Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder if: (i) the Holder agrees in writing
with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to Purchaser within a reasonable time after such
assignment, (ii) Purchaser is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned, (iii) following such
transfer or assignment the further disposition of such securities by the
transferee or assignees is restricted under the Securities Act and applicable
state securities laws, and (iv) at or before the time Purchaser receives the
written notice contemplated by clause (ii) of this Section, the transferee or
assignee agrees in writing with Purchaser to be bound by all of the provisions
of this Agreement. The rights to assignment shall apply to the Holders (and to
subsequent) successors and assigns.
(g) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(h) GOVERNING LAW. The corporate laws of the State of Delaware
shall govern all issues concerning the relative rights of Purchaser and the
Shareholders as its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed in accordance with the laws of the State of
California, without regard to principles of conflicts of law. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.
(i) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that
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<PAGE> 15
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(j) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE TO FOLLOW]
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<PAGE> 16
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
PURCHASER:
GERON CORPORATION
By: _________________________________________
Name: _________________________________________
(print)
Title: _________________________________________
Address: 230 Constitution Drive
Menlo Park, CA 94025
Facsimile Number: (650) 473-7701
SHAREHOLDERS:
_________________________
By: _________________________________________
Name: _________________________________________
(print)
Title: _________________________________________
Address: _________________________________________
_________________________________________
Facsimile Number:__________________________________
-16-
<PAGE> 1
EXHIBIT 10.42
DATED MAY 3, 1999
ROSLIN INSTITUTE (EDINBURGH)
GERON CORPORATION
- AND -
ROSLIN BIO-MED LIMITED
- --------------------------------------------------------------------------------
RESEARCH AND LICENCE AGREEMENT
- --------------------------------------------------------------------------------
Dundas & Wilson
191 West George Street
GLASGOW G2 2LB
<PAGE> 2
RESEARCH AND LICENCE AGREEMENT made the 3rd day of May, 1999
BETWEEN
GERON CORPORATION, a Delaware corporation having a principal place of business
at 230 Constitution Drive, Menlo Park, California 94025 ("Geron");
ROSLIN INSTITUTE (EDINBURGH), a company incorporated in Scotland under the
Companies Acts with registered number 157100 and having its registered office at
Roslin Biotechnology Centre, Roslin, Edinburgh, Midlothian, EH25 9PS ("the
Institute"); and
ROSLIN BIO-MED LIMITED, a company incorporated in Scotland under the Companies
Acts with registered number 179263 and having its registered office at Roslin
Biotechnology Centre, Roslin, Midlothian EH25 9PS ("RBM").
WHEREAS:
(A) The Institute, the Minister of Agriculture, Fisheries and Food acting
through the Ministry of Agriculture, Fisheries and Food ("MAFF") and the
Biotechnology and Biological Sciences Research Council ("BBSRC") are
joint owners of patent applications and the Institute and BBSRC are the
joint-owners of certain valuable know-how relating to both nuclear
transfer technology and the cloning and genetic modification of animals
and human cells;
(B) By an agreement dated 26th March and 7th April 1998 MAFF and BBSRC have
irrevocably consented for all purposes (except in relation to the
Cloning of Humans (as defined in Clause 1.1)) to the Institute
negotiating and granting licences under the said patent applications on
such terms and conditions as the Institute shall, in its entire
discretion, decide in respect of all applications of the inventions
which fall within the claims of the said patent applications relating to
end products for human health care, and by a letter dated 3 April 1998,
BBSRC consented to the Institute granting rights in the said know-how to
RBM ;
(C) The Institute and RBM entered into a Research Agreement on 7th April
1998 ("Existing Research Agreement") in order to fund development of
technology relating to the said patent applications and know-how
(D) On or prior to the execution of this Agreement Geron has acquired the
whole of the issued share capital of RBM;
(E) The Institute, Geron and RBM have entered into an agreement of even date
herewith ("the Licence Agreement") whereby a Licence dated 7th April
1998 between the Institute and RBM was terminated and the Institute
granted to Geron a licence of the said patent applications, know-how and
certain other intellectual property rights in respect of the fields of
use defined in the Licence Agreement;
<PAGE> 3
(F) Geron wishes to fund further development of the technology relating to
the said patent applications, know-how and other intellectual property
rights for bio-medical purposes as otherwise specified in this Agreement
and the Institute and to further the objectives of the Institute in a
manner consistent with its status as a research and educational
institute and its recognition as a Scottish Charity (number SC023592),
has agreed to carry out such research;
(G) It is also envisaged that Geron may actively participate and engage in
the research and to that end will make available to the Institute
Geron's existing know-how and other intellectual property to assist the
Institute in carrying out the research; and
(H) It has therefore been agreed that, as from the Commencement Date, the
Existing Research Agreement will be terminated and a research agreement
shall be entered into on the terms and conditions set out herein.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement, unless the context otherwise requires, the following
words and expressions shall have the respective meanings set out
opposite them:
<TABLE>
<S> <C> <C>
"Associate" shall mean, in relation to any
company, any subsidiary or holding
company of that company or any
subsidiary of any such holding
company and for this purpose
"subsidiary" and "holding company"
shall have the meanings specified in
Section 736 of the Companies Act
1985;
"Background Intellectual Property" shall mean all and any Intellectual
Property belonging to or used by any
party other than Foreground
Intellectual Property;
"Cloning of Humans" shall mean the uterine implantation
and development of a reconstructed
embryo with identical nuclear
genetic information to another
living or deceased human being;
"Commencement Date" the last date of execution of this
Agreement;
"Directed Research" shall mean the programmes of
scientific research funded by the
Directed Research Funding and which
are to be carried out by the
Institute at the Premises in
accordance with the Directed
Research Workplan;
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
* "Directed Research Funding" shall mean the sum of [*]
"Directed Research Results" shall mean the results of the
Directed Research including all
reports, data, formulae, processes,
technical information, laboratory
books and all documents, materials,
drawings and models produced by the
Institute in the conduct of the
Directed Research in whatever form
and on whatever media they are held
and all Intellectual Property in
those results;
"Directed Research Workplan" shall mean the workplan for the
Directed Research to be agreed and
as may be amended from time to time
by the Project Board in accordance
with Clause 3.2;
"EEA" The European Economic Area as
constituted from time to time;
"Fields of Use" shall mean, subject to Clause 4 of
the Licence Agreement, all
applications of the Foreground
Intellectual Property;
"First Sale Date" shall mean the date on which Geron
or any of its Associates or any sub-
licensees first puts a Product on
the market;
"Foreground Intellectual Property" shall mean all and any Intellectual
Property arising from the Directed
Research and/or the Undirected
Research;
"Institute Intellectual Property" shall mean Intellectual Property
owned by the Institute pursuant to
Clause 7.6.1;
"Intellectual Property" means all inventions, discoveries,
know-how, processes, copyright,
design right, rights to apply for
Patents, Patents, applications for
Patents and all other intellectual
property rights of a similar nature
arising anywhere in the world;
"Jointly Owned Intellectual shall mean the Intellectual Property
Property" jointly owned by the Institute and
Geron pursuant to
</TABLE>
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-3-
<PAGE> 5
<TABLE>
<S> <C> <C>
Clause 7.3;
"Net Sales Price" shall mean, in relation to Sales:
(a) where the Products are Sold or
supplied on arms length terms,
the price charged in the
relevant invoice less any value
added tax or other sales taxes
and other government imposed
duties, trade or cash discounts,
insurance and packing and
freight costs (to the extent
identified in the relevant
invoice), rebates and allowances
for promotions and returns; and
(b) where the Products are Sold or
supplied otherwise than on arm's
length terms but are
subsequently sold or supplied on
arm's length terms, the price
charged under the first such
arm's length sale calculated in
accordance with paragraph (a)
above less any value added tax
or other sales taxes, trade or
cash discounts, insurance and
packing and freight costs (if
separately charged) and
allowances for returns;
"Option" shall mean the option referred to in
Clause 9.1;
"Patent" shall mean any and all patent rights
throughout the world including any
re-issues, extensions, substitutions,
continuation in part applications and
supplementary protection certificates
and all other rights of a like
nature;
"Patent Methods" means any process or method the use
or practice of which would constitute
an infringement of a Valid Claim in a
particular territory but for any
licence granted under this Agreement;
"Premises" shall mean the Institute's facilities
at the Roslin Biotechnology Centre or
any other facilities under the
Institute's control and such other
premises as Geron and the Institute
may from time to time agree;
"Products" shall mean any product, process, kit,
composition of matter, material, or
service to be used in a manner
requiring the performance of or
</TABLE>
-4-
<PAGE> 6
<TABLE>
<S> <C> <C>
production by the Patent Methods to
the extent that the manufacture, use,
sale, offer for sale, or importation
of any such product, process, kit,
composition of matter, material, or
service would constitute an
infringement of a Valid Claim in a
particular territory but for the
licence of the Jointly Owned
Intellectual Property granted by the
Institute to Geron under Clause 8.1
or any licence of Institute
Intellectual Property which may be
granted by the Institute to Geron
under Clause 9;
"Project Board" shall mean the board appointed
pursuant to Clause 3.7;
"Quarter" shall mean the period from the
Commencement Date until 30 June 1999
(inclusive), the period of three (3)
months beginning on 1 July 1999 and
each successive period of three (3)
months during the continuation of
this Agreement, and "Quarterly"
shall be construed accordingly;
* "Relevant Royalty Rate" shall mean the rate of [*] per cent
for Products intended for [*] and the
rate of [*] per cent for Products
intended for any other use including
although not limited to [*]
"Research" shall mean collectively the Directed
Research and the Undirected Research;
"Research Period" shall mean the period from the
Commencement Date until 30 June 2005
as that period may be extended
pursuant to Clause 3.6.7 or such
further period or periods as the
Institute and Geron shall agree;
"Research Teams" shall mean the teams of people
defined in the Directed Research
Workplan engaged in carrying out the
Directed Research on behalf of the
Institute from time to time under
this Agreement and any other persons
engaged in carrying out the Directed
Research on behalf of the Institute
as may be agreed between the
Institute and Geron;
</TABLE>
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-5-
<PAGE> 7
<TABLE>
<S> <C> <C>
"Sale" shall mean any sale, hire, lease or
other disposal on a commercial basis
of any Product by Geron any of its
Associates or any sub-licensees and
"Sold" shall be construed
accordingly;
"Schedule" shall mean the schedule (in two
parts) annexed to and which shall be
deemed to form part of this
Agreement;
"Supervisors" shall mean Professor Anthony John
Clark and Professor Ian Wilmut or
any other persons appointed pursuant
to Clause 3.6.2;
"Undirected Research" shall mean a programme of research
* in the field of [*] to be carried
out by the Institute and which is
funded in whole or in part by the
Undirected Research Funding;
* "Undirected Research Funding" shall mean the sum of [*]
"Undirected Research Results" shall mean the results of the
Undirected Research including all
reports, data, formulae, processes,
technical information, laboratory
books and all documents, materials,
drawings and models produced by the
Institute in the conduct of the
Undirected Research in whatever form
and on whatever media they are held
and all Intellectual Property in
those results;
"Undirected Research Workplan" shall mean the workplan for the
Undirected Research to be prepared
by the Institute pursuant to Clause
4.2;
"Valid Claim" shall mean
(a) any claim of any issued and
unexpired Patent comprised in
any Intellectual Property; and
(b) any claim made in any
application for a Patent which,
if granted, would constitute a
Valid Claim;
</TABLE>
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-6-
<PAGE> 8
<TABLE>
<S> <C> <C>
and which claim has not been finally
rejected or declared invalid by a
patent office or by a court of
competent jurisdiction;
"Xeno Pigs Project" shall mean the continuing Xeno Pigs
Project which will comprise part of
the Directed Research Workplan; and
"Year" shall mean the period from the
Commencement Date until 30 June 1999
(inclusive) and each period of
twelve (12) months commencing on 1
July 1999 and on each anniversary of
1 July 1999.
</TABLE>
1.2 In this Agreement unless the context otherwise requires: -
1.2.1 reference to a Clause is to a clause of this Agreement;
1.2.2 words importing the singular shall include the plural and vice
versa;
1.2.3 headings to Clauses are inserted for convenience only and shall
not affect the construction or interpretation of this Agreement;
and
1.2.4 references to any statute or statutory provision include a
reference to that statute or statutory provision as amended,
extended or re-enacted from time to time.
2. DURATION
2.1 This Agreement shall commence on the Commencement Date and shall,
subject to Clauses 17 (Force Majeure) and 18 (Termination), continue in
force during the Research Period and thereafter, on a country by country
or territory by territory basis, as appropriate, until the later of:
* 2.1.1 [*]; or
* 2.1.2 in relation to countries or territories within the EEA, [*] from
the First Sale Date in any part of the EEA and in relation to
countries or territories outside the EEA, [*] from the First
Sale Date in that country or territory.
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-7-
<PAGE> 9
3. DIRECTED RESEARCH
3.1 Payment for Directed Research
3.1.1 To enable the Institute to undertake the Directed Research and
to provide the necessary facilities in connection therewith,
Geron shall pay to the Institute or shall procure the payment to
the Institute of the Directed Research Funding in the manner set
out in Clause 5.
3.1.2 The Institute shall use the payments received from Geron
pursuant to Clause 3.1.1 to meet the costs of the Directed
Research specified in the budgets set forth in the Directed
Research Workplan.
* 3.1.3 The parties hereby agree that not less than [*] of the Directed
Research Funding will be allocated to research programmes [*]
3.1.4 The Directed Research (including the costs of providing
laboratory, animal and research facilities at the Institute)
shall be charged at reasonable commercial rates as shall be
agreed between the Institute and Geron in advance prior to the
commencement of each Year of this Agreement in accordance with
the principles set out in Part 1(a) of the Schedule. The rates
agreed for each Year of this Agreement may be varied only by the
prior written agreement of Geron and the Institute.
3.1.5 It is acknowledged by Geron that payment of the Directed
Research Funding is not and shall not be in any way
* conditional upon [*]
3.2 Directed Research Workplan
3.2.1 As soon as reasonably practicable and in any event within two
(2) months of the Commencement Date, the Project Board shall
prepare and agree the Directed Research Workplan having
reasonable regard to the resources available to the Institute at
that time and from time to time. The Directed Research Workplan
shall identify each separately identifiable research programme
and in respect of each such separately identifiable research
programme:
(i) the objectives;
(ii) without prejudice to Clause 3.1.5, the milestones;
(iii) the resources to be allocated to it;
(iv) the timescale for its completion; and
(v) any Background Intellectual Property (including that
owned by third parties) necessary or desirable to carry
it out.
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-8-
<PAGE> 10
3.2.2 The Project Board shall throughout the Research Period keep the
Directed Research Workplan under review. The Directed Research
Workplan may be amended from time to time by the Project Board.
3.2.3 Notwithstanding that the Institute shall use all reasonable
endeavours to carry out the Directed Research in accordance with
the Directed Research Workplan, if for any reason the Institute
is unable to comply with the Directed Research Workplan it shall
as soon as reasonably practicable notify the Project Board
specifying the reasons for its inability. The Project Board
shall thereafter determine whether any variation to the Directed
Research Workplan is necessary in the light of the Institute's
inability to comply with the Directed Research Workplan and, if
it considers any variation is necessary, the nature of that
variation.
3.2.4 It is the intention of the parties that the full amount of the
Directed Research Funding will be expended over the duration of
the Research Period in carrying out the Directed Research.
Subject to the Institute having available the necessary
personnel and facilities to carry out that level of research and
to clause 3.2.1, Geron and the Institute shall each procure that
their representatives on the Project Board instruct Directed
Research in accordance with the foregoing.
3.3 Conduct of the Directed Research
3.3.1 Subject to clause 6 the Directed Research shall be exclusively
undertaken by the Research Teams within the Premises, under the
supervision of the Supervisors and in accordance with the
Directed Research Workplan.
