<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 19, 2000
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
DYAX CORP.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 8731 04-3053198
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification Number)
organization)
</TABLE>
------------------------
ONE KENDALL SQUARE
CAMBRIDGE, MASSACHUSETTS 02139
(617) 225-2500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
HENRY E. BLAIR
PRESIDENT AND CHIEF EXECUTIVE OFFICER
DYAX CORP.
ONE KENDALL SQUARE, BUILDING 600
CAMBRIDGE, MASSACHUSETTS 02139
(617) 225-2500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
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NATHANIEL S. GARDINER, ESQ. MICHAEL W. BLAIR, ESQ.
PALMER & DODGE LLP DEBEVOISE & PLIMPTON
One Beacon Street 875 Third Avenue
Boston, Massachusetts 02108 New York, New York 10022
(617) 573-0100 (212) 909-6000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration number of the earlier effective registration
statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED MAXIMUM
AGGREGATE OFFERING AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED PRICE(1) REGISTRATION FEE
<S> <C> <C>
Common Stock, $.01 par value per share $75,000,000 $19,800.00
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
SUBJECT TO COMPLETION
PROSPECTUS
DATED MAY 19, 2000
SHARES
[LOGO]
COMMON STOCK
This is Dyax Corp.'s initial public offering. Dyax is selling all of the shares
in this offering. .
We expect the public offering price to be between $ and $ per share. Currently,
no public market exists for the shares. After pricing of the offering, we expect
that the shares will trade on the Nasdaq National Market under the symbol
"DYAX."
INVESTING IN THE COMMON STOCK INVOLVES RISKS THAT ARE DESCRIBED IN THE "RISK
FACTORS" SECTION BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
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<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT DYAX
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Per Share $ $ $
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Total $ $ $
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
The underwriters may also purchase up to an additional shares from Dyax at
the public offering price within 30 days from the date of this prospectus to
cover over-allotments.
The shares will be ready for delivery on or about , 2000.
J.P. MORGAN & CO.
LEHMAN BROTHERS
PACIFIC GROWTH EQUITIES, INC.
, 2000.
<PAGE>
You should rely only on the information contained in this prospectus. We have
not, and the underwriters have not, authorized any other person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate only as of the date on
the front cover of this prospectus. Our business, financial condition, results
of operations and prospects may have changed since that date.
TABLE OF CONTENTS
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PAGE
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Prospectus Summary........................ 1
Risk Factors.............................. 5
Special Note Regarding Forward-Looking
Statements.............................. 14
Use of Proceeds........................... 14
Dividend Policy........................... 14
Capitalization............................ 15
Dilution.................................. 16
Selected Consolidated Financial Data...... 17
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................. 18
Business.................................. 23
</TABLE>
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Management................................ 46
Certain Relationships and Related
Transactions............................ 53
Principal Stockholders.................... 55
Description of Capital Stock.............. 57
Shares Eligible For Future Sale........... 60
Underwriting.............................. 61
Legal Matters............................. 63
Experts................................... 63
Where You Can Find More Information....... 63
Index to Consolidated Financial
Statements.............................. F-1
</TABLE>
------------------------
We have filed for trademark protection for the Dyax mark and the Dyax logo. We
have a United States registration on the Kiloprep mark. We have also registered
the Kiloprep mark in Japan, Germany and the United Kingdom. In addition, we
consider "Biotage" as a trade name and consider Parallex, ProPrep, BioFLASH and
Reltran to be trademarks. All other trademarks or service marks appearing in
this prospectus are the property of their respective holders.
------------------------
Through and including , 2000 (the 25(th) day after the date of this
prospectus), all dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY MAY NOT CONTAIN ALL OF THE INFORMATION THAT MAY BE IMPORTANT TO
YOU. YOU SHOULD CAREFULLY READ THE ENTIRE PROSPECTUS, INCLUDING "RISK FACTORS"
AND THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED IN THE PROSPECTUS,
BEFORE MAKING AN INVESTMENT DECISION.
DYAX CORP.
We are a biopharmaceutical company that has developed and patented phage display
technology with broad applications in the discovery and development of new
therapeutic, separations, diagnostic and industrial enzyme products. Through the
use of our phage display technology, our scientists, collaborators and licensees
discover proteins and peptides, including human antibodies, that bind to disease
targets with high affinity and high specificity. We believe that our technology
has significant advantages over other technologies for rapidly and
cost-effectively discovering therapeutic lead compounds, validating targets and
purifying therapeutic products. Given the quantity of disease targets made
available by the genomics revolution, these advantages should increase in
importance. We believe that phage display can have the greatest potential impact
on our business through the discovery of proprietary therapeutic lead compounds.
PHAGE DISPLAY
In the late 1980s, Dyax scientists invented phage display, a novel method to
display individually up to tens of billions of peptides and proteins, including
human antibodies and enzymes, on the surface of a small bacterial virus called a
phage. Using phage display, we can produce and search through large collections,
or libraries, of peptides and proteins to identify rapidly those compounds that
bind with high affinity and high specificity to targets of interest. Phage
display can be used to improve the speed and cost effectiveness of drug
discovery and optimization. Our core patent position in this technology has
enabled us to license our patents to an extensive and increasing number of
companies that use phage display. We believe that with our intellectual property
position, our diverse types of libraries and our substantial experience in
applying phage display, we are an attractive partner for companies seeking
collaborative arrangements in the application of this technology.
BUSINESS STRATEGY
We plan to maximize the value of our phage display technology by pursuing our
internal product discovery and development programs and our collaborative
arrangements and by broadly licensing our phage display technology. The
principal elements of our business strategy are to:
- - discover and develop proprietary therapeutic products;
- - leverage our technology through collaborative arrangements and licensing of
our phage display patents and libraries;
- - develop and market innovative separations products through our separations
business;
- - develop novel phage display-derived products in other areas, including IN VIVO
imaging and industrial enzymes; and
- - extend our intellectual property and technology through internal and external
initiatives.
OUR PRODUCTS, PROGRAMS AND INITIATIVES
THERAPEUTIC PRODUCT DEVELOPMENT PROGRAMS
We have used our phage display technology to:
- - discover two therapeutic compounds, EPI-HNE4 (which we refer to as
Reltran-TM-) and DX-88, that are in Phase I clinical trials for some
inflammatory diseases; and
- - identify two proteins, including one human monoclonal antibody, with potential
applications for treating some cancers.
EPI-HNE4/Reltran-TM-, a human neutrophil elastase inhibitor, is a potential
therapeutic for the treatment of cystic fibrosis, chronic obstructive pulmonary
disease, asthma and acute respiratory distress syndrome. Our collaborator,
Debiopharm S.A., a Swiss pharmaceutical development company, is currently
conducting a Phase I clinical study of this compound. We have retained the right
to develop the inhibitor ourselves outside of Europe. DX-88, an inhibitor of
human kallikrein, is a potential therapeutic for the treatment of hereditary
angioedema, complications of cardiopulmonary bypass surgery and rheumatoid
1
<PAGE>
arthritis. We have entered into a joint venture with Genzyme Corporation to
develop DX-88, which is now in Phase I clinical trials. We have also discovered
an inhibitor of the enzyme plasmin, and a human antibody that has potential
applications for treating some cancers.
COLLABORATION AND LICENSE ARRANGEMENTS
We are currently engaged in collaborative arrangements with biotechnology and
pharmaceutical companies for the discovery and/or development of therapeutic,
separations and diagnostics lead compounds. We currently have 10 of these
arrangements, and have completed work under several others, that generally
provide us with research funding, license fees, milestone payments and
royalties. We have also licensed our phage display patents to enable the broad
application of this technology in the fields of therapeutics and IN VITRO
diagnostics. We have licensed our phage display patents to over 40 companies and
institutions on a non-exclusive basis. Under these licenses, we generally obtain
revenues from license fees, milestone payments and royalties on sale of
phage-derived products.
In addition, we recently entered into two broad license and collaboration
agreements with Amgen Inc. and Human Genome Sciences, Inc.:
- - In February 2000, we entered into a license technology transfer and technology
services agreement with Amgen Inc. under which we are developing a new phage
library for Amgen. Amgen has broad rights to develop and commercialize
therapeutic products using phage display.
- - In March 2000, we entered into a collaboration and license agreement with
Human Genome Sciences, Inc. Under this agreement, we and HGSI will use our
phage display technology to identify and optimize product leads that bind to
therapeutic targets selected by HGSI, and also to develop new technologies for
screening and purifying targets. We granted HGSI a non-exclusive license to
our phage display technology and compound libraries to create leads that may
be used as peptide drugs, human monoclonal antibody drugs and IN VITRO
diagnostic products.
SEPARATIONS AND PURIFICATION PRODUCTS AND PRODUCT DEVELOPMENT PROGRAMS
We are a leading developer and manufacturer of cartridge chromatography
separations systems and cartridges, which we market under our Biotage trade
name. In 1999, we had over $12 million in Biotage product revenues. Our
customers use our systems in separations processes from discovery through
commercial production scale. Using our phage display technology, we are also
developing affinity separations media to provide improved solutions for
discovery, development and purification of therapeutics.
DIAGNOSTIC IMAGING AND INDUSTRIAL ENZYME PRODUCT DEVELOPMENT PROGRAMS
We have discovery and preclinical programs for IN VIVO imaging products and
discovery programs for novel industrial enzymes. We are developing phage
display-derived compounds as IN VIVO imaging agents for diagnosis and monitoring
of cardiovascular and inflammatory diseases and some cancers. We are also using
our phage display technology to develop methods for engineering novel industrial
enzymes in the fields of pharmaceutical production and agricultural chemicals.
TECHNOLOGY EXPANSION INITIATIVES
We continue to develop technology internally and acquire technology rights that
are complementary to or expand our existing technology. As an example of these
initiatives, in July 1999 we acquired Target Quest B.V., which increased our
capabilities in phage display-derived human antibodies.
------------------------
We incorporated in Delaware in 1989 under the name Biotage, Inc. and merged with
Protein Engineering Corporation in August 1995. Our principal executive offices
are located at One Kendall Square, Building 600, Cambridge, Massachusetts 02139,
and our telephone number is (617) 225-2500.
2
<PAGE>
THE OFFERING
The number of shares outstanding after the offering excludes shares
reserved for issuance under our stock option plans, of which options to purchase
shares at an average option price of $ have been issued. This
number assumes no exercise of the underwriters' over-allotment option. If the
over-allotment option is exercised in full, we will issue and sell an additional
shares.
Unless otherwise indicated, all information in this prospectus reflects the
filing of an amended and restated certificate of incorporation with the
Secretary of State of the State of Delaware prior to the closing of this
offering.
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<S> <C>
COMMON STOCK OFFERED BY DYAX.................... shares
COMMON STOCK TO BE OUTSTANDING AFTER THE shares
OFFERING......................................
USE OF PROCEEDS................................. We expect to use the net proceeds to fund:
- research and development;
- possible acquisitions of technology and
complementary businesses; and
- working capital, capital expenditures and
other general corporate purposes.
Please read "Use of Proceeds."
PROPOSED NASDAQ NATIONAL MARKET SYMBOL.......... "DYAX"
</TABLE>
All information in this prospectus assumes the issuance and sale of common stock
in the offering at an assumed initial public offering price of $ per share, the
mid-point of the range of the initial public offering prices set forth on the
cover page of this prospectus.
3
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
We have derived the consolidated statement of operations data for the years
ended December 31, 1997, 1998, and 1999 from our audited financial statements
included elsewhere in this prospectus. We have derived the summary consolidated
financial data as of March 31, 2000 and for the three months ended March 31,
1999 and March 31, 2000 from our unaudited financial statements included
elsewhere in this prospectus. The pro forma net loss per share reflects the
number of shares outstanding as of December 31, 1999 and March 31, 2000, after
giving effect to the conversion of all of the outstanding shares of preferred
stock into common stock and the acceleration of vesting with respect to some
shares of restricted common stock. The pro forma as adjusted balance sheet data
reflect that conversion and also reflect the sale of shares of common
stock in this offering at an assumed initial offering price of $ per share
after deducting underwriting discounts and estimated offering expenses. You
should read the selected financial information below in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our financial statements and notes related to those financial
statements included elsewhere in this prospectus.
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<S> <C> <C> <C> <C> <C>
THREE MONTHS ENDED MARCH
YEARS ENDED DECEMBER 31, 31,
-------------------------------------- -------------------------
IN THOUSANDS, EXCEPT SHARE DATA 1997 1998 1999 1999 2000
---------- ----------- ----------- ----------- -----------
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues:
Product sales............................................. $ 7,138 $ 9,641 $ 12,596 $ 2,840 $ 3,378
Product development and license fee revenues.............. 2,192 4,490 4,237 825 1,429
---------- ----------- ----------- ----------- -----------
Total revenues........................................ 9,330 14,131 16,833 3,665 4,807
---------- ----------- ----------- ----------- -----------
Operating expenses:
Cost of products sold..................................... 2,931 4,164 5,515 1,274 1,493
Research and development.................................. 5,625 6,778 10,618 2,322 3,703
Selling, general and administrative....................... 6,787 10,061 14,069 2,964 3,856
Stock-based compensation.................................. 75 681 939 229 404
---------- ----------- ----------- ----------- -----------
Total operating expenses.............................. 15,418 21,684 31,141 6,789 9,456
---------- ----------- ----------- ----------- -----------
Loss from operations........................................ (6,088) (7,553) (14,308) (3,124) (4,649)
Interest income (expenses), net............................. 265 401 856 261 158
Investment income........................................... -- -- 265 -- --
---------- ----------- ----------- ----------- -----------
Net loss.................................................... $ (5,823) $ (7,152) $ (13,187) $ (2,863) $ (4,491)
---------- ----------- ----------- ----------- -----------
Net loss per common share, basic and diluted................ $ (3.95) $ (4.22) $ (6.81) $ (1.65) $ (1.97)
Shares used in computing basic and diluted net loss
per share--............................................... 1,473,474 1,694,782 1,936,907 1,738,693 2,277,725
Unaudited pro forma basic and diluted net loss per share.... $ (.97) $ (.32)
Shares used in computing unaudited, pro forma basic and
diluted net loss per share................................ 13,604,750 13,956,254
</TABLE>
<TABLE>
<CAPTION>
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MARCH 31, 2000
----------------------
PRO FORMA
AS
IN THOUSANDS ACTUAL ADJUSTED
--------- ----------
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 18,160 $
Working capital............................................. 16,073
Total assets................................................ 30,845
Long-term debt and capital lease obligations, less current
portion................................................... 1,383
Accumulated (deficit)....................................... (56,146)
Total stockholders' equity.................................. 15,594
</TABLE>
4
<PAGE>
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE YOU DECIDE TO BUY
OUR COMMON STOCK. YOU SHOULD ALSO REFER TO THE OTHER INFORMATION IN THIS
PROSPECTUS, INCLUDING OUR FINANCIAL STATEMENTS AND RELATED NOTES. ADDITIONAL
RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US, OR RISKS THAT WE CURRENTLY
CONSIDER IMMATERIAL, MAY ALSO IMPAIR OUR OPERATIONS. IF ANY OF THE FOLLOWING
RISKS ACTUALLY OCCURS, OUR BUSINESS COULD BE HARMED. THIS COULD CAUSE THE
TRADING PRICE OF OUR COMMON STOCK TO DECLINE, AND YOU COULD LOSE ALL OR PART OF
YOUR INVESTMENT.
WE HAVE A HISTORY OF OPERATING LOSSES AND EXPECT TO INCUR SIGNIFICANT ADDITIONAL
OPERATING LOSSES
We have generated operating losses since our inception in 1989. As of March 31,
2000, we had an accumulated deficit of approximately $56.1 million. We expect to
incur substantial additional operating losses over the next several years as our
research, development, preclinical testing and clinical trial activities
increase. We do not have any phage display-derived products that have generated
revenues, and we do not expect them to generate significant product revenues for
the next several years. Even if our research and development efforts eventually
generate revenues from the sale of phage display-derived products, those
revenues may not fully offset the expenses of our efforts.
To date, our chromatography separations products business has not been
profitable. For sales of our separations business to increase, we must expand
the market penetration of our existing products as well as develop new
chromatography-based and new phage display-derived separations products. Our
phage display-derived affinity separations products are still in the early
stages of development.
To date, we have received revenues principally from:
- - sales of chromatography separations systems and products;
- - milestone payments and signing and maintenance fees paid by licensees of our
phage display patents and libraries; and
- - research and development funding received from our collaborative partners.
To become profitable, we must:
- - fully develop and commercialize therapeutic products;
- - establish additional collaborative arrangements;
- - produce new chromatography and affinity separations products; and/or
- - develop additional product lead compounds from phage display.
WE MAY BE UNABLE TO RAISE THE CAPITAL THAT WE WILL NEED TO SUSTAIN OUR
OPERATIONS
We expect the proceeds of this offering, together with our existing resources,
to be sufficient to fund our operations through at least 2001. We may, however,
need to raise additional funds before that date. We will need additional funds
if our cash requirements exceed our current expectations, if we generate less
revenue than currently expected, or if we are unable to raise all the funds
contemplated by this offering.
Our future capital requirements will depend on many factors, including:
- - the progress of our drug discovery and separations technology development
programs;
- - maintaining our existing collaborative and license arrangements and entering
into additional ones;
- - sales of existing and new separations products;
- - our decision to manufacture some of our products;
- - competing technological and market developments;
- - costs of defending our patents and other intellectual property rights;
- - the amount and timing of additional capital equipment purchases; and
- - the progress of the development and commercialization of milestone and
royalty-bearing compounds by our collaborative partners and licensees.
5
<PAGE>
We may seek additional funding through collaborative arrangements and public or
private financings. We may not be able to obtain financing on acceptable terms
or at all. In addition, the terms of the financing may adversely affect the
holdings or the rights of our stockholders. If we are unable to obtain funding
on a timely basis, we may be required to curtail significantly one or more of
our research or development programs. We also could be required to seek funds
through arrangements with collaborators or others that may require us to
relinquish rights to some of our technologies, product candidates or products
that we would otherwise pursue on our own.
OUR BUSINESS DEPENDS ON COLLABORATIONS AND LICENSES
Our strategy for maximizing the value of our phage display technology requires
us to enter into contractual arrangements with collaborators and other third
parties. We may be unable to establish additional arrangements on acceptable
terms. Our business will be adversely affected if we fail to enter into
additional collaborative arrangements or if our current or prospective
collaborative arrangements are unsuccessful. Our success depends on our
collaborators' and licensees' acceptance of phage display as an effective
discovery process for therapeutic and diagnostic products.
WE MAY HAVE CONFLICTS WITH OUR COLLABORATORS OVER MILESTONE AND PAYMENT RIGHTS.
THESE CONFLICTS MAY HAVE A NEGATIVE IMPACT ON OUR BUSINESS, INCLUDING THE
POSSIBLE LOSS OF COLLABORATORS
Under our existing collaborative arrangements, we are generally entitled to
receive milestone and royalty payments for potential products developed using
phage display-derived binding compounds. Our collaborators may dispute their
obligation to make these payments. For example, we may disagree with our
collaborators as to whether a development milestone has been achieved or whether
a product developed by them is a phage display-derived product subject to
milestone and royalty payments. We depend on our collaborators and licensees to
inform us when they develop products using phage display. Our collaborators and
licensees may fail to inform us of their progress. We may not succeed in
collecting payments to which we believe we are entitled. Moreover, even if we do
collect these payments, we may be forced to incur significant expenses to do so.
Our collaborators and licensees generally may terminate their agreements with us
on short notice. The termination of a significant number of our existing or
prospective collaborative arrangements or licenses would have a negative effect
on our business.
WE DEPEND ON THE EXPERTISE, EFFORT, PRIORITIES AND DEDICATION OF OUR
COLLABORATORS. ANY CHANGES IN THEIR BUSINESS DIRECTION OR PRIORITIES MAY HAVE AN
ADVERSE IMPACT ON OUR BUSINESS
Our current or prospective collaborators may pursue alternative technologies or
develop competing products. Our collaborative arrangements do not obligate our
collaborators to develop or market lead compounds that we discover. Our
collaborators may independently develop a competing lead compound that they
identify on their own or in collaboration with others, including our
competitors. If one of our collaborators becomes involved in a business
combination or other major corporate transaction, this could cause a strategic
shift in that collaborator's business focus. This could negatively affect the
success of our collaborative arrangement, which in turn would have a negative
effect on our business. Moreover, our collaborators control many of the
decisions with respect to research, clinical trials and commercialization. Their
priorities may not be in our best interest.
OUR PHAGE DISPLAY TECHNOLOGY MAY NOT PRODUCE SAFE, EFFICACIOUS OR COMMERCIALLY
VIABLE PRODUCTS
Our phage display technology is a relatively new drug discovery technology.
Although there are several product candidates in preclinical or clinical trials,
we are not aware of any commercialized therapeutic products that have been
developed using phage display technologies, nor have we commercialized any
products using our phage display technology. All of our phage display-derived
therapeutic and diagnostic products are in research, preclinical or early stage
clinical trials. Preclinical and clinical data on the safety and efficacy of
phage display-derived therapeutic and diagnostics compounds is limited. If our
phage display technology fails to generate product candidates that lead to the
successful development and commercialization of therapeutic or diagnostic
products, our business will be materially and adversely affected.
OUR THERAPEUTIC, DIAGNOSTIC AND INDUSTRIAL ENZYME PRODUCT CANDIDATES MUST
UNDERGO RIGOROUS CLINICAL TESTING AND REGULATORY APPROVALS, WHICH COULD
SUBSTANTIALLY DELAY OR PREVENT THEIR DEVELOPMENT OR MARKETING
The clinical trial process is complex, uncertain and expensive. Positive results
from preclinical studies and early clinical trials do not ensure positive
results in late stage clinical trials designed to permit application for
regulatory approval. Prior to marketing products in the United States, any
product that we develop must undergo rigorous preclinical testing and clinical
trials as well as an extensive regulatory approval process implemented by the
Food and Drug Administration. These approval processes are
6
<PAGE>
typically lengthy and expensive, and approval is never certain. Because of the
risks and uncertainties in biopharmaceutical development, phage display-derived
products developed by us or our collaborators could take a significantly longer
time to gain regulatory approval than we expect or may never gain approval. If
we or our collaborators do not receive these necessary approvals, we will not be
able to generate substantial product or royalty revenues and may not become
profitable. We and our collaborators may encounter significant delays or
excessive costs in our efforts to secure regulatory approvals. Factors that
raise uncertainty in obtaining these regulatory approvals include:
- - we must demonstrate through clinical trials that the proposed product is safe
and effective for its intended use;
- - data obtained from preclinical and clinical activities are susceptible to
varying interpretations, which could delay, limit or prevent regulatory
approvals; and
- - we are not aware of any phage display-derived therapeutic products that have
obtained marketing approval from a regulatory agency.
Regulatory authorities may suspend clinical trials at any time if they believe
that the patients participating in trials are being exposed to unacceptable
health risks or if they find deficiencies in the clinical trial procedures. In
addition, the failure to comply with applicable regulatory requirements may
result in criminal prosecution, civil penalties and other actions that could
impair our ability to conduct our business.
WE HAVE LIMITED EXPERIENCE IN CONDUCTING CLINICAL TRIALS, WHICH MAY CAUSE DELAYS
IN COMMENCING AND COMPLETING CLINICAL TRIALS OF OUR PRODUCTS. WE WILL HAVE TO
DEPEND ON THIRD PARTIES TO CONDUCT CLINICAL TRIALS. THE PERFORMANCE OF THESE
THIRD PARTIES MAY BE UNSATISFACTORY
We have limited experience in conducting the clinical trials necessary to obtain
regulatory approval. Consequently, we may encounter problems in clinical trials
which cause us or the appropriate regulatory authorities to delay, suspend or
terminate these trials. Problems we may encounter include the chance that we may
not be able to conduct clinical trials at preferred sites, enroll sufficient
patients or begin or successfully complete clinical trials in a timely fashion,
if at all.
We may also enter into contractual arrangements with collaborators and third
parties to conduct clinical trials on our behalf. Our success depends upon the
performance by these collaborators of their responsibilities under these
arrangements. Some collaborators may not perform their obligations as we expect.
We cannot control the amount of resources our current and future collaborators
will devote to their collaborative arrangements with us. Any failure of these
collaborators to perform may delay or terminate the trials.
WE HAVE NO THERAPEUTIC, DIAGNOSTIC OR INDUSTRIAL ENZYME PRODUCT MANUFACTURING
EXPERIENCE AND WILL DEPEND ON THIRD PARTIES TO MANUFACTURE THESE PRODUCTS.
ADDITIONALLY, WE DEPEND ON ONE SOLE SOURCE SUPPLIER FOR SOME OF OUR SEPARATIONS
PRODUCTS
We do not currently operate manufacturing facilities for clinical or commercial
production of our phage display-derived products under development. We have no
experience in manufacturing these products, and we currently lack the resources
or capability to manufacture any of these therapeutic products on a clinical or
commercial scale. As a result, we depend on collaborators, partners, licensees
or other third parties to manufacture clinical and commercial scale quantities
of these products.
Our existing contract therapeutic product manufacturer does not have regulatory
approval to produce our commercial products, nor does it have sufficient
manufacturing capacity to produce our products on a clinical or commercial
scale. We may incur substantial expenses to contract with others to manufacture
our therapeutic products for us. As a result, we may experience delays in the
manufacture of our therapeutic products, and we may be unable to price our
products competitively.
We manufacture our separations products using compounds and separations media
manufactured by others. We depend upon one sole-source supplier for separations
media used in our prepacked disposable separations cartridges and other
separations products. We generally do not carry significant inventories of this
media. Our sole source supplier may not devote the resources necessary to
support the continued availability of this media. While we believe that we could
obtain separations media from alternative sources of supply at prices and on
terms and conditions substantially similar to those in the agreement with our
existing supplier, any interruption in our source of supply or an inability to
obtain separations media could slow production and delay shipments to our
customers, which would adversely impact our separations product revenues.
7
<PAGE>
WE DO NOT HAVE MARKETING AND SALES EXPERIENCE FOR THERAPEUTIC, DIAGNOSTIC AND
INDUSTRIAL ENZYME PRODUCTS
We do not have a marketing, sales or distribution capability for any
therapeutic, diagnostic and industrial enzyme products that we may develop. For
some of these products, we may establish an internal marketing and sales force.
We intend to enter into arrangements with third parties to market and sell most
of our therapeutic products. However, we may not be able to enter into marketing
and sales arrangements with others on acceptable terms, if at all. To the extent
that we enter into marketing and sales arrangements with other companies, our
revenues, if any, will depend on the efforts of others. These efforts may not be
successful. If we are unable to enter into third-party arrangements, then we
must develop a marketing and sales force, which may need to be substantial in
size, in order to achieve commercial success for these products. If we
successfully develop such capabilities, we will compete with other companies
that have experienced and well-funded marketing and sales operations. If we fail
to establish successful marketing and sales capabilities or fail to enter into
successful marketing arrangements with third parties, our business will be
materially and adversely affected.
MARKET ACCEPTANCE OF OUR PRODUCTS IS UNCERTAIN
Our product candidates, if successfully approved, may not gain market acceptance
among physicians, patients, healthcare payors, pharmaceutical manufacturers or
others. We may not achieve market acceptance even if clinical trials demonstrate
safety and efficacy of our therapeutic and diagnostic products and the necessary
regulatory and reimbursement approvals are obtained. The degree of market
acceptance of our product candidates will depend on a number of factors,
including:
- - their clinical efficacy and safety;
- - their cost-effectiveness;
- - their potential advantage over alternative treatment methods;
- - their marketing and distribution support;
- - reimbursement policies of government and third-party payors; and
- - market penetration and pricing strategies of competing and future products.
If our products do not achieve significant market acceptance, our business will
be materially and adversely affected.
COMPETITION AND TECHNOLOGICAL CHANGE MAY MAKE OUR POTENTIAL PRODUCTS AND
TECHNOLOGIES LESS ATTRACTIVE OR OBSOLETE
We compete with major pharmaceutical and biotechnology companies that are
pursuing forms of treatment or prevention for the diseases that we target and
technology platforms that compete with phage display. Our business depends
significantly on the competitive position of phage display technology. If
competing technology platforms obtain broader market acceptance or technologies
superior to phage display are developed, our business would be materially and
adversely affected.
In addition, we may experience competition from companies that have acquired or
may acquire technology from universities and other research institutions. As
these companies develop their technologies, they may develop proprietary
positions which may prevent us from successfully commercializing our products.
We also face competition from pharmaceutical and biotechnology companies that
have licensed our phage display technology.
Our chromatography separations business competes in mature markets with several
companies that manufacture, market and sell chromatography separations and
purification systems. Some of these competitors also have long-term
relationships with our existing customers. In addition, many therapeutic and
diagnostic product manufacturers have traditionally assembled their own
chromatography systems. As a result, any future affinity separations products
that we develop using phage display may not become accepted in the marketplace
as effective technology for use in purification processes for the manufacture of
pharmaceuticals and other products.
Many of these competitors have substantially greater financial and other
resources than we do and are conducting extensive research and development
activities. Other companies may succeed in developing products earlier than we
do, obtaining regulatory approval for products more rapidly than we do, or
developing products that are more effective or less costly than those we
develop.
8
<PAGE>
WE MUST OBTAIN AND MAINTAIN INTELLECTUAL PROPERTY PROTECTION FOR OUR PRODUCTS
AND TECHNOLOGIES, DEFEND OUR ISSUED PATENTS AND AVOID THE INFRINGEMENT OF
PATENTS ISSUED TO OTHERS
Our business faces risks and uncertainties related to intellectual property
rights. For example:
- - we may be unable to obtain or maintain patent or other intellectual property
protection for any products or processes that we may develop;
- - third parties may file patent applications or obtain patents covering the
manufacture, use or sale of these products, which may prevent us from
commercializing any of our products under development globally or in certain
regions; or
- - our patents or any future patents that we may obtain may not prevent other
companies from competing with us by designing their products or conducting
their activities so as to avoid the coverage of our patents.
The patents that we currently hold, as well as the patents that we may obtain in
the future, may be challenged, narrowed, invalidated or circumvented. Our
pending and future patent applications may not result in issued patents.
The laws of certain foreign countries do not protect our intellectual property
rights to the same extent as do the laws of the United States. In countries
where we do not have and/or have not applied for phage display patent rights, we
will be unable to prevent others from developing or selling products or
technologies derived using phage display. In addition, in jurisdictions outside
the United States where we have phage display patent rights, we may not be able
to prevent others from selling or importing products or technologies derived
elsewhere using phage display. Any inability to protect and enforce our phage
display patent rights, whether by licensing or otherwise, could negatively
affect our business.