3.3.2 If at any time the Institute wishes to collaborate with any
third party in carrying out the Directed Research, it may do so
(subject to Clauses 7.5 and 7.9) only after having notified
Geron of the identity of the third party and having obtained
Geron's prior written consent to the collaboration.
3.3.3 The Institute shall at all times during the Research Period
ensure that access to the main building of the Roslin
Biotechnology Centre is controlled by means of a secure entry
system;
3.3.4 The Institute shall use its reasonable endeavours to ensure that
all documents, software and other materials (including but not
limited to animals and cell lines) embodying the Directed
Research Results are kept in a secure environment and can only
be accessed by members of the Research Teams, and that all
laboratory books are locked away when not being used by members
of the Research Teams.
3.3.5 During the Research Period the Institute shall permit duly
authorised employees or representatives of Geron to confer from
time to time with the Supervisors and to visit the Premises at
the reasonable convenience of the Institute and the Supervisors
solely for the purpose of facilitating disclosure to Geron of
the Directed Research Results and witnessing performance of the
Directed Research, provided that Geron and their duly authorised
employees or representatives shall, while on the Premises, be
bound by all
-9-
<PAGE> 11
the Institute's regulations and requirements (so far as made
known to them) which are from time to time applicable to the
Premises.
3.3.6 The Institute shall use its reasonable endeavours to ensure that
all members of the Research Teams shall at all times comply with
all necessary procedures as specified by the Project Board from
time to time in relation to the evidencing of any inventions and
protection of any associated Intellectual Property.
3.4 Reports
3.4.1 The Institute shall procure that the Research Teams deliver to
the Project Board within thirty (30) days following the end of
each Quarter a written report detailing the progress of the
Directed Research in that Quarter and containing information
regarding the Directed Research Results. In each report the
Institute will use all reasonable endeavours to identify any
Intellectual Property which may have arisen or which the
Institute considers is likely to arise in the course of the
Directed Research.
3.4.2 Within three (3) months of completion of each separately
identifiable research programme comprised within the Directed
Research, the Institute shall deliver a final report to the
Project Board summarising and collating the whole history of
that research programme and containing the results thereof
(including but not limited to any Intellectual Property which
has arisen in the course of that research programme).
3.4.3 The Institute acknowledges that all reports relating to the
Directed Research prepared pursuant to Clauses 3.4.1 and 3.4.2
shall at all times be kept confidential.
3.5 The Research Teams
3.5.1 The Institute shall procure that each Research Team shall be
composed of a sufficient number of appropriately skilled and
experienced members to carry out the Directed Research in terms
of this Agreement. All members of Research Teams shall be
subject to the approval of the Project Board.
3.5.2 The Institute shall use all reasonable endeavours to ensure the
continuity of the members of the Research Teams, both in
relation to the particular Research Team to which each member is
allocated and the particular research programme allocated to
each Research Team, so as to minimise any disruption or delay to
the Directed Research.
3.5.3 If for any reason a member of one of the Research Teams (but
excluding the Supervisors) is unable to continue with the
Directed Research, the Institute shall with the prior consent of
the Project Board promptly appoint a replacement for that
member. The Project Board shall not unreasonably withhold or
delay its consent to any replacement suggested by the Institute.
3.5.4 If at any time the Institute wishes to transfer a member of one
of the Research Teams (but excluding the Supervisors) to another
project being conducted by the Institute, the
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<PAGE> 12
Institute shall first obtain the consent of the Project Board.
The Project Board shall not unreasonably withhold or delay its
consent to any transfer suggested by the Institute.
3.5.5 The Institute shall ensure that each member of the Research Team
enters into an undertaking in favour of Geron in the form set
out in Part 2 of the Schedule.
3.6 The Supervisors
3.6.1 The Research Teams shall be led by the Supervisors.
Notwithstanding any separate arrangements between Geron and each
or both of the Supervisors, the Institute shall procure that the
Supervisors devote a sufficient amount of their available time
to the Directed Research so as to enable the Directed Research
to be progressed and carried out in accordance with the terms of
this Agreement and the Directed Research Workplan.
3.6.2 If at any time during the Research Period either or both of the
Supervisors are unable or unwilling for whatever reason to
continue leading the Directed Research, the Institute shall give
notice of this immediately to the Project Board. The Institute
shall thereafter use its reasonable endeavours to find as soon
as reasonably practicable a replacement or replacements for the
Supervisor(s) who is/are acceptable to Geron. Subject to Clause
3.6.3, Geron shall have sole discretion as to the acceptability
of any person(s) proposed by the Institute as a replacement or
replacements for the Supervisor(s) provided that in reaching its
decision Geron shall take reasonable account of any comments
made by the Institute in relation to the suitability of the
person or persons suggested by the Institute.
3.6.3 Geron shall give all assistance reasonably required by the
Institute to find an acceptable replacement or replacements for
the Supervisor(s) pursuant to Clause 3.6.2.
3.6.4 Subject to Clause 3.6.6 if within six (6) months of the
Institute giving notice to Geron in accordance with Clause 3.6.2
an acceptable replacement or replacements has or have not been
found and no offer has been made to any identified replacement
or replacements which Geron has reasonable grounds to believe
will be accepted, Geron shall, provided that it is not in
material breach of its obligations under Clause 3.6.3 be
entitled to suspend further payment of the Directed Research
Funding pending the finding of a suitable replacement or
replacements for the Supervisor(s).
3.6.5 If [*], Geron shall, provided that it is not in material breach
of its obligations under Clause 3.6.3, be entitled to terminate
* this Agreement pursuant to Clause 18.2 and thereafter and
subject to clause 18.5.1 each party's rights and obligations in
relation to the Directed Research shall cease.
3.6.6 Notwithstanding the foregoing Geron shall not be entitled to
* suspend payment of the Directed Research Funding or to terminate
this Agreement under Clause 3.6.5 if [*].
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-11-
<PAGE> 13
3.6.7 If at any stage Geron suspends payment of the Directed Research
Funding pursuant to clause 3.6.4 and/or the Project Board is
required to suspend or delay the Directed Research because of a
lack of facilities or resources at the Institute, there shall be
added to the Research Period a period equivalent to the length
of such suspension or delay.
3.7 The Project Board
3.7.1 The Project Board shall comprise five members, two of whom shall
be appointed by the Institute and the balance of whom shall be
appointed by Geron. For so long as they remain employees of
BBSRC working at the Institute the Supervisors shall be the
Institute's appointees. If at any time during the Research
Period there are not two Supervisors the Institute shall be
entitled to appoint to the Project Board an alternative suitably
qualified scientific representative or representatives pending a
replacement or replacements for the Supervisor(s) being
appointed in accordance with Clause 3.6.2. The chairperson of
the Project Board shall be one of Geron's appointees.
3.7.2 All members of the Project Board shall be given reasonable
notice of meetings of the Project Board unless such requirement
is unanimously waived by such members. The quorum for meetings
of the Project Board shall be three members, one of which must
be an appointee of the Institute provided however that if both
of the Institute appointees are given proper notice of a meeting
of the Project Board and neither of them attends without
reasonable excuse or if, for any reason, neither of the
Institute appointees attends two properly convened consecutive
Project Board meetings or in the case of emergency, a meeting of
the Project Board will be deemed to be quorate without the
presence of either of the Institute appointees.
3.7.3 All decisions of the Project Board regarding the Directed
Research shall be by simple majority. In the case of an equality
of votes the Chairman shall have a casting vote.
3.7.4 Except as otherwise provided in this Clause 3.7, the procedures
of the Project Board, the way in which it is conducted and the
frequency of its meetings shall be determined by the Project
Board itself. Unless otherwise determined by the Project Board,
all proceedings of the Project Board shall be confidential.
3.7.5 All formal communications between the parties relating to the
conduct of the Directed Research pursuant to this Agreement
shall be made through the Project Board.
4. UNDIRECTED RESEARCH
4.1 Payment for Undirected Research
4.1.1 To enable the Institute to undertake the Undirected Research and
to provide the necessary facilities in connection therewith,
Geron shall pay to the Institute or shall
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<PAGE> 14
procure the payment to the Institute of the Undirected Research
Funding in the manner set out in Clause 5.
4.1.2 The Institute shall use the payments received from Geron
pursuant to Clause 4.1.1 to meet the costs of the Undirected
Research specified in any budgets set forth in the Undirected
Research Workplan.
4.1.3 The Undirected Research (including the costs of providing
laboratory, animal and research facilities at the Institute)
shall be charged at reasonable commercial rates as shall be
agreed between the Institute and Geron in advance prior to the
commencement of each Year of this Agreement in accordance with
the principles set out in Part 1(a) of the Schedule. The rates
agreed for each Year of this Agreement may be varied only by the
prior written agreement of Geron and the Institute.
4.1.4 It is acknowledged by Geron that payment of the Undirected
* Research Funding is not and shall not be in any way conditional
upon [*]
4.2 Undirected Research Workplan
4.2.1 Within six (6) months of the Commencement Date the Institute
shall submit a written proposal to the Project Board for the
Undirected Research. This proposal shall identify each
separately identifiable research programme and in respect of
each separately identifiable research programme:
(i) the objectives;
(ii) without prejudice to Clause 4.1.4, the milestones;
(iii) the resources to be allocated to it;
(iv) the timescale for its completion; and
(v) any Background Intellectual Property (including that
owned by third parties) necessary or desirable to carry
it out.
4.2.2 The Institute shall have sole discretion as to the terms of the
Undirected Research Workplan and any amendments thereto provided
that the Institute shall consult with Geron in relation to the
proposal submitted to the Project Board pursuant to Clause 4.2.1
and any amendments thereto and shall take reasonable account of
any comments received from Geron in relation thereto.
4.3 Conduct of the Undirected Research
4.3.1 The Institute shall conduct the Undirected Research in
accordance with the Undirected Research Workplan. Provided that
it complies with the Undirected Research Workplan as the same
may be amended from time to time in accordance with the
provisions of this Agreement nothing contained in this Agreement
shall prevent the Institute carrying out
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-13-
<PAGE> 15
such research and experimental work as it desires in relation to
or as part of the Undirected Research.
4.3.2 If at any time the Institute wishes to collaborate with any
third parties in relation to the Undirected Research, it shall
consult with Geron regarding the proposed collaboration and
shall take reasonable account of any comments made by Geron in
relation thereto.
4.3.3 The Institute shall use its reasonable endeavours to ensure that
at all times during which Geron has rights in relation to the
Undirected Research Results under this Agreement all documents,
software and other materials (including but not limited to
animals and cell lines) embodying the Undirected Research
Results are kept in a secure environment and can only be
accessed by the persons engaged in performing the Undirected
Research on the Institute's behalf and that all laboratory books
are locked away when not being used by such persons.
4.3.4 The Institute shall use its reasonable endeavours to ensure that
all persons conducting the Undirected Research shall at all
times comply with all necessary procedures as specified by the
Project Board from time to time in relation to the evidencing of
any inventions and protection of any associated Intellectual
Property.
4.4. Reports
4.4.1 The Institute shall deliver to the Project Board from time to
time as the circumstances and conduct of the Undirected Research
require but not less than once every six (6) months during the
continuation of the Undirected Research, a written report
detailing the progress of the Undirected Research during the
period to which the report applies and containing information
regarding the Undirected Research Results.
4.4.2 The Institute will use all reasonable endeavours to identify and
shall notify to the Project Board as soon as reasonably
practicable full details of any Intellectual Property which
arises or which the Institute considers is likely to arise in
the course of the Undirected Research . With a view to ensuring
that all potential Intellectual Property is properly protected
the Project Board may from time to time request sight of any raw
data generated as part of the Undirected Research.
4.4.3 Within three (3) months of completion of each separately
identifiable research programme comprised within the Undirected
Research, the Institute shall deliver a final report to the
Project Board summarising and collating the whole history of
that research programme and containing the results thereof
(including but not limited to any Intellectual Property which
have arisen in the course of that research programme).
4.4.4 The Institute acknowledges that for so long as Geron has rights
in relation to the Undirected Research Results under this
Agreement all reports and information relating to the Undirected
Research provided pursuant to Clauses 4.4.1, 4.4.2 and 4.4.3
shall at all times be kept confidential in accordance with
Clause 14.
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<PAGE> 16
4.4.5 Geron acknowledges that all reports and information relating to
the Undirected Research provided to it pursuant to Clauses
4.4.1, 4.4.2 and 4.4.3 shall at all times be kept confidential
in accordance with Clause 14.
4.5 Geron's Rights in relation to the Undirected Research Results
4.5.1 Except as provided in this Clause 4.5 and Clauses 7.6.2 and 9,
Geron shall have no rights in the relation to the Undirected
Research Results other than as may be set forth in other
agreements between the Institute and Geron and (where
appropriate) other third parties specifically relating to the
Undirected Research Results.
4.5.2 Subject to its obligations under Clause 4.4.5 Geron may carry
out such investigations, developmental and experimental work as
it thinks desirable with a view to assessing the commercial
possibilities of the Undirected Research Results.
5. PARTICIPATION BY GERON IN THE RESEARCH
5.1 It is envisaged that Geron shall participate in the conduct of the
Directed Research and the Undirected Research and at all times provide
leadership for and input into the Research via Project Board. Such
participation by Geron may also include:
(a) the provision to the Institute of background know-how and
information in the areas in which Geron is specialised and which
are relevant to and useful for the carrying out of the research;
(b) the licensing to the Institute of Geron's Background
Intellectual Property for the purposes of the Research in
accordance with Clause 8.2;
(c) participation of Geron personnel on one or more of the Research
Teams to assist with the carrying out of the Research;
(d) carrying out of discrete parts of any of the research programs
which form part of the Directed Research Workplan and the
Undirected Research Program by Geron personnel at the premises
of Geron;
(e) arranging for regular visits by Geron and members of the
Research Teams to the parties' respective premises so that Geron
personnel can advise the Research Teams on any issues or
problems which they may have encountered in carrying out the
Research.
5.2 In order to facilitate Geron's participation Geron will set up direct
methods of electronic and telephonic systems between its personnel and
the members of the Research Teams.
5.3 The costs of Geron's participation in the conduct of the Research under
clauses 5.1 and 5.2 shall be borne by Geron and shall not be deducted
from the Directed Research Funding or Undirected Research Funding.
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<PAGE> 17
6. PAYMENT PROCEDURES
6.1 The Institute shall invoice Geron in advance for each instalment of the
Directed Research Funding and the Undirected Research Funding. The first
instalment of the Directed Research Funding in the amount of [*] shall
be paid by Geron to the Institute on the Commencement Date. The second
* instalment of the Directed Research Funding in the amount of [*]shall be
paid by Geron to the Institute on 1 July 1999. Thereafter instalments of
Directed Research Funding and Undirected Research Funding shall be paid
to the Institute Quarterly in accordance with the budgets set out in the
Directed Research Workplan and the Undirected Research Workplan.
6.2 At the end of each Quarter the Project Board shall reconcile the
payments made by Geron under Clause 5.1 with the actual sums spent by
the Institute in conducting the Directed Research and the Undirected
Research during that Quarter. The Institute will provide to the Project
Board all information reasonably necessary to enable the Project Board
to make such reconciliations, including information relating to the
application of the Directed Research Funding and the Undirected Research
Funding to meet the costs of carrying out the Directed Research and the
Undirected Research Funding respectively. Any sums paid by Geron but not
used by the Institute to meet the costs of the Directed Research or the
Undirected Research (as the case may be) shall be carried forward and
set off against the instalment due by Geron in respect of the following
Quarter in respect of the Directed Research and the Undirected Research
(as the case may be) provided that the Directed Research Funding shall
not be set off against the Undirected Research Funding or vice versa.
6.3 All sums payable to the Institute under this Agreement:
6.3.1 are stated exclusive of value added tax or any other tax which
may at any time during the period of this Agreement replace
value added tax, which (if payable) shall be paid in addition by
Geron at the appropriate rate subject to receipt of a suitable
invoice; and
* 6.3.2 shall be paid in Pounds Sterling by bank transfer to the
Institute's bank account [No: [*]] at Bank of Scotland, The
Mound, Edinburgh (Sort Code No [*]) or such other bank account
as may be designated in writing by the Institute.
*6.4 Without prejudice to any other rights accruing to the Institute, if any
sums payable by Geron to the Institute pursuant to this Agreement remain
unpaid on the due date for payment, interest at the rate of [*] above
the base rate from time to time of the Bank of Scotland shall be payable
on such sums from the due date for payment until the date of actual
payment in full, PROVIDED THAT no interest shall be payable by Geron
where the failure to make payment by the due date is due to any default
or failure on the part of the Institute.
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE> 18
6.5 All sums payable under this Agreement shall be made in full without
deduction of taxes, charges and other duties (including any withholding
or other income taxes) that may be imposed except where Geron is
required by law to make such deduction or withholding, in which event
Geron shall:
6.5.1 ensure that the deduction or withholding does not exceed the
minimum amount legally required;
6.5.2 pay to the applicable taxation or other authorities within the
period for payment permitted by law the full amount of the
deduction or withholding;
6.5.3 furnish to the Institute, within the period for payment
permitted by law, either (a) an official receipt of the
applicable taxation or other authorities for all amounts
deducted or withheld as aforesaid or (b) if such receipts are
not issued by the taxation or other authorities concerned on
payment to them of amounts so deducted or withheld, a
certificate of deduction or equivalent evidence of the relevant
deduction or withholding; and
6.5.4 co-operate in all respects necessary to permit the Institute to
take advantage of such double taxation agreements as may be
available.
7. CLONING OF HUMANS
7.1 Geron and RBM hereby acknowledge that at the Commencement Date the
Institute is expressly prohibited from carrying out any experiments or
otherwise engaging in any research directed towards or relating to the
Cloning of Humans.
8. INTELLECTUAL PROPERTY RIGHTS
8.1 Subject to Clauses 7.2 and 8.2 it is acknowledged that nothing in this
Agreement shall operate to transfer or grant any right in any Background
Intellectual Property which may be used by any party in connection with
the Directed Research and/or the Undirected Research unless expressly
provided in this Agreement.
8.2 Geron hereby grants to the Institute a royalty-free, non-exclusive
licence for the duration of the Research Period to use any of its
Background Intellectual Property to the extent necessary for carrying
out the Directed Research and the Undirected Research.
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<PAGE> 19
8.3 Except as provided in Clauses 7.4 and 7.5.2 any and all Intellectual
Property arising from the Directed Research shall be and remain the
joint property of the Institute and Geron both of whom shall have a one
half pro indiviso share.
8.4 Any and all Intellectual Property arising from the Xeno Pigs Project,
whether embodied in the Directed Research Results or otherwise, shall be
and remain the property of Geron.
8.5 The Institute shall ensure that the terms of any collaboration
agreements entered into pursuant to Clause 3.3.2 provide that ownership
of all or any Intellectual Property arising from any collaboration
relating to:
8.5.1 the Directed Research (other than the Xeno Pigs Project) are
jointly owned by Geron and the Institute each of whom shall have
one half pro indiviso share; and
8.5.2 the Xeno Pig Project, are owned solely by Geron.
8.6 Unless otherwise agreed in writing between the Institute and Geron, any
and all Intellectual Property arising from the Undirected Research,
whether embodied in the Undirected Research Results or otherwise:
8.6.1 which is developed solely by the Institute shall be and remain
the sole and exclusive property of the Institute; and
8.6.2 which is jointly developed by Geron and the Institute shall be
the joint property of the Institute and Geron both of whom shall
have one half pro indiviso share.
8.7 Geron and the Institute hereby agree that any Intellectual Property
arising from the Undirected Research shall not be deemed to have been
jointly developed for the purposes of Clause 8.6.2 merely because it has
been developed by the Institute using the Undirected Research Funding.
8.8 Neither Geron nor the Institute shall assign their share in any Jointly
Owned Intellectual Property to any third party save as part of an
assignation of their whole rights and obligations under this Agreement
in accordance with Clause 20.
8.9 The Institute shall, and shall procure that any person working on behalf
of the Institute, employed at the Institute or working in collaboration
with the Institute pursuant to Clause 3.3.2 shall, at the expense of
Geron (as to out of pocket expenses only) execute such documents and do
such acts as may reasonably be required by Geron to confirm Geron's
ownership of any Jointly Owned Intellectual Property and/or the
Intellectual Property owned solely by Geron under Clause 8.4.
8.10 Geron shall, and shall procure that any of its employees or
representatives shall, at the expense of the Institute (as to out of
pocket expenses only) execute such documents and do such acts as may
reasonably be required by the Institute to confirm the Institute's
ownership of any Jointly Owned Intellectual Property.
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<PAGE> 20
8.11 Geron and the Institute shall each, and shall procure that any person
employed by them or working on their behalf in conducting the Undirected
Research shall, at the expense of the other (as to out of pocket
expenses only), execute such documents and do such acts as may
reasonably be required by the other to confirm the other's ownership of
any Intellectual Property pursuant to Clause 8.6.2.
9. EXPLOITATION RIGHTS
9.1 The Institute hereby grants to Geron an exclusive worldwide licence to
use the Institute's share of any Jointly Owned Intellectual Property for
the purpose of exploiting the Jointly Owned Intellectual Property in the
Fields of Use. The Institute shall not grant or purport to grant any
rights to exploit the Jointly Owned Intellectual Property to any third
party, or use the Jointly Owned Intellectual Property for any commercial
purpose whatsoever.
9.2 If Geron requires any Background Intellectual Property of the Institute
(with the express exception of the Intellectual Property which is
subject of the Licence Agreement) used by the Institute in conducting
the Directed Research for the purpose of exploiting the Jointly Owned
Intellectual Property in the Fields of Use, the Institute will:
9.2.1. if such Background Intellectual Property is owned or freely
licensable by the Institute, grant a royalty-free non-exclusive
licence to Geron of any such Background Intellectual Property
for this specific purpose; and
9.2.2 if such Background Intellectual Property is owned by a third
party and is not freely licensable by the Institute, use its
reasonable endeavours to assist Geron to obtain a licence to use
such Background Intellectual Property for this specific purpose
on reasonable commercial terms.
9.3 Notwithstanding the licence referred to in Clause 8.1, the Institute
shall be entitled to use any Jointly Owned Intellectual Property and any
Intellectual Property arising from the Xeno Pigs Project for its
academic research and teaching purposes only and Geron hereby grants to
the Institute a non-exclusive, royalty-free licence (but without any
right to sub-licence) to use Geron's share of any Jointly Owned
Intellectual Property and to use any Intellectual Property arising from
the Xeno Pigs Project for that purpose only.
9.4 Geron shall be entitled to grant sub-licences to third parties of any
Jointly Owned Intellectual Property for the purpose of exploiting the
Jointly Owned Intellectual Property in the Fields of Use provided that
the sub-licence agreement contains undertakings by the sub-licensee to
observe and perform provisions substantially the
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<PAGE> 21
same as those contained in this Agreement with regard to Fields of Use,
confidentiality and termination and prohibits any assignation and
further sub-licensing.
9.5 Geron hereby represents, warrants and undertakes to the Institute that
it will not take any steps or purport to exploit the Institute
Intellectual Property unless and until it has entered into a licence
agreement with the Institute pursuant to its exercise of the Option.
9.6 Neither the Institute nor Geron shall sub-licence or otherwise
commercially exploit the Directed Research Results or the Jointly Owned
Intellectual Property for the purposes of the Cloning of Humans.
9.7 Geron shall at all times indemnify the Institute and keep the Institute
indemnified against all costs, claims, damages or expenses incurred by
the Institute or for which the Institute may become liable with respect
to any product liability claim relating to any products or processes
(including Products) produced or supplied or put into use by Geron or
any of its Associates or sub-licensees, provided that the Institute
shall, at Geron's expense (as to out of pocket expenses only), give such
assistance as Geron may reasonably require in order to defend any such
claim, shall not without the prior written consent of Geron take any
steps to defend, settle or compromise any such claim, and shall not
without Geron's prior written consent make any admission with respect to
such claim. The foregoing indemnity will not apply where the costs,
claims, damages or expenses arise as a result of negligence, breach of
any term of this Agreement or willful deceit on the part of the
Institute, its agents or employees.
9.8 At all times during which any Products are being produced, supplied or
put to use by Geron or any of its Associates or any sub-licensee, Geron
shall, in order to meet its obligations to the Institute under Clause
8.7, either self insure or obtain and maintain reasonable insurance, in
each case commensurate with good industry practice. In the event that
Geron obtains insurance it shall on request by the Institute, (subject
to Clause 14) supply the Institute with a copy of the insurance policy.
9.9 If any third parties approach the Institute regarding the Directed
Research Results and wish to utilise the same, the Institute shall
inform Geron as soon as reasonably practicable. The Institute shall not
disclose any information in respect of the Directed Research and/or the
Directed Research Results to any third party without the prior written
consent of Geron which consent Geron may grant or withhold in its
absolute discretion.
9.10 Geron undertakes at all times when this Agreement is in force to use its
reasonable endeavours to exploit the Jointly Owned Intellectual
Property. If at any time Geron decides that it no longer wishes to
exploit the Intellectual Property it shall so advise the Institute and
thereafter the parties shall enter into discussions in good faith with a
view to entering alternative arrangements to maximise the value to both
parties of the Jointly Owned Intellectual Property.
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<PAGE> 22
10. OPTION RIGHTS
10.1 The Institute hereby grants to Geron an option to acquire from the
Institute an exclusive worldwide licence to use any and all Institute
Intellectual Property for the purpose of exploiting the Undirected
Research Results in the Fields of Use. If Geron requires to use any
Background Intellectual Property of the Institute (with the express
exception of the Intellectual Property which is the subject of the
Licence Agreement) used by the Institute in conducting the Undirected
Research for the purpose of exploiting the Institute Intellectual
Property the Institute will:
10.1.1 if such Background Intellectual Property is owned or freely
licensable by the Institute, grant to Geron a non-exclusive
right to use such Background Intellectual Property to the extent
necessary for such exploitation; and
10.1.2 if such Background Intellectual Property is owned by a third
party and is not freely licensable by the Institute, use its
reasonable endeavours to assist Geron to obtain a licence to use
such Background Intellectual Property for this specific purpose
on reasonable commercial terms.
10.2 Under any licence granted pursuant to Geron exercising the Option Geron
shall pay to the Institute royalties in respect of all Sales during each
Quarter at the Relevant Royalty Rate of the aggregate Net Sales Price of
the Products.
10.3 The Option may be exercised by Geron by serving upon the Institute an
appropriate written notice at any time prior to the expiry of three (3)
months from the date on which the Institute's final report of each
separately identifiable research programme comprised within the
Undirected Research being delivered to the Project Board pursuant to
Clause 4.4.3 or such other period as Geron and the Institute may
mutually agree between them.
10.4 Upon the Institute's receipt of a written notice from Geron pursuant to
Clause 9.3, the Institute and Geron shall negotiate in good faith the
terms of the exclusive licence to be granted to Geron. Such negotiations
will include the amount of any licence fees (which may be paid in one or
more instalment) and the proportion of any patent costs which shall be
payable by Geron, but shall not include royalty rates or any other form
of payment for use of the relevant Institute Intellectual Property which
shall by governed by Clause 10.2.
10.5 If the Institute and Geron are unable to agree the terms of an exclusive
licence within ninety (90) days of the Institute's receipt of a written
notice pursuant to Clause 10.3, Geron shall be entitled within fourteen
(14) days of the expiry of the ninety (90) day period to elect by giving
notice in writing to be granted a non-exclusive licence pursuant to
Clause 10.6 and/or to refer any matter in dispute for determination by
an independent expert pursuant to Clause 10.7.
10.6 If pursuant to Clause 10.5 Geron elects to be granted a non-exclusive
licence, the parties will within forty five (45) days of the date of
Geron's election negotiate the terms of the
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<PAGE> 23
non-exclusive licence and subject to Clause 10.1, any licence to use any
Background Intellectual Property, PROVIDED THAT for the purposes of the
non-exclusive licence:
(a) royalties shall be calculated and payable at the Relevant
Royalty Rate on the aggregate Net Sales Prices of Products; and
(b) there shall be no licence fees or any other form of payment.
If the other terms of the non-exclusive licence are not agreed within
the forty five (45) day period specified in this Clause 10.6, any matter
in dispute may be referred by either the Institute or Geron for
determination by an independent expert as set forth in Clause 10.7.
10.7 Geron may pursuant to Clauses 10.5 or 10.6 and the Institute may
pursuant to Clause 10.6 refer any matters in dispute (which shall in the
case of a referral by Geron under Clause 10.5 include the terms upon
which a non-exclusive licence should be granted to Geron) for
determination by an independent expert ("the Expert") nominated by
agreement between the Institute and Geron or, failing agreement within
twenty one (21) days of referral by Geron, by the President of the
Chartered Institute of Patent Agents from time to time. The Institute
and Geron shall each be entitled to submit to the Expert within twenty
eight (28) days of the date upon which the Expert is appointed written
submissions, documentation and other evidence relating to or supporting
its position in relation to the matters in dispute. A copy of all such
written submission, documentation and other evidence shall, at the same
time as submission to the Expert, be delivered to the other party. The
Expert shall, unless the Institute and Geron otherwise agree, convene a
meeting to be held within five (5) weeks of the expiry of such twenty
eight (28) day period at such time (having due regard to the
availability of relevant persons) and at such place as the Expert may
decide at which both the Institute and Geron shall (unless either shall
otherwise determine in respect of itself only) be heard and
cross-examined by the Expert. The Institute and Geron shall use their
reasonable endeavours to procure that the Expert makes his determination
within ninety (90) days following the date of his appointment. The fees
and costs of the Expert shall be borne as the Expert shall determine.
The Expert's decision shall be final and binding on all parties to this
Agreement.
10.8 Following a referral to an independent expert by Geron pursuant to
Clause 9.5, Geron shall be entitled within thirty (30) days of the date
of the Expert's decision to elect by giving notice in writing to the
Institute to either:
10.8.1 take an exclusive licence on the terms determined by the Expert;
or
10.8.2 take a non exclusive licence on the terms determined by the
Expert; or
10.8.3 forego its rights to be granted any licence of the Institute
Intellectual Property.
In the absence of any election by Geron in accordance with Clauses
10.8.1 or 10.8.2, Clause 10.8.3 shall be deemed to apply.
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<PAGE> 24
10.9 If:
10.9.1 Geron does not exercise the Option; or
10.9.2 the Option having been exercised, the Institute and Geron are
unable to agree the terms of the licence pursuant to Clauses
10.4 or 10.6 and the matters in dispute are not referred to an
expert for determination within the periods specified in
Clauses 10.5 or 10.6; or
10.9.3 Geron does not make a valid election in accordance with Clause
10.8; or
10.9.4 this Agreement is lawfully terminated by the Institute pursuant
to Clause 18, the Option shall lapse with respect to the
particular Institute Intellectual Property and cease to have any
further effect and neither Geron nor the Institute shall be
under any obligation to the other in relation to those
Undirected Research Results and/or that Institute Intellectual
Property save as follows:
(a) Geron shall forthwith return to the Institute all
documents relating to the relevant Undirected Research
Results and the Institute Intellectual Property and any
relevant Background Intellectual Property of the
Institute as referred to in Clause 10.1 supplied to
Geron by the Institute together with any copies of or
extracts from such documents which Geron has made;
(b) Geron shall not, and shall procure that its officers and
employees shall not, at any time thereafter use or
disclose to any person, firm or company any information
given to it regarding the relevant Undirected Research
(including but not limited to the relevant Undirected
Research Results) or any use or application of the
Institute Intellectual Property and any relevant
Background Intellectual Property of the Institute as
referred to in Clause 10.1;
(c) the Institute shall not, and shall procure that its
employees shall not, at any time thereafter use or
disclose to any person, firm or company any trade or
industrial secrets or other confidential information of
Geron (including but not limited to any of Geron's
Background Intellectual Property) made available to the
Institute by Geron for the purposes of or relating to
the Undirected Research (including but not limited to
the Undirected Research Results) or any use or
application of the Institute Intellectual Property; and
(d) subject to Clause 10.10, the Institute shall be entitled
to grant to any third party a licence to use the
Institute Intellectual Property for the purpose of
exploiting the Undirected Research Results.