Our phage display patent rights are central to our non-exclusive patent
licensing program. As part of that licensing program, we generally seek to
negotiate a phage display license agreement with parties practicing technology
covered by our patent rights.
In all of our activities, we also rely substantially upon proprietary materials,
information, trade secrets and know-how to conduct our research and development
activities and to attract and retain collaborators, licensees and customers.
Although we take steps to protect our proprietary rights and information,
including the use of confidentiality and other agreements with our employees and
consultants and in our academic and commercial relationships, these steps may be
inadequate, these agreements may be violated, or there may be no adequate remedy
available for a violation. Also, our trade secrets may otherwise become known
to, or be independently developed by, our competitors. Furthermore, others may
independently develop similar technologies or duplicate any technology that we
have developed.
OTHER PARTIES MAY OBTAIN PATENTS THAT COVER THE MANUFACTURE OR USE OF OUR
PRODUCTS
Other parties have patents and pending applications to various products and
methods related to phage display and may file additional applications and obtain
additional patents in the future. From time to time we learn of issued patents
which may cover our product development activities as well as any future product
commercialization. To date, we have filed oppositions against two European
patents in the general field of phage display. We do not believe these European
patents cover any of our present activities, but we cannot predict whether the
claims in these patents may, in their current or future form, cover our future
activities or the activities of our collaborators and licensees. We may file
other oppositions in the future.
WE MAY NEED PATENT LICENSES FROM THIRD PARTIES TO MARKET SOME OF THE PRODUCTS WE
PLAN TO DEVELOP. WE MAY BE UNABLE TO OBTAIN THESE OR OTHER DESIRABLE LICENSES ON
ACCEPTABLE TERMS
Before we and our collaborators can market some of our processes or products, we
and our collaborators may need to obtain licenses from other parties who have
patent or other intellectual property rights. Our business would be adversely
affected if a third party does not offer us or our collaborators a needed
license or offers us a license only on terms that are unacceptable.
We may seek affirmative rights of license or ownership under existing patent
rights relating to phage display technology of others. Through our patent
licensing program, we have secured a limited freedom to practice some of these
patent rights pursuant to our standard license agreement, which contains a
covenant by the licensee that it will not sue us under certain of the licensee's
phage display improvement patents. We cannot guarantee, however, that we will be
successful in enforcing any agreements from our licensees, including agreements
not to sue under their phage display improvement patents, or in acquiring
similar agreements in the future, or that we will be able to obtain satisfactory
licenses to the technology and patents of others. If we cannot obtain and
maintain these licenses and enforce these agreements, this could have a negative
effect on our business.
9
<PAGE>
PROCEEDINGS TO OBTAIN, ENFORCE OR DEFEND PATENTS AND TO DEFEND AGAINST
ACCUSATIONS OF INFRINGEMENT ARE TIME CONSUMING AND EXPENSIVE ACTIVITIES.
UNFAVORABLE OUTCOMES IN THESE PROCEEDINGS COULD LIMIT OUR PATENT RIGHTS, WHICH
COULD MATERIALLY AFFECT OUR BUSINESS
Obtaining, protecting and defending against patent and proprietary rights can be
expensive. For example, if a competitor files a patent application claiming
technology also invented by us, we may have to participate in an interference
proceeding before the U.S. Patent and Trademark Office. Our participation in an
interference proceeding would require us to spend significant amounts of time
and money to address who was first to invent the subject matter of the claim and
whether that subject matter was patentable. Moreover, an unfavorable outcome in
an interference proceeding could require us to cease using the technology or to
attempt to license rights to it from the prevailing party. Our business would be
harmed if a prevailing third party does not offer us a license or offers us a
license only on terms that are not acceptable to us.
In patent offices outside the United States, we may be forced to respond to
third party challenges to our patents. For example, two companies filed
oppositions in late 1997 against the phage display patent that the European
Patent Office issued to us. A hearing on these oppositions was held April 6,
2000 and, although we have not yet received the written opinion of the
Opposition Division, our patent was revoked. We plan to appeal this decision to
the European Patent Office's Technical Board of Appeals. This appeal will
suspend the Opposition Division's decision and reinstate our patent pending the
decision of the Technical Board of Appeals. Although we will be able to enforce
this patent during the appeal, any infringement action we file will likely be
stayed pending the results of the appeal. If we are not successful in our
appeal, or if additional valid patents do not result from our pending European
patent applications, then we will not be able to prevent other parties from
using phage display in Europe.
We may need to resort to litigation to enforce a patent issued to us. Third
parties may assert that we are employing their proprietary technology without
authorization. In addition, third parties may obtain patents in the future and
claim that the use of our technology infringes these patents. We could incur
substantial costs in connection with any litigation and our management's efforts
would be diverted, regardless of the results of the litigation. An unfavorable
result in litigation could subject us to significant liabilities to third
parties, require us to cease manufacturing or selling the affected products or
using the affected processes, require us to license the disputed rights from
third parties or result in awards of substantial damages against us. Our
business will be harmed if we cannot obtain a license, can obtain a license only
on terms we consider to be unacceptable or if we are unable to redesign our
products or processes to avoid infringement.
OUR REVENUES AND OPERATING RESULTS HAVE FLUCTUATED SIGNIFICANTLY IN THE PAST,
AND WE EXPECT THIS TO CONTINUE IN THE FUTURE
Our revenues and operating results have fluctuated significantly on a quarter to
quarter basis. We expect these fluctuations to continue in the future.
Fluctuations in revenues and operating results in the future will depend on:
- - the timing of our increased research and development expenses;
- - the establishment of new collaborative and licensing arrangements;
- - the timing and results of clinical trials;
- - the development and marketing programs of current and prospective
collaborators;
- - the completion of certain milestones; and
- - the timing of customer purchases of larger separations equipment systems.
If the revenues we actually receive are less than the revenues we expect for a
given fiscal period, then we may be unable to reduce our expenses quickly enough
to compensate for the shortfall. Our revenues in any period are not a reliable
indicator of our future performance. In addition, our fluctuating revenues and
operating results may fail to meet the expectations of securities analysts or
investors. Our failure to meet these expectations may cause the price of our
common stock to decline.
WE MAY NOT SUCCEED IN ACQUIRING TECHNOLOGY AND INTEGRATING COMPLEMENTARY
BUSINESSES
We may acquire additional technology and complementary businesses in the future.
Acquisitions involve many risks, any one of which could materially harm our
business, including:
- - the diversion of management's attention from core business concerns;
- - the failure to exploit effectively acquired technologies or integrate
successfully the acquired businesses;
10
<PAGE>
- - the loss of key employees from either our current business or any acquired
businesses; and
- - the assumption of significant liabilities of acquired businesses.
In July 1999, we acquired Target Quest B.V. We may be unable to make any
additional acquisitions in an effective manner. In addition, the ownership
represented by the shares of our common stock held by you will be diluted if we
issue equity securities in connection with any acquisition. If we make any
significant acquisitions using cash consideration, we may be required to use a
substantial portion of our available cash, including the proceeds of this
offering. If we issue debt securities to finance acquisitions, then the
debtholders would have rights senior to the holders of shares of our common
stock to make claims on our assets and the terms of any debt could restrict our
operations, including our ability to pay dividends on our shares of common
stock. Acquisition financing may not be available on acceptable terms, or at
all. In addition, we may be required to amortize significant amounts of goodwill
and other intangible assets in connection with future acquisitions, which could
harm our operating results.
IF WE LOSE OR ARE UNABLE TO HIRE AND RETAIN QUALIFIED PERSONNEL, THEN WE MAY NOT
BE ABLE TO DEVELOP OUR PRODUCTS OR PROCESSES
We are highly dependent on qualified scientific and management personnel, and we
face intense competition from other companies and research and academic
institutions for qualified personnel. If we lose any of our qualified personnel
or are unable to hire and retain qualified personnel, then our ability to
develop and commercialize our products and processes may be delayed or
prevented. We do not maintain key-man life insurance with respect to any
employees, and we do not currently intend to obtain such insurance.
HEALTH CARE REFORM AND RESTRICTIONS ON REIMBURSEMENT MAY LIMIT OUR PROFITABILITY
Our ability to earn sufficient returns on our products will depend in part on
the extent to which reimbursement for our products and related treatments will
be available from:
- - government health administration authorities;
- - private health coverage insurers; and
- - managed care and other organizations.
Government and other third-party payors are increasingly attempting to contain
health care costs by limiting both coverage and the level of reimbursement for
new therapies. We expect that there will continue to be a number of legislative
proposals to implement such government controls. The adoption of such proposals
or reforms could impair our business.
Additionally, government and third party payors are increasingly challenging the
prices of medical products and services. If purchasers or users of our products
are unable to obtain adequate reimbursement for the cost of using our products,
then they may forego or reduce their use. Significant uncertainty exists as to
the reimbursement status of newly approved health care products and whether
adequate government or third party coverage will be available.
WE MAY ENCOUNTER DIFFICULTIES IN MANAGING OUR GROWTH
Our ability to manage our operations and growth effectively depends upon the
continual improvement of our operational, financial and management controls,
reporting systems and procedures.
WE USE AND GENERATE HAZARDOUS MATERIALS IN OUR BUSINESS, AND ANY CLAIMS RELATING
TO THE IMPROPER HANDLING, STORAGE, RELEASE OR DISPOSAL OF THESE MATERIALS COULD
BE TIME-CONSUMING AND EXPENSIVE
Our research and development programs, preclinical testing and clinical trial
activities involve the controlled storage, use and disposal of hazardous
materials, chemicals, biological materials and radioactive compounds. We are
subject to foreign, federal, state and local laws and regulations governing the
use, manufacture and storage and the handling and disposal of materials and
waste products. Although we believe that our safety procedures for handling and
disposing of these hazardous materials comply with the standards prescribed by
laws and regulations, the risk of contamination or injury from hazardous
materials cannot be completely eliminated. In the event of an accident, we could
be held liable for any damages that result, and any liability could exceed the
limits or fall outside the coverage of our insurance. We may not be able to
maintain insurance on acceptable terms, or at all. We could be required to incur
significant costs to comply with current or future environmental laws and
regulations.
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<PAGE>
WE MAY HAVE SIGNIFICANT PRODUCT LIABILITY EXPOSURE
We face exposure to product liability and other claims if products or processes
are alleged to have caused harm. These risks are inherent in the testing,
manufacturing and marketing of human therapeutic products. Although we currently
maintain product liability insurance, we may not have sufficient insurance
coverage, and we may not be able to obtain sufficient coverage at a reasonable
cost. Our inability to obtain product liability insurance at an acceptable cost
or to otherwise protect against potential product liability claims could prevent
or inhibit the commercialization of any products developed by us or our
collaborators. We also have liability for products manufactured by us on a
contract basis for third parties. If we are sued for any injury caused by our
products or processes, then our liability could exceed our product liability
insurance coverage and our total assets.
OUR COMMON STOCK MAY HAVE A VOLATILE PUBLIC TRADING PRICE AND LOW TRADING VOLUME
Prior to this offering, our equity did not trade in a public market. An active
public market for our common stock may not develop or be sustained after this
offering. We and the underwriters, through negotiations, will determine the
initial public offering price. This price may not be indicative of the market
price at which the common stock will trade after this offering.
The market prices for securities of companies comparable to us have been highly
volatile. Often, the market in these stocks has experienced significant price
and volume fluctuations for reasons unrelated to the operating performance of
the individual companies.
Many factors may have a negative effect on the market price of our common stock,
including:
- - public announcements by us, our competitors or others;
- - developments concerning proprietary rights, including patents and litigation
matters;
- - publicity regarding actual or potential results with respect to products or
compounds under development by us or our collaborators;
- - regulatory developments in both the United States and abroad;
- - public concern about the safety or efficacy of new technologies;
- - general market conditions and comments by securities analysts; and
- - quarterly fluctuations in our revenues and financial results.
THE SALE OF A SUBSTANTIAL NUMBER OF SHARES COULD CAUSE THE MARKET PRICE OF OUR
COMMON STOCK TO DECLINE
The sale by our company or the resale by stockholders of shares of our common
stock after this offering could cause the market price of the common stock to
decline. We intend to file registration statements following the offering to
permit the sale of shares of our common stock. The additional
registration statements will cover shares issuable under our equity incentive
and employee stock purchase plans.
Future sales of common stock in the public market following this offering could
also adversely affect the market price of our common stock. After this offering,
we will have shares of common stock outstanding. Of these shares, the
shares sold in this offering will be freely transferable without
restriction.
All of our stockholders will sign lock-up agreements before the commencement of
this offering. Under these lock-up agreements, our stockholders will agree,
subject to certain limited exceptions, not to sell any shares owned by them as
of the effective date of this prospectus for a period of 180 days thereafter,
unless they first obtain the written consent of J.P. Morgan & Co. At the end of
180 days, approximately shares of common stock, including
approximately shares issuable upon exercise of vested options, will
be eligible for immediate resale.
The remainder of the approximately shares of common stock outstanding
or issuable upon exercise of options or warrants held by existing stockholders
or option holders will become eligible for sale at various times over a period
of approximately two years. These shares could be sold earlier if the holders
exercise registration rights that may be available to them.
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<PAGE>
The holders of shares of common stock issuable upon conversion of
convertible preferred stock will have the right in some circumstances to require
us to register their shares for resale to the public.
WE MAY ALLOCATE THE NET PROCEEDS FROM THIS OFFERING IN WAYS THAT STOCKHOLDERS
MAY NOT APPROVE
Our management will have considerable discretion in the application of the net
proceeds of this offering, and you will not have the opportunity, as part of
your investment decision, to assess whether the proceeds are being used
appropriately. The net proceeds may be used for corporate purposes that do not
increase our profitability or our stock price. Pending use of the net proceeds
of this offering, we intend to invest the net proceeds in short-term, interest
bearing, investment grade securities or guaranteed obligations of the United
States or other governments or their agencies.
OUR OFFICERS AND DIRECTORS MAY BE ABLE TO BLOCK PROPOSALS FOR A CHANGE IN
CONTROL
After this offering, our executive officers, directors and affiliates will
control approximately % of our outstanding common stock. Therefore, our
directors and officers will have the ability to control Dyax.
These stockholders may be able to determine all matters requiring stockholder
approval. For example, these stockholders may be able to control elections of
directors, amendments of our organizational documents, or approval of any
merger, sale of assets or other major corporate transaction. This may prevent or
discourage unsolicited acquisition proposals or offers for our common stock that
you may feel are in your best interest as one of our stockholders.
OUR CHARTER DOCUMENTS CONTAIN ANTI-TAKEOVER PROVISIONS, AND PROVISIONS OF
DELAWARE LAW MAY ALSO MAKE AN ACQUISITION MORE DIFFICULT
We are incorporated in Delaware. Anti-takeover provisions of Delaware law and
our charter documents may make a change in control more difficult. Also, under
Delaware law, our board of directors may adopt additional anti-takeover
measures. Our charter will authorize our board of directors to issue up to
1,000,000 shares of preferred stock and to determine the terms of those shares
of stock without any further action by our stockholders. If the board of
directors exercises this power to issue preferred stock, it could be more
difficult for a third party to acquire a majority of our outstanding voting
stock. Our charter also provides staggered terms for the members of our board of
directors. This may prevent stockholders from replacing the entire board in a
single proxy contest, making it more difficult for a third party to acquire
control of us without the consent of our board of directors. Our equity
incentive plans generally permit our board of directors to provide for
acceleration of vesting of options granted under these plans in the event of
certain transactions that result in a change of control. If our board of
directors used its authority to accelerate vesting of options, then this action
could make an acquisition more costly, and it could prevent an acquisition from
going forward. Under Delaware law, a corporation may not engage in a business
combination with any holder of 15% or more of its capital stock until the holder
has held the stock for three years unless, among other possibilities, the board
of directors approves the transaction. Our board of directors could use this
provision to prevent changes in management.
THERE WILL BE A SUBSTANTIAL DILUTION IN THE VALUE OF SHARES OF COMMON STOCK
IMMEDIATELY FOLLOWING THE OFFERING
Purchasers of the shares of common stock will experience immediate dilution of
their investment from the initial offering price. This dilution is estimated to
be $ per share, using the book value of our company. When holders of options
exercise their rights to purchase shares of common stock, the interests of
purchasers in this offering will be further diluted.
OUR BUSINESS IS SUBJECT TO RISKS ASSOCIATED WITH INTERNATIONAL SALES AND
OPERATIONS AND COLLABORATIONS
Since we sell our products worldwide, our business is subject to risks
associated with doing business internationally. Revenues originating outside the
United States represented 25% of our total revenues in 1999. We anticipate that
revenues from international operations will continue to represent a portion of
our total revenues. Accordingly, our future results could be harmed by a variety
of factors, including:
- - changes in foreign currency exchange rates;
- - differing protection of intellectual property; and
- - unexpected changes in regulatory requirements.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These forward-looking
statements appear principally in the sections entitled "Management's Discussion
and Analysis of Financial Conditions and Results of Operations" and "Business."
Forward-looking statements may appear in other sections of this prospectus as
well. Generally, the forward-looking statements in this prospectus use words
like "anticipate," "believe," "could," "estimate," "expect," "future," "intend,"
"may," "opportunity," "plan," "potential," "project," "will," and similar terms.
These forward-looking statements include statements about:
- - our strategic plans;
- - the future of our industry;
- - the scope of our patent coverage;
- - the commencement and completion of research and preclinical studies and
clinical trials;
- - the timing of planned regulatory filings;
- - the establishment of corporate collaborations;
- - competitive technologies and activities of competitive companies;
- - anticipated expenses;
- - anticipated sources of future revenues;
- - our need for additional funds; and
- - other circumstances described in terms of our expectations or intentions.
Forward-looking statements involve risks and uncertainties. Our actual results
could differ significantly from the results discussed in the forward-looking
statements in this prospectus. Many factors could cause or contribute to these
differences, including the factors discussed in the section of this prospectus
entitled "Risk Factors." You should carefully read this entire prospectus,
particularly the section entitled "Risk Factors," before you make an investment
decision.
We undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, or otherwise. The
forward-looking events discussed in this prospectus might not occur. Therefore,
you should not place undue reliance on our forward-looking statements.
USE OF PROCEEDS
If we sell shares of common stock in this offering at an assumed
price of $ per share, we estimate that our net proceeds will be
$ . This estimate takes into account the underwriting discount and all
estimated offering expenses that are payable by us. If the underwriters exercise
their over-allotment option in full, we estimate that our net proceeds will be
$ .
We plan to use the net proceeds from this offering to fund research and
development, possible acquisitions of technology and complementary businesses,
to meet our working capital needs, and for other general corporate purposes. At
this time, we cannot estimate precisely the allocation of the proceeds among
these uses, and we may use some of the proceeds from this offering for other
purposes. Although we may use a portion of the net proceeds for possible
in-licensing of technology or acquisition of complementary businesses, we have
no specific understandings, commitments, or agreements with respect to any
matters of this sort. We plan to invest the net proceeds in short-term, interest
bearing, investment grade securities or guaranteed obligations of the United
States or other governments or their agencies.
DIVIDEND POLICY
We have never paid cash dividends on our common stock. We do not anticipate
paying cash dividends on our common stock in the foreseeable future. We
currently intend to retain any future earnings to finance the growth and
development of our business.
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CAPITALIZATION
The following table shows, as of March 31, 2000, our actual, pro forma, and pro
forma as adjusted capitalization and cash and cash equivalents.
The pro forma capitalization reflects the conversion of our preferred stock into
common stock upon the closing of this offering. The pro forma as adjusted
capitalization reflects the sale in this offering of shares of common
stock at an assumed initial offering price of $ per share and the
application of the estimated net proceeds from this offering, after deducting
the underwriting discount and estimated offering expenses payable by us. This
table does not include shares of common stock that are issuable upon
exercise of stock options that were outstanding as of . The weighted
average exercise price of these outstanding options is $ . This table also
does not include shares of common stock that are issuable upon the exercise
of outstanding warrants $ per share.
This table should be read in conjunction with our consolidated financial
statements and the other financial information included in this prospectus.
<TABLE>
<CAPTION>
-------------------------------
<S> <C> <C> <C>
MARCH 31, 2000
-------------------------------
PRO FORMA
PRO AS
IN THOUSANDS, EXCEPT SHARE DATA ACTUAL FORMA ADJUSTED
-------- -------- ---------
Cash and cash equivalents................................... $ 18,160 $18,160 $
======== ======== =======
Current portion of long-term debt and capital lease
obligation................................................ $ 409 $ 409 $
Long-term debt and capital lease obligations, less current
portion................................................... $ 1,383 $ 1,383 $
Stockholders' equity:
Class A convertible preferred stock, $.01 par value;
15,312,391 shares authorized; 14,696,987 shares issued
and outstanding; no shares issued and outstanding on a
pro forma and pro forma as adjusted basis............... 57,426 --
Common stock, $.01 par value; 20,000,000 shares
authorized; 2,491,777 shares issued and outstanding,
14,076,236 shares issued on a pro forma basis and
shares issued on a pro forma adjusted basis
(unaudited)............................................. 25 141
Additional paid-in capital................................ 19,175 76,485
Receivable from officer for common stock purchase......... (418) (418)
Accumulated (deficit)..................................... (56,146) (56,146)
Treasury stock (1,378 common shares at cost).............. --
Deferred compensation..................................... (4,513) (4,513)
Accumulated other comprehensive loss...................... 45 45
-------- -------- -------
Total stockholders' equity.............................. 15,594 15,594
-------- -------- -------
Total capitalization.................................... $ 30,845 $30,845 $
======== ======== =======
</TABLE>
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DILUTION
Our pro forma net tangible book value as of March 31, 2000 was $ , or
$ per share of common stock. The pro forma net tangible book value per share
before this offering represents the amount of our pro forma stockholders'
equity, less intangible assets, divided by the pro forma number of shares of
common stock outstanding as of . Pro forma net tangible book value
per share after this offering gives effect to the application of net proceeds
from the sale of shares of our common stock in this offering, at an
assumed initial public offering price of $ per share. As of March 31, 2000,
our pro forma net tangible book value after this offering would have been
$ , or $ per share.
This represents an immediate increase in net tangible book value to existing
stockholders of $ per share and an immediate dilution to new investors of
$ per share. The following table illustrates the per share dilution:
<TABLE>
<CAPTION>
---------------------------
<S> <C> <C>
Assumed initial public offering price....................... $
Pro forma net tangible book value per share at March 31,
2000....................................................
Increase per share attributable to new investors..........
Pro forma net tangible book value per share after
offering..................................................
------------
Dilution per share to new investors(1)...................... $
============
</TABLE>
(1) If the Underwriters' over-allotment option is exercised in full, dilution
per share to new investors would be .
Assuming the exercise in full of the underwriters' over-allotment option, our
adjusted pro forma net tangible book value after this offering at March 31, 2000
would have been approximately $ per share, representing an immediate
increase in pro forma tangible book value of $ per share to our existing
stockholders and an immediate dilution in pro forma net tangible book value of
$ per share to purchasers in this offering.
The following table lists the number of shares of common stock purchased, the
total amount paid, and the average price per share paid by our existing
stockholders. The following table also lists the number of shares of common
stock purchased and the total amount paid, calculated before deduction of the
underwriting discount and estimated offering expenses, and the average price per
share paid by the new investors in this offering assuming the sale of
shares of our common stock at an assumed initial public offering
price of $ per share.
<TABLE>
<CAPTION>
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TOTAL CONSIDERATION
SHARES PURCHASED AVERAGE
------------------- ------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
-------- -------- -------- -------- -----------
Existing stockholders..................................
New investors..........................................
--- --- --- ---
Total..................................................
=== === === ===
</TABLE>
The table above is calculated as of .
Both of the above tables assume no exercise of the underwriters' over-allotment
option and no exercise of stock options that were outstanding as of .
As of March 31, 2000, there were options outstanding to purchase shares
of our common stock, at a weighted average exercise price of $ per share. If
any or all of these options are exercised, then there will be further dilution
to our investors, including the purchasers in this offering.
16
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
We have derived the consolidated statement of operations data for the years
ended December 31, 1997, 1998, and 1999 and the consolidated balance sheet data
as of December 31, 1998 and 1999 from our audited financial statements included
elsewhere in this prospectus. We have derived the consolidated statement of
operations data for the years ended December 31, 1995 and 1996 and the
consolidated balance sheet data as of December 31, 1995, 1996 and 1997 from our
audited financial statements that are not included in this prospectus. These
financial statements were audited by PricewaterhouseCoopers LLP. The selected
consolidated financial data as set forth below as of March 31, 2000 and for the
three months ended March 31, 1999 and March 31, 2000 have been derived from our
unaudited financial statements which are included elsewhere in this prospectus.
We have prepared the unaudited financial statements on a basis consistent with
our audited annual financial statements. In our opinion, the unaudited financial
statements include all normal recurring adjustments necessary for a fair
presentation of our results of operations and financial condition for such
periods. Our operating results for the three months ended March 31, 2000 are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 2000. You should read the selected financial information
below in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our financial statements and notes
related to those financial statements included elsewhere in this prospectus.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS ENDED MARCH
YEARS ENDED DECEMBER 31, 31,
--------------------------------------------------------------- -------------------------
IN THOUSANDS, EXCEPT SHARE DATA 1995 1996 1997 1998 1999 1999 2000
--------- ---------- ---------- ----------- ----------- ----------- -----------
CONSOLIDATED STATEMENT OF OPERATIONS
DATA:
Revenues:
Product sales..................... $ 3,592 $ 4,478 $ 7,138 $ 9,641 $ 12,596 $ 2,840 $ 3,378
Product development and license
fee revenues.................... 428 2,235 2,192 4,490 4,237 825 1,429
--------- ---------- ---------- ----------- ----------- ----------- -----------
Total revenues................ 4,020 6,713 9,330 14,131 16,833 3,665 4,807
--------- ---------- ---------- ----------- ----------- ----------- -----------
Operating expenses:
Cost of products sold............. 1,952 2,046 2,931 4,164 5,515 1,274 1,493
Research and development
(excluding stock-based
compensation of $0, $306 and
$423 for the years ended
December 31, 1997, 1998 and
1999, respectively; $103 and
$182 for the three months ended
March 31, 1999 and 2000,
respectively)................... 1,343 3,140 5,625 6,778 10,618 2,322 3,703
Selling, general and
administrative (excluding
stock-based compensation of $75,
$375 and $516 for the years
ended December 31, 1997, 1998
and 1999, respectively; $126 and
$222 for the three months ended
March 31, 1999 and 2000,
respectively)................... 2,710 4,170 6,787 10,061 14,069 2,964 3,856
Stock-based compensation.......... 0 0 75 681 939 229 404
Other expenses(1)................. 4,554 -- -- -- -- -- --
--------- ---------- ---------- ----------- ----------- ----------- -----------
Total operating expenses...... 10,559 9,356 15,418 21,684 31,141 6,789 9,456
--------- ---------- ---------- ----------- ----------- ----------- -----------
Loss from operations................ (6,539) (2,643) (6,088) (7,553) (14,308) (3,124) (4,649)
Interest income (expenses), net..... (46) (78) 265 401 856 261 158
Investment income................... -- -- -- -- 265 -- --
--------- ---------- ---------- ----------- ----------- ----------- -----------
Net loss............................ $ (6,585) $ (2,721) $ (5,823) $ (7,152) $ (13,187) $ (2,863) $ (4,491)
--------- ---------- ---------- ----------- ----------- ----------- -----------
Net loss per common share, basic and
diluted(2)........................ $ (27.53) $ (2.70) $ (3.95) $ (4.22) $ (6.81) $ (1.65) $ (1.97)
Shares used in computing basic and
diluted net loss
per share......................... 239,212 1,006,730 1,473,474 1,694,782 1,936,907 1,738,693 2,277,725
Unaudited pro forma basic and
diluted net loss per share(3)..... $ (.97) $ (.32)
Shares used in computing unaudited,
pro forma basic and diluted net
loss per share.................... 13,604,750 13,956,254
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DECEMBER 31,
---------------------------------------------------- MARCH 31,
IN THOUSANDS 1995 1996 1997 1998 1999 2000
-------- -------- -------- -------- -------- ---------
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 1,959 $ 8,591 $ 4,762 $ 25,491 $ 16,726 $ 18,160
Working capital............................................. 1,870 9,241 5,314 26,515 15,279 16,073
Total assets................................................ 4,692 12,236 10,636 34,416 29,608 30,845
Long-term debt and capital lease obligations, less current
portion................................................... 2,097 770 1,078 586 1,249 1,383
Accumulated (deficit)....................................... (22,772) (25,493) (31,316) (38,468) (51,655) (56,146)
Total stockholders' equity.................................. 705 8,997 5,671 29,410 19,300 15,594
</TABLE>
(1) Includes write-offs of an intangible asset in the amount of $456,000 and
incomplete technology in the amount of $4.1 million in the year ended
December 31, 1995. Excludes the results of operations of Protein Engineering
Corporation for periods before its acquisition by the company on August 11,
1995.
(2) Weighted average number of shares for the year ended December 31, 1995
reflects shares of Biotage, Inc. prior to the acquisition of Protein
Engineering Corporation.
(3) See Note 4 of Notes to Consolidated Financial Statements for a description
of the computation of pro forma net income (loss) per share.
17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
YOU SHOULD READ THE FOLLOWING DISCUSSION OF OUR FINANCIAL CONDITION AND RESULTS
OF OPERATIONS IN CONJUNCTION WITH OUR CONSOLIDATED FINANCIAL STATEMENTS AND
THEIR NOTES APPEARING ELSEWHERE IN THIS PROSPECTUS. THE FOLLOWING DISCUSSION
CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. WHEN
USED IN THIS PROSPECTUS, THE WORDS "INTEND," "BELIEVE," "ESTIMATE," "PLAN" AND
"EXPECT" AND SIMILAR EXPRESSIONS AS THEY RELATE TO US ARE INCLUDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. OUR ACTUAL RESULTS AND THE TIMING OF CERTAIN EVENTS
COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE DISCUSSED BELOW AND
ELSEWHERE IN THIS PROSPECTUS, PARTICULARLY UNDER THE HEADING "RISK FACTORS."
BACKGROUND
We are a biopharmaceutical company that has developed and patented phage display
technology with broad applications in the discovery and development of new
therapeutic, separations, industrial enzyme and diagnostic products. We are
using phage display technology to build a broad portfolio of product candidates
that we plan to develop and commercialize either ourselves or through
collaborations. We are further leveraging this technology platform with
collaborative arrangements and licenses that can produce revenues through
research funding, patent and/or library license fees, milestone payments and
royalties. We are currently engaged in 10 collaborative arrangements with
biotechnology and pharmaceutical companies for the discovery and/or development
of therapeutic, separations and diagnostic lead compounds, and we have licensed
our phage display patents to over 40 companies and institutions on a
non-exclusive basis. We are also a leading developer and manufacturer of
cartridge chromatography separations products and systems, which we market under
our Biotage trade name.