*10.10 The Institute hereby represents, warrants and undertakes to Geron that
it shall not at any time before the [*] from the date of delivery of its
final report for each separately
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE> 25
identifiable research programme comprised within the Undirected Research
being delivered to the Project Board pursuant to Clause 4.4.3 or during
any period of negotiation or determination pursuant to Clauses 10.4,
10.5, 10.6 or 10.7 and the period specified in Clause 10.8, grant to any
third party an option to acquire a licence or otherwise grant to any
third party any right to use the Institute Intellectual Property for the
purpose of exploiting the Undirected Research Results developed in the
course of such research programme.
11. ROYALTIES
11.1 In consideration of the licence rights granted to Geron pursuant to
Clause 8.1, Geron shall pay to the Institute royalties in respect of all
Sales during each Quarter at the Relevant Royalty Rate of the aggregate
Net Sales Prices of the Products Sold during that Quarter.
*11.2 If any Product incorporates or bundles core technologies for the
purposes of calculating royalties payable under Clause 10.1 the royalty
shall be [*] irrespective of the number of technologies.
11.3 If any Product is combined with any other products (a "Combination
Product") for the purposes of calculating Royalties the Net Sales Price
shall be the greater of:
* 11.3.1 [*]
* 11.3.2 [*]
*11.4 In the event that Geron is required to pay to any third party royalties
in respect of licenses which are necessary in order to effect Sales of
Products, the royalty payable to the Institute in respect of such Sales
shall be reduced by an amount equal to [*] of third party royalties so
paid or payable, provided that such reduction shall not cumulatively
exceed [*] of royalties payable to the Institute.
11.5 Any royalties payable by Geron in respect of Products Sold during any
Quarter shall be paid within sixty (60) days following the end of that
Quarter in accordance with the procedures set out in Clause 6 and shall
be accompanied by a written statement showing:
11.5.1 the total number of Products Sold during the relevant Quarter;
11.5.2 the Net Sales Price in respect of each Product Sold during the
relevant Quarter; and
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE> 26
11.5.3 the total amount of the royalties payable with all necessary
particulars of how the royalties have been calculated.
11.6 If any judgment that one or more patent claims which form part of the
Jointly Owned Intellectual Property or the Institute Intellectual
Property are not Valid Claims is subsequently reversed on appeal then
the patent claims in question shall be deemed to have been Valid Claims
for the whole of the period ("the relevant period") from the date of
first judgment until the date of the Appeal (the "Appeal Judgment").
Within sixty (60) days of the date of the Appeal Judgment Geron shall
provide to the Institute a statement containing a recalculation of the
Royalties arising during the relevant period taking into account that
the aforesaid patent claims were Valid Claims and shall at the same time
pay to the Institute any shortfall between the Royalties previously paid
in respect of the relevant period and the Royalties which are shown by
such recalculation to have been due.
12. PROPER ACCOUNTS
12.1 Geron shall maintain (and retain for not less than six (6) years) true
and accurate accounts and records of all Sales which shall show in
sufficient detail all facts necessary for the accurate calculation of
the royalty payments payable by Geron pursuant to this Agreement.
12.2 Geron shall permit the Institute and its accountants not more than once
in any Year on reasonable prior notice to inspect the accounts and
records referred to in Clause 12.1 for the purpose of verifying that all
royalties due to the Institute pursuant to this Agreement have been
properly calculated. The Institute shall, and shall procure that its
accountants shall, treat information arising from such inspection as
strictly confidential.
12.3 If it is established that the amount of royalties paid in respect of any
Quarter is 5% or more less than the amount of the royalties which were
properly payable under Clause 11 in respect of that Quarter Geron,
shall, within seven (7) days of the date on which it is so established,
pay the shortfall to the Institute together with any interest due
thereon and the reasonable costs and expenses incurred by the Institute
in making the inspection and audit pursuant to which the underpayment is
discovered. Any overpayment of royalties Quarters shall be credited
against royalties owed to the Institute for the following Quarter or
shall be repaid by the Institute to Geron within fourteen (14) days of
the Institute's receipt of a notice from Geron requiring repayment.
12.4 The provisions of this Clause 12 shall remain in full force and effect
following the expiry or termination of this Agreement for any reason
whatsoever until the settlement of all subsisting claims of the
Institute under this Agreement.
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<PAGE> 27
13. PATENT PROTECTION
13.1 Geron shall be responsible for diligently preparing, filing, prosecuting
and maintaining all Patent Applications and Patents comprised within the
Jointly Owned Intellectual Property. Geron shall have sole discretion in
relation to the patenting strategy to be adopted in relation to any
patentable inventions, Patent application and/or Patents comprised
within the Jointly Owned Intellectual Property provided that Geron shall
consult with the Institute in relation to the patenting strategy and
shall take reasonable account of any comments received from the
Institute in relation to and prior to implementation of such patenting
strategy.
13.2 Notwithstanding Clause 12.1 if, at any time, Geron wishes to remove any
country or territory from the scope of any Patent rights or to abandon
any Patent application in whole or in part which has been filed pursuant
to this Clause 12, it shall give not less than twenty eight (28) days
notice in writing to the Institute of its proposed intentions. If the
Institute elects to file, prosecute and maintain (or to continue to
file, prosecute and maintain) those Patents rights within the relevant
countries or territories at its sole expense and cost, any Patents
granted in the relevant countries or territories shall be owned
exclusively by the Institute and shall not thereafter constitute Jointly
Owned Intellectual Property. Geron shall at the cost of the Institute
(as to out of pocket expenses only) execute such deeds and do such acts
as may reasonably be required by the Institute to assign such Patent
rights to the Institute.
*13.3 Subject to Clause 13.2, Geron and the Institute shall each be liable [*]
of the costs of preparing, filing, prosecuting and maintaining any
Patent rights (including reasonable legal and patent agents fees and
expenses) comprised within the Jointly Owned Intellectual Property,
provided that if either of them withdraws in accordance with Clause
13.2, it shall after the date of withdrawing cease to be liable to bear
or reimburse any part of the costs, fees or expenses as aforesaid other
than the costs, fees and expenses incurred prior to the date of
withdrawing. Costs shall not include any internal costs of the parties
and the expense of any management time. Any sums expended by Geron in
connection with the preparing, filing, prosecution and maintaining of
Patent rights shall be offset against any royalties arising under clause
* 11 of this Agreement provided that the amount of such offset shall not
exceed [*] of the royalties due in any Year.
13.4 If at any time any claim is made by a third party that any Patent right
comprised within the Jointly Owned Intellectual Property is invalid,
each party shall promptly notify the other parties of such claim. Geron
shall be entitled to conduct the defence of any such claim and shall at
all times keep the Institute informed as to the progress of such defence
and take into account the reasonable comments of the Institute and in
relation to the conduct of such defence. The costs of any such defence
shall be deemed to be part of the costs of maintaining the Patent rights
and shall be dealt with in accordance with Clause 13.3.
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE> 28
13.5 The Institute and Geron shall forthwith notify each other of any
infringement or suspected infringement by any third party of any Jointly
Owned Intellectual Property which may come to their attention. Unless
otherwise agreed Geron shall have ninety (90) days within which to
commence proceedings for the purposes of protecting the Jointly Owned
Intellectual Property. The Institute hereby authorises Geron to
institute proceedings in the joint names of Geron and the Institute in
respect of any such infringement or suspected infringement of the
Jointly Owned Intellectual Property.
13.6 The Institute hereby agrees to execute such deeds or other documents and
provide such assistance as Geron may reasonably require for the purposes
of any defence under Clause 13.4 and any infringement action under
Clause 13.5 (including authorising any attorneys appointed by Geron to
conduct the action in the name of the Institute) provided that Geron
shall indemnify the Institute against its reasonable costs and expenses
in so doing. Geron shall have full conduct of any such proceedings under
Clauses 13.4 and 13.5 and the right to give instructions to the
appointed attorneys as to how such proceedings are to be conducted but
shall at all times keep the Institute informed as to the conduct of the
proceedings and shall take account of all reasonable comments of the
Institute in relation to the proceedings insofar as reasonably
practicable prior to taking any steps in the conduct of the proceedings.
Subject thereto the Institute shall not take any part in the proceedings
and shall not settle or compromise such proceedings in any way without
the prior written consent of Geron. If within the period of ninety (90)
days from the date upon which notice of any third party claim is
received by Geron under Clause 13.4 or within the period of ninety (90)
days specified in Clause 13.5, Geron has not initiated the defence of
the claim under Clause 13.4 or any action in respect of the infringement
under Clause 13.5 then the Institute shall be entitled to do so in its
own name and at its own expense and Geron hereby agrees to execute such
deeds or other documents and to provide such assistance as the Institute
may reasonably require in so doing provided that the Institute shall
indemnify Geron against its reasonable costs and expenses.
13.7 Subject to Geron or the Institute (as the case may be) being fully
reimbursed for all its reasonable costs and expenses referred to in
Clause 13.6, unless otherwise agreed any damages or costs awarded in the
course of any infringement action or any sums which are agreed to be
paid in settlement of any infringement action shall belong to the party
bringing the action.
13.8 If Geron or the Institute considers that it has grounds for dispute with
any person who has entered into an agreement with either of them
relating either to the Jointly Owned Intellectual Property or to any
Institute Intellectual Property licensed to Geron under Clause 10, such
party shall immediately notify the other whereupon Geron and the
Institute shall consult with a view to agreement on the appropriate
course of action. If Geron and the Institute fail to agree upon an
appropriate course of action either party desiring to undertake
proceedings against the person concerned shall have the right to do so
at its own cost and provided it shall indemnify and keep indemnified the
other party against all or any costs and expenses arising in or from
such proceedings.
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<PAGE> 29
13.9 The Institute shall have sole discretion in relation to the patenting
strategy to be adopted in relation to any patentable inventions, patent
applications and/or patents comprised within the Institute Intellectual
Property which is not licensed to Geron under Clause 10 provided that
for so long as Geron has rights under Clause 10 in relation to such
Institute Intellectual Property the Institute shall consult with Geron
in relation to the patenting strategy and shall take reasonable account
of any comments received from Geron in relation and prior to
implementation of such patenting strategy.
14. WARRANTIES AND INDEMNITIES
14.1 The Institute represents, warrants and undertakes to Geron that:
14.1.1 it has full power and authority to enter into this Agreement and
does not require the consent or approval of any third party;
14.1.2 in performing the Directed Research and the Undirected Research
it will not knowingly use, without all necessary consents, any
Intellectual Property belonging to a third party;
14.1.3 it shall carry out all of its obligations under this Agreement
in a timely, competent and professional manner and with all
reasonable skill and care; and
14.1.4 the persons executing this Agreement on behalf of the Institute
are authorised to do so.
14.2 Geron represents, warrants and undertakes to the Institute that:
14.2.1 it has full power and authority to enter into and execute this
Agreement;
14.2.2 it is not in any way restricted, prevented or prohibited from
entering into or performing its obligations under this
Agreement;
14.2.3 by entering into this Agreement, it will not be in breach of any
other agreement or arrangement; and
14.2.4 the persons executing this Agreement on behalf of Geron are
authorised to do so.
14.3 The Institute hereby agrees to indemnify Geron in respect of any claims
imposed upon and reasonable costs, expenses and losses incurred by Geron
as a result of the infringement or alleged infringement of any third
party Intellectual Property by the Institute in conducting the Directed
Research and/or Undirected Research.
15. CONFIDENTIALITY
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<PAGE> 30
15.1 The Institute agrees that it shall, at all times, both during and after
the term of this Agreement, maintain confidentiality in relation to the
Directed Research and the Undirected Research including the Directed
Research Results and the Undirected Research Results except to the
extent that the Institute shall be entitled to enter into any licence or
sub-licence pursuant to Clause 10.9.
15.2 All of the parties agree that they shall (and they shall procure that
all of their repective employees, consultants, representatives
sub-contractors and agents) at all times during the period of this
Agreement and thereafter maintain confidentiality in relation to any
proprietary information or business secrets of the other parties which
is disclosed to them in the course of the Directed Research and/or the
Undirected Research.
15.3 The obligations contained in Clauses 15.1 and 15.2 shall not extend to
any information which:
15.3.1 is generally available to the public otherwise than by reason of
breach by the recipient of the provisions of this Clause; or
15.3.2 is known to the recipient and is at its free disposal prior to
its receipt under this Agreement provided that such prior
knowledge can be demonstrated by written evidence; or
15.3.3 is subsequently disclosed to the recipient party without
obligations of confidence by a third party owing no such
obligations in respect of the information; or
15.3.4 is required to be disclosed to any governmental agency or
regulatory body including, without limitation, the Ministry of
Agriculture, Fisheries and Food, the Biotechnology and
Biological Sciences Research Council or as may be required under
the National Audit Act 1983, or is otherwise legally required to
be disclosed, PROVIDED THAT in all cases the party required to
make the disclosure shall take all reasonable steps to ensure
that the disclosure is the minimum necessary to comply with its
legal requirements and in the case of any disclosure pursuant to
any Court order will seek from the Court an appropriate order
safeguarding the confidentiality of the material disclosed; or
15.3.5 is independently developed by the recipient party without
reference to any information disclosed to it under this
Agreement,
PROVIDED THAT in using such information the recipient shall not take any
action which would prejudice the protection of any Intellectual Property
contained in such information.
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<PAGE> 31
16. PUBLICATION OF RESULTS
16.1 Geron recognises that it is the Institute's policy to publish the
Directed Research Results and the Undirected Research Results and Geron
agrees subject to Clause 16.2 that the Supervisors, any other member of
the Research Team or any person engaged in the Undirected Research on
the Institute's behalf may present at seminars, symposia, national, or
regional professional meetings, and publish in journals, theses or
dissertations, or otherwise of their own choosing, the Directed Research
Results and the Undirected Research Results.
16.2 Notwithstanding Clause 16.1 Geron shall in all cases be provided with
copies of any proposed publication or presentation at least 42 days in
advance of the submission of the proposed publication or presentation.
Geron shall have 30 days after receipt of such copies to reject the
proposed presentation or proposed publication if, in its reasonable
opinion, a delay in publication or presentation is commercially
desirable or necessary to ensure that any Jointly Owned Intellectual
Property or Institute Intellectual Property is adequately protected. In
such event, Geron may require that the Supervisor or members of the
Research Team shall refrain from making such publication or presentation
for a maximum further period of three (3) months in order for patent
applications to be filed directed to the patentable subject matter
contained in the proposed publication or presentation or that other
steps be taken in order to protect any commercially sensitive subject
matter including if Geron considers it appropriate the deletion of such
subject matter from the proposed publication or presentation. A delay or
deletion imposed on submission for publication as a result of a
requirement made by Geron shall not exceed 6 months from the date of
receipt of the original publication or presentation by Geron although
the Institute will not unreasonably refuse a request from Geron for
additional delay in the event that Jointly Owned Intellectual Property
might otherwise be lost or compromised.
17. LIMITATION OF LIABILITY
17.1 Each party shall indemnify and hold the other party harmless from and
against any and all claims, actions, damages, losses and expenses
resulting from personal injury to or death of any employee, agent or
representative of the other party engaged in the performance of the
Directed Research and Undirected Research except where such injury or
death is due to the negligent act or omission of the other party, its
employees, agents or representatives.
17.2 Whilst the Institute will use all reasonable endeavours to ensure the
accuracy of the Directed Research Results and the Undirected Research
Results, the Institute makes no warranty, express or implied, as to
accuracy and will not be held responsible for any consequence arising
out of any inaccuracies or omissions (unless such inaccuracies or
omissions are the result of wilful default on the part of the Institute)
and nothing contained in this Agreement shall constitute a condition,
warranty or representation that exploitation of the Directed Research
Results or the Undirected Research Results will not infringe the
Intellectual Property of any third party.
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<PAGE> 32
17.3 The Institute and Geron each agree that, if they are notified by any
third party of any claim or potential claim arising from or in
connection with the Directed Research or the use of the Directed
Research Results, they shall:
17.3.1 forthwith inform the other party of such claim or potential
claim;
17.3.2 make no admission of any kind and take all reasonable steps to
prevent judgement by default being granted in favour of any such
third party; and
17.3.3 ensure that the other is given the right to conduct proper
consultations with the party concerned and the defence
(including, without limitation, settlement, litigation or
appeal) of any such claim.
If requested by either of the parties, such defence shall be jointly
conducted by Geron and the Institute. Unless the provisions of Clauses
13.4 or 13.5 apply, such jointly conducted defence will be at the joint
expense of the parties.
17.4 The parties agree that no liability whatsoever either direct or indirect
shall rest upon the Institute for the effects of any Product that may be
produced or adopted by Geron or any other party, notwithstanding that
the formulation of such Product may be based upon the Jointly Owned
Intellectual Property.
18. FORCE MAJEURE
18.1 If any party is prevented from the performance of its obligations under
this Agreement by any cause beyond its reasonable control it shall
immediately inform the other parties and shall be released from its
obligations under this Agreement for so long as such circumstances
prevail PROVIDED THAT it shall use its reasonable endeavours to avoid or
remove such causes of non-performance. If such circumstances endure for
a period of six (6) months either of the parties not in default may
terminate this Agreement upon giving to the other party not less than
twenty eight (28) days' written notice.
19. TERMINATION
19.1 Subject to Clause 19.5, this Agreement may be terminated immediately by
the Institute by service of a written notice upon the other in the event
of:
19.1.1 a failure by Geron to meet its payment obligations in respect of
the Directed Research Funding and/or the Undirected Research
Funding and/or any royalties arising under clause 10 which are
not in dispute which failure is not remedied forty eight (48)
days after receipt of written notification specifying the
alleged failure and the action required to remedy it; or
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<PAGE> 33
19.1.2 the liquidation or bankruptcy of Geron, a receiver or similar
officer being appointed over Geron's assets or Geron ceasing to
carry on business or the equivalent of any of the foregoing
occurring in the United States of America or the jurisdiction
under the laws of which any permitted assignee of Geron is
incorporated;
19.1.3 Geron challenging the validity or contesting the ownership of
the Jointly Owned Intellectual Property, the Institute
Intellectual Property or the Institute's Background Intellectual
Property or claiming that any patent rights comprised in any of
the foregoing are not "necessary patents" within the meaning of
Commission Regulation EEC No. 240/96 or contesting the secrecy
or substantial nature of any know how.
19.2 Geron may terminate this Agreement (in relation to [*] only) if the
Institute does not find a suitable replacement or replacements for the
Supervisor or Supervisors pursuant to Clause 3.6.2. Geron's rights and
* obligations in relation to [*].
19.3 Upon termination of this Agreement howsoever arising the Institute shall
deliver up all information, materials and property supplied by Geron to
the Institute and shall not retain any copies in whatever form. The
Institute shall cease to conduct the Directed Research and shall deliver
up to Geron written details of all Directed Research Results together
with all reports in respect thereof prepared up to the date of
termination.
19.4 Lawful termination of this Agreement by Geron will not terminate:
19.4.1 any licences or exploitation rights arising prior to the date of
termination and granted to Geron in respect of any Jointly Owned
Intellectual Property pursuant to Clauses 9.1 and/or of any
Background Intellectual Property pursuant to Clause 9.2 or 9; or
19.4.2 Geron rights in relation to any Institute Intellectual Property
in respect of which it has exercised the Option in accordance
with Clause 10 prior to the date of termination; or
19.4.3 the licence granted to the Institute under Clause 9.3; or
19.4.4 any terms in this Agreement relating to any of the foregoing
licences or exploitation rights.
19.5 If this Agreement is lawfully terminated by the Institute, Geron shall
indemnify the Institute in respect of the balance of any sums which the
Institute would have received as the Directed Research Funding and the
Undirected Research Funding pursuant to this Agreement but for the
Institute's termination of this Agreement.
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE> 34
19.6 The provisions of Clauses 1, 6, 14 , 18, 19, and 28 shall not be
affected by the termination of this Agreement and the obligations
contained in such clauses shall, except as otherwise stated, survive
such termination and remain in full force and effect notwithstanding
such termination.
19.7 Any termination of this Agreement shall not prejudice or affect any
accrued rights or liabilities of the parties and the exercise by the
parties of any rights or remedies under the terms of this Agreement
shall be without prejudice to any other rights or remedies to which such
party may be entitled.
19.8 The Institute and RBM hereby agree that the Existing Research Agreement
will terminate with effect from the Commencement Date. The termination
of the Existing Research Agreement is without prejudice to any accrued
rights and obligations of the Institute and RBM as at the date of
termination thereof.
20. NOTICES
20.1 Notices under this Agreement shall be served by hand or by recorded
delivery mail, postage pre-paid and addressed as follows:
20.1.1 In the case of the Institute to:
Roslin Institute (Edinburgh)
Roslin Biotechnology Centre
Roslin
Midlothian
EH25 9PS
For the attention of: the Company Secretary
20.1.2 In the case of Geron to:
Geron Corporation
230 Constitution Drive
Menlo Park
California 94025
United States of America
For the attention of: VP Corporate Development
20.1.3 In the case of RBM to:
ROSLIN BIO-MED LIMITED
Roslin Biotechnology Centre
Roslin
Midlothian
EH25 9PS
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<PAGE> 35
For the attention of: the Managing Director
20.2 If a party changes its address for notification purposes, it shall give
the other parties prior written notice of the new address and the date
on which it shall become effective.
20.3 Notices served by mail shall be deemed to be delivered seventy two (72)
hours after the date of posting.
21. NON-ASSIGNATION
21.1 None of the parties may assign, transfer, sub-contract or otherwise
dispose of the benefit or burden of this Agreement to a third party
without the prior written consent of the other parties, such consent not
to be unreasonably withheld or delayed save that:
21.1.1 the Institute may assign the benefit or burden to a publicly
funded research body (including a trust, foundation or similar
body) which assumes all rights and obligations of the Institute
under this Agreement; and
21.1.2 Geron may assign the benefit and burdens of this Agreement in
connection with the sale of all or substantially all of the
assets of Geron whether by way of sale, merger or other
corporate reorganisation; and
21.1.3 Geron may assign the benefit and burden of this Agreement to its
Associate,
PROVIDED THAT in the case of an assignation pursuant to Sub-Clauses
21.1.2 or 21.1.3 if the Institute is able to reasonably demonstrate that
the proposed assignee is incapable of fulfilling Geron's obligations
under this Agreement then Geron will remain liable to the Institute to
procure the performance of such obligations notwithstanding that it may
have assigned this Agreement.
22. WAIVER
22.1 The failure of a party to exercise or enforce any right conferred upon
it by this Agreement shall not be deemed to be a waiver of any such
right or operate so as to bar the exercise or enforcement of such right
at any time or times thereafter.
22.2 No waiver or discharge shall be valid unless in writing and signed by
the relevant party against whom such waiver or discharge is sought to be
enforced.
23. ENTIRE AGREEMENT
23.1 This Agreement together with the Licence Agreement constitutes the
entire agreement between the parties in relation to the subject matter
hereof and applies to the exclusion of all other terms and conditions of
business including those of the Institute.
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<PAGE> 36
23.2 No amendment, alteration or addition to the terms of this Agreement
shall be valid unless signed by or on behalf of the parties by an
authorised signatory of the parties.
24. PUBLICITY
24.1 None of the parties shall use the names of the other parties (and Geron
and RBM shall not use the name "Dolly" or the name of the Supervisors or
any member of the Research Team or other member of staff employed at the
Institute) in any publicity, advertising or news release without the
prior written consent of the other parties, such consent not to be
unreasonably withheld.
24.2 None of the parties may issue a press release in relation to this
Agreement without the consent of the other parties to the wording of the
press release, save where such release is required in order to comply
with any regulatory requirements.
25. NO PARTNERSHIP OR AGENCY
25.1 Nothing in this Agreement shall be deemed to constitute a partnership
between the parties nor shall any party have any authority to bind or
commit the other parties or have authority to act as the agent to the
other parties or in any other capacity other than as expressly
authorised in this Agreement.
26. ENTICEMENT
26.1 Geron undertakes that it shall not without the Institute's prior written
consent either during or within [*] after expiry or termination of this
Agreement for any reason engage, employ of or otherwise solicit for
* employment any person who, during the Research Periods was an employee
or engaged by or on behalf of the Institute in carrying out the Directed
Research or the Undirected Research. PROVIDED THAT the foregoing shall
not apply to [*].
27. STAMP DUTY ETC
27.1 If any stamp taxes or other similar taxes are levied on this Agreement
by reason of its execution or performance, it shall be the
responsibility of Geron to pay all such taxes when due. Such taxes shall
be in addition to other amounts payable by Geron under this Agreement
and shall not be set off against any of the amounts due to the Institute
under this Agreement.
27.2 Geron agrees to release and indemnify the Institute and keep it
indemnified from and against all liability of whatever nature arising
out of Geron's failure duly and timely to pay and discharge any of the
above mentioned taxes.
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE> 37
28. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
Law of Scotland the and the parties hereby submit to the non-exclusive
jurisdiction of the
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<PAGE> 38
Scottish courts.
IN WITNESS WHEREOF these presents consisting of this and the preceding 34 pages
are executed as follows:
<TABLE>
<S> <C> <C>
Subscribed for and on behalf of )
GERON CORPORATION )
at )
on the day of 1999 )
by its Vice President )
-----------------------------
Vice President
Before the following witness:
Name
--------------------------------------
Address
----------------------------------- ------------------------------
Witness
-----------------------------------
Occupation
--------------------------------
Subscribed for and on behalf of )
ROSLIN BIO-MED LIMITED (EDINBURGH) )
at )
on the day of 1999 )
by one of its Directors )
-----------------------------
Director
Before the following witness:
Name
--------------------------------------
Address
----------------------------------- ------------------------------
Witness
-----------------------------------
Occupation
--------------------------------
Subscribed for and on behalf of )
ROSLIN BIO-MED LIMITED )
at )
on the day of 1999 )
by one of its Directors )
-----------------------------
Director
Before the following witness:
Name
--------------------------------------
Address
----------------------------------- ------------------------------
Witness
-----------------------------------
Occupation
--------------------------------
</TABLE>
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<PAGE> 39
SCHEDULE
PART 1(a)
PRINCIPLES FOR RECHARGING OF COSTS
(a) DIRECT LABORATORY COSTS
The actual costs incurred by the Institute in conducting the Directed
Research and Undirected Research in respect of:
(i) Salary, national insurance and pension contributions for
research scientists and technical support scientists who are
members of the Research Teams; plus
(ii) Laboratory consumables and equipment costs used in the Directed
Research and Undirected Research as authorised by the written
authorisation of the Institute's project manager in each case;
plus
(iii) Other costs incurred directly as a result of the Directed
Research and the Undirected Research as authorised by the
Institute's project manager and approved by the Project Board
(b) FARM
A reasonable market rate for animal process through the Institute's farm
together with any reasonable additional costs (including labour, feed,
veterinary costs and other such costs actually incurred by the Institute
as a result of implementing such procedures as may be agreed by the
Institute and Project Board as reasonably necessary to properly conduct
the Directed Research and Undirected Research. The reasonable market
rate per animal and the additional costs shall be no more than the ratio
Project Board can show by written evidence may be obtained from at least
two similar facilities and staff with commensurate skills. The
reasonable market rate is calculated by taking the average market price
of a similar animal over the previous twelve (12) months.
(c) LARGE ANIMAL UNIT ("LAU")
A per animal charge used in the Directed Research and Undirected
Research, such charge based upon the Institute's total direct cost
(including but not limited to labour, equipment, veterinary costs and
other such costs required to maintain the facilities as agreed between
the parties), multiplied by the total number of animals to be processed
through the LAU in the relevant year.
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<PAGE> 40
(d) OVERHEADS
* To be allocated as a percentage of Direct Research costs. The percentage
to be charged is [*] and will be subject to annual review and agreement
between the Institute and Project Board. In the event of agreement not
being reached the agreed percentage for the preceding year will be
retained.
PART 1(b)
ADMINISTRATIVE SERVICE AGREEMENT
The parties will enter into negotiations in good faith and shall within
45 days enter into a detailed Administrative Services Agreement
providing inter alia for office accommodation, use of equipment and
computers and other services to be provided by the Institute to RBM in
addition to the cost set out in Schedule Part 1(a) above.
- ----------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE> 41
THE SCHEDULE
PART 2
FORM OF UNDERTAKING
In consideration of my being engaged to carry out for Geron Corporation ("the
Company") the Research as defined in the agreement between Geron Corporation,
Geron Bio-Med Limited and Roslin Institute (the Institute) dated May 3 1999, I
hereby represent and agree as follows:
1. I understand that the Company in engaged in a continuous
programme of research, development, production and marketing in
connection with its business and that I am expected to make new
contributions to and create inventions of value for the Company.
2. I confirm that I will promptly disclose in confidence to the
Company all inventions, improvements, original works of authorship,
formulas, processes, computer programs, databases and trade secrets
("Inventions"), whether or not patentable, copyrightable or protectable
as trade secrets, that are made or conceived or first reduced to
practice or created by me, either alone or jointly with others, during
the period of the Research, whether or not in the course of any
employment, which were or are related in any way to the business of the
Company, similar to or competitive with the products or Research and
development activities of the Company, or sold to the Company's
customers or potential customers.
3. I agree that all Inventions that (a) are developed using
equipment, supplies, facilities or trade secrets of the Company, (b)
result from work performed by me for the Company or (c) relate to the
Research, the business or the actual research or development of the
Company, will be the sole and exclusive property of and are (to the
extent not already assigned) hereby assigned to the Company and I hereby
irrevocably and unconditionally waive in favour of the Company the moral
rights (if any) conferred to me by Part 1, Chapter IV, of the Copyright,
Design and Patents Act 1988 in respect of such Inventions in which the
copyright is vested in the Company. I understand that the provisions of
this paragraph shall be without prejudice to the provisions of the
Patents Act 1977.
4. I agree to assist the Company in every proper way to obtain for
the Company and enforce patents, copyrights and other legal protections
for the Company's Inventions in any and all countries, subject to the
company meeting any out of pocket costs and expenses. I will execute any
documents that the Company may reasonably request for use in obtaining
or enforcing such patents, copyrights and other legal protections. My
obligations under this paragraph will continue beyond the period of the
Research. In the event the Company is unable for any reason, after
reasonable effort, to secure any signature on any document needed in
connection with the actions specified in this
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<PAGE> 42
paragraph, I hereby irrevocably appoint the Company and its duly
authorised officers and agents as my agent and attorney to act for and
in my behalf to execute, verify the file any such documents and to do
all other lawfully permitted acts to further the purposes of the
preceding paragraph with the same legal force and effect as if executed
by me. I hereby waive in favour of the Company any and all claims, of
any nature whatsoever, which I now or may hereafter have for
infringement of any rights assigned hereunder to the Company.
5. I understand that this Agreement has created and creates a
relationship of confidence and trust with respect to any information of
a confidential or secret nature that may have been or may be disclosed
to me by the Institute or the Company that relates to the Research, the
business of the Company or to the business of any patent, subsidiary,
affiliate, customer or supplier of the Company or other third party
("Proprietary Information"). Such Proprietary Information includes but
is not limited to Inventions, ideas, data, know-how, developments,
designs, techniques, marketing plans, product plans, business
strategies, financial information, forecasts, personnel information and
customer lists.