We had net losses of approximately $2.7 million in 1996, $5.8 million in 1997,
$7.2 million in 1998 and $13.2 million in 1999 and $4.5 million for the three
months ended March 31, 2000. As of March 31, 2000, we had an accumulated deficit
of approximately $56.1 million. These losses resulted primarily from research
and development efforts on phage display-derived products and the development,
sales and marketing efforts for our Biotage separations business. For us to be
profitable, we must complete discovery and development of therapeutic lead
compounds, establish additional licenses and collaborative arrangements and
achieve greater market penetration for our Biotage product line.
RECENT DEVELOPMENTS
In February 2000, we entered into a license technology transfer and technology
services agreement with Amgen Inc. under which we are developing a new phage
library for Amgen. Amgen has broad rights to develop and commercialize
therapeutic products using phage display.
In March 2000, we entered into a collaboration and license agreement with Human
Genome Sciences, Inc. Under this agreement we and HGSI will use our phage
display technology to identify and optimize product leads that bind to
therapeutic targets selected by HGSI, as well as to develop new technologies for
screening and purifying targets. We granted HGSI a non-exclusive license to our
phage display technology and compound libraries to create leads that may be used
as peptide drugs, human monoclonal antibody drugs and IN VITRO diagnostic
products.
ACQUISITIONS
On July 14, 1999, we acquired all of the capital stock of Target Quest B.V., a
Netherlands corporation, in exchange for 412,500 shares of our common stock. We
acquired Target Quest B.V. to advance our antibody program with human antibody
libraries, product leads and scientific expertise. We accounted for this
acquisition as a pooling of interests. Our historical consolidated financial
statements have been restated to reflect the combined financial position and the
results of operations and cash flows of Dyax and Target Quest B.V. for all
periods prior to this acquisition.
Also on July 14, 1999, we acquired the remaining 33% interest in Target Quest,
LLC not owned by Target Quest B.V. in exchange for 379,152 shares of our common
stock. We accounted for this acquisition as a purchase. Accordingly, we have
included the results of operations of Target Quest, LLC in our consolidated
financial statements since July 1, 1999. We allocated approximately
$2.1 million of the purchase price to goodwill and are amortizing it over
2.5 years on a straight-line basis.
18
<PAGE>
REVENUE RECOGNITION
The financial terms of our collaboration agreements often include signing fees,
funding for research and development, milestone payments and royalties on any
product sales derived from the collaboration. The standard terms of our license
agreements generally include signing fees, annual maintenance fees, milestone
payments and royalties on sales of products derived using phage display. Signing
fees and annual maintenance fees are generally recognized as revenue ratably
over the period of the collaborative arrangement or the license. Funding for
research and development is recorded as revenue as the related expenses are
incurred. Milestone payments are recognized as revenue on a retrospective basis.
Accordingly, upon achievement of the milestone, a portion of the milestone
payment equal to the percentage of the collaboration completed through that date
will be recognized. The remainder will be recognized ratably over the remaining
term of the collaboration. Royalties on product sales paid by our collaborators
and licensees are recorded as revenue when they are earned.
We derive product sales from our Biotage chromatography separations systems and
products. We generally recognize product revenues upon product shipment to our
customers and satisfaction of all our obligations. For products that require
significant installation services, we recognize revenues upon product
installation.
Historically, product revenues are highest in the fourth quarter of a year as
our customers complete their annual capital expenditure cycles. Non-product
revenues have historically fluctuated significantly from quarter to quarter due
to variations in the nature and timing of our collaborators and licensees.
Prior to 1999, our collaboration arrangements were primarily funded research
programs with smaller upfront signing fees. These arrangements and license
agreements typically had 12 to 24 month terms. Beginning in 1999, and continuing
through the first three months of March 2000, we began to enter into
collaboration and license arrangements with longer terms. Several of these
arrangements have significantly larger signing fees resulting in an increase in
deferred revenue. These deferred revenues will be amortized over the terms of
the related agreements.
STOCK-BASED COMPENSATION EXPENSES
As of March 31, 2000, we have recorded a deferred compensation expense of
approximately $6.6 million, representing the difference between the fair market
value of the common stock on the option grant date and the exercise price. These
amounts are presented as a reduction of stockholders' equity and are amortized
ratably over the vesting period of the options, which is generally four years.
These valuations resulted in charges to operations of $75,000 in 1997, $681,000
in 1998, $939,000 in 1999 and $404,000 in the three months ended March 31, 2000.
We expect to recognize stock-based compensation expense of up to $1.6 million in
each of 2000, 2001 and 2002 and $800,000 in 2003.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
REVENUES. Total revenues increased 31% to $4.8 million for the three months
ended March 31, 2000 from $3.7 million in the comparable period in 1999. Product
sales and product development and license revenues accounted for 70% and 30%,
respectively, of total revenues in the 2000 period, as compared to 77% and 23%
in the 1999 period. For the three months ended March 31, 2000, product sales
increased 19% to $3.4 million from $2.8 million in 1999 primarily due to
increased market share of our existing product lines particularly in the Flash
chromatography product line. In the three months ended March 31, 2000, we
entered into two significant product development collaborations and technology
licenses arrangements and an additional license agreement. The effect of these
new agreements is as follows:
- - our deferred revenue increased to $9.9 million at March 31, 2000 from
$2.9 million at December 31, 1999
- - our product development and license fee revenue in the three months ended
March 31, 2000 increased 73% to $1.4 million from $825,000 in the comparable
period in 1999.
COST OF PRODUCTS SOLD. The cost of products sold increased 17% to $1.5 million
in the three months ended March 31, 2000 from $1.3 million in the 1999 period as
a result of increased product sales. The cost of products sold as a percentage
of product sales decreased to 44% in the 2000 period as compared to 45% in the
1999 period. This was due to increased productivity in the manufacturing process
realized through labor and overhead efficiencies.
19
<PAGE>
RESEARCH AND DEVELOPMENT. Research and development expenses increased 59% to
$3.7 million in the three months ended March 31, 2000 from $2.3 million in the
comparable period in 1999. The increase resulted primarily from expenditures on
new collaboration arrangements and compound manufacturing expenditures on the
DX-88 project with Genzyme as Phase I clinical trials began in April 2000. We
expect that manufacturing expenditures will continue to increase as products
progress through clinical trials. Additionally, we increased our development
activities on internal efforts to develop products in therapeutics, separations,
diagnostics and industrial enzymes.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased 30% to $3.9 million in the three months ended March 31, 2000
from $3.0 million in the 1999 period. These expenses increased due to increased
selling and marketing expenses in connection with the growth in product sales
and business development expenses to support increased collaboration and
licensing activity.
STOCK-BASED COMPENSATION EXPENSES. Stock-based compensation expense increased
76% to $404,000 in the three months ended March 31, 2000 as compared to $229,000
in the comparable period in 1999, due to higher amortization arising from the
greater number of options granted under our equity incentive plan in 1999.
Stock-based compensation represents the difference between the fair market value
of the common stock on the option grant date and the option exercise price.
INTEREST AND INVESTMENT INCOME. Interest and investment income decreased 39% to
$158,000 in the three months ended March 31, 2000 from $261,000 in 1999 due to
lower average cash balance in the 2000 period than in the 1999 period. This
reduction was due to the funding of our net losses from our available cash
balances.
NET LOSS. Our net loss for the three months ended March 31, 2000 was
$4.5 million as compared to our net loss for the three months ended March 31,
1999 of $2.9 million.
YEARS ENDED DECEMBER 31, 1999 AND 1998
REVENUES. Total revenues increased 19% to $16.8 million in 1999 from
$14.1 million in 1998. Product sales and product development and license
revenues accounted for 75% and 25% respectively, of total revenues in 1999, as
compared with 68% and 32% in 1998. For 1999, product sales increased 31% to
$12.6 million in 1999 from $9.6 million in 1998 as we introduced new separations
products and increased the market share of our existing product line. As a
result of new collaborations in 1999, our deferred revenues increased to
$2.9 million at December 31, 1999 from $859,000 at December 31, 1998. These
product development and license fee revenues are amortized over the expected
term of each agreement. Product development and license fee revenues decreased
6% to $4.2 million in 1999 from $4.5 million in 1998. This decrease in revenue
in 1999 is primarily due to replacing 1998 shorter term funded research programs
with a longer term collaboration and a longer term license arrangement, each of
which had significant signing fees. Revenues from these signing fees are
deferred and amortized over the terms of the agreements. Our deferred revenue
increased to $2.9 million at December 31, 1999 to $859,000 at December 31, 1998.
COST OF PRODUCTS SOLD. The cost of products sold increased 32% to $5.5 million
in 1999 from $4.2 million in 1998 as a result of an increase in product sales
over 1998. The cost of products sold as a percentage of product sales remained
relatively constant at 44% in 1999 and 43% in 1998.
RESEARCH AND DEVELOPMENT. Research and development expenses increased 57% to
$10.6 million for the year ended December 31, 1999 as compared with
$6.8 million for the year ended December 31, 1998. The increase was the result
of funded research for new research discovery collaborative arrangements,
primarily our DX-88 project with Genzyme, together with increases in our ongoing
internal efforts to develop products in therapeutics, separations, diagnostics
and industrial enzymes.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased 40% to $14.1 million in 1999 from $10.1 million in 1998.
These expenses increased due to the addition of several executives to the
management team and increased selling expenses incurred in connection with the
growth in product sales and business development expenses to support the general
expansion of our production and research operations.
STOCK-BASED COMPENSATION EXPENSES. Stock-based compensation expense increased
38% to $939,000 in 1999 as compared with $681,000 in 1998, due to a greater
number of options granted under our equity incentive plan in 1999. Stock-based
20
<PAGE>
compensation expense represents the difference between the fair market value of
the common stock on the option grant date and the option exercise price.
INTEREST AND INVESTMENT INCOME. Interest and investment income increased 180%
to $1.1 million in 1999 from $401,000 in 1998, due to a higher average cash
balance in 1999 than in 1998, which resulted from the private placement of
preferred stock in 1998. Investment income in 1999 represents the net proceeds
after exercising stock warrants and selling the underlying stock. The warrants
were granted to the Company as consideration for a non-exclusive license.
NET LOSS. Our net loss in 1999 was $13.2 million compared to $7.2 million in
1998.
YEARS ENDED DECEMBER 31, 1998 AND 1997
REVENUES. Total revenues increased 51% to $14.1 million in 1998 from
$9.3 million in 1997. Product sales and research and license revenues accounted
for 68% and 32%, respectively, of total revenues in 1998 as compared with 77%
and 23% in 1997. Product sales increased 35% to $9.6 million in 1998 from
$7.1 million in 1997. In 1998, we introduced new separations products and
increased market share of our existing product line. The 105% increase in
research and license revenues to $4.5 million in 1998 from $2.2 million in 1997
resulted primarily from seven additional licenses for phage display granted in
1998 as compared with 1997.
COST OF PRODUCTS SOLD. The cost of products sold increased 42% to $4.2 million
in 1998 from $2.9 million in 1997 following increases in product sales from year
to year. The cost of goods sold as a percentage of product sales increased to
43% in 1998 from 41% in 1997, principally due to changes in product mix.
RESEARCH AND DEVELOPMENT. Research and development expenses increased 20% to
$6.8 million in 1998 from $5.6 million in 1997. The increase was the result of
funded research for new research discovery collaborative arrangements
established during 1998 and 1997, together with increases in our ongoing
internal efforts to develop products in therapeutics, separations, diagnostics
and industrial enzymes.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased 48% to $10.1 million in 1998 from $6.8 million in 1997 due to
the addition of several executives to the management team, write-offs of
expenses incurred in connection with our withdrawn public offering, market
research expenses invested in the identification of new therapeutic
opportunities, increased selling expenses incurred in connection with our growth
in product sales, and expenses necessary to support the general expansion of the
our production and research operations.
STOCK-BASED COMPENSATION. Stock-based compensation expenses increased 808% to
$681,000 in 1998 as compared with $75,000 in 1997, due to the greater number of
options granted under our equity incentive plan in 1998 as compared with 1997.
Stock-based compensation expense represents the difference between the fair
market value of the common stock on the option grant date and the option
exercise price.
INTEREST AND INVESTMENT INCOME. Interest income increased 51% to $401,000 in
1998 from $265,000 in 1997 due to a higher average cash balance in 1998 than in
1997, which resulted from the private placement of preferred stock in 1998.
NET LOSS. Our net loss in 1998 was $7.2 million compared to $5.8 million in
1997.
LIQUIDITY AND CAPITAL RESOURCES
Through March 31, 2000, we funded our operations principally through the sale of
equity securities, which provided aggregate net cash proceeds since inception of
approximately $68.0 million. We have also generated funds from product sales,
product development and license fee revenues, interest income and other sources.
As of March 31, 2000, we had cash and cash equivalents of approximately
$18.2 million. Our funds are currently invested in U.S. Treasury obligations.
Our operating activities used cash of $7.9 million in 1999, $8.1 million in
1998, and $5.6 million in 1997. The use of cash in all years primarily resulted
from our losses from operations and change in our working capital accounts. In
the three months ended March 31, 2000, operations generated cash of
$1.3 million due to fees received from development collaborations.
21
<PAGE>
Our investing activities used cash of $1.8 million in 1999, $893,000 in 1998,
and $961,000 in 1997. Our investment activities consisted of purchases of
property and equipment.
Our financing activity provided $942,000 in 1999, provided $29.8 million in
1998, and provided $2.9 million in 1997. Our financing activities consisted
primarily of the sale of preferred stock to both private investors and strategic
partners, which were offset by the net repayment of our capital lease lines and
notes payable.
We currently have a $3.0 million loan facility available from Genzyme
Corporation that was established as part of the collaboration to bring DX-88 to
market. Interest on any outstanding balance accrues at a rate equal to one
percent over the prime rate of interest. Additionally, after we have funded the
first $6.0 million of development costs, we will share equally all subsequent
development costs under the Genzyme collaboration.
We expect the proceeds of this offering, together with our existing resources,
to be sufficient to fund our operations for at least eighteen months. We plan to
use the net proceeds from this offering to fund research and development,
possible acquisitions of technology and complementary businesses, working
capital needs, and other general corporate purposes. At this time, we cannot
estimate precisely the allocation of the proceeds among these uses, and we may
use some of the proceeds from this offering for other purposes.
TAX LOSS CARRYFORWARDS
We have net operating loss carryforwards available to offset future federal
taxable income of $49.7 million as of December 31, 1999, and research credits of
$1.2 million available to offset future federal tax. The net operating loss and
credit carryforwards expire at various dates through 2019. As a result of
certain acquisitions and stock issued over the past five years, the availability
of the net operating loss carryforwards may be subject to annual limitation
under section 382 of the Internal Revenue Code. We also have United Kingdom
operating loss carryforwards for income tax purposes of approximately
$1.4 million as of December 31, 1999, which are indefinitely available to offset
future taxable income in the United Kingdom.
QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
As of March 31, 2000, we had cash and cash equivalents of $18.2 million
consisting of cash and highly liquid, short-term investments. Our short-term
investments will decline by an immaterial amount if market interest rates
increase, and therefore, our exposure to interest rate changes is immaterial.
Declines of interest rates over time will, however, reduce our interest income
from our short-term investments. Our outstanding capital lease obligations are
all at fixed interest rates and therefore have minimal exposure to changes in
interest rates.
RECENT PRONOUNCEMENTS
In December 1999, the SEC issued SAB 101, "Revenue Recognition in Financial
Statements", which provides guidance related to revenue recognition based on
interpretations and practices promulgated by the SEC. Before modification by
SAB 101A, SAB 101 was to be effective with the first fiscal quarter of fiscal
years beginning after December 15, 1999 and requires companies to report any
changes in revenue recognition as a cumulative change in accounting principle at
the time of implementation. In March 2000, the SEC issued SAB 101A, "Amendment:
Revenue Recognition in Financial Statements", which delays implementation of
SAB 101 until our second fiscal quarter of 2000. We have adopted SAB 101 in our
financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The standard established accounting and
reporting standards requiring the recognition of all derivative instruments as
either assets or liabilities in the statement of financial position and the
measure of those instruments at fair value. In June 1999, the FASB issued SFAS
No. 137, which defers the effective date of SFAS No. 133 to fiscal years
beginning after June 15, 2000. Because we do not currently hold any derivative
instruments and do not currently engage in hedging activities, we expect the
adoption of SFAS No. 133 will not have a material impact on our financial
position or operating results.
In March 2000, the FASB issued FASB Interpretation ("FIN") 44, "Accounting for
Certain Transactions Involving Stock Compensation--an interpretation of
Accounting Principles Board ("APB") Opinion 25". FIN 44 clarifies the
application of APB Opinion 25 and among other issues clarifies the following:
the definition of an employee for purposes of applying APB Opinion 25; the
criteria for determining whether a plan qualifies as a non-compensatory plan;
the accounting consequence of various modifications to the terms of previously
fixed stock options or awards; and the accounting for an exchange of stock
compensation awards in a business combination. FIN 44 is effective July 1, 2000,
but certain conclusions in FIN 44 cover specific events that occurred after
either December 15, 1998 or January 12, 2000. We do not expect the application
of FIN 44 to have a material impact on our financial position or results of
operations.
22
<PAGE>
BUSINESS
OVERVIEW
We are a biopharmaceutical company that has developed and patented phage display
technology with broad applications in the discovery and development of new
therapeutic, separations, industrial enzyme and diagnostic products. Through the
use of our phage display technology, our scientists, collaborators and licensees
discover proteins and peptides, including human antibodies, that bind to disease
targets with high affinity and high specificity. We believe that our technology
has significant advantages over other technologies for rapidly and
cost-effectively discovering therapeutic lead compounds, validating targets and
purifying therapeutic products. Given the enormous quantity of disease targets
made available by the genomics revolution, these advantages should increase in
importance. We believe that phage display can have the greatest potential impact
on our business through the discovery of proprietary therapeutic lead compounds.
We are using phage display technology to build a broad portfolio of product
candidates that we plan to develop and commercialize either ourselves or with
partners. We are further leveraging this technology platform with collaborations
and licenses that can produce revenues through research funding, license fees,
milestone payments and royalties.
- - We have used our phage display technology to discover two proprietary
therapeutic compounds, DX-88 and EPI-HNE4 (which we refer to as Reltran-TM-)
that are in Phase I clinical trials for some inflammatory diseases, and to
identify two proteins, including one human monoclonal antibody, with potential
for treating some cancers.
- - We are currently engaged in 10 collaborative arrangements with biotechnology
and pharmaceutical companies for the discovery and/or development of
therapeutics, separations and diagnostic lead compounds.
- - We have licensed our phage display patents to over 40 companies and
institutions on a non-exclusive basis to enable the broad application of our
technology in the discovery and development of therapeutic and diagnostic
products.
- - We are developing affinity separations products, to be combined with our
existing Biotage chromatography systems, that can purify the increasing number
of therapeutic products being developed.
- - We have discovery and preclinical programs for IN VIVO imaging products and
discovery programs for novel industrial enzymes.
- - We continue to develop technology internally and acquire technology rights
that are complementary to or expand our existing technology.
BACKGROUND
Traditional drug discovery relied on screening thousands of potential
therapeutic candidates one at a time. Often the actual molecular target and
biological mechanisms of action were unknown. With the advent of modern biology,
scientists were able to identify an individual target and the role that it
played in a specific disease. Until recently, however, identifying and isolating
the genetic basis of targets was a laborious and time-consuming process.
Scientists were limited to several hundred identified human genes and their
encoded proteins to use as targets out of between 50,000 and 100,000 total human
genes.
Recent improvements in life science research tools and significant investments
of financial and scientific resources have greatly accelerated the
identification of human genetic sequence information. Scientists now know the
identity of most of the genes in the human genome and estimate that the
remainder will be known within one year. However, with few exceptions, the
function of newly discovered genes in health and disease is not known.
Furthermore, the traditional approaches to identifying the genes that cause a
disease, producing and purifying the protein products encoded by these genes and
screening drug candidate compounds are inadequate to exploit fully the
information resulting from the greater number of identified genes.
The genomics revolution has created a significant potential role for
technologies that allow for:
TARGET VALIDATION. The first step in the discovery and development of a
therapeutic product is to identify a molecular target that is involved in a
disease. The binding of a molecule to another molecule (target) is the mechanism
nature uses to modulate biochemical and physiological processes such as cellular
growth, differentiation, metabolism and death. To validate a target, scientists
need to demonstrate that the presence or absence of the target is correlated to
the disease state.
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DISCOVERY OF THERAPEUTIC LEADS. Once scientists identify and validate a disease
target, they search for a compound that will bind to this target to achieve a
desired effect. In order for a binding compound to be considered a promising
therapeutic product candidate it must distinguish between the correct target and
other closely related molecules (specificity) and bind tightly to the target
(affinity) under appropriate physiological conditions. To a great extent, the
safety and efficacy of a therapeutic product depends on its affinity and
specificity for the disease target. Scientists use several drug discovery
technologies to identify therapeutic product candidates, known as leads, with
appropriate affinity and specificity.
PURIFICATION OF THERAPEUTIC PRODUCTS. Once scientists identify a therapeutic
product lead, they use separations processes to purify the desired product for
further development and commercialization. Traditional separations processes
rely on the physical and chemical characteristics of the product and multiple
steps are required to purify it. Typically these same purification steps are
used in both the development of a product, as well as in the commercial
manufacture of that product. The purification steps often have the greatest cost
impact on the overall manufacturing process.
To help solve these needs, new platform technologies are required to validate
targets rapidly and improve drug discovery and purification processes. We
believe that phage display offers significant advantages over other technologies
for addressing these challenges.
OTHER DRUG DISCOVERY TECHNOLOGIES
Scientists use several technology platforms to address the need for rapid drug
discovery, including combinatorial chemistry, single target high throughput
screening and monoclonal antibodies. These technology platforms play important,
though specific, roles in accelerating the productivity and effectiveness of
drug discovery and are likely to continue to be used into the foreseeable
future.
COMBINATORIAL CHEMISTRY. Combinatorial chemistry involves the creation of large
collections of chemical compounds for the purpose of identifying leads.
Combinatorial chemistry has made possible the synthesis of up to millions of
molecules in a shorter period of time than previously possible. Over the last
decade, the field of combinatorial chemistry has been augmented by computational
approaches to facilitate molecular design and synthesis. While both
combinatorial chemistry and computational approaches are useful in drug
discovery, they are limited by several significant factors:
- - libraries of these compounds are expensive to produce and screen;
- - library compounds and costly biological reagents are consumed during the
screening process; and
- - initial leads rarely have the requisite affinity, specificity and
bioavailability and therefore require time-consuming and expensive
optimization procedures.
SINGLE TARGET HIGH THROUGHPUT SCREENING. High throughput screening is a highly
automated method used to test large populations of potential drug candidates for
activity to a single target. Typically, the target is robotically added to tens
of thousands of miniaturized testing vessels, each containing a different
compound, to identify those compounds that bind to the target. Scientists then
optimize these binding compounds one step at a time using iterative design,
synthesis and testing to achieve desired binding affinity and specificity for
the target. This process has produced several drug candidates based on the rapid
screening of well-known genetic targets. While this process was acceptable when
targets were discovered one at a time, its usefulness is limited now that
thousands of potential targets are available.
MONOCLONAL ANTIBODIES. Antibodies are part of the body's principal defense
mechanism against disease-causing organisms. Antibodies recognize and bind to a
specific target referred to as an antigen. When bound to a target the antibody
triggers physiological processes that protect humans against disease. Antibodies
are capable of having high affinity and specificity to their target. Monoclonal
antibodies are antibodies that are produced from cell or phage clones that
produce a single antibody capable of binding to a specific antigen.
Historically, mice have been the source of monoclonal antibodies that have been
developed into therapeutic products. Although a mouse monoclonal antibody can be
produced to bind to one of a number of antigens, it contains mouse protein
sequences that tend to be recognized as foreign by the human immune system,
which may impair efficacy or cause life threatening allergic responses in
humans. Using new technical approaches, scientists have been able to replace
most of the mouse structure of a mouse antibody with a corresponding human
antibody structure to produce monoclonal antibodies that retain the target
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affinity and specificity of the mouse antibody but do not trigger an immune
response in humans. These are often referred to as "humanized" or chimeric
monoclonal antibodies. More recently, scientists have specially engineered
laboratory mice to incorporate a portion of the large number of human antibody
genes into the genome of mice that delete or inactivate the mouse antibody
genes. When immunized with a purified target, these "human-mice" produce fully
human antibodies that bind to the target. This process is often referred to as
human-mouse technology.
These approaches have yielded multiple successes for antibody-based products.
There are currently eight monoclonal antibodies approved for human therapy, and
we estimate that there are over 100 other monoclonal antibodies in clinical
trials. These approaches, however, are limited by several significant factors:
- - they typically require at least four to six months to produce an antibody;
- - they are generally able to generate antibodies that bind to only one target
per test group of mice;
- - they are limited by the range of product candidates that the mouse immune
system can generate, including identifying only a limited number of potential
antibodies that bind to a target; and
- - they are not amenable to subsequent optimization of the identified antibody.
The abundance of new genomic-derived disease targets emphasizes the need and
associated opportunity for a more rapid, high throughput, cost effective process
for discovering human antibodies and other new therapeutic lead compounds.
PHAGE DISPLAY
In the late 1980s, Dyax scientists invented phage display, a novel method to
individually display up to tens of billions of peptides and proteins, including
human antibodies and enzymes, on the surface of a small bacterial virus called a
phage. Using phage display, we are able to produce and search through large
collections, or libraries, of peptides and proteins to rapidly identify those
compounds that bind with high affinity and high specificity to targets of
interest. See "Dyax Technology."
Our phage display process generally consists of the following steps:
- - generating one or more phage display libraries;
- - screening new and existing phage display libraries to select binding compounds
with high affinity and high specificity; and
- - producing and evaluating the selected binding compounds.
Phage display can be used to improve the speed and cost effectiveness of drug
discovery and optimization. Phage display offers important advantages over, and
can be used synergistically to improve, other drug discovery technologies
currently employed to identify binding proteins. Over the past ten years, our
scientists, collaborators and licensees have applied this powerful platform
technology to a wide range of biopharmaceutical applications. We and our
collaborators and licensees are using phage display technology at every stage of
the drug discovery process to:
- - identify and determine the function of novel targets;
- - discover therapeutic lead compounds; and
- - purify lead compounds and targets for research, development and
commercialization.
ADVANTAGES OF OUR PHAGE DISPLAY TECHNOLOGY IN THERAPEUTIC DRUG DISCOVERY
We believe our phage display technology has several advantages over other drug
discovery technologies:
DIVERSITY AND ABUNDANCE. Many of our phage display libraries contain billions
of potential binding compounds that are rationally-designed variations of a
particular peptide or protein framework. Furthermore, genetic diversity can be
captured by isolating a diverse family of genes, including those that encode all
human antibodies. The size and diversity of our libraries significantly improve
the likelihood of identifying binding compounds with high affinity and high
specificity for the target. Once generated, libraries can be reproduced rapidly
and used for an unlimited number of screenings instead of being depleted.
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SPEED AND COST EFFECTIVENESS. Our phage display libraries can be constructed in
a few weeks and screened in a few days to identify binding compounds.
Conventional or combinatorial chemistry approaches require between several
months and several years to complete this process. Similarly, mouse and
human-mouse technologies generally require four to six months to identify a
compound. As a result, our phage display technology can significantly reduce the
time and expense required to identify a compound with desired binding
characteristics.
PARALLEL SCREENING. In automated format, our phage display technology can be
applied to many targets simultaneously to discover specific, high-affinity
compounds, including human monoclonal antibodies, for each target. In contrast,
human mouse antibody technology identifies antibodies that bind to a single
target per test group of mice and cannot be automated. Among antibody
technologies, phage display is particularly well-suited for genomic
applications, due to the large number of gene targets that need to be screened
for specific antibodies.
RAPID OPTIMIZATION. We screen phage display libraries to identify binding
compounds with high affinity and high specificity for the desired target and can
produce successive generations of phage display libraries to further optimize
the leads. We have demonstrated between 10- and 100-fold improvement in binding
affinity with second generation phage display libraries. This optimization
cannot occur with humanized mouse or human-mouse technology and cannot progress
as rapidly or with equivalent diversity with combinatorial chemistry.
COMPLEMENTS OTHER DRUG DISCOVERY TECHNOLOGIES. Phage display works
synergistically with other drug discovery technologies, including human mouse
technology and high throughput screening, to improve product screening. For
example, following immunization of the human mice, the antibody genes from the
mice can be collected and used to build a phage display library for further
optimization of the antibody leads. This process allows for more rapid selection
of a highly diverse population of therapeutic human antibodies. High throughput
parallel screening can be used to expose multiple targets simultaneously to the
diversity of proteins expressed by our phage libraries. This combination of
phage display with automated, high throughput screening technology allows a
multi-target approach to lead discovery that is more efficient than the
traditional single-target approach. The resulting increase in discovery
throughput and capacity are required for the large number of new genomic
targets.
NON-THERAPEUTIC APPLICATIONS OF PHAGE DISPLAY
Our phage display technology has potentially broad applications in a number of
other areas:
SEPARATIONS PRODUCTS. Purification of a therapeutic product is a complex,
multi-step process, which can be a time-consuming step in the discovery process
and is often the most expensive step in the manufacturing process. We believe
that our phage display technology is a powerful tool for developing new affinity
separations media that can cost-effectively and efficiently purify complex
therapeutic products. We believe that affinity purification will be more cost
effective and efficient than other purification processes. Our affinity-based
purification capability should be particularly useful for purifying the large
number of new therapeutic and diagnostic targets and products resulting from
advances in genomics.
ENZYME ENGINEERING. Enzymes are proteins that accelerate, or catalyze, the rate
of chemical reactions in a highly specific manner. They are used in a wide range
of pharmaceutical and chemical manufacturing processes. To identify novel
enzymes, we use phage display to create millions of variants of an enzyme and
screen these libraries to identify novel enzymes that catalyze a desired
reaction.
DIAGNOSTIC AND IMAGING PRODUCTS. Binding compounds are essential to most
diagnostic products. Often the binding compounds that we discover for
therapeutic and separations targets can be used in diagnostic or imaging
products to assess therapeutic effectiveness and monitor disease progression. As
therapeutics are being designed more precisely for specific gene targets, the
availability of diagnostic methods to detect the relevant gene target will be
essential to correctly matching patients with appropriate therapy.