6. At all times and in perpetuity I will keep all such Proprietary
Information in confidence and trust, and I will not use or disclose any
of such Proprietary Information without the written consent of the
Company, except to the extent that such Proprietary Information:
(a) is generally available to the public otherwise than by
breach by me or a third party of a duty of confidentiality to
the Company;
(b) is subsequently disclosed to me without obligation of
confidentiality by a third party owing no such obligation
thereof;
(c) is required to be disclosed by any governmental or other
authority or otherwise legally required to be disclosed.
Upon termination of my engagement at the Institute to carry out the
Research, I will promptly deliver to the Company all documents and
materials of any nature pertaining to my work and I will not take with
me any documents or materials or copies thereof containing any
Proprietary Information.
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<PAGE> 43
7. I confirm, and agree that during the period of the Research I
will not engage, without the Company's express written consent, in any
other employment or business activity; and that for a period of six
months thereafter, I will not be interested in or provide any services
to another undertaking in the field of the Research. I confirm and agree
further that for a period of the Research and six months thereafter I
will not (i) induce any employee of the Institute to leave the employ of
the Institute and (ii) solicit the business of any client or customer of
the Company (other than on behalf of the Company).
8. I represent that my performance of all terms of this Agreement
and the Research will not breach any terms of any contract of employment
or any invention, assignment or proprietary information agreement with
any employer or other party. I represent that I will not bring with me
to the Institute or use in the performance of the Research any documents
or materials of a former or present employer that are not generally
available to the public.
9. This Agreement will be governed by and construed according to
Scottish law and the parties submit to the non-exclusive jurisdiction of
the Scottish courts. If any provision of this Agreement is deemed
unenforceable by law, then such provision will be deemed severed from
this Agreement, unless it can be modified by a court so as to render it
enforceable with the intent of the Agreement, and the remaining
provisions will continue in full force and effect. I understand that in
the event of a breach or threatened breach of this Agreement by me the
Company may suffer irreparable harm and will therefore be entitled to
interim or injunctive relief to enforce this Agreement.
10. This Agreement together with the terms and conditions of my
employment with Biotechnology and Biological Sciences Research Council
("BBSRC") at the Institute is the final, complete and exclusive
agreement of the parties with respect to the subject matter hereof and
supersedes all prior representations. In the event of any conflict
between this Agreement and the terms and conditions of my employment
with BBSRC the terms of this Agreement will prevail. No modification of
or amendment to this Agreement, nor any waiver of any rights under this
Agreement, will be effective unless in writing and signed by both
parties.
11. I understand that this Agreement does not constitute a contract
of employment or obligate the Company, BBSRC and the Institute to employ
me for any stated period of time. This Agreement shall be effected as of
the first day of my employment.
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<PAGE> 44
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS
RESEARCHER
COMPANY
By:
-------------------------------
By:
-------------------------------
Title:
----------------------------
Title:
-------------------------
Date:
-----------------------------
Date:
---------------------------
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<PAGE> 1
EXHIBIT 10.43
DATED APRIL 30, 1999
-------------------------------------------------
ROSLIN INSTITUTE (EDINBURGH)
GERON CORPORATION
- AND -
ROSLIN BIO-MED LIMITED
- -------------------------------------------------------------------------------
LICENCE AGREEMENT
- --------------------------------------------------------------------------------
Dundas & Wilson
191 West George Street
GLASGOW G2 2LB
<PAGE> 2
LICENCE AGREEMENT made the 30th day of April, 1999
BETWEEN
ROSLIN INSTITUTE (EDINBURGH) a company registered in Scotland with registered
number 157100 and having its registered office at Roslin, Edinburgh, Midlothian,
EH25 9PS ("the Licensor");
GERON CORPORATION, a Delaware corporation having a principal place of business
at 230 Constitution Drive, Menlo Park, California 94025 ("Geron");
and
ROSLIN BIO-MED LIMITED a company registered in Scotland with registered number
179263 and having its registered office at Roslin Biotechnology Centre, Roslin,
Midlothian EH25 9PS ("RBM")
WHEREAS
(A) The Licensor is, together with the Minister of Agriculture, Fisheries
and Food, acting through the Ministry of Agriculture, Fisheries and Food
("MAFF") and the Biotechnology and Biological Sciences Research Council
("BBSRC"), the joint-owner of patent applications and the Licensor and
BBSRC are the joint owners of certain valuable know-how relating to both
nuclear transfer technology and the cloning and genetic modification of
animals;
(B) by an agreement dated 26 March and 7 April 1998, MAFF and BBSRC
irrevocably consented for all purposes (except in relation to the
Cloning of Humans) to the Licensor negotiating and granting licenses
under the said patent applications on such terms and conditions as the
Licensor shall in its entire discretion decide in respect of all
applications of the inventions which fall within the claims of the said
patent applications relating to end products for human healthcare and by
a letter dated 3 April 1998, BBSRC consented to the Licensor granting
rights in the know-how to RBM;
(C) by an agreement dated 7th April 1998 (the "Original Licence") the
Licensor granted to RBM a license of the said patent applications,
know-how and certain other intellectual property rights in respect of
the field of use defined in the Original Licence;
(D) Geron proposes to acquire the entire issued share capital of RBM and to
fund the Licensor to carry out research;
(E) to further the objectives of the Licensor in a manner consistent with
its status as a research and educational institute and its recognition
as a Scottish charity (No. SCO23592) the Licensor has agreed to grant a
new licence to Geron with agreed changes to and a wider field of use
than that contained in the Original Licence;
<PAGE> 3
(F) therefore it has been agreed, subject to the satisfaction or waiver of
certain conditions precedent, that as from the Commencement Date the
Original Licence will be terminated and a licence of the said patent
applications, know-how and other intellectual property rights be granted
to Geron on the terms and conditions set out in this Agreement; and
(G) by letters dated 29 April 1999 MAFF has consented to the Institute
granting a licence of the said patent applications, and BBSRC has
consented to the Institute granting a licence of the said patent
applications know-how and other intellectual property rights to Geron on
the terms and conditions set out in this Agreement.
NOW IT IS HEREBY AGREED as follows :
1 DEFINITIONS
1.1 In this Agreement, unless the context otherwise requires, the following
defined terms shall have the meanings set out opposite them below:-
"Associate" shall mean in relation to any company, any
subsidiary or holding company of that company or
any subsidiary of any such holding company and for
this purpose "subsidiary" and "holding company"
shall have the meanings specified in Section 736
of the Companies Act 1985;
"Cloning of Humans" shall mean the uterine implantation and
development of a reconstructed embryo with
identical nuclear genetic information to another
living or deceased human being;
"Commencement Date" shall mean the last date of execution of this
Agreement;
"Co-ownership Agreement" the Agreement dated 26 March 1998 between the
Licensor, BBSRC and MAFF;
"Disclosure Letter" shall mean the Warrantors' Disclosure
Letter of even date herewith referred to in the
agreement of even date herewith between Geron and,
inter alia, the Licensor for the sale and purchase
of the whole issued share capital of RBM,
"EEA" shall mean the European Economic Area as
constituted from time to time;
-2-
<PAGE> 4
"Fields of Use" shall mean, subject to Clause 4, all applications
of the Intellectual Property Rights, with the
exception of the production of and the
facilitation of the commercial manufacture of
products for pharmaceutical or Nutraceutical use
by modification of the composition of the milk of
ruminant livestock and rabbits;
"First Sale Date" shall mean the date on which Geron or a
Sub-Licensee first puts a Product or Process on
the market in the EEA;
"Geron Improvements" shall mean Improvements made or acquired by Geron
or its Associates;
"Improvements" shall mean all improvements or modifications or
adaptations to or any new application of the
Intellectual Property Rights or any part thereof
in the Fields of Use which may be made or acquired
by any party during the continuance of this
Agreement, but excluding any improvements,
modifications, adaptations or new applications of
the Intellectual Property Rights developed in the
performance of the Research;
"Intellectual Property shall mean the Patent Rights, the Know-How, any
Rights" Licensor Improvements and any copyright, design
rights or any other intellectual property rights
of a similar nature relating to the Technology
owned or co-owned by or under the control of the
Licensor;
"Know-How" shall mean all ideas, concepts, inventions,
unpatented drawings, designs, models,
specifications, data, formulae, processes and
procedures, techniques and any other technical
information or documentation (including computer
stored information and documentation) owned or
co-owned by or under the control of the Licensor
and relating to the Technology which is secret,
substantial and identified ;
"Licensor Improvements" shall mean Improvements made or acquired by the
Licensor ;
"Net Sales Price" shall mean, in relation to Sales:-
-3-
<PAGE> 5
(a) where the Royalty Products are Sold or
supplied on arms length terms, the price charged
in the relevant invoice less any value added tax
or other sales taxes and other government imposed
duties, trade or cash discounts, insurance and
packing and freight costs (to the extent
identified in the relevant invoice), rebates and
allowances for promotions and returns; and
(b) where the Royalty Products are Sold or
supplied otherwise than on arm's length terms but
are subsequently sold or supplied on arm's length
terms, the price charged under the first such
arm's length sale calculated in accordance with
paragraph (a) above less any value added tax or
other sales taxes, trade or cash discounts,
insurance and packing and freight costs (if
separately charged) and allowances for returns;
"Nutraceuticals" shall mean an active ingredient of a food which is
formulated to be consumed or administered
enterally under the supervision of a physician and
which is intended for the specific dietary
management of a disease or condition for which
distinctive nutritional requirements based on
recognised scientific principles are established
by medical evaluation and/or any milk product
intended for infant nutrition;
"Patent" shall mean any and all patents throughout the
world including any re-issues, extensions,
substitutions, continuations, divisions,
continuations in part applications and
supplementary protection certificates and all
other rights of a like nature;
"Patent Methods" means any process or method the use or practice of
which would constitute an infringement of a Valid
Claim in a particular territory but for any
licence granted under this Agreement;
"Patent Rights" shall mean the patent applications details of
which are set out in the Schedule and all
corresponding national and regional patent
applications, all
-4-
<PAGE> 6
patents which may be granted pursuant to such
patent applications, any Supplementary Protection
Certificates or other means by which any of the
aforesaid patent applications and patents or the
effects of such patent applications and patents
are extended, and all continuations, divisionals,
re-issues and re-examinations of any of the
foregoing;
"PPL License shall mean the licence agreement between PPL
Therapeutics (Scotland) Limited and the Institute
and the terms and conditions of the Department of
Trade & Industry Link project entitled "Link
Engineering Programs - Strategies for the Gene
Targeting in Livestock" dated 17, 22 and 23 June
1998;
"Process" shall mean any process which is obtained or
derived directly or indirectly from or utilising
the Intellectual Property Rights ;
"Products" shall mean any product or technology which is
obtained or derived directly or indirectly from or
utilising the Intellectual Property Rights;
"Research" shall mean the programme of research to be carried
out by the Licensor in terms of the Research
Agreement;
"Research Agreement" shall mean the Research and Licence Agreement of
even date herewith to be entered into between
Geron, the Licensor and RBM;
"Royalty Products" shall mean any product, process, kit, composition
of matter, material, or service to the extent that
the manufacture, use, sale, offer for sale, or
importation of any such product, process, kit,
composition of matter, material, or service would
constitute an infringement of a Valid Claim in a
particular territory but for the licence herein
granted by the Institute to Geron in respect of
patents which constitute Licensor Improvements.
"Quarter" shall mean the period from the Commencement Date
until 30 June 1999 (inclusive), the period of
three (3) months beginning on 1 July 1999 and each
successive period of three (3) months during the
-5-
<PAGE> 7
continuation of this Agreement, and "Quarterly"
shall be construed accordingly;
"SAC Collaboration" shall mean the academic collaboration between the
Licensor and the Scottish Agricultural College
(Aberdeen) in relation to the causes of the birth
of unusually large offspring after nuclear
transfer;
"Sale" shall mean any sale, hire, lease or other disposal
on a commercial basis of any Royalty Product by
Geron any of its Associates or any sub-licensees
and "Sold" shall be construed accordingly;
"Sub-Licensee" shall mean a sub-licensee of the Intellectual
Property Rights from Geron in accordance with
Clause 3.6;
"Technology" shall mean cell based systems for the cloning of
human and animal cells and non-human animals;
"Territory" shall mean the world;
"Valid Claim" shall mean
(a) any claim of any issued and unexpired Patent
which is a Licensor Improvement; and
(b) any claim contained within any application for
a Patent referred to in sub-para (a) which, if
granted, would constitute a Valid Claim;
and which claim has not been finally rejected or
declared invalid by a patent office or by a court
of competent jurisdiction;
"VAT" shall mean Value Added Tax; and
"Year" shall mean each period of twelve months
commencing on the Commencement Date and on each
anniversary hereof.
1.2 In this Agreement:
1.2.1 references to the singular include the plural and vice versa;
-6-
<PAGE> 8
1.2.2 references to Clauses and the Schedule are to clauses of and the
schedule to this Agreement;
1.2.3 headings to Clauses and the Schedule are inserted for
convenience only and shall not affect the construction or
interpretation of this Agreement; and
1.2.4 references to statutory provisions shall be construed as
including references to:-
(a) any statutory modification, consolidation or
re-enactment (after the date of execution of this
Agreement) of such statutory provisions for the time
being in force; and
(b) all statutory instruments or orders made pursuant to
such statutory provisions.
2 CONDITIONS PRECEDENT
2.1 This Agreement is entered into conditional upon and subject to:-
2.1.1 the completion of the acquisition by Geron of the entire issued
share capital of RBM; and
2.1.2 the execution of the Research Agreement by the Licensor, Geron
and RBM,
in each case on or before 4th May 1999 or such later date as the parties
may agree.
2.2 None of the parties shall be entitled to waive in whole or in part
compliance with the conditions contained in Clause 2.1 without the
written consent of the other parties.
3 GRANT OF LICENSE
3.1 The Licensor hereby grants to Geron an exclusive licence to use the
Intellectual Property Rights in the Fields of Use anywhere in the
Territory:
3.1.1 to develop any Products, any Process and the Technology;
3.1.2 to manufacture, have manufactured, use, market, sell, lend, let
out, hire or lease, or otherwise dispose of Products;
3.1.3 to exploit any Process; and
3.1.4 to grant sub-licences of the Intellectual Property Rights in the
Fields of Use,
subject to and on the terms and conditions contained in this Agreement.
-7-
<PAGE> 9
3.2. Subject to its obligations to keep the Know-How confidential, the
Licensor shall be entitled to use the Intellectual Property Rights and,
subject as hereinafter provided, any Geron Improvements for its own
academic research and teaching purposes and for non commercial
collaboration with other academic parties, charitable, research and
other not for profit organisations. To the extent necessary to enable
such non-commercial collaborations to proceed, the Licensor shall be
entitled to request Geron to grant Sub-licenses of the Intellectual
Property Rights and licences of Geron Improvements (but with no right to
grant further sub-licences) to such other academic parties, charitable,
research and other not for profit organisations for the sole purpose of
such non-commercial collaboration and Geron shall grant such
Sub-licenses and licenses unless it has reasonable objection thereto.
For the avoidance of doubt, any such grant by Geron may be subject to
the proposed collaborating party agreeing terms with Geron as to the
ownership and/or rights of exploitation of the results of such
collaboration and the terms under which any confidential materials may
be transferred to such collaborating party.
3.3 Except to the extent expressly permitted by or under this Agreement and
subject to any mandatory provisions under any applicable legal system
which expressly or by implication apply notwithstanding the terms of
this Agreement, the Licensor will not use for commercial purposes and
will not licence any third party to use the Intellectual Property Rights
in the Fields of Use in the Territory. The Licensor's obligations under
this Clause 3.3 shall remain in force for the duration of this
Agreement. Without prejudice to the foregoing, in respect of any country
or territory in the EEA, such obligations will remain in force in
respect of that country or territory for the longer of:
* 3.3.1 the period in which the Patent Rights [*]; or
* 3.3.2 the period from the Commencement Date until the date [*] from
the First Sale Date or the [*] through no fault of either party,
whichever is earlier.
3.4 The Licensor and Geron will execute, at their joint expense, such
short-form licence agreements as may be required by the relevant patent
registries and do such other acts and things as may be reasonably
necessary for the purpose of registering the licences granted in terms
of this Agreement in the Territory.
3.5 Geron shall from time to time keep the Licensor advised as to the
progress of any applications for regulatory approvals in the Territory
with respect to any Process and /or any Products. All such
communications shall be considered confidential and shall be treated in
accordance with Clause 8.
3.6 Geron shall be entitled to grant sub-licences of its rights under the
Agreement and to sub-contract manufacture of Products to appropriate
third parties, provided that the
- --------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-8-
<PAGE> 10
sub-contract agreement contains undertakings by the sub-contractor to
observe all applicable provisions of
* this Agreement and that the sub-contract [*], and the sub-licence
agreement contains undertakings by the Sub-Licensees to perform
provisions substantially similar to those contained in this Agreement
with regard to fields of use, confidentiality and termination (including
in particular a prohibition on Cloning of Humans) and prohibits
assignation, although in the case of Sub-Licensees further sub-licensing
to any extent may be permitted.
3.7 Following termination of this Agreement, any sub-licence that has been
granted by Geron
* shall, except as provided in Clause 3.8, continue to operate provided
that [*]
3.8 Geron shall, prior to or within 30 days of the grant of any sub-licence,
notify the Licensor of the identity of the Sub-Licensee and the fields
of use for which the sub-licence has been granted. The Licensor acting
reasonably and with good reason may object in writing to the relevant
Sub-Licensee within 30 days of receipt of Geron's notification under
this Clause specifying the reason for the Licensor's objection. Where
* the Licensor acting reasonably has notified Geron of its objection to
any Sub-Licensee under this Clause, the sub-licence agreement which
Geron has entered into with that Sub-Licensee shall, upon termination of
this Agreement, [*]
3.9 Geron shall at all times indemnify and keep indemnified the Licensor
against all losses, costs, claims, damages or expenses incurred by the
Licensor or for which the Licensor may become liable as a result of any
breach by any Sub-Licensee or sub-contractor of the terms of any
sub-licence agreement or sub-contract agreement, as if the breach had
been a breach by Geron.
4 Use of the Intellectual Property Rights for Human Applications
4.1 Subject to Clause 6.3, Geron shall be entitled to use the Intellectual
Property Rights to produce
* [*] without requiring any further consent or permission from the
Licensor.
4.2 Notwithstanding the terms of Clause 3, Geron shall not use the
Intellectual Property Rights to carry out experiments or otherwise
engage in research in the field of the Cloning of Humans, and Geron
shall not and shall use its reasonable endeavours (including ensuring
that all sub-licence agreements contain appropriate restrictions and
taking all reasonable steps to enforce such restrictions, including
termination of the sub-licence agreement) to procure that its
Sub-Licensees shall not use the Intellectual Property Rights for the
purpose of the Cloning of Humans.
- --------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-9-
<PAGE> 11
4.3 Geron shall not use the Intellectual Property Rights to carry out
experiments or otherwise engage in research in any territory which are
illegal within that territory as at the date on which the experiments
are carried out or the research is conducted.
5 TECHNICAL ASSISTANCE
Throughout the term of this Agreement, the Licensor shall deliver to
Geron the Know-How in written form in sufficient detail to enable Geron
to use and exploit to the fullest extent the Intellectual Property
Rights in the Fields of Use.
6 PERFORMANCE
6.1 Geron undertakes at all times when this Agreement is in force to use all
reasonable endeavours to exploit the Intellectual Property Rights in the
Fields of Use for commercial gain in the Territory.
6.2 All Products supplied by Geron pursuant to Sub-Clause 3.1.2 shall, where
reasonably practicable, be marked clearly with the relevant patent
numbers of the Licensor and a statement that the Products are
manufactured and supplied by Geron under licence from the Licensor.
6.3 Geron will ensure that it conforms with all legislation, rules,
regulations and statutory requirements, including but without limitation
obtaining necessary consents from the relevant authorities, existing in
any country within the Territory from time to time in relation to the
use and exploitation of the Intellectual Property Rights in that
country.
7 IMPROVEMENTS
7.1 If during the term of this Agreement the Licensor or Geron develops an
Improvement then it shall forthwith notify the other in writing of the
Improvement and shall disclose all necessary information to permit the
use of the Improvement by the other party upon the terms of this
Agreement, except neither Geron nor the Licensor shall be obliged to
disclose any Improvement to the other to the extent that or for so long
as the party disclosing is precluded from doing so by law or any
obligation owed to a third party.
7.2 Any Improvements developed by the Licensor shall be the absolute
property of the Licensor and any Improvements developed by Geron shall
be the absolute property of Geron.
7.3 Where any party has developed or acquired an Improvement it shall have
sole discretion as to whether and in what manner to apply for patent
protection.
7.4 If during the term of this Agreement the Licensor shall make any
discoveries or inventions which have application in the Fields of Use
not falling within the definition of "Improvement" pursuant to this
Agreement or which is not an intellectual property
-10-
<PAGE> 12
right and arising in the performance of Research Geron shall to the
extent that the Licensor is not prohibited by law or any obligation to
any other person have a right of first refusal with respect to such
discovery or invention. The Licensor shall use its reasonable endeavours
to present any such discovery or invention to Geron promptly and Geron
shall have 60 days from such notification within which to make the
Licensor an offer to obtain a licence of any such discovery or
invention. The Licensor agrees that it shall consider all such offers in
good faith and shall revert to Geron within 60 days of receipt of the
offer with its acceptance or refusal. If the Licensor refuses any such
offer from Geron, it shall be free to grant any rights to such discovery
or invention to any third party on terms no less favourable to the
Licensor as those offered by Geron.
8 CONFIDENTIALITY
8.1 Both during the term of this Agreement and following its expiry or
termination each party shall keep the Know-How and any confidential
know-know disclosed to it under Clause 7 confidential and use the
Know-How and confidential know-how only for the purpose of this
Agreement and not at any time for any reason whatsoever (save as
permitted by this Agreement) to disclose or permit to be disclosed the
same to any third party other than any Sub-Licensees (to any level of
sub-licensing) or to any persons who the party considers need to know
the same in connection with its use of the rights granted to it under
this Agreement, but then only if such persons have been informed of the
secret and confidential nature of the same and have agreed to be bound
by an obligation of confidentiality in terms no less onerous than the
obligations of confidentiality to which the parties have agreed in this
Clause.
8.2 Each party undertakes and agrees not to disclose or permit to be
disclosed to any third party or make use of or permit to be made use of
for any purpose other than as permitted by this Agreement any trade
secrets or any confidential information relating to the other parties'
business, affairs or finances which comes into their possession. In the
case of the Licensor this obligation shall cover the identity of any
Sub-Licensee and any information relevant to such Sub-Licensee disclosed
by the Licensor under Clause 3.
8.3 The obligations referred to in Clauses 8.1 and 8.2 shall not extend to
any information which:
8.3.1 is generally available to the public otherwise than by reason of
breach by the recipient of the provisions of this Clause 8;
8.3.2 is known to the recipient party and is at its free disposal
prior to its receipt under this Agreement provided that such
prior knowledge can be demonstrated by written evidence;
8.3.3 is subsequently disclosed to the recipient party without
obligations of confidence by a third party owing no such
obligations in respect thereof;
-11-
<PAGE> 13
8.3.4 is required to be disclosed to any governmental or other
authority or other regulatory body including, without
limitation, MAFF, BBSRC or as may be required under the National
Audit Act 1983 or otherwise legally required to be disclosed
PROVIDED THAT in all cases the party required to make the
disclosure shall take all reasonable steps to ensure that the
disclosure is the minimum necessary to comply with its legal
requirements and in the case of any disclosure pursuant to any
Court order to seek from the Court an appropriate order
safeguarding the confidentiality of the material disclosed;
8.3.5 is independently developed by the recipient party without
reference to the information disclosed to it under this
Agreement,
PROVIDED THAT in using such information the recipient party shall not
take any action which would prevent protection of an invention or any
intellectual property right contained in such information.
9. Royalties
9.1 Geron shall pay to the Institute royalties in respect of all Sales of
Royalty Products during each Quarter at the rate of [*] per cent of the
* aggregate Net Sales Prices of the Royalty Products Sold during that
Quarter.
9.2 Any royalties payable by Geron in respect of Royalty Products Sold
during any Quarter shall be paid within sixty (60) days following the
end of that Quarter in accordance with the procedures set out in Clauses
9.5 to 9.7 and shall be accompanied by a written statement showing:-
9.2.1 the total number of Royalty Products Sold during the relevant
Quarter;
9.2.2 the Net Sales Price in respect of each Royalty Product Sold
during the relevant Quarter; and
9.2.3 the total amount of the royalties payable with all necessary
particulars of how the royalties have been calculated.
9.3 If any judgment that one or more Patent claims which constitute a
Licensor Improvement are not Valid Claims is subsequently reversed on
appeal then the Patent claims in question shall be deemed to have been
Valid Claims for the whole of the period ("the relevant period") from
the date of first judgment until the date of the Appeal (the "Appeal
Judgment"). Within sixty (60) days of the date of the Appeal Judgment
Geron shall provide to the Institute a statement containing a
recalculation of the Royalties arising during the relevant period taking
into account that the aforesaid Patent claims were Valid Claims and
shall at the same time pay to the Institute any
- --------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-12-
<PAGE> 14
shortfall between the Royalties previously paid in respect of the
relevant period and the Royalties which are shown by such recalculation
to have been due.
9.4 For the avoidance of doubt Geron shall only be obliged to pay royalties
in respect of Sales of Royalty Products. All the other licenses and
privileges granted to Geron hereunder shall be royalty free and Geron
shall not be obliged to make any payment to the Institute in respect of
Geron's exercise of such licenses and privileges.
9.5 All sums payable to the Institute under this Agreement:-
9.5.1 are stated exclusive of value added tax or any other tax which
may at any time during the period of this Agreement replace
value added tax, which (if payable) shall be paid in addition by
Geron at the appropriate rate subject to receipt of a suitable
invoice; and
9.5.2 shall be paid in Pounds Sterling by bank transfer to the
Institute's bank account
* [No: [*]] at Bank of Scotland, The Mound, Edinburgh (Sort Code
No [*]) or such other bank account as may be designated in
writing by the Institute.
9.6 Without prejudice to any other rights accruing to the Institute, if any
sums payable by Geron to the Institute pursuant to this Agreement remain
unpaid on the due date for payment,
* interest at the rate of [*] above the base rate from time to time of the
Bank of Scotland shall be payable on such sums from the due date for
payment until the date of actual payment in full, PROVIDED THAT no
interest shall be payable by Geron where the failure to make payment by
the due date is due to any default or failure on the part of the
Institute.
9.7 All sums payable under this Agreement shall be made in full without
deduction of taxes, charges and other duties (including any withholding
or other income taxes) that may be imposed except where Geron is
required by law to make such deduction or withholding, in which event
Geron shall:-
9.5.1 ensure that the deduction or withholding does not exceed the
minimum amount legally required;
9.5.2 pay to the applicable taxation or other authorities within the
period for payment permitted by law the full amount of the
deduction or withholding;
9.5.3 furnish to the Institute, within the period for payment
permitted by law, either (a) an official receipt of the
applicable taxation or other authorities for all amounts
deducted or withheld as aforesaid or (b) if such receipts are
not issued by the taxation or other authorities concerned on
payment to them of amounts so
- --------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-13-
<PAGE> 15
deducted or withheld, a certificate of deduction or equivalent
evidence of the relevant deduction or withholding; and
9.5.4 co-operate in all respects necessary to permit the Institute to
take advantage of such double taxation agreements as may be
available.
10 Proper Accounts
10.1 Geron shall maintain (and retain for not less than six (6) years) true
and accurate accounts and records of all Sales which shall show in
sufficient detail all facts necessary for the accurate calculation of
the royalty payments payable by Geron pursuant to this Agreement.
10.2 Geron shall permit the Institute and its accountants not more than once
in any Year on reasonable prior notice to inspect the accounts and
records referred to in Clause 10.1 for the purpose of verifying that all
royalties due to the Institute pursuant to this Agreement have been
properly calculated. The Institute shall, and shall procure that its
accountants shall, treat information arising from such inspection as
strictly confidential.
10.3 If it is established that the amount of royalties paid in respect of any
Quarter is 5% or more less than the amount of the royalties which were
properly payable under Clause 9 in respect of that Quarter Geron, shall,
within seven (7) days of the date on which it is so established, pay the
shortfall to the Institute together with any interest due thereon and
the reasonable costs and expenses incurred by the Institute in making
the inspection and audit pursuant to which the underpayment is
discovered. Any overpayment of royalties Quarters shall be credited
against royalties owed to the Institute for the following Quarter or
shall be repaid by the Institute to Geron within fourteen (14) days of
the Institute's receipt of a notice from Geron requiring repayment.
10.4 The provisions of this Clause 10 shall remain in full force and effect
following the expiry or termination of this Agreement for any reason
whatsoever until the settlement of all subsisting claims of the
Institute under this Agreement.
11 PATENT MAINTENANCE, WARRANTIES AND INFRINGEMENT
11.1 Geron shall diligently prepare, file, prosecute and maintain all patents
and patent applications comprising the Patent Rights using patent
counsel of its choice. Geron shall have sole discretion in relation to
the patenting strategy to be adopted in relation to any patentable
inventions, patent applications and/or patents comprised within the
Patent Rights provided that Geron shall consult with the Licensor in
relation to the patenting strategy and shall take reasonable account of
any comments received from the Licensor in relation to and prior to
implementation of such patenting strategy. Geron will promptly provide
copies of all relevant documentation to the Licensor so that, insofar as
reasonably practicable, the Licensor may be currently informed of the
continuing
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<PAGE> 16
prosecution and maintenance of the Patent Rights and may comment upon
such documentation sufficiently in advance of any initial deadline for
filing a response thereto.
11.2 Geron will use all reasonable efforts to amend any patent applications
to include reasonable and appropriate claims requested by the Licensor
to protect patent products contemplated to be sold, or patent methods
contemplated to be practiced, in connection with the production of and
the facilitation of the commercial manufacture of products for
pharmaceutical or Nutraceutical use by modification of the composition
of the milk of ruminant livestock and rabbits.
*11.3 The Licensor shall bear [*] and Geron shall bear [*] of all costs
actually incurred by the Licensor and/or Geron on or after the
Commencement Date relating to the preparation and maintenance of the
Patent Rights ("Patent Costs"). Patent Costs shall include inter alia
filing costs such as government fees as required, extension fees where
appropriate, translation charges relating to claims and/or the entire
patent applications or patent applications in non-English speaking
territories as the case may be, filing costs in relation to any
divisional, continuation or continuation-in-part patent application or
patent applications which may arise in the course of prosecution of any
patent application and expenses related thereto, reasonable professional
charges of patent agent or patent attorney or patent counsel engaged by
Geron, reasonable expenses relating to the travel or accommodation of
the patent agent or patent attorney or patent counsel incurred in
connection with actions required relating to the patent application(s)
and/or granted patent(s) which may arise and all costs relating to
interferences, oppositions and the defence of any invalidity claims
pursuant to clause 11.4 which may arise in the course of the viable life
of any of the Patent Rights. Patent costs shall not include any internal
costs of the parties and the expense of any management time.