OUR BUSINESS STRATEGY
Our mission is to use phage display to discover and develop novel products
focused on major unmet medical needs. We plan to maximize the value of our phage
display technology by pursuing both our internal product discovery and
development
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programs and our collaborative arrangements, and by broadly licensing our phage
display patents and libraries. Our combination of business activities is
designed to facilitate the transition of our value creation model from
technology to products.
The following are the principal elements of our business strategy:
DISCOVER AND DEVELOP THERAPEUTIC PRODUCTS. We have identified three peptides
and one human monoclonal antibody lead compound that we intend to develop with
potential for treating some inflammatory diseases and some cancers. We intend to
identify new leads for targets that we discover or license from others. We
intend to commercialize these leads ourselves or through collaborative
arrangements.
LEVERAGE OUR TECHNOLOGY THROUGH THERAPEUTIC PRODUCT COLLABORATIONS. We are
leveraging our technology through our 10 current collaborative arrangements with
biotechnology and pharmaceutical companies for the discovery and/or development
of therapeutics, separations and diagnostic lead compounds. We intend to enter
into additional collaborative arrangements for new lead discovery, and
preclinical and clinical evaluation of our current and future lead therapeutic
compounds, while seeking to retain product commercialization rights by field or
geographic area.
LEVERAGE OUR TECHNOLOGY BY LICENSING OUR PHAGE DISPLAY PATENTS AND
LIBRARIES. We are leveraging our phage display patents by licensing them to
over 40 companies and institutions on a non-exclusive basis to encourage the
broad application of our technology. We make some of our phage display libraries
in limited fields available to some of our licensees in exchange for technology
transfer payments, milestone payments and royalties. We intend to enter into
additional license agreements for our phage display patents and libraries.
DEVELOP AND MARKET A NEW GENERATION OF SEPARATIONS PRODUCTS. Using phage
display, we are developing and intend to market innovative affinity separations
products designed to meet the challenges of purifying complex therapeutic
products. Through collaborative arrangements with pharmaceutical and
biotechnology companies, we are identifying compounds that purify the
collaborator's specific therapeutic compound. We are also developing proprietary
affinity separations products for purifying classes of molecules, for example
antibodies, that may be used by multiple customers.
DEVELOP DIAGNOSTIC PRODUCTS AND NOVEL INDUSTRIAL ENZYMES. We are applying our
phage display technology to develop diagnostic products for IN VIVO imaging, as
well as to engineer novel enzymes with unique chemical specificity that address
important market needs. We have identified two lead diagnostic compounds for IN
VIVO imaging of inflammation and blood clots. We plan to partner the development
of any IN VIVO imaging products and may do the same for any industrial enzymes
that we discover.
CONTINUE TO EXTEND OUR INTELLECTUAL PROPERTY AND TECHNOLOGY. We plan to
continue to develop internally and acquire technology that is complementary to
our existing technology. Through our patent licensing program, we will continue
to enhance our phage display technology by obtaining access to phage display
improvements that our licensees develop.
OUR THERAPEUTICS PROGRAMS
We are using phage display technology internally and through collaborative
arrangements to discover and develop therapeutic products. Our product
development programs target a number of therapeutic areas, including some
inflammatory/autoimmune diseases and some cancers.
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DYAX THERAPEUTIC PROGRAMS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DYAX RETAINED
LEAD COMPOUND DISEASE AREA/INDICATION STATUS COLLABORATOR RIGHTS
- --------------------------------------------------------------------------------------------------------------
EPI-HNE4 Pulmonary Inflammation/ Phase I Debiopharm Outside of Europe
(RELTRAN-TM-) Cystic Fibrosis
DX-88 Acute and Chronic Phase I Genzyme 50/50 Joint Venture
Inflammation/Hereditary Worldwide
Angioedema
EPI-PLA2 Cancer/Prostate Cancer Lead Identified -- Worldwide
HmAb16 Cancer Lead Identified -- Worldwide
</TABLE>
PULMONARY INFLAMMATORY DISEASE
EPI-HNE4 (RELTRAN-TM-). In a number of lung diseases, the enzyme known as
neutrophil elastase, or elastase, is secreted in excess. Excess neutrophil
elastase destroys lung tissue. Using phage display, we have discovered a human
neutrophil elastase inhibitor, EPI-HNE4. This inhibitor binds to elastase with
high affinity and high specificity, suggesting that it may be a potent treatment
with very few side effects. Our preclinical studies have indicated that EPI-HNE4
may stop the destruction of lung tissue in the following pulmonary diseases:
- - CYSTIC FIBROSIS. There are approximately 40,000 patients in the United States
and Europe who suffer from cystic fibrosis. Their average life expectancy is
30 years of age. A genetic mutation causes progressive lung destruction and
frequent infections in these patients. Large amounts of elastase are secreted
into a chronically infected lung. The elastase directly destroys tissue and
initiates a cycle of inflammation and repeated tissue destruction. Current
treatments manage symptoms poorly. By blocking elastase, EPI-HNE4 may be the
first treatment to stop progressive tissue destruction in cystic fibrosis.
- - CHRONIC OBSTRUCTIVE PULMONARY DISEASES. Approximately 16 million Americans
suffer from chronic obstructive pulmonary diseases, which include chronic
bronchitis and emphysema. Genetic mutations or inhaled irritants, including
cigarette smoke, cause these diseases, which are characterized by a
progressive deterioration in lung function. Over $14 billion is spent annually
to treat this group of diseases, which is the fourth leading cause of death in
the United States. Elastase plays a role in the progressive destruction of
lung tissue in these diseases. EPI-HNE4 may block elastase and stop further
damage, improving the quality of life and life expectancy for these patients.
- - ASTHMA. Each year, 500,000 of the approximately 15 million asthmatics in the
United States are hospitalized for a potentially life-threatening asthma
attack. These severe attacks are caused by excessive airway inflammation in
response to an allergen. The inflammation leads to elastase release, which
directly activates mucous secretion. Mucous secretion results in airway
obstruction and potentially death. No current treatment inhibits mucous
production. We believe that EPI-HNE4, by inhibiting elastase, may block mucous
secretion and reduce the number of life-threatening asthma attacks.
- - ACUTE RESPIRATORY DISTRESS SYNDROME. There are approximately 15,000 patients
in the United States who suffer from acute respiratory distress syndrome
annually, and mortality rates are approximately 40%. Acute respiratory
distress syndrome is a severe disease resulting from the introduction of
toxins to the lung. Patients rapidly develop a severe inflammatory response to
a lung injury. Elastase has been implicated in the rapid pulmonary
deterioration of acute respiratory distress syndrome. EPI-HNE4 may block this
tissue destruction and may therefore offer a treatment for this disease.
Our collaborator, Debiopharm S.A., a Swiss pharmaceutical development company,
is currently conducting a Phase I clinical study in Europe with EPI-HNE4. The
purpose of this dose-escalating study is to examine the safety of administering
EPI-HNE4 by aerosol to healthy subjects. If this study is successful, Debiopharm
plans to initiate further tolerance studies followed by a Phase II clinical
study for cystic fibrosis. We and Debiopharm then plan to expand into clinical
trials for additional indications, including chronic obstructive pulmonary
disease, asthma and ARDS.
INFLAMMATORY/AUTOIMMUNE DISEASE
DX-88. Kallikrein is a key component responsible for the regulation of
inflammatory and blood clotting responses. Excess kallikrein activity is thought
to play a role in a number of inflammatory and autoimmune diseases. Using phage
display, we
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have discovered DX-88, a high affinity, high specificity inhibitor of human
kallikrein. DX-88 may be a potent inhibitor with few side effects that can be
used to treat:
- - HEREDITARY ANGIOEDEMA (HAE). Between 5,000 and 27,000 patients in the United
States suffer from HAE. Hereditary angioedema is a genetic disease that causes
painful swelling of the larynx, gastrointestinal tract and extremities. Severe
swelling of the larynx may require insertion of an air tube into the airway to
prevent asphyxiation. In the United States, the only currently available
treatment involves pain control and rehydration. Kallikrein is believed to be
a primary cause of both the pain and swelling in hereditary angioedema. DX-88,
a potent kallikrein inhibitor, may decrease the pain and swelling of acute
attacks of HAE and therefore provide an effective treatment for this disease.
- - COMPLICATIONS OF CARDIOPULMONARY BYPASS. In the United States there are
500,000 cardiac surgeries which use cardiopulmonary bypass annually.
Cardiopulmonary bypass surgery elicits a whole body inflammatory response,
which adversely affects the outcome of surgery. Approximately 25% of
cardiopulmonary bypass patients have significant post-operative cardiac,
pulmonary, coagulative or kidney dysfunction. The kallikrein system has been
implicated in cardiopulmonary bypass and is thought to cause pathologic
inflammation. Aprotinin, a kallikrein inhibitor derived from cattle, is
currently approved for use in cardiopulmonary bypass. DX-88 may have benefits
over existing therapies, since the compound is a human protein 1,000 times
more potent than aprotinin and is more specific for kallikrein. We believe
that DX-88 may offer improved outcomes, require lower doses and result in
fewer side effects than current treatments.
- - RHEUMATOID ARTHRITIS. Rheumatoid arthritis affects approximately three million
patients in the United States. Rheumatoid arthritis is characterized by pain,
swelling and stiffness of joints. In most patients, rheumatoid arthritis
causes disability due to eventual joint abnormalities. Kallikrein has been
implicated in the inflammatory response of rheumatoid arthritis and is thought
to contribute to joint damage. DX-88 may inhibit the inflammatory response in
rheumatoid arthritis and inhibit progression of the disease.
We have completed toxicology studies of DX-88 in preclinical studies and have
commenced Phase I clinical trials of intravenous administration in healthy
subjects in the second quarter of 2000. If the Phase I trials are successful, we
will begin Phase II clinical trials in our lead indication, HAE. We will then
expand into additional indications, including cardiopulmonary bypass and
rheumatoid arthritis.
CANCER
EPI-PLA2. Metastatic cancer is cancer that has spread from its solid tumor site
of origin. Metastatic cancer kills 550,000 patients a year in the United States
and has no effective treatment. The enzyme plasmin plays a key role in the
ability of cancer cells to invade other tissues. Using phage display, we have
discovered EPI-PLA2, a potent and specific inhibitor of plasmin, which we
believe may inhibit this invasion and therefore prevent metastatic spread of
cancer.
PROSTATE CANCER. Prostate cancer is the most common cancer in the United
States. Approximately 66% of all patients who develop metastatic prostate cancer
will die within five years. EPI-PLA2 may decrease metastatic spread and increase
survival in patients diagnosed with localized prostate cancer.
We evaluated EPI-PLA2 in cell-based models of prostate cancer metastases in
collaboration with an academic research group. Currently, we are preparing
sufficient quantities of EPI-PLA2 to determine its IN VIVO efficacy in a mouse
model. If the preclinical studies are successful, we may begin clinical trials
in prostate cancer. We will then expand into clinical trials in other solid
tumors, including lung, breast, ovarian, colorectal and pancreatic cancers.
HMAB16. Cancer cells express unique antigens. We have discovered a therapeutic
product candidate that targets a unique antigen expressed only on some breast
and ovarian cancer cells. We believe that this antibody will bind specifically
to tumor cells and initiate cell death. The antibody can also be linked to a
toxin to increase the rate of tumor cell death. Approximately 170,000 patients
are diagnosed with breast or ovarian cancer annually in the United States. We
expect hmAb16 to selectively kill cancerous cells in these patients, providing
an effective alternative to chemotherapy, which is toxic to healthy cells as
well as cancer cells.
We have demonstrated that hmAb16 recognizes breast and ovarian cancer cells IN
VITRO. We are currently producing adequate amounts of this antibody for
preclinical testing in preclinical models of breast and ovarian cancer.
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OTHER THERAPEUTIC DISCOVERY PROGRAMS
We also plan to pursue other therapeutic discovery programs in the fields of
immunology, tumor vasculature biology and other enzymology.
COLLABORATIONS AND LICENSES
We are leveraging our phage display technology in therapeutics, separations and
diagnostics through collaborative discovery and development arrangements with
biotechnology and pharmaceutical companies and research institutions. These
arrangements are generally corporate collaborative partnerships or funded
discovery projects. We share ongoing development rights and/or obligations with
our partners in corporate collaborative partnerships. In funded discovery
projects, our obligation is usually limited to conducting a discovery project,
and we are entitled to milestone and royalty payments if the other party
proceeds with development. We expect that we will continue to rely on
collaborative partners to fund different product development efforts and new
research and development efforts for the foreseeable future. We also generate
revenues through licensing our phage display patents and libraries. The
following table sets forth selected parties to our collaborations and licensees.
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SELECTED COLLABORATIONS AND LICENSES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LICENSES COLLABORATIONS
------------------- --------------------------------
COLLABORATOR/LICENSEE PATENTS LIBRARIES THERAPEUTICS SEPARATIONS DIAGNOSTICS
- ----------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY COMPANIES:
Amersham Pharmacia Biotech........................ -
Amgen............................................. - - -
Cambridge Antibody Technology..................... -
Chiron............................................ -
Chugai............................................ -
Coulter Pharmaceutical............................ -
CropTech.......................................... -
Debiopharm........................................ -
EPIX Medical...................................... -
Genetics Institute................................ -
Genzyme........................................... - -
Human Genome Sciences............................. - - - - -
Imclone Systems................................... - -
MorphoSys......................................... -
PHARMACEUTICAL COMPANIES:
Bristol-Myers Squibb.............................. -
DuPont Pharmaceutical............................. -
Merck............................................. -
Aventis Pasteur (formerly Pasteur Merieux
Connaught)...................................... -
Pharmacia & Upjohn................................ -
RESEARCH INSTITUTIONS:
The Burnham Institute............................. -
National Institute of Standards and Technology.... -
</TABLE>
THERAPEUTICS
DEBIOPHARM. In March 1997, we entered into a research and development agreement
with Debiopharm for the clinical development of our neutrophil elastase
inhibitors, including EPI-HNE4. Under this agreement, Debiopharm began
developing and producing EPI-HNE4 for the treatment of inflammation resulting
from cystic fibrosis and other chronic pulmonary inflammatory disorders.
Recently Debiopharm has exercised its right to obtain an exclusive commercial
license for some therapeutic uses of EPI-HNE4 in the European market, which we
are currently finalizing and which will include a right of first refusal for
Debiopharm with respect to any license that we may propose for other
territories. We have the right to use the regulatory information, including
preclinical, clinical and manufacturing data, generated by Debiopharm. We have
retained the right to develop the inhibitor ourselves outside of Europe. We also
retain all rights to develop and produce EPI-HNE4 in all other fields and
territories outside of Europe. We are entitled to receive royalties on revenues
received by Debiopharm from the use or sale in the European market of
therapeutic products developed using information Debiopharm obtained under this
agreement. If we choose to use information owned solely by Debiopharm for
therapeutic uses of EPI-HNE4, we will pay to Debiopharm a royalty on revenues
that we receive from the use or sale of products outside Europe.
GENZYME. In October 1998, we entered into a collaboration agreement with
Genzyme Corporation for the development of DX-88 as a treatment for hereditary
angioedema and other inflammatory diseases. We will be entitled to receive
significant milestone payments and up to 50% of the profits from sales of
products developed under this collaboration. Genzyme will oversee development
jointly with us and provide a commercialization plan and exclusive marketing and
distribution services for all developed products. We are currently undertaking
the preclinical testing and manufacturing necessary to initiate Phase I human
testing of DX-88. Genzyme has also provided us with a $3.0 million loan facility
and purchased preferred stock for a
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total purchase price of $3.0 million. After we have funded the first
$6.0 million of development costs, we will share equally with Genzyme all
subsequent development costs under this collaboration.
HUMAN GENOME SCIENCES, INC. In March 2000, we entered into a collaboration and
license agreement with Human Genome Sciences, Inc. Under this agreement we and
HGSI will use our phage display technology to identify and optimize product
leads that bind to therapeutic targets selected by HGSI. We intend to
collaborate with HGSI to use our phage display technology to develop a new high
throughput screening technology for HGSI and to develop affinity ligands to
purify its development candidates and drug products. We granted HGSI a
non-exclusive license to our phage display technology and compound libraries to
create leads that may be used as peptide drugs, human monoclonal antibody drugs
and IN VITRO diagnostic products. With the exception of selected IN VIVO imaging
rights, HGSI will retain the rights to all products that result from this
collaboration. In exchange, HGSI is required to pay us a minimum of
$16.0 million in committed license fees and research funding during the first
three years of the five year agreement, $6.0 million of which was paid in March
2000. We will also be entitled to receive milestone payments on therapeutic
products and royalties on all products developed by HGSI under the agreement and
will share HGSI's revenues on any of those products that it outlicenses.
AMGEN INC. In February 2000, Amgen entered into a license, technology transfer
and technology services agreement with us. Under this agreement, we are
developing a new phage display library for Amgen. Amgen has a non-exclusive
license for some of our other phage display libraries and our phage display
patents in the therapeutic field. We will be entitled to receive milestone
payments in connection with any product that is developed, in addition to the
license and library fees paid up front by Amgen.
DISCOVERY PROJECTS. In addition to the four corporate collaborative
partnerships described above, we have also entered into funded discovery
projects with several biotechnology companies. Generally in our funded discovery
projects, we screen our phage display libraries to identify compounds that bind
to a collaborative partner's therapeutic or diagnostic targets of interest. In
addition, if the collaborative partner chooses to continue to develop the
binding compound into therapeutic leads, then we will be entitled to receive
milestone payments and/or royalties on product sales based on the collaborative
partner's successful development and marketing of leads as products.
SEPARATIONS
AMERSHAM PHARMACIA BIOTECH. In June 1999, we entered into a four-year research,
development and marketing collaboration agreement with Amersham Pharmacia
Biotech AB to develop affinity chromatography media for use in purification of
biopharmaceuticals on a project-by-project basis. Under this agreement, we will
use our phage display technology to discover and develop ligands that bind to
specific separations targets that Amersham Pharmacia can then commercialize as
products.
GENETICS INSTITUTE. In September 1997, we entered into an agreement with
Genetics Institute, Inc. to discover a novel affinity ligand for purification of
a recombinant blood factor for treating hemophilia. Genetics Institute has
provided us with research and development funding to support the ligand
discovery and development work. This collaboration was extended in 1998 and 1999
to develop and optimize affinity media based on our ligands, and during this
period, we received several milestone payments on technical achievements. In
March 1999, Genetics Institute exercised its option to acquire an exclusive
license to use the ligand to manufacture the recombinant product. Under the
terms of the proposed license, we will be entitled to license fees, milestone
payments and royalties on the sale of Genetics Institute's recombinant blood
factor.
CROPTECH. In October 1997, we entered into a four-year joint collaboration
agreement with CropTech Corporation to develop novel technologies for the
production and separation of large volume protein products, therapeutic
glycoproteins and bioactive peptides. The agreement was in connection with a
$4.3 million Advanced Technology Program grant from the National Institute of
Standards and Technology. Under the agreement, CropTech agreed to use its
transgenic plant technology to develop novel expression systems for these
therapeutic products, and we agreed to use phage display technology to develop
affinity separations systems for use in purifying the protein and peptide
products.
DISCOVERY PROJECTS. We have ongoing discovery projects with five sponsors,
including Aventis Pasteur (formerly Pasteur Merieux Connaught) and Human Genome
Sciences, Inc. Typically in funded discovery projects, the corporate sponsors
have agreed to fund our use of phage display technology to discover affinity
ligands for evaluation in the purification and separations processes of the
sponsor's pharmaceutical product candidates. These sponsors are generally
obligated to make a milestone payment upon
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the successful evaluation of the ligand. Upon completion of the discovery phase,
the sponsor generally has the option to expand the project to a development
phase and/or to negotiate a license agreement for the commercial use of the
affinity ligand in conjunction with a media to purify the sponsor's product.
Except for Genetics Institute, described above, none of our sponsors' products
has yet reached this stage.
INDUSTRIAL ENZYMES
NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY ENZYME ENGINEERING
PROGRAM. Under a research and development grant from the National Institute of
Standards, we are using our phage display technology to engineer novel enzymes.
We retain rights to all products and technology developed under this agreement.
Under this agreement, the National Institute of Standards and Technology agreed
to reimburse all of the direct expenses incurred under the program.
DIAGNOSTICS
EPIX MEDICAL, INC. In June 1997, we entered into a collaboration agreement with
EPIX Medical, Inc. Under this agreement, we used our phage display technology to
identify peptides for use in blood clot imaging applications and EPIX has funded
this research. EPIX is responsible for the development of imaging agents for the
magnetic resonance imaging (MRI) field and has exclusive commercial rights for
that field. We are responsible for the development of imaging agents for the
nuclear medicine field and have exclusive commercial rights for that field. We
are entitled to receive royalties from sales of any MRI products, and EPIX is
entitled to receive a percentage of revenues from sales of any nuclear medicine
products.
PATENT AND LIBRARY LICENSING PROGRAMS
We have established a broad licensing program of our phage display patents for
use in the fields of therapeutics, antibody-based IN VITRO diagnostics and phage
display research kits. Through this program, we grant companies and research
institutes non-exclusive licenses to practice our phage display patents in their
discovery and development efforts in the licensed fields. Since the inception of
this licensing program in 1996, we have granted licenses to more than 40
companies and institutions. We believe that the success of our patent licensing
program provides support for our patent position in phage display and enhances
the usefulness of phage display as an enabling discovery technology. Under these
licenses, we have retained rights to practice our phage display technology in
all fields. We also make available some of our phage display libraries in
limited fields to some of our licensees in exchange for technology transfer
payments, milestone payments and royalties.
Our license agreements generally provide for a signing fee, annual maintenance
fees, milestone payments based on successful product development and royalties
based on any future product sales. In addition, under the terms of our standard
license agreement, most licensees have agreed not to sue us for using phage
display improvement patents developed by the licensee that are dominated by our
phage display patents. We believe that these covenants allow us to practice
enhancements to phage display developed by our licensees.
BIOTAGE SEPARATIONS PRODUCTS AND PROGRAMS
Purification of a therapeutic product is a complex, multi-step process, that can
often be the most expensive step in product manufacturing. A widely used
separations technology, chromatography is used for purification during the
discovery, development and manufacture of a therapeutic product. Chromatography
separates molecules in a liquid mixture by making use of the different rates at
which the molecules in the solution accumulate on the surface of another
material known as separations media. In this technology, the molecules in
solution pass through a chamber, or column, packed with separations media. The
migration rates of different molecules through the column vary due to
differences in the strength of binding interactions with the media in the
column.
BIOTAGE SEPARATIONS PRODUCTS
We develop, manufacture and sell chromatography separations systems under the
Biotage trade name. Our customers use our systems in separations processes from
the discovery scale, where small amounts of a compound are purified for research
work, through the preparative and production scales, where a product is
manufactured for commercialization. We have designed our FLASH and BioFLASH
systems to use prepacked cartridges at all of these scales for a wide range of
chemical and biological materials. Our customers in the pharmaceutical industry
use our Parallex and Flex systems for purification of synthetic organic
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molecules, synthetic peptides, DNA diagnostics and natural products. We
customize our Proprep systems to meet the requirements of development and
manufacturing scale chromatography applications for the production of biologics.
We are a leader in cartridge chromatography products and systems. Our prepacked,
disposable cartridges can be packed with a wide range of separations, or
chromatography, media from a variety of sources. We believe that cartridge-based
chromatography systems provide competitive advantages to our customers compared
to manually packed systems, including:
- - greater speed and convenience;
- - lower cost due to less labor and reduced solvent use;
- - improved safety by minimizing exposure of production personnel to media and
hazardous solvents; and
- - reproducible performance.
The following table summarizes our principal chromatography products:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REPRESENTATIVE
PRODUCTS MARKET SEGMENT PRICE RANGE APPLICATIONS CUSTOMERS
- ---------------------------------------------------------------------------------------------------------------------------------
BioFLASH and Proprep systems BioPharmaceutial $30,000- Protein and peptide Applied BioSystems
discovery and $500,000 purification Genentech
production Merck
Antibody purification Genzyme
FLASH systems Pharmaceutical $2,000-$250,000 Novel compound Pfizer
Parallex and Flex discovery purification SmithKline Beecham
systems Eli Lilly
High throughput Astra-Zeneca
compound purification
Natural products
Production FLASH Pharmaceutical $60,000- Production scale Merck
systems production $975,000 purification Schering Plough
Kiloprep systems Genprobe
Antibodies and DNA Bachem
diagnostics
FLASH, BioFLASH and Pre-packed $6-$15,000 Disposable cartridges for Most Biotage system
Kiloprep cartridges disposable cartridges use on all Biotage customers
for all Biotage systems
systems
</TABLE>
AFFINITY SEPARATIONS DEVELOPMENT PROGRAMS
Purification of therapeutics products is a complex, multi-step process which can
often be rate-limiting in the discovery and development of new therapeutics and
can be the most expensive step in product manufacturing. In conventional
chromatography, separations are based on broad physical properties such as size,
charge or solubility in water. The types of available, standard chromatography
media have changed little in recent years. Chromatographic separations are
achieved by selection of the surface chemistry of the media and the solvent
composition, so that different molecules exit the column at different times and
therefore can be collected in purified form. For a given separation, the
available media generally have unpredictable specificity, and there has been no
practical way to modify the existing media to create specific binding to a
particular target. Thus, the development of useful separation processes relies
on trial and error that is time consuming and labor intensive.
We believe that our phage display technology is a powerful tool for developing
new affinity separations media that can cost-effectively and efficiently purify
complex therapeutic products. We plan to combine our Biotage chromatography
systems with affinity chromatography media derived using our phage display
technology to provide solutions for the purification of natural products,
peptides, proteins, organic compounds and other molecules.
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Our phage display technology can be used to generate small, stable binding
compounds, known as ligands, that have high affinity and high specificity for
the desired compound. Since affinity chromatography can purify the desired
therapeutic compound in one column, one affinity chromatography column can
replace multiple conventional chromatography columns that otherwise would be
required. We have developed ligands that bind and release in predetermined
conditions, such as those conditions that can be used for the purification of
therapeutics. We believe that these new affinity separations products can reduce
the time, cost and risk associated with purification at the discovery,
development and production scale.
We have several ongoing funded affinity separations discovery projects with
leading biopharmaceutical companies, including Genetics Institute, Amersham
Pharmacia, Human Genome Sciences, and Aventis Pasteur (formerly Pasteur Merieux
Connaught). In these projects we are seeking to identify one or more potential
binding compounds that can be attached to separations media for development into
affinity separations products for purification of the collaborative partner's
designated therapeutic product. To date, we have discovered affinity ligands for
such products as a viral vaccine, tissue plasminogen activator, a recombinant
blood product, blood cells and transgenic animal and plant products. We have
delivered affinity separations products containing phage display-derived
affinity ligands for testing and evaluation by our partners. In one of these
programs, the partner has agreed to proceed with the development of the affinity
ligand for use in purification of a biotherapeutic product. We are continuing to
seek collaborative partners in the discovery and development of affinity
separations products.
In addition to our custom-designed affinity separations products program, we are
developing proprietary affinity separations products, including products under
development in a collaborative arrangement with CropTech for broad commercial
applications. We believe that these products will have applications in research
as well as in the process and manufacturing markets.
INDUSTRIAL ENZYMES. Enzymes are naturally occurring proteins that catalyze or
accelerate the rate of chemical reactions in a highly specific manner. Because
of their catalytic efficiency, enzymes are used in many commercially important
pharmaceutical and chemical processes. Enzymatic processes are often less
expensive and involve fewer potential environmental contaminants than chemical
processes. Naturally occurring enzymes with the required chemical specificity
have not been identified for many potential applications. In addition, current
techniques for altering the chemical specificity of an enzyme are costly and
inefficient.
Phage display can be used to engineer novel enzymes with new chemical
specificity. We believe that these novel enzymes can be used in a wide range of
commercial opportunities. Our current enzyme engineering program is focused on
developing enzymes which can be used in the process for making intermediate
chemical compounds, or building blocks, that are required in the manufacture of
drugs.
DIAGNOSTIC IMAGING PRODUCTS AND PROGRAMS
We are using phage display technology internally and through collaborative
arrangements to discover and develop products to diagnose cardiovascular and
inflammatory diseases and cancer. The following table summarizes our diagnostic
discovery and development programs:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DISEASE
LEAD COMPOUND AREA/INDICATION STATUS COLLABORATOR DYAX RETAINED RIGHTS
- --------------------------------------------------------------------------------------------------------
DX-182............... Cardiovascular Preclinical EPIX Medical Worldwide in nuclear
Disease medicine
EPI-HNE2............. Inflammation/Infection Preclinical -- Worldwide
EPI-PLA2............. Tumor Metastasis Preclinical -- Worldwide
CEA Peptides......... Multiple Cancers Discovery City of Hope Worldwide
Multiple Peptides.... Solid Tumor Cancers Research Burnham Cancer Worldwide
and other Indications Research Institute
</TABLE>
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DIAGNOSTIC IMAGING
Our diagnostic agents consist of detectable markers linked to binding compounds.
The binding compound binds to the target of interest, while the marker indicates
where the compound has bound. Our diagnostic imaging product candidates have the
following characteristics:
- - High affinity: bind target and localize to site quickly;
- - High specificity: bind only to target; provide clear imaging without
background interference; and
- - Increased safety: rapidly cleared from the body decreasing patient exposure.
CARDIOVASCULAR IMAGING
DX-182. Imaging of clots in the blood vessels is important for accurate
diagnosis and treatment of cardiovascular disease. We collaborated with EPIX
Medical, Inc. to use our phage display technology to identify peptides that bind
to a component unique to blood clots. When linked to a radioisotope, the
peptides are intended to travel to and illuminate clots.
PULMONARY EMBOLUS (PE)/ DEEP VEIN THROMBOSIS (DVT). Deep vein thromboses are
blood clots in the legs which may break apart and travel to the lungs, creating
pulmonary embolism. In the United States, 600,000 patients annually are
diagnosed with pulmonary embolism. Up to 100,000 patients die annually due to
pulmonary embolism. The high mortality associated with pulmonary embolism is due
to the lack of accurate tests to diagnose pulmonary embolism. We expect our
peptides to provide rapid imaging of pulmonary embolism and deep vein
thromboses. Rapid diagnosis and prompt treatment should dramatically decrease
the mortality associated with pulmonary emboli.
We are evaluating a number of peptides in a preclinical model of pulmonary
embolism with our collaborators at University of Massachusetts Medical Center.
We will choose the peptide with optimal characteristics to advance into clinical
trials.