11.4 If at any time any claim is made by a third party that any of the Patent
Rights is invalid, then each party shall promptly notify the other
parties of such claim. Geron shall be entitled to conduct the defence of
any such claim provided that Geron shall at all times keep the Licensor
informed as to the progress of such defence, and shall insofar as it is
practicable to do so, take into account any comments received from the
Licensor prior to taking any steps in the conduct of such defence. The
Licensor hereby agrees to do any deeds, execute any agreements and
render any assistance as Geron shall reasonably require for the purpose
of conducting the defence of any third party claim (including
authorising any attorneys appointed by Geron to conduct the defence in
the name of the Licensor) providing that Geron shall indemnify the
* Licensor against [*] of its reasonable costs and expenses actually
incurred in doing any such deeds, executing any agreements or rendering
any assistance pursuant to this Clause. If within a period of 90 days
from the date upon which notice of any third party
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* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE> 17
claim is received Geron has not initiated defence of the claim the
Licensor shall be entitled to do so in its own name and at its own
expense and Geron hereby agrees to do any deeds, execute any agreements
and render any assistance as the Licensor shall reasonably require for
the purpose of conducting the defence of any third party claims provided
that the Licensor shall indemnify Geron against its reasonable costs and
expenses actually incurred in doing any deeds, executing any agreements
or rendering any assistance pursuant to this Clause . Subject to the
foregoing provisions of this Clause the Licensor shall not take any part
in the defence of any claims and shall not settle or compromise any
claims in any way without the prior written consent of Geron.
11.5 Notwithstanding any other provisions of this Agreement, Geron may, upon
90 days written notice to the Licensor terminate its obligations with
respect to prosecution and maintenance of any of the patents and patent
applications comprising the Patent Rights and payment of the Patent
Costs incurred after the effective date of such notice with respect to
any particular patent application or patent in any or all countries or
territories. The Licensor may continue prosecution and/or maintenance of
such patent application or patent at its sole discretion and expense,
and Geron shall have no further right or licences thereunder in this
Agreement or otherwise.
11.6 The Licensor warrants to Geron that :
11.6.1 as at the Commencement Date it, MAFF and BBSRC are be the
co-owners of the Patent Rights but that as between and among
them the Licensor has and shall at all times have full and sole
authority to make any decisions and take any necessary steps to
protect and enforce the Patent Rights.
11.6.2 it has the authority to enter into this Agreement and to grant
the rights granted under this Agreement;
11.6.3 save for the rights granted to PPL Therapeutics (Scotland)
Limited under the PPL Licence and the rights arising under the
SAC collaborations it has not granted and will not during the
term of this Agreement grant to any third party any rights which
are inconsistent with the rights granted under this Agreement;
11.6.4. it has not granted and will during the term of this Agreement
not grant to any third party to whom it licenses the Patent
Rights outside the Fields of Use any greater right in relation
to patent prosecution or patent maintenance then are granted to
Geron pursuant to the Agreement;
11.6.5 as at the Commencement Date the Intellectual Property Rights
constitute all the intellectual property rights owned by or
under the control of the Licensor required to exploit the
Intellectual Property Rights in the Fields of Use;
11.6.6 as at the Commencement Date it has not received notice of any
third party rights which would prevent the exercise by Geron of
any of the rights granted under this Agreement; and
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<PAGE> 18
11.6.7 as at the Commencement Date , it has not disclosed the Know-How
to any third party except as expressly permitted by the terms of
this Agreement.
The warranties under Clauses 11.6.5, 11.6.6 and 11.6.7 are subject to
the information disclosed in the Disclosure Letter.
11.7 Each party shall forthwith notify the other parties of any infringement
or suspected infringement of any Intellectual Property Rights by any
person, which comes to that party's attention. Unless otherwise agreed
Geron shall have 90 days in which to commence at its own expense
proceedings for the purposes of protecting such Intellectual Property
Rights in the Fields of Use. The Licensor hereby authorises Geron to
institute proceedings in the joint names of Geron and the Licensor in
respect of any such infringement or suspected infringement of the
Intellectual Property Rights in the Fields of Use. The Licensor hereby
agrees to do any deeds, execute any agreements and render any assistance
as Geron shall reasonably require for the purposes of any such
infringement action (including authorising any attorneys appointed by
Geron to conduct the action in the name of the Licensor) provided that
Geron shall indemnify the Licensor and keep it identified against its
reasonable costs and expenses actually incurred in doing any deeds,
executing any agreements or rendering any assistance pursuant to this
Clause. Geron shall have full conduct of any such proceedings and the
right to give instructions to the appointed attorneys as to how such
proceedings are to be conducted but shall at all times keep the Licensor
informed as to the conduct of the proceedings and shall take account of
all reasonable comments of the Licensor in relation to the proceedings.
Subject thereto and to the provisions of Clause 11.8, the Licensor shall
not take any part in the proceedings and shall not settle or compromise
such proceedings in any way without the prior written consent of Geron.
11.8 If within the period of 90 days specified in Clause 11.7 Geron has not
initiated any action in respect of the infringement of the Intellectual
Property Rights then the Licensor shall be entitled to do so in its own
name and at its own expense and Geron hereby agrees to do any deeds,
execute any agreements and render any assistance as the Licensor shall
reasonably require for the purposes of any such infringement action
provided that the Licensor shall indemnify Geron against its reasonable
costs and expenses actually incurred in doing any deeds, executing any
agreements or rendering any assistance pursuant to this Clause.
11.9 Subject to reimbursing in full all costs and expenses incurred by the
parties in bringing any infringement actions pursuant to Clauses 11.7
and 11.8 any damages or costs awarded or any sums which are agreed to be
paid in settlement of any such action will belong solely to the party
bringing the infringement action.
11.10 Geron shall at all times indemnify and keep indemnified the Licensor,
against all costs, claims, damages or expenses incurred by the Licensor
or for which the Licensor may become liable with respect to any product
liability claim relating to any Process or Products produced or supplied
or put into use by Geron (or any Sub-Licensee or any sub-contractor
appointed by Geron) pursuant to this Agreement, provided that the
Licensor shall give, at Geron's expense, such assistance as Geron may
reasonably require
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<PAGE> 19
in order to defend any such claim, shall not without the prior written
consent of Geron take any steps to defend, settle or compromise any such
claim, and shall not without such consent make any admission with
respect to such claim. Such indemnity will not apply where the costs,
claims, damages or expenses arise as a result of negligence or wilful
deceit by the Licensor, its agents or employees.
11.11 At all times during which any Products are being produced, supplied or
put to use by Geron or any of the Associates or any sub-licensee, Geron
shall in order to meet its obligations to the Institute under Clause
11.10, either self insure or obtain and maintain reasonable insurance in
each case commensurate with good industry practice. In the event that
Geron obtains insurance it shall on request by the Institute, and
(subject to Clause 8) supply the Institute with a copy of the insurance
policy.
12 ASSIGNATION
12.1 Subject to Clause 3.6 none of the parties may assign, transfer,
sub-contract or otherwise dispose of the benefit or burden of this
Agreement to a third party without the prior written consent of the
other parties, such consent not to be unreasonably withheld or delayed
save that:
12.1.1 the Licensor may assign the benefit or burden to a publicly
funded research body (including a trust, foundation or similar
body) which assumes all rights and obligations of the Licensor
under this Agreement; and
12.1.2 Geron may assign the benefit and burdens of this Agreement in
connection with the sale of all or substantially all of the
assets of Geron whether by way of sale, merger or other
corporate reorganisation; and
12.1.3 Geron may assign the benefit and burden of this Agreement to any
Associate of Geron;
PROVIDED THAT in the case of an assignation pursuant to Sub-Clauses 12.1.2 or
12.1.3 if the Licensor is able to reasonably demonstrate that the proposed
assignee is incapable of fulfilling Geron's obligations under this Agreement
then Geron will remain liable to the Licensor to procure the performance of such
obligations notwithstanding that it may have assigned this Agreement.
13 TERM AND TERMINATION
13.1 Subject to any mandatory provisions under any applicable legal system
which expressly or by implication apply notwithstanding the terms of
this Agreement, this Agreement shall start on the Commencement Date and
shall continue in force, on a country by country or territory by
territory basis, as appropriate, until the later of:
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<PAGE> 20
* 13.1.1 [*] or
* 13.1.2 [*] from the Commencement Date or (in relation to countries
within the EEA) [*] from the First Sale Date, whichever is the earlier
* This Agreement shall expire [*]
13.2 This Agreement may be terminated by the Licensor forthwith by notice in
writing in the event of a breach by Geron of its obligations under
Clauses 4.2 (Cloning of Humans) or 4.3 (Illegal Uses).
13.3 If Geron challenges the validity or contests the Licensor's ownership of
any of the Patent Rights or if Geron claims that any or all of the
Patent Rights is not a "necessary patent" within the meaning of
Commission Regulation EEC No. 240/96 or contests the secrecy or
substantial nature of the Know-How, the Licensor shall be entitled to
terminate this Agreement forthwith by giving written notice to Geron.
13.4 Geron may at any time terminate this Agreement by giving not less than
90 days' written notice of termination to the Licensor.
13.5 The Licensor and RBM hereby agree that the Original Licence shall
terminate with effect from the Commencement Date. The termination of the
Original Licence is without prejudice to any accrued rights and
obligations of the Licensor and RBM as at the date of termination
thereof. The provisions of Clauses 8 and 9 of the Original Licence shall
remain in full force and effect as regards the Licensor's and RBM's
rights and obligations under those clauses in respect of the period
prior to the termination of the Original Licence.
14 CONSEQUENCES OF TERMINATION
14.1 Upon termination of this Agreement pursuant to Clauses 13.2, 13.3 or
13.4;
14.1.1 Geron shall be entitled to sell any stock of the Products
manufactured prior to the date of termination, but shall not be
entitled to manufacture any further Products or further exploit
any Process;
14.1.2 Each party shall remain due to pay to the other any sums which
have accrued, or which subsequently accrue, due hereunder and
shall not be entitled to reimbursement of any such sums paid or
any proportions thereof;
14.1.3 each party shall return to the other parties any property of the
other parties in its possession or under its control;
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* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE> 21
14.1.4 each party shall return to the other parties any Know-How or
other technical documentation or information provided to it by
the other parties in the course of this Agreement;
14.1.5 Geron shall co-operate with the Licensor in the cancellation of
all or any confirmatory licences registered pursuant to Clause
3.4 of this Agreement, and shall execute any and all such
documents and do acts and things as may be reasonably required
in such connection;
* 14.1.6 any sub-contracts entered into by Geron under Clause 3.6
shall [*]; and
14.1.7 any sub-licenses granted by Geron in accordance with Clause 3.6
shall be dealt with in accordance with Clauses 3.7 and 3.8.
14.2 Upon termination or expiry of this Agreement all rights and licenses
granted in favour of the Licensor or Geron under this Agreement shall
cease except and to the extent expressly provided otherwise under the
terms of this Agreement.
14.3 Clauses 1, 3.7, 3.9, 8, 9.2, 9.6, 10.1, 11.2, 11.10, 11.11, 13.5, 14,
16, 19, 22 and 23 shall survive the termination or expiry of this
Agreement.
14.4 Termination of this Agreement shall not affect any rights or obligations
of any of the parties either party which have accrued prior to the date
of termination and all provisions which are expressed to or by
implication survive the termination of this Agreement shall remain in
full force and effect.
14.5 For the avoidance of doubt if this Agreement terminates by reason of the
expiry of the Patent Rights, the Licensor acknowledges that Geron shall
be entitled to use the Technology thereafter without reference to the
Licensor.
15 WAIVER
15.1 The failure of a party to exercise or enforce any right conferred upon
it by this Agreement shall not be deemed to be a waiver of any such
right or operate so as to bar the exercise or enforcement of such right
at any time or times thereafter. No waiver or discharge shall be valid
unless in writing and signed by the relevant party against whom such
waiver or discharge is sought to be enforced.
16 NOTICES
16.1 Notice under this Agreement shall be given by delivery by hand, or by
recorded delivery mail, posted prepaid and addressed as follows:
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* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE> 22
In the case of Licensor:
Roslin Institute (Edinburgh)
Roslin
Edinburgh
Midlothian EH25 9P5
For the attention of: (Company Secretary)
In the case of Geron:
Geron Corporation
230 Constitution Drive
Menlo Park
California 94025
For the attention of:VP Corporate Development
In the case of RBM:
Roslin Bio-Med Limited
c/o Ruby Institute (Edinburgh)
Ruby
Edinburgh
Midlothian EH25 9P5
For the attention of: Managing Director
If a party changes its address for notification purposes, then it shall
give the other parties prior written notice of the new address and the
date on which it shall become effective.
Notices served by mail shall be deemed to be delivered 72 hours after
the date of posting.
17 ENTIRE AGREEMENT
17.1 With effect from the Commencement Date this Agreement constitutes the
entire Agreement between the parties relating to the subject matter
hereof and supersedes all prior agreements in connection with that
subject matter. No amendment or alteration or addition variations or
waiver of or to the terms of this Agreement shall be valid unless in
writing and signed by each of the parties.
18 FORCE MAJEURE
18.1 In the event that either Geron or the Licensor is delayed or prevented
from the performance of its obligations under this Agreement by any
cause beyond its reasonable control it shall immediately inform the
other. The party whose performance is delayed or prevented shall be
released from its obligations under this Agreement for so long as
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<PAGE> 23
such circumstances prevail, provided that it shall use its reasonable
endeavours to avoid or remove the cause of delay or non-performance.
19 PUBLICITY
19.1 None of the parties shall use the name of the other parties (and
Geron and RBM shall not use the name "Dolly" or the name of any member
of staff employed by or at the Licensor) in any publicity advertising or
news release without the prior written consent of the other parties,
such consent not to be unreasonably withheld.
19.2 None of the parties may issue a press release in relation to this
Agreement unless its wording has been agreed by the other parties, such
agreement not to be unreasonably withheld.
20 NO AGENCY
20.1 Nothing in this Agreement shall be deemed to constitute a partnership
between the parties nor shall any party have any authority to bind or
commit the other or have authority to act as the agent of the other or
in any others capacity other than expressly authorised in this
Agreement.
21 FURTHER ASSURANCE
21.1 Each party agrees that it will do all such further acts and undertake as
such further deeds as may be necessary in order to give full effect to
the transaction herein set out and to fully vest in Geron the rights and
licences granted hereunder.
21.2 The Licensor agrees that it will at the request and cost (as to out of
pocket expenses only) of Geron exercise its rights under the
Co-ownership agreement and seek to procure the reasonable co-operation
of MAFF and BBSRC to give full effect to the provisions of this
agreement.
22 COMPLIANCE WITH LAWS
22.1 In their performance of their respective obligations pursuant to this
Agreement, the parties shall comply in all respects with the
requirements of Scottish law.
23 GOVERNING LAW
23.1 This Agreement shall be governed by and construed in accordance with the
law of Scotland and each party hereby irrevocably submits to the
non-exclusive jurisdiction of the Scottish courts.
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<PAGE> 24
IN WITNESS WHEREOF these presents consisting of this and the preceding 20 pages
together with the Schedule annexed hereto are executed as follows:
Subscribed for and on behalf of )
ROSLIN INSTITUTE (EDINBURGH) )
at__________________________________________)
on the______day of________1999______________)
by_____________________its Director_________) _________________________
Director
before the following witness:-
Name _______________________________________
Address_____________________________________
____________________________________________
____________________________________________
Witness_____________________________________
Occupation__________________________________
Subscribed for and on behalf of )
GERON CORPORATION )
at__________________________________________)
on the______day of________1999______________)
by_____________________its Director_________) _________________________
Vice President
before the following witness:-
Name _______________________________________
Address_____________________________________
____________________________________________
____________________________________________
Witness_____________________________________
Occupation__________________________________
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<PAGE> 25
Subscribed for and on behalf of )
the said ROSLIN BIO-MED LIMITED )
at__________________________________________)
on the______day of________1999______________)
by__________________________________________
one of its Directors________________________) _________________________
Director
before the following witness:-
Name _______________________________________
Address_____________________________________
____________________________________________
____________________________________________
Witness_____________________________________
Occupation__________________________________
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<PAGE> 26
SCHEDULE
This is the Schedule referred to in the foregoing Licence Agreement
between (1) Roslin Institute (Edinburgh) (2) Geron Corporation and (3)
Roslin Bio-Med Limited.
* [*]
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* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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