IMAGING INFECTION AND INFLAMMATION
EPI-HNE2. EPI-HNE2 is a binding compound with high affinity and high
specificity to neutrophil elastase. Neutrophil elastase is secreted by
inflammatory cells in response to infection and inflammation. We have linked
EPI-HNE2 to technetium-99 and expect the peptide to bind to and image
inflammatory and infectious foci. Current agents used to diagnose inflammation
and infection lack specificity which leads to poor imaging due to background
interference. We believe that EPI-HNE2 will provide a clear image of
inflammatory and infectious disease sites, allowing rapid and accurate diagnosis
of multiple diseases.
Diagnostic indications include: inflammatory bowel disease, rheumatoid
arthritis, non-localized fever, musculoskeletal infection, chronic endocarditis,
aortic graft infections, and catheter infections. We estimate that 300,000
patients annually might be eligible to benefit from such an agent.
We are conducting preclinical studies of EPI-HNE2 in collaboration with
scientists at the University of Massachusetts Medical Center. We have
demonstrated detection of inflammatory disease sites in preclinical models of
infection in under 30 minutes.
CANCER IMAGING PROGRAMS
TUMOR CELL SURFACE ANTIGENS FOR ONCOLOGY IMAGING. In collaboration with
scientists at the City of Hope, we have discovered both human monoclonal
antibodies and small cyclic peptides that specifically bind to a cell surface
antigen (CEA) expressed on over 95% of colorectal carcinomas and on over 50% of
both breast and lung tumors. We retain rights to develop products in this area.
Our scientists are engaged in improving the binding affinity of the anti-CEA
cyclic peptides prior to evaluation in preclinical models. We believe our CEA
imaging agent may be used in a variety of clinical settings to improve
management of colorectal, lung and breast cancer. It may accurately stage
patients with primary and recurrent disease. It may also guide surgical
resection of microtumors. In addition, it may allow doctors to monitor patient
response to therapy.
NEOVASCULAR MARKERS FOR IMAGING METASTATIC CANCERS. We are evaluating EPI-PLA2,
our high-affinity inhibitor of plasmin, for use as an imaging agent in detecting
and localizing sites of new blood vessel formation. A single metastatic imaging
agent would eliminate the need for multi-modality scanning of patients with
suspected metastases. Such an agent would also guide
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treatment for 550,000 patients diagnosed with metastatic cancer in the United
States each year. We believe that our metastatic imaging agents may improve the
diagnosis and management of metastatic cancer.
PEPTIDE-BASED RESEARCH PROGRAM. Through an alliance with The Burnham Institute,
a nonprofit research institute, we are evaluating peptides obtained by The
Burnham Institute's practice of phage display for possible imaging applications.
Several of The Burnham Institute's peptides bind to molecular targets that have
been shown to be over expressed at sites of tumor-induced neovasculature.
Scientists at The Burnham Institute have discovered a larger number of peptides
which bind to molecular targets uniquely expressed by the blood vessels of
specific organs, including the lung, ovary, prostate and pancreas.
DYAX TECHNOLOGY
Molecular binding is the key to the function of most therapeutic, diagnostic,
industrial enzyme and separations products. The binding of a molecule to a
target is the mechanism nature uses to modulate biochemical and physiological
processes such as cellular growth, differentiation, metabolism and death. To
effect these processes, naturally occurring binding molecules typically
distinguish between the correct target and other closely related molecules,
called specificity, and bind tightly to the target, called affinity, under
appropriate physiological conditions. Therapeutic and diagnostic products bind
to targets, including cellular receptors, ion channels, cytokines or enzymes, to
achieve a desired effect, and are generally selected for their binding affinity
and specificity for the target. Binding also plays a significant role in the
separations products used to purify material for the development and manufacture
of a therapeutic product.
PHAGE DISPLAY
Living organisms, such as viruses, have the ability to display a foreign gene
product, or protein, on their surfaces. Based on this ability of organisms to
display proteins, our scientists developed our patented phage display technology
for displaying large collections of proteins on filamentous "phage," a virus
that infects laboratory bacteria. Our phage display technology is a broadly
adopted method to display and select proteins with desired binding properties.
Phage display is used to select proteins that bind to one or more targets of
interest. The selection is made from a diverse set of up to tens of billions of
proteins displayed on the surface of a bacterial virus, bacteriophage, known
commonly as "phage." Our phage display process generally consists of the
following steps:
GENERATING A PHAGE DISPLAY LIBRARY. The generation of a phage display library
is based upon a single protein framework and contains tens of billions of
variations of this protein. The first step in generating a library is the
selection of the protein framework upon which the library will be created. This
selection is based on desired product properties, such as structure, size,
stability, or lack of immunogenicity. Scientists then determine which amino
acids in the framework will be varied, but they do not vary amino acids that
contribute to the chosen protein framework. The scientists also control the
exact numbers and types of different amino acids that are varied, so that the
resulting phage display library consists of a diverse set of chemical entities,
each of which retains the desired physical and chemical properties of the
original framework.
[Image: Generation of a phage display library]
The next step is the creation of a collection of genes encoding the designed
variations of the framework protein. Scientists can easily generate diverse
collections of up to hundreds of millions of different synthetic DNA sequences.
Each new DNA sequence, or gene, encodes a single protein sequence that will be
displayed on the surface of the individual phage that contain this gene. The
scientists combine the new DNA sequences with phage genome DNA and certain
enzymes so that the new DNA is inserted into a specific location of the phage
genome. The result is that the encoded protein is displayed on the phage surface
as a fusion to one of the existing (naturally occurring) phage proteins. The
phage is a physical link between the displayed protein and its gene.
In addition to the creation of synthetic DNA sequences for a phage display
library, scientists can also use naturally occurring genes, such as genomic DNA
(all genes in an organism) or cDNA (sequences that represent all the expressed
genes in a cell or organism) as sources of the genes for a library. Our
scientists have also inserted into the phage genome genes from antibody
expressing human cells (B cells). Using these genes, we have constructed phage
display libraries that are engineered to express millions of different human
antibodies on the phage surface. From one of these libraries we can select
individual antibody
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fragments and use them to build highly specific human monoclonal antibodies.
Using this process, monoclonal antibodies can be identified in a few weeks.
The scientist then transfers the new phage genomes into laboratory bacteria,
where the phage genome directs the bacterial cells to produce thousands of
copies of each new phage. The resulting collection of phage is the phage display
library. Because scientists can reproduce the phage display library by infecting
a new culture of laboratory bacteria to produce thousands more copies of each
phage, they can use libraries for a potentially unlimited number of screenings.
SCREENING PHAGE DISPLAY LIBRARIES. Once scientists have generated a phage
display library they can select binding compounds with high affinity and high
specificity by exposing the library to specified targets of interest and
isolating the phage that display compounds that bind to the target. For certain
applications of phage display, such as separations, scientists can design the
binding and release conditions into the selection. Each individual phage
contains the gene encoding one potential binding compound, and when its
displayed protein is selected in the screening procedure, it can be retrieved
and amplified by growth in laboratory bacteria.
To screen a phage display library, the scientist exposes the library to the
target under desired binding conditions. The target is normally attached to a
fixed surface, such as the bottom of a tube, or a bead, allowing removal of
phage whose potential binding compounds do not bind to the target. Once these
unbound phage are washed away, the phage containing the selected binding
compounds can be released from the target. Since the phage are still viable,
they can be amplified rapidly by again infecting bacteria with them. The phage's
capacity to replicate itself is an important feature that makes it particularly
well-suited for rapid discovery of specific binding compounds. Scientists can
amplify a single phage by injecting it into standard laboratory bacteria to
produce millions of identical copies in one day.
If the affinity of the compounds identified in an initial screening is not
sufficiently high, information derived from the binding compounds identified in
the initial screening can be used to design a new focused library. The binding
and screening of a second generation library, known as affinity maturation, can
lead to increases of 10- to 100-fold in the affinity of the binding compounds
for the target.
[Image: Screening of a phage display library]
EVALUATION OF SELECTED BINDING COMPOUNDS. Screening phage display libraries
generally results in the identification of one or more groups of related binding
compounds such as peptides, antibodies or enzymes. These groups of compounds are
valuable in providing information about which chemical features are necessary
for binding to the target with affinity and specificity, as well as which
features can be altered without affecting binding. Using DNA sequencing,
scientists can determine the amino acid sequences of the binding compounds and
identify the essential components of desired binding properties by comparing
similarities and differences in such sequences. If desired, the binding
compounds can be further optimized by building additional phage display
libraries based on these key components and repeating this process. We can
complete the entire selection process in one week. Small amounts of the binding
compound can be produced by growing and purifying the phage. For production of
larger amounts, scientists can remove the gene from the phage DNA and place it
into a standard recombinant protein expression system. Alternatively, if the
identified binding compound is sufficiently small, scientists can chemically
synthesize it. These binding compounds can be evaluated for desired properties
including affinity, specificity and stability under conditions that will be
encountered in its intended use. From each group of compounds, a lead compound
with the best properties can be identified and developed and tested as a
therapeutic, diagnostic or affinity separations product.
The entire phage display process is nearly identical whether scientists are
searching for a product to be used for therapeutics, diagnostics and/or
separations, which allows for an efficient use of scientific resources across a
broad array of phage display applications. In addition, in some instances a
single binding compound may be used as a therapeutic, diagnostic and/or
separations product.
OTHER TECHNOLOGIES
ENZYME TECHNOLOGY. The catalytic properties of enzymes are controlled by the
binding interactions of these proteins with the molecules on which they act, or
substrates. Our phage display technology is a powerful technique for the
engineering of proteins with tailored binding properties. In order to apply
phage display to the engineering of enzymes, we have produced phage libraries
displaying enzymes in which the substrate binding sites have been varied. These
libraries can be rapidly
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screened to find novel enzymes that bind to and convert the desired substrate.
We have developed several libraries and additional libraries are planned.
We believe that enzymes produced through our phage display technology will
enable the production of new molecules for the pharmaceutical and agrochemical
industries.
COMPETITION
We compete in industries characterized by intense competition and rapid
technological change. New developments occur and are expected to continue to
occur at a rapid pace. Discoveries or commercial developments by our competitors
may render some or all of our technologies or potential products obsolete or
non-competitive.
Our phage display technology is one of several technologies available to
generate libraries of compounds that can be used to discover and develop new
products. Pharmaceutical, diagnostics and biotechnology industries use other
technologies to identify molecules that bind to a desired target, including
combinatorial chemistry, single target high throughput screening and monoclonal
antibodies. Further, we license our phage display patents and libraries to other
parties in the fields of therapeutic and antibody-based IN VITRO diagnostic
products on a non-exclusive basis, and, therefore, our licensees may compete
with us in the development of specific therapeutic and diagnostic products.
We are aware of several pharmaceutical and biotechnology companies that are
actively engaged in research and development in areas related to antibody
therapy. Also, we compete with companies that offer antibody discovery services.
These companies include: Abgenix, Medarex, Kirin Brewing Co., Ltd., Cambridge
Antibody Technology Group plc, Protein Design Labs, Inc. and Morphosys AG.
Our therapeutic and IN VIVO diagnostic compounds under development are expected
to address one or more indications in the therapeutic or diagnostic markets. We
will face significant competition in these markets. Also, several companies are
using conventional antibody technology and other means to identify products for
use as imaging agents, which may compete with any future imaging products that
we develop. Our goal is to focus our development efforts on selected disease
markets in which we believe there is an unmet need.
Chromatography is only one of several types, including centrifugation,
filtration, etc., of separations processes used in the manufacture of
therapeutic products. We will continue to face intense competition from other
suppliers of separations products. The principal competitors in our target
markets include Amersham Pharmacia, Millipore Corporation, Bio-Rad
Laboratories Inc., Isco, Inc., Gilson, Inc., Prometrics Life Sciences, Inc. and
Waters Corporation. In addition, many pharmaceutical companies have historically
assembled their own chromatography systems. Our only competitor in the prepacked
disposable cartridge market where we market our FLASH and BioFLASH cartridges is
Isco, which has started selling non-interchangeable cartridges. Others may be
able to use conventional or combinatorial chemistry approaches, or develop new
technology, to identify binding molecules for use in separating and purifying
products, including molecules which may compete with our affinity ligands.
PATENTS AND PROPRIETARY RIGHTS
Our success is significantly dependent upon our ability to obtain patent
protection for our products and technologies, to defend and enforce our issued
patents, including patents related to phage display, and to avoid the
infringement of patents issued to others. Our policy generally is to file for
patent protection on methods and technology useful for the display of binding
molecules, on therapeutic, diagnostic and separation product candidates, and on
chromatography product improvements and applications.
Our proprietary position in the field of phage display is based upon patent
rights, technology, proprietary information, trade secrets and know-how. Our
patents and patent applications for phage display include U.S. Patent Nos.
5,837,500 (expires June 29, 2010), 5,571,698 (expires June 29, 2010), 5,403,484
(expires April 4, 2012) and 5,223,409 (expires June 29, 2010), European Patent
No. 436,597 (expires September 1, 2009)and an allowed European patent
application, issued patents in Canada and Israel, and pending patent
applications in the United States and other countries. These phage display
patent rights contain claims covering inventions in the field of the surface
display of proteins and certain other peptides, including surface display on
bacteriophage.
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For our therapeutic, imaging and affinity products, we file for patent
protection on groups of peptides, proteins and antibody compounds we identify
using phage display. These patent rights now include U.S. Patent No. 5,666,143
(expires September 2, 2014) claiming sequences of peptides that have neutrophil
elastase inhibitory activity, including the sequence for EPI-HNE4; and U.S.
Patent Nos. 5,994,125 (expires January 11, 2014) and 5,795,865 (expires
August 8, 2015) claiming sequences of peptides that have human kallikrein
inhibitory activity, including the sequence for DX-88.
To protect our chromatography separations products, we rely primarily upon trade
secrets and know-how, as well as the experience and skill of our technical
personnel. We also have several patents and patent applications claiming
specific inventions relating to our proprietary chromatography systems and
cartridges.
There are no legal challenges to our phage display patent rights or our other
patent rights now pending in the United States, but we cannot assure you that a
challenge will not be brought in the future. We plan to protect our patent
rights in a manner consistent with our product development and business
strategies. If we bring legal action against an alleged infringer of any of our
patents, we expect the alleged infringer to claim that our patent is invalid,
not infringed, or not enforceable for one or more reasons, thus subjecting that
patent to a judicial determination of infringement, validity and enforceability.
In addition, in certain situations, an alleged infringer could seek a
declaratory judgment of non-infringement, invalidity or unenforceability of one
or more of our patents. We cannot assure you that we will have sufficient
resources to enforce or defend our patents against any such challenges or that a
challenge will not result in an adverse judgment against us or the loss one or
more of our patents. Uncertainties resulting from the initiation and
continuation of any patent or related litigation, including those involving our
patent rights, could have a material adverse effect on our ability to maintain
and expand our licensing program and collaborations, and to compete in the
marketplace.
Our first phage display patent in Europe, European Patent No. 436,597, was
opposed by two parties in late 1997. The oppositions primarily relate to whether
the written description of the inventions in our European patent is sufficient
under European patent law. A hearing on these oppositions was held on April 6,
2000 and, although we have not yet received the written opinion of the
Opposition Division, our patent was revoked. We plan to appeal this decision to
the Technical Board of Appeals. This appeal will suspend the Opposition
Division's decision and reinstate our patent pending the decision of the
Technical Board of Appeals. Although we will be able to enforce this patent
during the appeal, any infringement action we file will likely be stayed pending
the results of the appeal. The appeal could take several years to resolve. We
expect to receive a second European patent in 2000 for phage display. We cannot
assure you that we will prevail in the appeal proceedings or in any other
opposition or litigation contesting the validity or scope of our European
patents. If we are not successful in our defense of our European patent, or if
additional valid and enforceable patents do not result from our pending European
patent applications, we will not be able to prevent other parties from using
phage display in Europe.
Our phage display patent rights are central to our non-exclusive patent
licensing program. We offer non-exclusive licenses under our phage display
patent rights to companies and non-profit institutes in the fields of
therapeutics and IN VITRO diagnostics. In jurisdictions where we have not
applied for, obtained or maintained patent rights, we will be unable to prevent
others from developing or selling products or technologies derived using phage
display. In addition, in jurisdictions where we have phage display patent
rights, we cannot assure you that we will be able to prevent others from selling
or importing products or technologies derived using phage display.
Presently, we are engaged in a United States court proceeding relating to
patents owned by a third party. George Pieczenik and I.C. Technologies
America, Inc. have sued us for patent infringement of three United States
patents (U.S. Patent Nos. 5,866,363, 4,528,266 and 4,359,535). The amended
complaint filed March 13, 2000 alleges that our licensing of our phage display
patents rights infringes these patents. In addition, plaintiffs have contended
that we make, use, sell or offer to sell methods and products that infringe the
patents. We have moved to dismiss the action on several grounds. Although we
cannot predict the outcome of this litigation, we believe that the lawsuit is
unlikely to have a material adverse effect on our business.
We are aware that other parties have patents and pending applications to various
products and processes relating to phage display technology. Through licensing
our phage display patent rights, we have secured a limited ability to practice
under some of the third party patent rights relating to phage display
technology. These rights are a result of our standard license agreement, which
contains a covenant by the licensee that it will not sue us under the licensee's
phage display improvement patents. In addition, we may seek affirmative rights
of license or ownership under patent rights relating to phage display
40
<PAGE>
technology owned by other parties. If we are unable to obtain and maintain such
covenants and licenses on reasonable terms it could have a material adverse
effect on our business.
We have filed, and in the future we may file more, oppositions or other
challenges to patents issued to others. To date, we have filed oppositions
against two European patents relating to the phage display field. We do not
believe these European patents cover any of our present activities, but we
cannot predict whether the claims in these patents may, in their current or
future form, cover our future activities. If any of these patents do cover any
of our activities, then our activities in Europe may be affected unless licenses
are available to them on reasonable terms.
Patent positions are complex in the fields of biotechnology, therapeutic and
diagnostic products and separation processes and products. In order for us to
commercialize a process or product, we may need to license the patent rights of
other parties. We are aware of certain patents for which we may need to obtain
licenses to commercialize some of our products and technologies. While we
believe that we will be able to obtain such licenses, we cannot assure you that
these licenses, or licenses to other patent rights that we identify as necessary
in the future, will be available on reasonable terms, if at all. If we decide
not to seek a license, or if licenses are not available on reasonable terms, we
may become subject to infringement claims or other legal proceedings, which
could result in substantial legal expenses. If we are unsuccessful in these
actions, adverse decisions may prevent us from commercializing the affected
process or products.
In all of our activities, we substantially rely on proprietary materials and
information, trade secrets and know-how to conduct research and development
activities and to attract and retain collaborative partners, licensees and
customers. Although we take steps to protect these materials and information,
including through the use of confidentiality and other agreements with our
employees, consultants and in academic and commercial relationships, we cannot
assure you that these steps will be adequate, that these agreements will not be
violated, that there will be an available or sufficient remedy for any such
violation or that others will not also develop similar proprietary information.
GOVERNMENT REGULATION
The production and marketing of any of our future therapeutic or diagnostic
products will be subject to numerous governmental laws and regulations on
safety, effectiveness and quality, both in the United States and in other
countries where we intend to sell the products. In addition, our research and
development activities in the United States are subject to various health and
safety, employment and other laws and regulations.
UNITED STATES FDA APPROVAL
In the United States, the U.S. Food & Drug Administration subjects products
intended for IN VITRO diagnostic use and IN VIVO diagnostic and therapeutic use
in humans to rigorous regulation. In addition, products intended for use in the
manufacture of these products, such as separations equipment, are subject to
certain FDA manufacture and quality standards.
The steps required before a new pharmaceutical or IN VIVO diagnostic product can
be sold in the United States include:
- - preclinical tests;
- - submission of an Investigative New Drug Application to the FDA which must
become effective before initial human clinical testing can begin;
- - human clinical trials to establish safety and effectiveness of the product,
which normally occurs in three phases monitored by the FDA;
- - submission and approval by the FDA of a New Drug or Biologics License
Application; and
- - compliance with the FDA's Good Manufacturing Practices regulations and
facility and equipment validation and inspection.
The requirements for testing and approval for IN VITRO diagnostic products may
be somewhat less onerous than for pharmaceutical products, but similar steps are
required. All our therapeutic or diagnostic product candidates, including our
neutrophil elastase inhibitor Reltran-TM-, our plasma kallikrein inhibitor
DX-88, or the products of our collaborators and licensees, will need to complete
successfully the FDA-required testing and approvals.
41
<PAGE>
Some of our separations products are intended for use in the manufacturing
processes of clinical grade and commercial grade therapeutic and diagnostic
products. These separations products, therefore, must be manufactured and
delivered in accordance with GMP requirements, and other applicable rules and
regulations. The customer may also be required to comply with other quality and
inspection regulations prior to use. We have not yet produced any separations
products under GMP conditions. There can be no assurance that we or our
customers will be successful in complying with FDA and other regulations to
permit the full clinical and commercial use of our separations products.
FOREIGN REGULATORY APPROVAL
In many countries outside the United States governmental authorities similar to
the FDA must approve the testing and marketing of pharmaceutical and diagnostic
products. These approval procedures vary from country to country and can involve
additional testing. The time required may differ from that required for FDA
approval. Although there are some procedures for unified filings for some
European countries with the sponsorship of the country which first granted
marketing approval, in general each country has its own procedures and
requirements, many of which are time consuming and expensive. Thus, there can be
substantial delays in obtaining required approvals from foreign regulatory
authorities after the relevant applications are filed.
In Europe, for example, marketing authorizations, which may apply to our
products and our collaborators and licensees, may be submitted at a centralized,
a decentralized or a national level. The centralized procedure is mandatory for
the approval of biotechnology products and provides for the grant of a single
marketing authorization which is valid in all European Union member states. As
of January 1995, a mutual recognition procedure is available at the request of
the applicant for all medicinal products which are not subject to the
centralized procedure. Additionally, national laws of European Community member
states govern clinical trials, manufacturing procedures, advertising and
promotion and pricing and reimbursement. The export of unapproved products to
foreign countries for testing, approval, or marketing is subject to United
States law and that of the importing country, and may require FDA approval.
ENVIRONMENTAL, HEALTH, SAFETY AND OTHER REGULATIONS
In addition to the laws and regulations which apply to the development,
manufacture and sale of our products, our operations are subject to numerous
foreign, federal, state and local laws and regulations. Our research and
development activities involve the controlled use, storage, handling and
disposal of hazardous materials, chemicals and radioactive compounds and, as a
result, we are required to comply with regulations and standards of the
Occupational Safety and Health Act, Nuclear Regulatory Commission and other
safety and environmental laws. Although we believe that our activities currently
comply with all applicable laws and regulations, the risk of accidental
contamination or injury cannot be completely eliminated. In the event of such an
accident, we could be held liable for any damages that result, which could have
a material adverse affect on our business, financial condition and results of
operations.
MANUFACTURING
We manufacture and sell chromatography systems and cartridges. Components for
chromatography systems are manufactured to our specifications by subcontractors.
We purchase commercial media for certain prepacked cartridges, which we repack
and sell in disposable cartridges. A small number of components of our
chromatography systems are currently purchased from single sources. However, we
believe that alternative sources for these components are readily available, if
necessary, and that we will be able to enter into acceptable agreements to
obtain these components from such alternate sources at similar costs with only a
temporary disruption or delay in production.
For our new affinity separations products, we plan to supply separations media
containing phage display-derived affinity ligands directly to customers and
collaborative partners, and may from time to time license a third party to
supply its own requirements. For those affinity separations products which we
are developing for use in a customer's or collaborative partner's clinical or
commercial manufacturing processes, we will need to manufacture the products
under highly controlled conditions. We have not yet established a facility to
manufacture affinity separations products under these conditions, and we may not
be able to do so by the time such facility is needed. We are currently
contracting the production of affinity ligands from manufacturers who have
appropriate facilities; however, should this situation change, our inability to
obtain these components could have a material adverse effect on our business,
financial condition or results of operations.
42
<PAGE>
In addition, we currently plan to rely on third party manufacturers for
production of our therapeutic lead candidates for both development and
commercial quantities. We are currently contracting the production of DX-88 from
manufacturers who have GMP facilities. We cannot assure you that these third
parties will be able to complete successfully on our behalf the required
preclinical studies, clinical development, regulatory approval, manufacturing
and marketing of any such therapeutic products. See "--Government Regulation."
SALES AND MARKETING
For the therapeutic and diagnostic products that result from our research and
development efforts, we primarily plan to commercialize these products through
licensing, marketing, offering and other arrangements with pharmaceutical and
diagnostic companies. If we decide to market and sell any of these products
ourselves, we do not expect to establish direct sales capability until shortly
before the products are approved for commercial sale.
Our Biotage separations business has a sales and marketing group of 20 people in
the United States and Europe. We also sell these products via stocking
distributors. In selected countries we sell Biotage products via independent
distributors As new products are introduced and the market for our Biotage label
products grows, we anticipate increasing our direct marketing and sales
capacity.
For the custom affinity separations products business, we have ongoing marketing
efforts to develop new collaborative arrangements. For other affinity ligand
products that we may develop outside of a collaborative arrangement, we plan to
market and sell the ligands, either as stand-alone products or integrated with
separations media and equipment, through a combination of direct sales,
distributors and other marketing arrangements.
FACILITIES
We currently lease and occupy 30,100 square feet of laboratory and office space
in Cambridge, Massachusetts under three leases, as well as 28,200 square feet of
manufacturing, office and storage space in Charlottesville, Virginia. The leases
for the Cambridge facilities expire in December 2000, June 2001 with monthly
options to extend the lease term through December 2001, and June 2002. The lease
for the Charlottesville facility expires in April 2002. We also lease
approximately 4,000 square feet of office space in the United Kingdom to support
marketing efforts for our Biotage label products and 3,100 square feet of
laboratory and office space in the Netherlands to support research efforts. We
believe that our current space is adequate for our needs through 2001 and that
we will be able to obtain additional space, as needed, on commercially
reasonable terms.
LEGAL PROCEEDING
Except for the proceedings described in the Patents and Proprietary Rights
section above, we are not a party to any material legal proceedings.
EMPLOYEES
As of May 15, 2000, we had 147 employees, including 30 Ph.Ds and one M.D.
Approximately 62 of our employees are in research and development, 24 in
manufacturing, 33 in sales and marketing and 28 in administration. Our workforce
is predominantly non-unionized, and we believe that our relations with employees
are good.
43
<PAGE>
STRATEGIC AND SCIENTIFIC ADVISORS
We have a Strategic Advisory Committee as well as scientific advisory boards for
the therapeutics and diagnostics and for separations research programs. Members
of the Strategic Advisory Committee meet with our management on a quarterly
basis and, like the members of the scientific advisory boards, are available to
our management and scientific staff on an as-needed basis for consultation in
their respective areas of expertise. All of the advisors are employed by and/or
have consulting arrangements with other entities and are expected to devote only
a small portion of their time to Dyax. No advisor is employed by Dyax. Advisors'
other commitments to or consulting or advisory contracts with their employers or
other entities may conflict or compete with their obligations to Dyax.
Our advisors are paid an annual retainer for attending meetings, reimbursed for
their expenses and have been granted options to purchase Common Stock under our
Amended and Restated 1995 Equity Incentive Plan. We have entered into consulting
agreements with a number of the Scientific Advisory Board members. The
agreements generally are subject to termination by either party with advance
notice.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
ADVISOR
NAME PROFESSIONAL AFFILIATION SINCE
- ------------------------------------------------------------------------------------------------------
STRATEGIC ADVISORS
Charles L. Cooney, Ph.D.*.................... Professor, Department of Chemical and 1992
Biochemical Engineering and Executive
Officer, Department of Chemical Engineering,
Massachusetts Institute of Technology.
Peter Feinstein.............................. Managing Director, Feinstein Kean Healthcare 1997
and Kendall Strategies Inc.
James W. Fordyce............................. Managing General Partner, Prince Ventures LP, 1997
and President, Albert and Mary Lasker
Foundation.
John G. Gorman, M.D.......................... Professor of Pathology, New York University 1998
School of Medicine and Former Director, Blood
Bank, NYU.
Harvey F. Lodish, Ph.D....................... Professor of Biology, Massachusetts Institute 1997
of Technology and Member, Whitehead Institute
for Biomedical Research.
Erkki Ruoslahti, M.D., Ph.D.................. President and Chief Executive Officer, 1999
Burnham Institute.
William A. Scott, Ph.D....................... President and Chief Executive Officer, 1997
Physiome Sciences, Inc., and previously
Senior Vice President of Exploratory and Drug
Discovery Research, Bristol-Myers Squibb
Pharmaceutical Research Institute.
Thomas P. Stossel, M.D.**.................... American Cancer Society Professor of 1995
Medicine, Harvard Medical School, and Senior
Physician, Hematology-Oncology Division,
Brigham and Women's Hospital.
Henri A. Termeer............................. Chairman, President and Chief Executive 1997
Officer, Genzyme Corporation.
Christopher T. Walsh, Ph.D................... Hamilton Kuhn Professor, Department of 1997
Biological Chemistry and Molecular
Pharmacology, Harvard Medical School.
George M. Whitesides, Ph.D.**................ Mallinckrodt Professor of Chemistry, Harvard 1995
University.
Peter Wirth, Esq............................. Executive Vice President and Chief Legal 1997
Officer, Genzyme Corporation.
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
ADVISOR
NAME PROFESSIONAL AFFILIATION SINCE
- ------------------------------------------------------------------------------------------------------
SCIENTIFIC ADVISORS--THERAPEUTICS AND IMAGING
Thomas J. Brady, M.D......................... Director, Nuclear MRI Center, Massachusetts 1996
General Hospital; Professor of Radiology,
Harvard Medical School.
Leonard Guarente, Ph.D....................... Professor of Biology, Massachusetts Institute 1995
of Technology.
Jordan Gutterman, M.D........................ Virginia Cockrell Professor of Medicine, 1996
University of Texas, M.D. Anderson Cancer
Center.
Phillip W. Robbins, Ph.D..................... Professor of Biochemistry, Massachusetts 1995
Institute of Technology.
Thomas M. Roberts, Ph.D...................... Chair, Department of Cancer Biology at Dana 1995
Farber Cancer Institute; Chair, Division of
Medical Sciences and Professor of Pathology,
Harvard Medical School.
H. William Strauss, M.D...................... Chief, Division of Nuclear Medicine, Stanford 1998
University.
Ralph Weissleder, M.D., Ph.D................. Director, Center for Molecular Imaging 1998
Research, Massachusetts General Hospital.
Andrew Wright, Ph.D.......................... Professor of Microbiology, Tufts University 1995
Medical School.
SCIENTIFIC ADVISORS--SEPARATIONS
Stuart E. Builder, Ph.D...................... Consultant, and formerly Staff Scientist, 1996
Strategic Development, Genentech Inc.
Hubert Koster, Ph.D.......................... Professor of Chemistry and Biochemistry, 1997
University of Hamburg; President and Chief
Executive Officer, Sequenom, Inc.
Jack Johanssen, Ph.D......................... President and CEO, Boston Probes, Inc. 1997
Irving W. Wainer, Ph.D....................... Professor of Pharmacology, Georgetown 1996
University Medical Center; Director,
Georgetown University Bioanalytical Center.
</TABLE>
* Dr. Cooney is also a member of Scientific Advisors--Therapeutics and
Imaging, and Scientific Advisors--Separations.
** Drs. Stossel and Whitesides are members of our Scientific
Advisors--Therapeutic and Imaging.
45
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The table below lists our executive officers and directors as of May 15, 2000:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Henry E. Blair................................ 56 Chairman of the Board, President and Chief
Executive Officer
Gregory D. Phelps............................. 51 Vice Chairman of the Board
L. Edward Cannon, Ph.D........................ 53 Executive Vice President, President,
Therapeutic and Imaging Division and Director
Robert A. Dishman, Ph.D....................... 56 Executive Vice President, President,
Separations Division and Director
Stephen S. Galliker........................... 53 Executive Vice President, Finance and
Administration, and Chief Financial Officer
Robert Charles Ladner, Ph.D................... 55 Senior Vice President and Chief Science
Officer
Constantine E. Anagnostopoulos, Ph.D. (1)..... 77 Director
James W. Fordyce (1).......................... 54 Director
Thomas L. Kempner (2)......................... 72 Director
Henry R. Lewis, Ph.D. (1)(2).................. 74 Director
John W. Littlechild........................... 48 Director
Alix Marduel, M.D............................. 42 Director
David J. McLachlan (2)........................ 61 Director
</TABLE>
(1) Member of Compensation Committee
(2) Member of Audit Committee
HENRY E. BLAIR has served as the Chairman of the Board and President of Dyax
since the merger of Protein Engineering Corporation with Dyax in August 1995 and
as acting Chief Executive Officer from August 1995 until his appointment as
Chief Executive Officer in April 1997. He also served as a director and officer
of Dyax since its formation in 1989. Mr. Blair is also a director of and
consultant to Genzyme Corporation, a biotechnology company, a company he
co-founded in 1981. Mr. Blair also co-founded Biocode, Inc. and GelTex
Pharmaceuticals, Inc. In addition, he is a director of Celtrix
Pharmaceuticals, Inc. and Genzyme Transgenics Corporation and a member of the
Board of Overseers at both Tufts University School of Medicine and the Lahey
Hitchcock Clinic.
GREGORY D. PHELPS has been Vice Chairman and a director of Dyax since
August 1998. Mr. Phelps was an executive officer of Genzyme from 1991 to 1997,
most recently as Executive Vice President. At Genzyme, he supervised the
company's therapeutics business, research and development and corporate
development activities. Mr. Phelps served as Chief Executive Officer of
Viagene, Inc., a biotechnology company, from 1988 to 1990. Mr. Phelps presently
serves as a director of Ostex International, Inc. and as a director of Atlantic
BioPharmaceuticals, Inc.
L. EDWARD CANNON, PH.D. has served as Executive Vice President of Dyax and
President of the Therapeutics and Diagnostics Division since 1995. He served as
the Chief Executive Officer and held other senior management roles at Protein
Engineering Corporation from October 1992 to August 1995 and has been a director
of Dyax since its merger with Protein Engineering Corporation. Dr. Cannon
founded Hygeia Sciences, Inc. in 1980 and served as its Chief Scientific Officer
and Senior Vice President from 1986 to 1991.
ROBERT A. DISHMAN, PH.D. has served as Executive Vice President of Dyax and
President of the Separations Division since the merger of Protein Engineering
Corporation with Dyax and has been a director since April 1994. He was President
and Chief Executive Officer of Dyax from April 1994 until August 1995. Prior to
April 1994, Dr. Dishman co-founded and served as Chief Executive Officer of the
predecessor of ArQule Inc. and served as Executive Vice President and Chief
Operating Officer of
46
<PAGE>
Sepracor, Inc. Dr. Dishman also served as President of Millipore's MilliGen
bioscience Division, which he founded, and Vice President, Business, Development
and Marketing, of Millipore's Waters Chromatography Division.
STEPHEN S. GALLIKER has served Dyax as Executive Vice President Finance and
Administration, and Chief Financial Officer since September 1999. He was Chief
Financial Officer of Excel Switching Corporation, a developer and manufacturer
of open switching platforms for telecommunications networks, from July 1996 to
September 1999 and was Excel's Vice President, Finance and Administration from
September 1997. Mr. Galliker was employed by Ultracision, Inc., a developer and
manufacturer of ultrasonically powered surgical instruments from September 1992
to June 1996. At Ultracision, Inc., Mr. Galliker was Chief Financial Officer and
Vice President of Finance until November 1995 and Chief Operating Officer from
December 1995 to June 1996.
ROBERT CHARLES LADNER, PH.D. joined Dyax as Senior Vice President and Chief
Science Officer in August 1995. He was a co-founder of Protein Engineering
Corporation where he served as Senior Vice President and Scientific Director
from 1987 until its merger with Dyax. Previously, Dr. Ladner served as Senior
Scientist of Genex Corp., where he was an inventor of single chain antibodies.
CONSTANTINE E. ANAGNOSTOPOULOS, PH.D. has been a director of Dyax since 1991. He
is a Managing General Partner of Gateway Associates L.P., a venture capital
management firm which is the general partner of Gateway Venture Partners II and
Gateway Venture Partners III. Dr. Anagnostopoulos was formerly a corporate
officer of Monsanto Company. He is also a director of Genzyme Corporation.
JAMES W. FORDYCE has been a director of Dyax since August 1995. Since 1981, he
has served as a general partner of Prince Ventures Partners LP, a venture
capital management firm, and its affiliated partnerships. Prince Venture
Partners IV is a venture capital limited partnership, managed by Prince Ventures
LP, which specializes in early stage investments in companies involved in the
medical and life science areas. He is also President of the Albert and Mary
Lasker Foundation.
THOMAS L. KEMPNER has been a director of Dyax since August 1995 and previously
was a director of Protein Engineering Corporation. Mr. Kempner is the Chairman
and Chief Executive Officer of Loeb Partners Corporation, an investment banking,
registered broker/dealer and registered investment advisory firm. He is also
President of Loeb Partners Corporation, the general partner of the Loeb
Investment Partnerships. Mr. Kempner is also a director of Alcide Corporation,
CCC Information Services Group, Inc., Evercel, Inc., FuelCell Energy, IGENE
BioTechnology, Inc., Insight Communications Company, Inc., Intermagnetics
General Corporation, and Roper Starch Worldwide, Inc.
HENRY R. LEWIS, PH.D. has been a director of Dyax since August 1995 and
previously was a director of Protein Engineering Corporation. Mr. Lewis is a
consultant to several companies. From 1986 to February 1991, Mr. Lewis was the
Vice Chairman of the board of directors of Dennison Manufacturing Company, a
manufacturer and distributor of products for the stationery, technical paper and
industrial and retail systems markets. From 1982 to 1986, he was a Senior Vice
President of Dennison Manufacturing Company. Mr. Lewis is also a director of
Genzyme Corporation.
JOHN W. LITTLECHILD has been a director of Dyax since 1998. Mr. Littlechild is a
general partner of HealthCare Partners, V, which is the general partner of
HealthCare Ventures V, L.P. He also serves in a similar capacity with other
related entities. Mr. Littlechild is also a member of HealthCare Ventures LLC a
venture management company that, among other things, provides management
services to HealthCare Ventures V, L.P., and its related entities. From 1984 to
1991, Mr. Littlechild was a Senior Vice President of Advent International
Corporation, a venture capital company in Boston and London. Prior to working at
Advent in Boston, Mr. Littlechild was involved in establishing Advent in the
United Kingdom. Mr. Littlechild serves on the board of directors of various
health care and biotechnology companies, including AVANT
Immunotherapeutics, Inc., and Diacrin, Inc., which are biotechnology companies,
and Orthofix International N.V., a medical device company.
ALIX MARDUEL, M.D. has been a director of Dyax since October 1998. Since 1997,
she has been a general partner of Alta Partners, a venture capital partnership
investing in information technologies and life science companies. Prior to
joining Alta Partners, from 1990 to 1997 Dr. Marduel managed investments in
medical companies for Sofinnova, Inc., a venture capital company.
47
<PAGE>
DAVID J. MCLACHLAN has been a director of Dyax since May 1999. Mr. McLachlan has
been a consultant to Genzyme Corporation since June 1999. He was Genzyme's Chief
Financial Officer and Executive Vice President from 1989 to 1999. He currently
serves as a director of Aronex Pharmaceuticals, Inc., a biotechnology company;
Hearx, Ltd., a hearing care company; and the Massachusetts Biotechnology
Council.
BOARD OF DIRECTORS
The size of the board of directors is currently set at eleven members. There are
no family relationships among any of the directors or executive officers.
Our certificate of incorporation gives the holders of each series of the
Class A Series 3, Class A Series 4, and Class A Series 5 Preferred Stock the
right to elect one director. These rights will terminate upon the closing of
this offering, when all outstanding preferred stock converts automatically into
common stock. All directors hold office until the next annual meeting of
stockholders and until their successors are duly elected and qualified. Officers
serve until the next annual meeting of the board of directors, or until their
earlier death, resignation or removal.
AUDIT COMMITTEE
The Audit Committee provides the board of directors with an independent review
of our financial health and of the reliability of our financial controls and
financial reporting systems. The Audit Committee reviews the general scope of
our annual audit, the fee charged by our independent accountants, and other
matters relating to internal control systems. The Audit Committee consists of
Dr. Lewis (Chair), Mr. Kempner and Mr. McLachlan.
COMPENSATION COMMITTEE
The Compensation Committee determines the compensation of our executive
officers, including the Chief Executive Officer. The Compensation Committee also
administers our Amended and Restated 1995 Equity Incentive Plan and loans to
officers. The Compensation Committee consists of Mr. Fordyce (Chair),
Dr. Anagnostopoulos, and Dr. Lewis.
DIRECTOR COMPENSATION
Directors who are also our employees receive no additional compensation for
serving as directors. Our non-employee directors receive $12,000 per year as
compensation for their services as a director. We pay non-employee directors who
serve as the chairman of a committee of the board of directors an additional
$3,000 per year. In addition, all of our non-employee directors are eligible to
receive stock options under the Company's Amended and Restated 1995 Equity
Incentive Plan.
In October 1999, we granted Dr. Anagnostopoulos, Mr. Fordyce, Mr. Kempner and
Mr. Lewis options to purchase 19,560 shares of common stock at an exercise price
of $2.00 per share in substitution for options we granted to them in
January 1998. The shares underlying these options immediately vested with
respect to 13,040 shares and the remaining 6,520 shares will vest on the earlier
of our 2000 annual stockholders' meeting or June 30, 2000.
In November 1999, we granted options to all of our non-employee directors to
purchase shares of our common stock at an exercise price of $2.00 per share.
Dr. Anagnostopoulos, Mr. Fordyce, Mr. Kempner and Mr. Lewis were granted options
to purchase 5,000 shares which will vest on the earlier of our 2001 annual
stockholders' meeting or June 30, 2001. We granted Mr. Littlechild and
Dr. Marduel options to purchase 20,000 shares, which were vested immediately
with respect to 10,000 shares, with an additional 5,000 shares to vest on the
earlier of our 2000 annual stockholders' meeting or June 30, 2000, and the
remaining 5,000 shares to vest on the earlier of our 2001 annual stockholders'
meeting or June 30, 2001. We also granted Mr. McLachlan an option to purchase
15,000 shares, which were vested immediately with respect to 5,000 shares, with
an additional 5,000 shares to vest on the earlier of our 2000 annual
stockholders' meeting or June 30, 2000, and the remaining 5,000 shares to vest
on the earlier of our 2001 annual stockholders' meeting or June 30, 2001.
48
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid to or earned during the
fiscal year ended December 31, 1999 for our Chief Executive Officer and our four
most highly compensated executive officers. We refer to these persons as the
named executive officers. For additional compensation information, see the
section of this prospectus entitled "Employment Agreements."
<TABLE>
--------------------------------------------------
LONG-TERM
COMPENSATION
AWARDS
------------------
ANNUAL COMPENSATION SECURITIES
------------------- UNDER-LYING ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS OPTIONS/SARS COMPENSATION(1)
- ---------------------------------------------- -------- -------- ------------------ ------------
<S> <C> <C> <C> <C>
Henry E. Blair................................ $321,905 $100,000 30,000 $ 131
President and Chief Executive Officer
Gregory D. Phelps............................. 227,734 50,000 15,000 84
Vice-Chairman of the Board
Robert A. Dishman, Ph.D....................... 258,900 41,250 15,000 26,520(2)
Executive Vice President
L. Edward Cannon, Ph.D........................ 196,376 49,500 48,000 84
Executive Vice President
Stephen S. Galliker(3)........................ 51,149 16,667 137,500 21
Executive Vice President and Chief Financial
Officer
</TABLE>
(1) Represents group term life insurance premiums paid by us.
(2) Consists of a group life insurance premium of $131 plus $26,389 in interest
forgiven on a loan made to Dr. Dishman in 1998. See "Certain Relationships
and Related Transactions."
(3) Mr. Galliker joined us in August 1999. His initial salary is $185,000 per
year. Upon joining us Mr. Galliker purchased 25,000 shares of common stock
and 22,500 shares of restricted common stock at fair market value. The
restricted stock vests in 24 substantially equal installments beginning
October 1, 1999. This vesting schedule can be accelerated under some
circumstances after a change in control of Dyax.
49
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains certain information regarding options we granted to
our named executive officers during the twelve months ended December 31, 1999.
<TABLE>
<CAPTION>
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
--------------------------------------------- VALUE AT ASSUMED
PERCENT OF ANNUAL
TOTAL RATES OF STOCK
OPTIONS/SARS PRICE
NUMBER OF GRANTED TO APPRECIATION FOR
SECURITIES EMPLOYEES OPTION
UNDERLYING IN EXERCISE TERM(2)
OPTION/SARS FISCAL OR BASE EXPIRATION -------------------
NAME GRANTED YEAR(1) PRICE DATE 5% 10%
- -------------------------------------- --------- ----------- -------- -------- -------- --------
Henry E. Blair........................ 30,000 2.9 $2.00 10/29/09
Gregory D. Phelps..................... 15,000 1.5 $2.00 10/29/09
Robert A. Dishman, Ph.D............... 15,000 1.5 $2.00 10/29/09
L. Edward Cannon, Ph.D................ 33,000 3.2 $2.00 7/14/09
15,000 1.5 $2.00 10/14/09
Stephen S. Galliker................... 52,500 5.1 $2.00 9/9/09
75,000 7.3 $2.00 9/9/09
10,000 1.0 $2.00 10/29/09
</TABLE>
(1) Based on an aggregate of 1,033,720 options that we granted in the year ended
December 31, 1999 to our employees and consultants, including the named
executive officers.
(2) The dollar amounts under these columns are the result of calculations at
rates set by the SEC and, therefore, are not intended to forecast possible
future appreciation, if any, in the price of the underlying common stock.
The potential realizable values are calculated on the basis of an initial
public offering price of $ per share, assume that the market price
appreciates from this price at the indicated rate for the entire term of
each option and that each option is exercised and sold on the last day of
its term at the appreciated price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table below contains certain information concerning options held
by our named executive officers as of December 31, 1999.
<TABLE>
<CAPTION>
---------------------------------------------
<S> <C> <C> <C> <C>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END(1) FISCAL YEAR-END(2)
--------------------- ---------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------- -------- ---------- -------- ----------
Henry E. Blair......................................... 35,030 68,870
Gregory D. Phelps...................................... 62,125 110,875
Robert A. Dishman, Ph.D................................ 77,395 28,143
L. Edward Cannon, Ph.D................................. 100,654 70,034
Stephen S. Galliker.................................... 11,668 125,832
</TABLE>
(1) None of the named executive officers exercised options in 1999.
(2) Based on the difference between the option exercise price and the initial
public offering price of $ per share of common stock.
EMPLOYMENT AGREEMENTS
Our only executive officers with employment agreements are Dr. Dishman,
Dr. Ladner, Mr. Galliker and Mr. Phelps.
Dr. Dishman's employment agreement, dated February 18, 1998, entitles him to an
annual base salary of at least $200,000. If we terminate Dr. Dishman without
cause, we must pay him his annual base salary rate for six months. These
payments continue for up to an additional six months if Dr. Dishman does not
obtain comparable employment. We may reduce these payments by any amounts earned
by Dr. Dishman during this period. In addition, his unvested stock options
accelerate and
50
<PAGE>
become immediately exercisable. We also granted Dr. Dishman a restricted stock
award to purchase 78,240 shares of our common stock at a price of $4.60 per
share. Upon his purchase of the restricted stock and his exercise in full of an
earlier option to purchase 37,490 shares of our common stock, we loaned
Dr. Dishman an aggregate of $453,600 in exchange for his issuance to us of two
promissory notes for $360,000 and $93,600. The notes are secured by the shares
of common stock purchased under the restricted stock award and the option
exercise. These notes are payable in four years, and are subject to
acceleration. These loans are due and payable on the earlier of February 18,
2002 or the last trading date under our then applicable insider trading policy
during the trading period immediately after the second quarterly earnings
announcement made after the expiration of his lock-up agreement. As long as
Dr. Dishman remains our employee, we will forgive all interest accrued on the
notes annually or through the date of any earlier termination of his employment.
Dr. Ladner's employment agreement terminates in August 2001. He is entitled to
receive a minimum base salary of $172,000 under his employment agreement. If we
terminate Dr. Ladner without cause, we must pay him his annual base salary for
one year and 50% of his vested options will become exercisable.
Mr. Galliker is entitled to receive a minimum base salary of $185,000 under his
employment agreement. We will also pay Mr. Galliker a housing allowance of
$15,000 a year until he finds permanent housing in the Cambridge area.
Mr. Galliker received three option grants, giving him options to purchase a
total of 137,500 shares of our common stock at an exercise price of $2.00 per
share. These options become exercisable as to 3,750 shares per month during the
first two years of Mr. Galliker's employment and as to approximately 1,563
shares per month during the third and fourth years of his employment. Pursuant
to the terms of his agreement, Mr. Galliker purchased 22,500 shares of
restricted common stock. We have the right to repurchase these shares from
Mr. Galliker if he leaves our employment, but this repurchase right lapses in
monthly installments over a two-year period. Mr. Galliker also purchased 25,000
shares of common stock at $2.00 per share which are not subject to a repurchase
option. We have a right of first refusal if Mr. Galliker transfers these shares.
If we terminate Mr. Galliker without cause, we must continue to pay him at his
current salary for six months, reduced by any compensation that Mr. Galliker
earns for other work performed during this six-month period. The agreement also
provides that 50% of Mr. Galliker's options will become immediately exercisable
following a change in control of the company if he is terminated or quits
because the terms of his employment have been adversely changed.
Mr. Phelps is entitled to an annual base salary of $200,000 under his employment
agreement. In addition, we granted Mr. Phelps options to purchase a total of
148,000 shares of common stock at an exercise price of $2.00 per share. In
consideration of this grant, Mr. Phelps agreed to cancel an option to purchase
48,000 shares that he had previously received while he was a consultant. These
options become exercisable in substantially equal monthly installments over a
four-year period. Mr. Phelps's employment agreement provides that if we
terminate him for any reason, 50% of his unvested options will become
immediately exercisable. The agreement also provides that 50% of Mr. Phelps'
unvested options will become immediately exercisable following a change in
control of the company if he is terminated or quits because the terms of his
employment have been adversely changed.
STOCK PLANS
AMENDED AND RESTATED 1995 EQUITY INCENTIVE PLAN
We adopted our 1995 Equity Incentive Plan in August 1995. We amended and
restated the plan in January 1998. The Amended and Restated 1995 Equity
Incentive Plan gives us flexibility in awarding equity incentives by permitting
multiple types of incentives. The plan's purposes are:
- - to attract and retain our key employees, consultants and directors; and
- - to enable those employees, consultants and directors to participate in our
long-term growth.
Our equity plan provides for the grant of stock options, stock appreciation
rights, performance shares, restricted stock or stock units for the purchase of
an aggregate of of our common stock, subject to adjustment to reflect
stock splits and similar capital changes, to officers, employees and other
individuals. The board of directors has appointed the compensation committee to
administer this equity plan. The compensation committee selects the participants
and establishes the terms and conditions of each option or other equity right
granted under the 1995 Equity Incentive Plan The compensation has broad
discretion to set these terms, except that all incentive stock options must have
an exercise price at least equal to 100% of the fair market value of the option
shares on the date of grant, and the term of any incentive stock option may not
exceed ten
51
<PAGE>
years. The purpose of these restrictions is to ensure that incentive stock
options qualify for favorable tax treatment under Section 422 of the Internal
Revenue Code.
As of May 15, 2000 we had granted options to purchase an aggregate of
shares of common stock under the 1995 Equity Incentive Plan. As of
that date, options to purchase shares had been exercised and options to
purchase shares had been cancelled. Options to purchase an aggregate
of shares of common stock were outstanding as of December 31, 1999,
and of those, options to purchase shares were exercisable as of that
date. As of December 31, 1999, awards to purchase shares of
Restricted Common Stock had been granted under the Equity Plan. Except as set
forth above, no other awards have been granted under the 1995 Equity Incentive
Plan.
1998 EMPLOYEE STOCK PURCHASE PLAN
We adopted the 1998 Employee Stock Purchase Plan in January 1998. Under this
plan, our employees may purchase shares of our common stock at a discount from
fair market value. We have reserved shares of common stock for issuance
under this plan. To date, we have not issued any shares under this plan.
The 1998 Employee Stock Purchase Plan is intended to qualify as an employee
stock purchase plan, within the meaning of Section 423 of the Internal Revenue
Code. The Compensation Committee has discretion to grant rights to purchase
stock under the plan and to determine other terms and conditions of grants under
the plan. The purchase price per share of common stock is 85% of the lesser of
its fair market value at the beginning of the offering period or on the
applicable exercise date. Employees may pay the purchase price through payroll
deductions, periodic lump-sum payments, or a combination of both. Eligible
employees participate voluntarily, and they may withdraw from any offering at
any time before stock is purchased. The 1998 Employee Stock Purchase Plan will
terminate on January 30, 2008.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our Compensation Committee determines salaries, incentives and other
compensation for our directors and officers. The Compensation Committee also
administers incentive compensation and benefit plans. For more information, see
the discussion of "Stock Plans" earlier in this section. The Compensation
Committee currently consists of Dr. Anagnostopoulos, Dr. Lewis, and
Mr. Fordyce. For more information, see the sections of this prospectus entitled
"Principal Stockholders" and "Certain Relationships and Related Transactions."
52
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Blair serves as an outside director of and consultant to Genzyme
Corporation. Two of our other directors, Constantine Anagnostopoulos and Henry
Lewis, are also directors of Genzyme. We sublease a portion of our facilities in
Cambridge, Massachusetts, from Genzyme pursuant to a lease we entered into on
September 21, 1996. This sublease was amended on December 31, 1997, and has been
extended on two occasions. The most recent extension expires on June 30, 2001.
We have an option to extend that period until the end of 2001. The size of the
facilities we sublease from Genzyme is 16,183 square feet, and the rent is
currently $40 per square foot. We believe these terms are neither more nor less
favorable than we would have received if we had leased a comparable facility
from a third party.
In October 1998, we loaned $1,300,000 to Henry Blair, our Chairman and Chief
Executive Officer, in connection with a purchase of real property. This loan was
secured by Mr. Blair's interest in the real property and by his shares of our
capital stock. Interest accrues on the unpaid principal balance at the rate of
one and a half percent less than the base rate of Fleet National Bank, provided
that the interest rate will not be less than the minimum rate required to avoid
imputed interest for federal tax purposes. As modified pursuant to a resolution
of the board of directors in March 2000, this loan is due and payable whenever
the Compensation Committee determines that repayment is in the best interest of
Dyax, and in any event (i) if Mr. Blair ceases to be our Chairman and Chief
Executive Officer; (ii) if our cash and marketable investments total less than
$10,000,000; or (iii) on the last trading date under our then applicable insider
trading policy during the trading period immediately after the second quarterly
earnings announcement made after the expiration of his lock-up agreement. As of
May 15, 2000, the full principal amount remained outstanding under this loan.
In February 1998, we loaned Robert Dishman, an Executive Vice President and one
of our directors, an aggregate of $453,600 to enable him to purchase restricted
stock and exercise an option to purchase common stock. These loans are described
more fully under Management--Employment Agreements. As modified pursuant to a
resolution of the board of directors in March 2000, these loans are due and
payable on the earlier of February 18, 2002 or the last trading date under our
then applicable insider trading policy during the trading period immediately
after the second quarterly earnings announcement made after the expiration of
his lock-up agreement. As of May 15, 2000, approximately $460,760 in unpaid
principal and accrued interest remained outstanding under these loans.
In October 1999, when Stephen Galliker, our Executive Vice President and Chief
Financial Officer, joined us, we sold him 47,500 shares of common stock.
Mr. Galliker paid $2.00 per share, for an aggregate purchase price of $95,000.
We have a right to repurchase 22,500 of the shares from Mr. Galliker at his
purchase price if he ceases to be employed by us, but this right lapses in
monthly installments over a two-year period from October 1, 1999.
Mr. Fordyce was elected to our board of directors in August 1995 pursuant to
voting rights that our charter grants to holders of our Class A convertible
preferred stock. These voting rights will terminate following the automatic
conversion of all outstanding shares of our Class A convertible preferred stock
into shares of common stock, which will occur in connection with this offering.
See "Description of Capital Stock." Mr. Fordyce is a general partner of Prince
Ventures Partners LP, which is the general partner of Prince Venture Partners
IV. Prince Venture Partners IV is one of our stockholders. In August 1995, we
sold 375,000 shares of Class A Series 3 convertible preferred stock to Prince
Venture Partners IV at a purchase price of $2.00 per share. In October 1996, we
sold 478,556 shares of Class A Series 4 convertible preferred stock to Prince
Venture Partners IV at a purchase price of $3.13 per share. In September 1997,
Prince Venture Partners IV purchased (1) 119,946 shares of Class A Series 1
convertible preferred stock at a purchase price of $1.73 per share; and
(2) 20,413 shares of common stock at a purchase price of $0.50 per share from a
group of related stockholders.
Dr. Anagnostopoulos, who is one of our directors, is a general partner of
Gateway Associates, L.P., which is the general partner of Gateway Venture
Partners. Gateway Venture Partners is one of our stockholders. In August 1995,
we issued 191,409 shares of Class A Series 1 convertible preferred stock to
Gateway Venture Partners III, L.P., in connection with a recapitalization that
took place at that time. Also in August 1995, we sold 150,000 shares of Class A
Series 3 convertible preferred stock to Gateway Venture Partners III, L.P., at a
purchase price of $2.00 per share. In October 1996, we sold 75,000 shares of
Class A Series 4 convertible preferred stock to Gateway Venture Partners III,
L.P., at a purchase price of $3.13 per share.
Mr. Kempner, who is one of our directors, is the President of Pinpoint Partners
Corporation, which is the general partner of each of Loeb Investment Co. 106,
Loeb Investment Co. 106A, Loeb Investment Co. 106B and Loeb Investment Co. 106C
For
53
<PAGE>
purposes of simplicity, we refer to these organizations collectively as the
"Loeb Investment Partnerships." All of these entities own stock in our company.
In August 1995, we issued an aggregate of 279,990 shares of Class A Series 2
convertible preferred stock to the Loeb Investment Partnerships in connection
with our merger with Protein Engineering Corporation. Also in August 1995, we
sold an aggregate of 150,000 shares of Class A Series 3 convertible preferred
stock to certain of the Loeb Investment Partnerships at a purchase price of
$2.00 per share. In October 1996, we sold an aggregate of 286,845 shares of
Class A Series 4 convertible preferred stock to certain of the Loeb Investment
Partnerships at a purchase price of $3.13 per share. In March 1997, we sold an
aggregate of 32,644 shares of Class A Series 4 convertible preferred stock to
certain of the Loeb Investment Partnerships at a purchase price of $3.13 per
share. In October 1998, we sold 255,137 shares of Class A Series 5 convertible
preferred stock to certain of the Loeb Investment Partnerships at a purchase
price of $5.45 per share.
Mr. Littlechild, who is one of our directors, is a general partner of HealthCare
Ventures V, L.P., which is one of our stockholders. In August 1998, we sold
1,651,376 shares of Class A Series 5 convertible preferred stock to HealthCare
Ventures V, L.P., at a purchase price of $5.45 per share. In connection with
this transaction, and pursuant to rights held by the holders of our Class A
Series 5 convertible preferred stock, Mr. Littlechild was elected to our board
of directors.
Dr. Marduel, who is one of our directors, is a general partner of Alta Partners.
The principals of Alta Partners control Alta BioPharma Partners LP, Alta
Embarcadero BioPharma LLC, and Dyax Chase Partners (AltaBio) LLC. In
October 1998, we sold an aggregate of 1,376,147 shares of Class A Series 5
convertible preferred stock at a price of $5.45 per share to these entities. In
connection with these transactions, and pursuant to rights held by the holders
of our Class A Series 5 convertible preferred stock, Dr. Marduel was elected to
our board of directors.
54
<PAGE>
PRINCIPAL STOCKHOLDERS
The table below provides certain information about beneficial ownership of our
stock as of May 15, 2000, and as adjusted to reflect the sale of
shares of common stock that we anticipate selling in connection with
this offering. The table shows information for:
- - each person, or group of affiliated persons, who is known to us to
beneficially own more than 5% of our common stock;
- - each of our directors;
- - each of our named executive officers; and
- - all of our directors and executive officers as a group.
Except as otherwise noted, the persons or entities in this table have sole
voting and investing power with respect to all shares of common stock
beneficially owned by them, subject to community property laws, where
applicable.
The "Percentage Ownership" column below is based on a total of 2,491,777 shares
of common stock outstanding before the offering and shares of common stock
outstanding after the offering and gives effect to the conversion of 14,696,987
shares of preferred stock into 11,584,459 shares of common stock. For purposes
of the table below, we treat shares of common stock subject to options that are
currently exercisable or exercisable within 60 days after May 15, 2000 to be
outstanding and to be beneficially owned by the person holding the options for
the purpose of computing the percentage ownership of the person, but we do not
treat the shares as outstanding for the purpose of computing the percentage
ownership of any other stockholder.
<TABLE>
<CAPTION>
--------------------------------------------------
<S> <C> <C> <C>
PERCENTAGE OWNERSHIP
SHARES BENEFICIALLY ------------------------
OWNED BEFORE AFTER
PRIOR TO OFFERING OFFERING OFFERING
------------------- ----------- ----------
HealthCare Ventures V, L.P.(1)..................... 1,651,376 11.7%
The Entities Affiliated with Alta Partners(2)...... 1,376,147(2) 9.8%
Loeb Investment Partnerships(3).................... 906,044(3) 6.4%
New York Life Insurance Company(4)................. 726,908 5.2%
Henry E. Blair..................................... 717,438(5) 5.1%
Gregory D. Phelps.................................. 86,834(6) *
L. Edward Cannon, Ph.D............................. 113,794(7) *
Robert A. Dishman, Ph.D............................ 278,791(8) 2.0%
Stephen S. Galliker................................ 86,667(9) *
Constantine E. Anagnostopoulos, Ph.D............... 306,252(10) 2.2%
James W. Fordyce................................... 674,112(11) 4.8%
Thomas L. Kempner.................................. 926,107(12) 6.6%
Henry R. Lewis, Ph.D............................... 62,907(13) *
John W. Littlechild................................ 1,666,376(14) 11.8%
Alix Marduel....................................... 1,391,147(15) 9.9%
David J. McLachlan................................. 10,000(16) *
All current executive officers and directors as a
group
(13 persons)..................................... 6,516,976(17) 44.8%
</TABLE>
- ------------------------
* Indicates beneficial ownership of less than one percent.
** The address of the directors and executive officers is One Kendall Square,
Cambridge, MA 02139
55
<PAGE>
(1) The stockholder's address is One Kendall Square, Building 300, Cambridge, MA
02139.
(2) Consists of 855,393 shares held by Alta Biopharma Partners LP, 32,242 shares
held by Alta Embarcadero Biopharma LLC, and 488,512 shares held by Dyax
Chase Partners (AltaBio) LLC. As general partners and managing members of
these entities, the principals of Alta Partners exercise control over voting
and investment decisions with respect to these shares. The shareholder's
address is One Embarcadero Center, Suite 4050, San Francisco, CA 94111.
(3) Includes: (i) 125,813 shares owned by Loeb Investment Co. 106, (ii) 218,988
shares owned by Loeb Investment Co. 106A, (iii) 97,800 shares owned by Loeb
Investment Co. 106B, and (iv) 208,307 shares owned by Loeb Investment Co.
106C. Pinpoint Partners Corporation, the general partner of each of the
named Loeb partnerships, exercises sole voting and investment control with
respect to all shares held by each of the Loeb partnerships. The
stockholder's address is c/o Irwin Rowe, 61 Broadway, 24th Floor, New York,
NY 10006.
(4) The stockholder's address is 51 Madison Avenue, New York, NY 10010.
(5) Includes (i) 114,100 shares which are held in trust for the benefit of
Mr. Blair's spouse and child, as to which Mr. Blair disclaims beneficial
ownership, and (ii) 48,017 shares of common stock issuable upon exercise of
outstanding options exercisable within the 60-day period following May 15,
2000.
(6) Includes 18,021 shares of common stock issuable to Mr. Phelps upon exercise
of outstanding options exercisable within the 60-day period following
May 15, 2000.
(7) Consists of 113,794 shares of common stock issuable to Dr. Cannon upon
exercise of outstanding options exercisable within the 60-day period
following May 15, 2000.
(8) Includes 85,746 shares of common stock issuable to Dr. Dishman upon exercise
of outstanding options exercisable within the 60-day period following
May 15, 2000.
(9) Includes 39,167 shares of common stock issuable to Mr. Galliker upon
exercise of outstanding options exercisable within the 60-day period
following May 15, 2000.
(10) Includes 285,811 shares held by Gateway Venture Partners.
Dr. Anagnostopoulos is a general partner of Gateway Associates, L.P., the
general partner of Gateway Venture Partners. He disclaims beneficial
ownership of these shares, except to the extent of his pecuniary interest in
the entities. Also includes 19,560 shares of common stock issuable upon
exercise of outstanding options exercisable within the 60-day period
following May 15, 2000.
(11) Includes 648,032 shares held by Prince Venture Partners IV. Mr. Fordyce is
a general partner of Prince Ventures Limited Partnership, the general
partner of Prince Venture Partners IV. He disclaims beneficial ownership of
these shares, except to the extent of his pecuniary interest in the
entities. Also includes 7,539 shares of common stock issuable upon exercise
of outstanding options exercisable within the 60-day period following
May 15, 2000.
(12) Includes 906,044 shares of common stock held by the Loeb partnerships named
in note (3) above. Mr. Kempner is the President of Loeb Partners
Corporation, the general partner of each of the Loeb partnerships. Also
includes 20,063 shares of common stock issuable upon exercise of outstanding
options exercisable within the 60-day period following May 15, 2000.
(13) Includes 22,549 shares of common stock issuable to Dr. Lewis upon exercise
of outstanding options exercisable within the 60-day period following
May 15, 2000.
(14) Includes 1,651,376 shares held by HealthCare Venture V, L.P.
Mr. Littlechild is the general partner of HealthCare Partners LP, which is
the general partner of Health Care Venture V, L.P. Mr. Littlechild disclaims
beneficial ownership of these shares except to the extent of his pecuniary
interest in the limited partnerships. Also includes 15,000 shares of common
stock issuable upon exercise of outstanding options exercisable within the
60-day period following May 15, 2000.
(15) Includes 855,393 shares held by Alta Biopharma Partners LP, 32,242 shares
held by Alta Embarcadero Biopharma LLC, and 488,512 shares held by Dyax
Chase Partners (AltaBio) LLC. The principals of Alta Partners exercise
control over voting and investment decisions with respect to these
securities. Dr. Marduel is a general partner of Alta Partners. She disclaims
beneficial ownership of these shares, except to the extent of her pecuniary
interest in the entities. Also includes 15,000 shares of common stock
issuable upon exercise of outstanding options exercisable within the 60-day
period following May 15, 2000.
(16) Consists of 10,000 shares of common stock issuable to Mr. McLachlan upon
exercise of outstanding options exercisable within the 60-day period
following May 15, 2000.
(17) Includes 459,061 shares of common stock issuable upon exercise of
outstanding options exercisable within the 60-day period following May 15,
2000.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock currently consists of 20,000,000 shares of common
stock, par value $0.01 per share, and 15,312,391 shares of preferred stock,
$0.01 par value per share. Upon completion of this offering, our authorized
capital stock will consist of 50,000,000 shares of common stock and 1,000,000
shares of preferred stock. These totals give effect to the amendment and
restatement of our Restated Certificate of Incorporation to delete references to
the Class A Series 1, Series 2, Series 3, Series 4 and Series 5 convertible
preferred stock.
On March 31, 2000, the following numbers of shares of common and preferred stock
were outstanding:
<TABLE>
<S> <C>
Common Stock................................................ 2,491,777 shares
Class A Series 1 Preferred Stock............................ 1,942,936 shares
Class A Series 2 Preferred Stock............................ 703,970 shares
Class A Series 3 Preferred Stock............................ 2,000,000 shares
Class A Series 4 Preferred Stock............................ 4,297,137 shares
Class A Series 5 Preferred Stock............................ 5,752,944 shares
</TABLE>
All of the outstanding preferred stock will convert into 11,584,459 shares of
common stock upon completion of this offering. Upon completion of this offering,
we expect to have about shares of common stock outstanding. As of
March 31, 2000, we had approximately 340 stockholders.
The following summary of certain provisions of our common and preferred stock
does not purport to complete. You should refer to our restated certificate of
incorporation and our by-laws, both of which are included as exhibits to the
registration statement we have filed with the SEC in connection with this
offering. The summary below is also qualified by provisions of applicable law.
COMMON STOCK
Holders of common stock are entitled to one vote per share on matters on which
our stockholders vote. There are no cumulative voting rights. Holders of common
stock are entitled to receive dividends, if declared by our board of directors,
out of funds that we may legally use to pay dividends. See the section of this
prospectus entitled "Dividend Policy" for further information. If we liquidate
or dissolve, holders of common stock are entitled to share ratably in our assets
once our debts and any liquidation preference owed to any then-outstanding
preferred stockholders are paid. No shares of preferred stock will be
outstanding immediately after the closing of this offering. All shares of common
stock that are outstanding as of the date of this prospectus and, upon issuance
and sale, all shares we are selling in this offering, will be fully-paid and
nonassessable.
PREFERRED STOCK
We are currently authorized to issue 15,312,391 shares of preferred stock. Upon
completion of this offering, all issued and outstanding shares of preferred
stock will convert into a total of 11,584,459 shares of common stock.
Immediately after this conversion, the outstanding shares of preferred stock
will be cancelled, and the total number of shares of preferred stock that we are
authorized to issue will be reduced to 1,000,000 shares.
Upon completion of this offering, our board of directors will have the authority
to issue up to 1,000,000 shares of preferred stock in one or more series and to
fix the rights of each series. These rights may include dividend rights,
dividend rates, conversion rights, voting rights, terms of redemption,
redemption prices, liquidation preferences, sinking fund terms, and the number
of shares that constitute any series. The board of directors may exercise this
authority without any further action by our stockholders.
We believe the power to issue preferred stock will provide our board of
directors with flexibility in connection with certain possible corporate
transactions. The issuance of preferred stock, however, could adversely affect
the voting power of holders of our common stock, restrict their rights to
receive payment upon liquidation, and have the effect of delaying, deferring, or
preventing a change in control. We have no present plans to issue any shares of
preferred stock.
57
<PAGE>
WARRANTS
In connection with our merger with Protein Engineering Corporation in 1995, we
issued warrants to purchase a total of 27,022 shares of common stock at an
exercise price of $3.97 per share. We issued these warrants in substitution for
warrants that Protein Engineering Corporation issued previously. The warrants
will expire on August 10, 2000. The exercise price for each warrant is subject
to adjustment in the event of a stock split, stock dividend, combination, or
similar transaction.
REGISTRATION RIGHTS
The holders of the shares of common stock to be issued upon conversion of
all series of our Class A Preferred Stock are entitled to demand that we
register those shares, known as registrable shares, under the Securities Act
commencing one year after the closing of this offering. In addition, if we
propose to register any more of our securities under the Securities Act after
the closing of this offering, either for our own account or for the account of
other security holders, the holders of these rights are entitled to notice of
that further registration and are entitled to have their registrable shares
included in it. These rights, however, are subject to conditions and
limitations, including thresholds as to minimum values of shares required for a
demand registration and the right of the underwriters of a registered offering
of Dyax to limit the number of shares included in the offering. Holders of
registrable shares can require us to file the registration at our expense and,
subject to some conditions and limitations, we are required to use our best
efforts to effect the registration. Furthermore, holders of these rights may
require us to file additional registration statements on Form S-3 for the sale
their registrable shares at any time after the first anniversary of the closing
of this offering if they are not then able to sell all of their shares under
Rule 144. Holders of these rights did not have the right to have their
registrable shares registered under the Securities Act as part of this offering.
ANTI-TAKEOVER MEASURES
DELAWARE LAW
Section 203 of the Delaware General Corporation Law is applicable to takeovers
of Delaware corporations. Subject to exceptions enumerated in Section 203,
Section 203 provides that a corporation shall not engage in any business
combination with any "interested stockholder" for a three-year period following
the date that the stockholder becomes an interested stockholder unless:
- - prior to that date, the board of directors of the corporation approved either
the business combination or the transaction that resulted in the stockholder
becoming an interested stockholder;
- - upon consummation of the transaction that resulted in the stockholder becoming
an interested stockholder, the interested stockholder owned at least 85% of
the voting stock of the corporation outstanding at the time the transaction
commenced, though some shares may be excluded from the calculation; and
- - on or subsequent to that date, the business combination is approved by the
board of directors of the corporation and by the affirmative votes of holders
of at least two-thirds of the outstanding voting stock that is not owned by
the interested stockholder.
Except as specified in Section 203, an interested stockholder is generally
defined to include any person who, together with any affiliates or associates of
that person, beneficially owns, directly or indirectly, 15% or more of the
outstanding voting stock of the corporation, or is an affiliate or associate of
the corporation and was the owner of 15% or more of the outstanding voting stock
of the corporation, any time within three years immediately prior to the
relevant date. Under certain circumstances, Section 203 makes it more difficult
for an interested stockholder to effect various business combinations with a
corporation for a three-year period, although the stockholders may elect not to
be governed by this section, by adopting an amendment to the certificate of
incorporation or by-laws, effective 12 months after adoption. Our certificate of
incorporation and by-laws do not opt out from the restrictions imposed under
Section 203. We anticipate that the provisions of Section 203 may encourage
companies interested in acquiring is to negotiate in advance with the board
because the stockholder approval requirement would be avoided if a majority of
the directors then in office excluding an interested stockholder approve either
the business combination or the transaction that resulted in the stockholder
becoming an interested stockholder. These provisions may have the effect of
deterring hostile takeovers or delaying changes in control, which could depress
the market price of our common stock and deprive stockholders of opportunities
to realize a premium on shares of common stock held by them.
58
<PAGE>
CHARTER AND BY-LAW PROVISIONS
In addition to the board of directors' ability to issue shares of preferred
stock, our restated certificate of incorporation and by-laws contain the
following provisions that may have the effect of discouraging unsolicited
acquisition proposals:
- - our restated certificate of incorporation classifies the board of directors
into three classes with staggered three-year terms;
- - our by-laws include a provision prohibiting stockholder action by written
consent;
- - under the certificate of incorporation and by-laws, our board of directors may
enlarge the size of the board and fill the vacancies;
- - our restated certificate of incorporation requires the approval of 66 2/3% of
the outstanding capital stock to merge the company into another entity, sell
all or substantially all of our assets, or engage in any other business
combination not approved by the board of directors;
- - our restated certificate of incorporation provides that some of its provisions
may only be changed by an affirmative vote of 66 2/3% of our outstanding
capital stock;
- - our by-laws provide that a stockholder may not nominate candidates for the
board of directors at any annual or special meeting unless that stockholder
notifies us of its intention a specified period in advance and provides us
with certain required information;
- - our by-laws provide that special meetings of stockholders may only be called
by the President or by the board of directors; and
- - stockholders who wish to bring business before the stockholders at our annual
meeting must provide advance notice.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock will be Boston EquiServe.
59
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no market for our common stock. We cannot
assure you that a liquid trading market for our common stock will develop or be
sustained after this offering. Future sales of substantial amounts of common
stock in the public market after this offering, or the anticipation of those
sales, could adversely affect market prices prevailing from time to time and
could impair our ability to raise capital through sales of our equity
securities.
After the closing of this offering, we will have shares of common
stock outstanding, assuming that there are no exercises of currently outstanding
warrants or options and that the underwriters do not exercise their
over-allotment option. Of these shares, the shares sold in
this offering will be freely tradable, unless they are purchased by our
"affiliates," as that term is defined in Rule 144 under the Securities Act.
The remaining shares of common stock will be owned by our existing
shareholders and are deemed "restricted shares" under Rule 144. Of these shares,
approximately shares will be eligible for sale immediately under Rule 144,
and approximately shares will become eligible for resale under
Rules 144 and 701 on the 91st day after the effective date of this prospectus.
Stockholders holding an aggregate of shares of our common stock prior
to this offering have agreed to enter into the 180-day lock-up agreements
described below. At the end of this 180-day period, approximately
shares will be eligible for sale under Rules 144 and 701, and the remaining
shares will become eligible from time to time thereafter upon the expiration of
the minimum one-year holding period prescribed by Rule 144.
In general, under Rule 144 as currently in effect, a person, or persons whose
shares are aggregated, who has beneficially owned restricted shares for at least
one year is entitled to sell within any three-month period up to that number of
shares that does not exceed the greater of: (1) one percent of the number of
shares of common stock then outstanding, which will be approximately
shares after this offering, or (2) the average weekly trading volume of the
common stock during the four calendar weeks preceding the filing of a Form 144
with respect to the sale. Sales under Rule 144 are also subject to certain
"manner of sale" provisions and notice requirements and to the requirement that
the issuer has made current public information about itself available. Under
Rule 144(k), a person who is not deemed to have been an affiliate of the issuer
at any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years, including the
holding period of any prior owner except an affiliate, is entitled to sell those
shares without complying with the manner of sale, public information, volume
limitation, or notice provisions of Rule 144.
Our directors and executive officers, along with all of our other current
stockholders, will have entered into various lock-up agreements. Pursuant to
these agreements, our stockholders agree, with limited exceptions, not to sell,
offer to sell, contract to sell, grant any option to sell, exercise any
registration rights, grant an option to purchase, effect a short sale, or
otherwise dispose of or engage in any hedging or other transaction that is
designed or reasonably expected to lead to a disposition of any shares of common
stock or any option to purchase common stock or any securities exchangeable for
or convertible into common stock for a period of 180 days after the date of this
prospectus.
Ninety days after the date of this prospectus, we plan to file registration
statements under the Securities Act to register:
- - approximately shares of common stock issuable under our Amended and
Restated 1995 Equity Incentive Plan; and
- - approximately shares of common stock issuable under our 1998
Employee Stock Purchase Plan.
Upon registration, after expiration of any lock-up agreements, these shares will
be eligible for immediate sale upon exercise, except for shares acquired by
affiliates, which will be subject to the requirements of Rule 144 described
above.
60
<PAGE>
UNDERWRITING
We and the underwriters named below have entered into an underwriting agreement
covering the common stock to be offered in this offering. J.P. Morgan Securities
Inc., Lehman Brothers Inc. and Pacific Growth Equities, Inc. are acting as
representatives of the underwriters. Each underwriter has agreed to purchase the
number of shares of common stock set forth opposite its name in the following
table.
<TABLE>
<CAPTION>
-------------
<S> <C>
NUMBER OF
UNDERWRITERS SHARES
---------
J.P. Morgan Securities Inc..................................
Lehman Brothers Inc.........................................
Pacific Growth Equities, Inc................................
---------
Total.....................................................
=========
</TABLE>
The underwriting agreement provides that if the underwriters take any of the
shares presented in the table above, then they must take all of these shares. No
underwriter is obligated to take any shares allocated to a defaulting
underwriter except under limited circumstances.
The underwriters are offering the shares of common stock, subject to the prior
sale of shares, and when, as and if these shares are delivered to and accepted
by them. The underwriters will initially offer to sell shares to the public at
the initial public offering price shown on the cover page of this prospectus.
The underwriters may sell shares to securities dealers at a discount of up to
$ per share from the initial public offering price. Any of these securities
dealers may resell shares to other brokers or dealers at a discount of up to
$ per share from the initial public offering price. After the initial public
offering, the underwriters may vary the public offering price and other selling
terms.
If the underwriters sell more shares than the total number shown in the table
above, the underwriters have the option to buy up to an additional shares
of common stock from us to cover these sales. They may exercise this option
during the 30-day period from the date of this prospectus. If any shares are
purchased with this option, the underwriters will purchase shares in
approximately the same proportion as shown in the table above.
The following table shows the per share and total underwriting discounts that we
will pay to the underwriters. These amounts are shown assuming both no exercise
and full exercise of the underwriters' option to purchase additional shares.
<TABLE>
<CAPTION>
---------------------
<S> <C> <C>
NO FULL
EXERCISE EXERCISE
--------- ---------
Per share................................................... $ $
Total..................................................... $ $
</TABLE>
The underwriters may purchase and sell shares of common stock in the open market
in connection with this offering. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater number of
shares than they are required to purchase in this offering. Stabilizing
transactions consist of bids or purchases made for the purpose of preventing or
slowing a decline in the market price of the common stock while this offering is
in progress. The underwriters may also impose a penalty bid, which means that an
underwriter must repay to the other underwriters a portion of the underwriting
discount received by it. An underwriter may be subject to a penalty bid if the
representatives of the underwriters, while engaging in stabilizing or short
covering transactions, repurchase shares sold by or for the account of that
underwriter. These activities may stabilize, maintain or otherwise affect the
market price of the common stock. As a result, the price of the common stock may
be higher than the price that otherwise might exist in the open market. If the
underwriters commence these activities, they may discontinue them at any time.
The underwriters may carry out these transactions on the Nasdaq National Market,
in the over-the-counter market or otherwise.
61
<PAGE>
A prospectus in electronic format will be made available on an Internet site
maintained by one or more of the underwriters participating in this offering.
We estimate that the total expenses of this offering payable by us, excluding
underwriting discounts, will be $ .
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
We and our executive officers, directors and all of our existing stockholders
will have agreed that, with limited exceptions, during the period beginning from
the date of this prospectus and continuing to and including the date 180 days
after the date of this prospectus, that we will not, directly or indirectly,
offer, sell, offer to sell, contract to sell or otherwise dispose of any shares
of common stock or any of our securities which are substantially similar to the
common stock, including but not limited to any securities that are convertible
into or exchangeable for, or that represent the right to receive, common stock
or any such substantially similar securities or enter into any swap, option,
future, forward or other agreement that transfers, in whole or in part, the
economic consequence of ownership of common stock or any securities
substantially similar to the common stock, other than pursuant to employee stock
option plans existing on the date of this prospectus, without the prior written
consent of J.P. Morgan Securities Inc.
At our request, the underwriters have reserved shares of common stock for sale
to our directors, officers, employees, consultants and family members of the
foregoing. We expect these persons to purchase no more than percent of the
common stock offered in this offering. The number of shares available for sale
to the general public will be reduced to the extent such persons purchase such
reserved shares.
We intend to apply to list our common stock listed on the Nasdaq National Market
under the symbol "DYAX."
It is expected that delivery of the shares will be made to investors on or about
, 2000.
There has been no public market for the common stock prior to this offering. We
and the underwriters will negotiate the initial offering price. In determining
the price, we and the underwriters expect to consider a number of factors in
addition to prevailing market conditions, including:
- - the history of and prospects for our industry and for biotechnology companies
generally;
- - an assessment of our management;
- - our present operations;
- - our historical results of operations;
- - the trend of our revenues and earnings; and
- - our earnings prospects.
We and the underwriters will consider these and other relevant factors in
relation to the price of similar securities of generally comparable companies.
Neither we nor the underwriters can assure investors that an active trading
market will develop for the common stock, or that the common stock will trade in
the public market at or above the initial offering price.
From time to time in the ordinary course of their respective businesses, certain
of the underwriters and their affiliates have engaged and may in the future
engage in commercial banking and/or investment banking transactions with us and
our affiliates.
62
<PAGE>
LEGAL MATTERS
Palmer & Dodge LLP, Boston, Massachusetts, will pass upon the validity of the
common stock offered by this prospectus for us. Nathaniel S. Gardiner, Esq., a
partner of Palmer & Dodge LLP, is our corporate secretary. Debevoise & Plimpton,
New York, New York, will pass upon certain legal matters in connection with this
offering for the underwriters.
EXPERTS
The consolidated financial statements of Dyax Corp. as of December 31, 1998 and
1999 and for the three years in the period ended December 31, 1999 included in
this prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
Statements relating to United States patent matters involving our patented phage
display technology in the portions of this prospectus entitled risk factors and
business, insofar as they constitute summaries of matters of United States
patent law, have been reviewed and approved by Yankwich & Associates, as experts
in patent law.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-1 with the SEC for the stock we
are offering by this prospectus. This prospectus does not include all of the
information contained in the registration statement. You should refer to the
registration statement and its exhibits for additional information. Although we
have disclosed the material terms of any contracts, agreements, or other
documents that are referenced in this prospectus, you should refer to the
exhibits attached to the registration statement for copies of the actual
contracts, agreements, or other documents. When we complete this offering, we
will be required to file annual and quarterly reports, special reports, proxy
statements, and other information with the SEC.
You can read our SEC filings, including the registration statement, over the
Internet at the SEC's web site at http://www.sec.gov. You also may read and copy
any document we file with the SEC at its public reference facilities at 450
Fifth Street N.W., Washington, DC 20549; 7 World Trade Center, Suite 1300, New
York, New York 100048; and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. You may also obtain copies of the documents at
prescribed rates by writing to the Public Reference Section of the SEC at 450
Fifth Street N.W., Washington, DC 20549. Please call the SEC at 1-800-732-0330
for further information on the operation of the public reference facilities. Our
SEC filings are also available at the office of the Nasdaq National Market. For
further information on obtaining copies of our public filings at the Nasdaq
National Market, you should call (212) 656-5060.
You should rely only on the information contained in the registration statement,
including its exhibits. We have not, and the underwriters have not, authorized
any other person to provide you with different information. This prospectus is
not an offer to sell, nor is it seeking an offer to buy, the securities in any
state where the offer or sale is not permitted. The information in this
prospectus is complete and accurate as of the date on the front cover. The
information may have changed since that date.
63
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
INDEX
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Report of Independent Accountants........................... F-2
Consolidated Balance Sheets as of December 31, 1998 and 1999
and March 31, 2000 Actual (unaudited) and March 31, 2000
Pro Forma (unaudited)..................................... F-3
Consolidated Statements of Operations for the years ended
December 31, 1997, 1998 and 1999 and for the three months
ended March 31, 1999 (unaudited) and March 31, 2000
(unaudited)............................................... F-4
Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 1997, 1998 and 1999 and
for the three months ended March 31, 2000 (unaudited)..... F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1997, 1998 and 1999 and for the three months
ended March 31, 1999 (unaudited) and March 31, 2000
(unaudited)............................................... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Dyax Corp.:
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows present fairly, in all material respects, the financial position of Dyax
Corp. and its subsidiaries at December 31, 1999 and 1998, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States. These financial statements are the responsibility
of the Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
March 29, 2000
F-2
<PAGE>
DYAX CORP.
CONSOLIDATED BALANCE SHEETS
<TABLE>
---------------------------------------------------
MARCH 31, 2000
DECEMBER 31, -----------------------------
------------------------- PRO FORMA (NOTE
1998 1999 ACTUAL 2)
----------- ----------- ----------- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $25,491,000 $16,726,000 $18,160,000 $ 18,160,000
Accounts receivable, net of allowances for doubtful
accounts of $129,000 at December 31, 1998 and 1999
and March 31, 2000................................. 2,913,000 3,098,000 2,964,000 2,964,000
Inventories.......................................... 2,305,000 2,912,000 2,853,000 2,853,000
Other current assets................................. 226,000 335,000 339,000 339,000
----------- ----------- ----------- ------------
Total current assets............................... 30,935,000 23,071,000 24,316,000 24,316,000
Fixed assets, net...................................... 1,595,000 2,709,000 2,931,000 2,931,000
Notes receivable, officers............................. 1,336,000 1,745,000 1,753,000 1,753,000
Goodwill, net.......................................... 260,000 1,886,000 1,668,000 1,668,000
Other assets........................................... 290,000 197,000 177,000 177,000
----------- ----------- ----------- ------------
Total assets....................................... $34,416,000 $29,608,000 $30,845,000 $ 30,845,000
=========== =========== =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses................ 3,312,000 5,850,000 3,534,000 3,534,000
Current portion of deferred revenue.................. 859,000 1,603,000 4,300,000 4,300,000
Current portion of capital leases.................... 249,000 339,000 409,000 409,000
----------- ----------- ----------- ------------
Total current liabilities.......................... 4,420,000 7,792,000 8,243,000 8,243,000
Capital leases......................................... 586,000 1,249,000 1,383,000 1,383,000
Deferred revenue....................................... -- 1,267,000 5,625,000 5,625,000
----------- ----------- ----------- ------------
Total liabilities.................................. 5,006,000 10,308,000 15,251,000 15,251,000
Commitments (Notes 9 and 10)
Stockholders' equity:
Class A convertible preferred stock, $.01 par value;
15,312,391 shares authorized; 14,696,987 shares
issued and outstanding at December 31, 1998 and
1999, and March 31, 2000 actual, $57,301,000
liquidation preference at March 31, 2000; and no
shares issued and outstanding at March 31, 2000 on
a pro forma basis.................................. 57,426,000 57,426,000 57,426,000 --
Common stock, $.01 par value; 20,000,000 shares
authorized; 1,873,851, 2,353,790 and 2,491,777
shares issued at December 31, 1998 and 1999 and
March 31, 2000, respectively; and 14,076,236 shares
issued at March 31, 2000 on a pro forma basis...... 19,000 24,000 25,000 141,000
Additional paid-in capital............................. 12,536,000 18,778,000 19,175,000 76,485,000
Receivable from officer for common stock purchase...... (418,000) (418,000) (418,000) (418,000)
Accumulated (deficit).................................. (38,468,000) (51,655,000) (56,146,000) (56,146,000)
Treasury stock (1,378 common shares at cost)........... -- -- -- --
Deferred compensation.................................. (1,562,000) (4,747,000) (4,513,000) (4,513,000)
Accumulated other comprehensive loss................... (123,000) (108,000) 45,000 45,000
----------- ----------- ----------- ------------
Total stockholders' equity......................... 29,410,000 19,300,000 15,594,000 15,594,000
----------- ----------- ----------- ------------
Total liabilities and stockholders' equity......... $34,416,000 $29,608,000 $30,845,000 $ 30,845,000
=========== =========== =========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
F-3
<PAGE>
DYAX CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
----------------------------------------------------------
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------------- -------------------------
1997 1998 1999 1999 2000
----------- ----------- ------------ ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Product sales.................................. $ 7,138,000 $ 9,641,000 $ 12,596,000 $ 2,840,000 $ 3,378,000
Product development and license fee revenues... 2,192,000 4,490,000 4,237,000 825,000 1,429,000
----------- ----------- ------------ ----------- -----------
Total revenues................................... 9,330,000 14,131,000 16,833,000 3,665,000 4,807,000
Operating expenses:
Cost of products sold.......................... 2,931,000 4,164,000 5,515,000 1,274,000 1,493,000
Research and development (excluding stock-based
compensation of $0, $306,000 and $423,000 for
the years ended December 31, 1997, 1998 and
1999, respectively; $103,000 and $182,000 for
the three months ended March 31, 1999 and
2000,
respectively)................................ 5,625,000 6,778,000 10,618,000 2,322,000 3,703,000
Selling, general and administrative (excluding
stock-based compensation of $75,000, $375,000
and $516,000 for the years ended December 31,
1997, 1998 and 1999, respectively; $126,000
and $222,000 for the three months ended
March 31, 1999 and 2000, respectively)....... 6,787,000 10,061,000 14,069,000 2,964,000 3,856,000
Stock-based compensation....................... 75,000 681,000 939,000 229,000 404,000
----------- ----------- ------------ ----------- -----------
Total operating expenses......................... 15,418,000 21,684,000 31,141,000 6,789,000 9,456,000
----------- ----------- ------------ ----------- -----------
Loss from operations............................. (6,088,000) (7,553,000) (14,308,000) (3,124,000) (4,649,000)
----------- ----------- ------------ ----------- -----------
Interest income (expense), net................. 265,000 401,000 856,000 261,000 158,000
Investment income.............................. -- -- 265,000 -- --
----------- ----------- ------------ ----------- -----------
Net loss......................................... $(5,823,000) $(7,152,000) $(13,187,000) $(2,863,000) $(4,491,000)
----------- ----------- ------------ ----------- -----------
Other comprehensive income (loss):
Foreign currency translation adjustments....... (171,000) 18,000 15,000 (21,000) 153,000
----------- ----------- ------------ ----------- -----------
Other comprehensive income (loss).............. (171,000) 18,000 15,000 (21,000) 153,000
----------- ----------- ------------ ----------- -----------
Comprehensive loss............................... $(5,994,000) $(7,134,000) $(13,172,000) $(2,884,000) $(4,338,000)
=========== =========== ============ =========== ===========
Basic and diluted net loss per share............. $ (3.95) $ (4.22) $ (6.81) $ (1.65) $ (1.97)
Shares used in computing basic and diluted net
loss per share................................. 1,473,474 1,694,782 1,936,907 1,738,693 2,277,725
Unaudited pro forma basic and diluted net loss
per share (Note 4)............................. $ (.97) $ (.32)
Shares used in computing unaudited pro forma
basic and diluted net loss per share (Note
4)............................................. 13,604,750 13,956,254
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
F-4
<PAGE>
DYAX CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999
AND FOR THE THREE MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CONVERTIBLE PREFERRED STOCK
-----------------------------------------------------------------------
CLASS A
--------------------------------------------------------
SERIES 1 SERIES 2 SERIES 3 SERIES 4 SERIES 5
SHARES SHARES SHARES SHARES SHARES AMOUNT
--------- -------- --------- --------- --------- ------------
Balance at December 31, 1996 as previously
reported......................................... 1,942,936 703,970 2,000,000 3,514,377 -- $ 24,821,000
Pooling of interests with Target Quest, BV.........
--------- ------- --------- --------- --------- ------------
Balance at December 31, 1996 as restated........... 1,942,936 703,970 2,000,000 3,514,377 -- 24,821,000
Issuance of preferred stock........................ 782,760 2,437,000
Issuance of Target Quest BV common stock...........
Exercise of stock options under the 1989 plan......
Exercise of stock options under the 1995 plan......
Issuance of restricted stock under the 1995 plan...
Deferred compensation..............................
Compensation expense associated with stock
options..........................................
Foreign currency translation adjustment............
Net Loss...........................................
--------- ------- --------- --------- --------- ------------
Balance at December 31, 1997....................... 1,942,936 703,970 2,000,000 4,297,137 -- 27,258,000
Issuance of preferred stock........................ 5,752,944 30,168,000
Exercise of stock options under the 1995 plan......
Issuance of restricted stock under the 1995 plan...
Loan to purchase common stock......................
Deferred compensation..............................
Compensation expense associated with stock
options..........................................
Cancellation of shares.............................
Foreign currency translation adjustment............
Net Loss...........................................
--------- ------- --------- --------- --------- ------------
Balance at December 31, 1998....................... 1,942,936 703,970 2,000,000 4,297,137 5,752,944 57,426,000
Shares issued for acquisition of Target Quest,
LLC..............................................
Exercise of stock options under the 1995 plan......
Issuance of restricted stock under the 1995 plan...
Deferred compensation..............................
Compensation expense associated with stock
options..........................................
Foreign currency translation adjustment............
Net Loss...........................................
--------- ------- --------- --------- --------- ------------
Balance at December 31, 1999....................... 1,942,936 703,970 2,000,000 4,297,137 5,752,944 57,426,000
Exercise of stock options under the 1995 plan......
Deferred compensation..............................
Compensation expense associated with stock
options..........................................
Foreign currency translation adjustment............
Net Loss...........................................
--------- ------- --------- --------- --------- ------------
Balance at March 31, 2000 (unaudited).............. 1,942,936 703,970 2,000,000 4,297,137 5,752,944 $ 57,426,000
========= ======= ========= ========= ========= ============
<CAPTION>
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RECEIVABLE
COMMON STOCK FOR
------------------------------- ADDITIONAL COMMON
PAR TREASURY PAID-IN STOCK ACCUMULATED
SHARES VALUE STOCK CAPITAL PURCHASE (DEFICIT)
--------- -------- -------- ----------- --------- ------------
Balance at December 31, 1996 as previously
reported......................................... 1,021,409 $10,000 -- $ 9,629,000 $(25,493,000)
Pooling of interests with Target Quest, BV......... 412,500 4,000 (4,000)
--------- ------- -------- ----------- --------- ------------
Balance at December 31, 1996 as restated........... 1,433,909 14,000 -- 9,625,000 (25,493,000)
Issuance of preferred stock........................
Issuance of Target Quest BV common stock........... 20,000
Exercise of stock options under the 1989 plan...... 93
Exercise of stock options under the 1995 plan...... 142,466 2,000 46,000
Issuance of restricted stock under the 1995 plan... 114,100 1,000 87,000
Deferred compensation.............................. 1,750,000
Compensation expense associated with stock
options.......................................... 7,000
Foreign currency translation adjustment............
Net Loss........................................... (5,823,000)
--------- ------- -------- ----------- --------- ------------
Balance at December 31, 1997....................... 1,690,568 17,000 -- 11,535,000 (31,316,000)
Issuance of preferred stock........................
Exercise of stock options under the 1995 plan...... 105,197 1,000 81,000
Issuance of restricted stock under the 1995 plan... 78,240 1,000 359,000
Loan to purchase common stock...................... (418,000)
Deferred compensation.............................. 561,000
Compensation expense associated with stock
options..........................................
Cancellation of shares............................. (154)
Foreign currency translation adjustment............
Net Loss........................................... (7,152,000)
--------- ------- -------- ----------- --------- ------------
Balance at December 31, 1998....................... 1,873,851 19,000 -- 12,536,000 (418,000) (38,468,000)
Shares issued for acquisition of Target Quest,
LLC.............................................. 379,152 4,000 1,969,000
Exercise of stock options under the 1995 plan...... 53,287 1,000 54,000
Issuance of restricted stock under the 1995 plan... 47,500 95,000
Deferred compensation.............................. 4,124,000
Compensation expense associated with stock
options..........................................
Foreign currency translation adjustment............
Net Loss........................................... (13,187,000)
--------- ------- -------- ----------- --------- ------------
Balance at December 31, 1999....................... 2,353,790 24,000 -- 18,778,000 (418,000) (51,655,000)
Exercise of stock options under the 1995 plan...... 137,987 1,000 -- 227,000
Deferred compensation.............................. 170,000
Compensation expense associated with stock
options..........................................
Foreign currency translation adjustment............
Net Loss........................................... -- (4,491,000)
--------- ------- -------- ----------- --------- ------------
Balance at March 31, 2000 (unaudited).............. 2,491,777 $25,000 -- $19,175,000 $(418,000) $(56,146,000)
========= ======= ======== =========== ========= ============
<CAPTION>
-----------------------------------------
<S> <C> <C> <C>
ACCUMULATED
DEFERRED OTHER
COMPEN- COMPREHENSIVE
SATION LOSS TOTAL
----------- ------------- -----------
Balance at December 31, 1996 as previously
reported......................................... -- $ 30,000 $ 8,997,000
Pooling of interests with Target Quest, BV......... --
----------- --------- -----------
Balance at December 31, 1996 as restated........... -- 30,000 8,997,000
Issuance of preferred stock........................ 2,437,000
Issuance of Target Quest BV common stock........... 20,000
Exercise of stock options under the 1989 plan...... --
Exercise of stock options under the 1995 plan...... 48,000
Issuance of restricted stock under the 1995 plan... 88,000
Deferred compensation.............................. $(1,750,000) --
Compensation expense associated with stock
options.......................................... 68,000 75,000
Foreign currency translation adjustment............ (171,000) (171,000)
Net Loss........................................... (5,823,000)
----------- --------- -----------
Balance at December 31, 1997....................... (1,682,000) (141,000) 5,671,000
Issuance of preferred stock........................ 30,168,000
Exercise of stock options under the 1995 plan...... 82,000
Issuance of restricted stock under the 1995 plan... 360,000
Loan to purchase common stock...................... (418,000)
Deferred compensation.............................. (561,000) --
Compensation expense associated with stock
options.......................................... 681,000 681,000
Cancellation of shares.............................
Foreign currency translation adjustment............ 18,000 18,000
Net Loss........................................... (7,152,000)
----------- --------- -----------
Balance at December 31, 1998....................... (1,562,000) (123,000) 29,410,000
Shares issued for acquisition of Target Quest,
LLC.............................................. 1,973,000
Exercise of stock options under the 1995 plan...... 55,000
Issuance of restricted stock under the 1995 plan... 95,000
Deferred compensation.............................. (4,124,000) --
Compensation expense associated with stock
options.......................................... 939,000 939,000
Foreign currency translation adjustment............ 15,000 15,000
Net Loss........................................... (13,187,000)
----------- --------- -----------
Balance at December 31, 1999....................... (4,747,000) (108,000) 19,300,000
Exercise of stock options under the 1995 plan...... 228,000
Deferred compensation.............................. (170,000) --
Compensation expense associated with stock
options.......................................... 404,000 404,000
Foreign currency translation adjustment............ 153,000 153,000
Net Loss........................................... (4,491,000)
----------- --------- -----------
Balance at March 31, 2000 (unaudited).............. $(4,513,000) $ 45,000 $15,594,000
=========== ========= ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
F-5
<PAGE>
DYAX CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------------- -------------------------
1997 1998 1999 1999 2000
----------- ----------- ------------ ----------- -----------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................................. $(5,823,000) $(7,152,000) $(13,187,000) $(2,863,000) $(4,491,000)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization....................... 316,000 462,000 651,000 128,000 186,000
Loss on disposal of fixed assets.................... 39,000 -- -- -- --
Amortization of goodwill............................ 17,000 17,000 452,000 4,000 218,000
Compensation expense associated with stock
options........................................... 75,000 681,000 939,000 229,000 404,000
Changes in operating assets and liabilities:
Accounts receivable................................. (703,000) (919,000) (203,000) (591,000) 133,000
Inventories......................................... (835,000) (141,000) (613,000) 224,000 60,000
Notes receivable, officers.......................... -- (1,336,000) (409,000) -- (10,000)
Other assets........................................ (128,000) (231,000) (41,000) (60,000) 13,000
Accounts payable and accrued expenses............... 597,000 1,128,000 2,528,000 (490,000) (2,316,000)
Deferred revenue.................................... 805,000 (653,000) 2,013,000 133,000 7,055,000
----------- ----------- ------------ ----------- -----------
Net cash (used in) provided by operating activities..... (5,640,000) (8,144,000) (7,870,000) (3,286,000) 1,252,000
----------- ----------- ------------ ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets.............................. (961,000) (893,000) (1,762,000) (423,000) (404,000)
----------- ----------- ------------ ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of preferred stock......... 2,437,000 30,168,000 -- -- --
Proceeds from the issuance of restricted common stock
and exercise of stock options....................... 156,000 25,000 150,000 4,000 228,000
Proceeds from sale-leaseback of equipment............. 446,000 355,000 1,077,000 433,000 286,000
Repayment of capital lease obligations................ (121,000) (753,000) (285,000) (46,000) (82,000)
----------- ----------- ------------ ----------- -----------
Net cash provided by financing activities............... 2,918,000 29,795,000 942,000 391,000 432,000
Effect of foreign currency translation on cash
balances.............................................. (146,000) (29,000) (75,000) (21,000) 154,000
----------- ----------- ------------ ----------- -----------
Net increase (decrease) in cash and cash equivalents.... (3,829,000) 20,729,000 (8,765,000) (3,339,000) 1,434,000
Cash and cash equivalents at beginning of the period.... 8,591,000 4,762,000 25,491,000 25,491,000 16,726,000
----------- ----------- ------------ ----------- -----------
Cash and cash equivalents at end of the period.......... $ 4,762,000 $25,491,000 $ 16,726,000 $22,152,000 $18,160,000
=========== =========== ============ =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid......................................... $ 74,000 $ 98,000 $ 81,000 $ 14,000 $ 24,000
Income taxes paid..................................... $ -- $ -- $ 58,000 $ 58,000 $ --
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Acquisition of property and equipment under capital
leases.............................................. $ 446,000 $ 355,000 $ 1,077,000 $ 433,000 $ 286,000
Deferred compensation................................. $ 1,750,000 $ 561,000 $ 4,124,000 $ -- $ 170,000
Issuance of promissory note in conjunction with
purchase of restricted common stock................. $ -- $ 454,000 $ -- $ -- $ --
Fair value of common stock issued in purchase
acquisitions........................................ $ -- $ -- $ 1,973,000 $ -- $ --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
F-6
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
1. NATURE OF BUSINESS
Dyax Corp. (the "Company") is a biopharmaceutical company that has developed and
patented phage display technology with broad applications in the discovery and
development of new therapeutic, separations, industrial enzyme and diagnostic
products. Through the use of phage display technology, Dyax's scientists,
collaborators and licensees seek to discover proteins and peptides, including
human antibodies, that bind to disease targets with high affinity and high
specificity. The Company believes that its technology has significant advantages
over other technologies for rapidly and cost effectively discovering therapeutic
lead compounds, validating targets and purifying therapeutic products. Given the
quantity of disease targets made available by the genomics revolution, these
advantages should increase in importance. The Company also develops,
manufactures and sells fully-integrated chromatography separations systems under
the Biotage trade name.
The Company is subject to risks common to companies in the biotechnology
industry including, but not limited to, dependence on collaborative
arrangements, development by the Company or its competitors of new technological
innovations, dependence on key personnel, protection of proprietary technology,
and compliance with FDA and other governmental regulations and approval
requirements.
2. ACCOUNTING POLICIES
BASIS OF CONSOLIDATION: The accompanying consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries, Biotage
(UK), Ltd., a United Kingdom sales subsidiary, Target Quest BV, a Netherlands
research subsidiary and Target Quest LLC, a U.S. based sales and marketing
subsidiary. All intercompany accounts and transactions have been eliminated.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the amounts of assets and liabilities
reported and disclosure of contingent assets and liabilities at the dates of the
financial statements and the reported amounts of revenue and expenses during the
reporting periods. The significant estimates and assumptions in these financial
statements include revenue recognition, receivable collectibility, inventory
valuation, useful lives with respect to long lived assets, valuation of common
stock and related stock options, accrued expenses and tax valuation reserves.
Actual results could differ from those estimates.
CONCENTRATION OF CREDIT RISK: Financial instruments that potentially subject
the Company to concentrations of credit risk consist principally of cash, cash
equivalents and trade accounts receivable. At December 31, 1999, approximately
70% of the Company's cash and cash equivalents was invested in a single U.S.
government securities fund held by one financial institution.
The Company provides most of its products and services to pharmaceutical and
biomedical companies worldwide. Concentrations of credit risk with respect to
trade receivable balances are limited due to the diverse number of customers
comprising the Company's customer base. The Company performs ongoing credit
evaluations of its customers' financial conditions and maintains reserves for
potential credit loss. Activity for fiscal 1997, 1998 and 1999 included
provisions of $40,000, $48,000 and $0, respectively, and $0 for each of the
three-month periods ended March 31, 1999 and 2000. Receivable write offs in
1997, 1998, 1999 and for each of the three month periods ended March 31, 1999
and 2000 were nominal.
CASH AND CASH EQUIVALENTS: Cash and cash equivalents consist principally of
cash and a U.S. government securities fund. The Company currently invests its
excess cash in a single U.S. government securities fund held by a financial
institution. The Company has periodically maintained balances in various
operating accounts in excess of federally insured limits.
F-7
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
INVENTORIES: Inventories are stated at the lower of cost or market. Cost is
determined using the first-in, first-out (FIFO) method.
FIXED ASSETS: Property and equipment are recorded at cost and depreciated over
the estimated useful lives of the related assets using the straight-line method.
Laboratory and production equipment and furniture and office equipment are
depreciated over a three to seven year period. Leasehold improvements are stated
at cost and are amortized over the lesser of the non-cancelable term of the
related lease or their estimated useful lives. Leased equipment is depreciated
over the lesser of the life of the lease or their estimated useful lives.
Maintenance and repairs are charged to expense as incurred. When assets are
retired or otherwise disposed of, the cost of these assets and related
accumulated depreciation and amortization are eliminated from the balance sheet
and any resulting gains or losses are included in operations in the period of
disposal.
GOODWILL: Goodwill, which represents the excess purchase price over the fair
value of net assets acquired, is amortized on a straight-line basis over its
useful life, currently 2.5 to 15 years. These amortization periods will be
evaluated by management on a continuing basis, and will be adjusted if the lives
are impaired. As of December 31, 1998 and 1999, and March 31, 2000, accumulated
amortization of goodwill was $113,000, $565,000 and $783,000, respectively.
IMPAIRMENT OF LONG-LIVED ASSETS: The Company reviews long-lived assets,
including goodwill, for impairment whenever events or changes in business
circumstances indicate that the carrying amount of assets may not be fully
recoverable or that the useful lives of these assets are no longer appropriate.
Each impairment test is based on a comparison of the undiscounted cash flow to
the recorded value of the asset. If an impairment is indicated, the asset is
written down to its estimated fair value on a discounted cash flow basis.
REVENUE RECOGNITION: Product revenue, which is derived from sales of Biotage
chromatography separations systems and products, is recognized upon shipment to
the customer and satisfaction of all obligations. For products that require
significant installation services, revenue is recognized upon product
installation. One customer accounted for approximately 12% and 10% of product
revenue in 1997 and 1998, respectively, although the largest customer was
different in each year. No customer accounted for more than 10% of sales in
1999. The Company is not dependent on any single customer for a significant
portion of its ongoing revenues.
The Company enters into product development agreements with collaborative
partners for the development of therapeutic, diagnostic and separations
products. The terms of the agreements may include non-refundable signing fees,
funding for research and development, payments based on the achievement of
certain milestones and royalties on any product sales derived from
collaborations. Non-refundable signing fees, with respect to product development
agreements and collaborations, for which the Company has no future obligations,
are recognized ratably over the term of the agreement. Collaborative research,
product development and government grant revenues, where the amounts recorded
are not refundable if research efforts are unsuccessful, are recognized as the
related expenses are incurred. Milestone payments are recognized as revenue on a
retrospective basis. Accordingly, upon achievement of the milestone, a portion
of the milestone payment equal to the percentage of the collaboration completed
through that date will be recognized. The remainder will be recognized ratably
over the remaining term of the collaboration. Sales royalties are recognized
when earned.
The Company licenses its patent rights covering phage display on a non-exclusive
basis in the fields of therapeutics, antibody-based IN VITRO diagnostics and
research products. Standard terms of the license agreements, which require no
further active performance by the Company, generally include non-refundable
signing fees, non-refundable annual maintenance fees, milestone payments and
royalties on product sales. Signing fees and annual maintenance fees are
recognized ratably over the term of the agreement. Milestone payments are
recognized as revenue on a retrospective basis. Accordingly, upon achievement of
the
F-8
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
milestone, a portion of the milestone payment equal to the percentage of the
collaboration completed through that date will be recognized. The remainder will
be recognized ratably over the remaining term of the collaboration. Sales
royalties are recognized when earned.
Revenue from National Institute of Standards and Technology grants, to conduct
research and development, is recognized as eligible costs are incurred, up to
the funding limit. Eligible grant related costs which have been incurred in
advance of cash receipts are recorded as receivables.
Payments received that have not met the appropriate criteria for revenue
recognition are recorded as deferred revenue.
PRODUCT WARRANTY: The Company provides customers with up to a twelve-month
warranty on its chromatography products from the date of customer startup or up
to a fourteen-month warranty from the date of shipment, whichever is less.
Estimated warranty obligations, which are included in the results of operations,
are evaluated and provided for at the time of sale. Product warranty costs were
not significant for any period presented.
RESEARCH AND DEVELOPMENT: Research and development costs are expensed as
incurred.
PATENTS: The Company owns, or is in the process of applying for, patents in the
United States and other countries. All costs associated with these filings are
expensed as incurred.
INCOME TAXES: The Company utilizes the asset and liability method of accounting
for income taxes as set forth in Statement of Financial Accounting Standards
("SFAS") No. 109, "Accounting for Income Taxes". Under this method, deferred tax
assets and liabilities are recognized for the expected future tax consequences
of temporary differences between the carrying amounts and the tax basis of
assets and liabilities using the current statutory tax rates.
TRANSLATION OF FOREIGN CURRENCIES: Assets and liabilities of the Company's
foreign subsidiaries are translated at year-end exchange rates. Amounts included
in the statements of operations are translated at the average exchange rate for
the year. The resulting currency translation adjustments are made directly to a
separate component of stockholders' equity. Gains and losses that result from
transactions in foreign currencies, which are included in the statement of
operations, have not been material.
COMPREHENSIVE INCOME (LOSS): The Company accounts for comprehensive income
(loss) under SFAS No. 130, "Reporting Comprehensive Income." The statement
established standards for reporting and displaying comprehensive income and its
components (revenues, expenses, gains and losses) in a full set of general
purpose financial statements. The statement required that all components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements.
INTERIM FINANCIAL INFORMATION (UNAUDITED): The financial statements for the
three months ended March 31, 1999 and 2000 are unaudited but include all
adjustments (consisting only of normal recurring adjustments), which the Company
considers necessary for a fair statement of the operating results and cash flows
for such periods.
NET LOSS PER SHARE: The Company accounts for and discloses earnings per share
("EPS") under SFAS No. 128, "Earnings per Share". This statement specified the
computation, presentation and disclosure requirements of EPS to simplify the
existing computational guidelines and increased comparability on an
international basis. This statement replaced primary EPS with basic EPS, the
principle difference being the exclusion of common stock equivalents in the
computation of basic EPS. In addition, this statement required the dual
presentation of basic and diluted EPS on the face of the statement of
operations.
F-9
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
Under SFAS No. 128, the Company is required to present two EPS amounts, basic
and diluted. Basic EPS is calculated based on income available to common
stockholders and the weighted-average number of common shares outstanding during
the reporting period. Diluted EPS may include additional dilution from potential
common stock, such as stock issuable pursuant to the exercise of stock options
and warrants outstanding, the conversion of preferred stock and conversion of
debt, unless their inclusion would be antidilutive.
BUSINESS SEGMENTS: The Company discloses business segments under SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information". The
statement established standards for reporting information about operating
segments in annual financial statements of public enterprises and in interim
financial reports issued to shareholders. It also established standards for
related disclosures about products and services, geographic areas and major
customers.
RECENT PRONOUNCEMENTS: In December 1999, the Securities and Exchange Commission
("SEC") issued Staff Accounting Bulletin ("SAB") 101, "Revenue Recognition in
Financial Statements", which provides guidance related to revenue recognition
based on interpretations and practices promulgated by the SEC. Before
modification by SAB 101A, SAB 101 was to be effective with the first fiscal
quarter of fiscal years beginning after December 15, 1999 and requires companies
to report any changes in revenue recognition as a cumulative change in
accounting principle at the time of implementation. In March 2000, the SEC
issued SAB 101A, "Amendment: Revenue Recognition in Financial Statements", which
delays implementation of SAB 101 until the Company's second fiscal quarter of
2000. The Company has adopted SAB 101 in these financial statements.
In June 1998, the Financial Accounting Standards Board, ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities". The
standard established accounting and reporting standards requiring the
recognition of all derivative instruments as either assets or liabilities in the
statement of financial position and the measure of those instruments at fair
value. In June 1999, the FASB issued SFAS No. 137, which defers the effective
date of SFAS No. 133 to fiscal years beginning after June 15, 2000. Because the
Company does not currently hold any derivative instruments and does not
currently engage in hedging activities, we expect the adoption of SFAS No. 133
will not have a material impact on our financial position or operating results.
In March 2000, the FASB issued FASB Interpretation ("FIN") 44, "Accounting for
Certain Transactions Involving Stock Compensation--an interpretation of
Accounting Principles Board ("APB") Opinion 25". FIN 44 clarifies the
application of APB Opinion 25 and among other issues clarifies the following:
the definition of an employee for purposes of applying APB Opinion 25; the
criteria for determining whether a plan qualifies as a non-compensatory plan;
the accounting consequence of various modifications to the terms of previously
fixed stock options or awards; and the accounting for an exchange of stock
compensation awards in a business combination. FIN 44 is effective July 1, 2000,
but certain conclusions in FIN 44 cover specific events that occurred after
either December 15, 1998 or January 12, 2000. The Company does not expect the
application of FIN 44 to have a material impact on the Company's financial
position or results of operations.
PRO FORMA BALANCE SHEET (UNAUDITED): In March 2000, the Board of Directors
authorized management of the Company to file a Registration Statement with the
Securities and Exchange Commission for the Company to sell shares of its common
stock in an initial pubic offering. If the initial public offering contemplated
by this Registration Statement is consummated under the terms presently
anticipated, all outstanding shares of convertible preferred stock at March 31,
2000 will convert into 11,584,459 shares of common stock and certain shares of
the unvested restricted stock will vest. The unaudited pro forma presentation of
the balance sheet has been prepared assuming all preferred stock was converted
into common stock at March 31, 2000.
F-10
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
RECLASSIFICATIONS: Certain reclassifications may have been made to the prior
years financial statements to conform to current presentation.
3. BUSINESS COMBINATIONS
On July 14, 1999, the Company acquired all of the capital stock of Target Quest,
B.V., a Netherlands corporation, in exchange for 412,500 shares of Dyax common
stock. The acquisition was accounted for as a pooling of interests. The
Company's historical consolidated financial statements have been restated to
reflect the combined financial position and results of operations and cash flows
of Dyax and Target Quest, B.V. for all periods presented.
The results of operations for Dyax and Target Quest, B.V. and the combined
amounts presented for periods preceding the acquisition were as follows:
<TABLE>
<CAPTION>
----------------------------------------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31,
----------------------------------------
1997 1998 1999
----------- ----------- ------------
Net Revenue:
Dyax...................................................... $ 9,235,000 $13,739,000 $ 16,408,000
Target Quest, B.V......................................... 95,000 392,000 425,000
----------- ----------- ------------
$ 9,330,000 $14,131,000 $ 16,833,000
=========== =========== ============
Net Income (Loss):
Dyax...................................................... $(5,833,000) $(7,176,000) $(13,429,000)
Target Quest, B.V......................................... 10,000 24,000 242,000
----------- ----------- ------------
$(5,823,000) $(7,152,000) $(13,187,000)
=========== =========== ============
</TABLE>
For the six month period ended June 30, 1999, Target Quest B.V. had revenues of
$490,000 and net income of $206,000, before elimination of intercompany
activity.
Also on July 14, 1999, the Company acquired the 33% share of Target Quest, LLC,
that was not owned by Target Quest, B.V., in exchange for 379,152 shares of Dyax
common stock. The acquisition was accounted for as a purchase and accordingly,
the results of its operations have been included in the consolidated financial
statements commencing on July 1, 1999, the effective accounting date of the
acquisition. Approximately $2,078,000 of the purchase price was allocated to
goodwill and is being amortized over 2.5 years, which is the remaining term of a
marketing agreement between Target Quest, LLC and Target Quest B.V., on a
straight-line basis. Target Quest, LLC was formed in late 1998, but did not
commence operations until 1999. For the six month period ended June 30, 1999,
Target Quest, LLC had revenues of $293,000 and a net loss of $310,000.
The following unaudited pro forma results of operations for the year ended
December 31, 1999, give effect to the Company's acquisition of Target Quest,
LLC, as if the transaction had occurred at the beginning of the year. The pro
forma results of
F-11
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
operations do not purport to represent (i) what the Company's results of
operations actually would have been if the acquisition had occurred at the
beginning of the period or (ii) what such results will be for any future
periods.
<TABLE>
<CAPTION>
-----------------------------
<S> <C>
UNAUDITED PRO FORMA RESULTS
FOR THE YEAR
ENDED DECEMBER 31, 1999
------------
Net Revenue................................................. $ 16,930,000
Net Loss.................................................... $(13,290,000)
</TABLE>
4. NET LOSS PER SHARE AND UNAUDITED PRO FORMA NET LOSS PER SHARE
Net loss per share is computed under SFAS No. 128. Basic net loss per share is
computed using the weighted average number of shares of common stock
outstanding. Diluted loss per share does not differ from basic loss per share
since potential common shares from the conversion of preferred stock and
exercise of stock options and warrants are antidilutive for all periods
presented and therefore are excluded from the calculation of diluted net loss
per share. Pro forma basic and diluted net loss per share have been calculated
assuming the conversion of all outstanding shares of preferred stock into common
shares, as if the shares had converted immediately upon their issuance, and
assuming certain shares of unvested restricted stock become vested upon an
initial public offering.
The following sets forth the computation of net loss per share:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------------- ----------------------------
1997 1998 1999 1999 2000
----------- ----------- ------------ ----------- -----------
Numerator:
Net loss............................ $(5,823,000) $(7,152,000) $(13,187,000) $(2,863,000) $(4,491,000)
=========== =========== ============ =========== ===========
Denominator:
Weighted average common shares, basic
and diluted......................... 1,473,474 1,694,782 1,936,907 1,738,693 2,277,725
=========== =========== ============ =========== ===========
Net loss per share:
Basic and diluted................... $ (3.95) $ (4.22) $ (6.81) $ (1.65) $ (1.97)
=========== =========== ============ =========== ===========
</TABLE>
The following potentially dilutive common shares were excluded because their
effect was antidiliutive:
<TABLE>
<CAPTION>
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DECEMBER 31, MARCH 31,
----------------------------------- -----------------------
1997 1998 1999 1999 2000
--------- ---------- ---------- ---------- ----------
Convertible preferred stock.................. 5,831,515 11,584,459 11,584,459 11,584,459 11,584,459
Stock options................................ 970,711 1,603,143 2,335,455 1,595,475 2,210,787
Warrants..................................... 27,022 27,022 27,022 27,022 27,022
Unvested restricted stock.................... 92,707 142,423 133,585 135,292 117,122
</TABLE>
Pro forma net loss per share is computed using the weighted average number of
shares of common stock outstanding, including potentially dilutive common shares
arising from convertible preferred stock (using the if-converted method), which
will automatically convert into common stock upon an initial public offering, as
if converted at the original date of issuance for
F-12
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
both basic and diluted earnings per share and including certain shares of
unvested restricted stock that will become vested upon an initial public
offering.
The following sets forth the computation of unaudited pro forma net loss per
share:
<TABLE>
<CAPTION>
-------------------------------
<S> <C> <C>
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED
1999 MARCH 31, 2000
------------ ------------
Numerator:
Net loss.................................................. $(13,187,000) $ (4,491,000)
============ ============
Denominator:
Weighted average common shares, basic and diluted......... 13,604,750 13,956,254
============ ============
Pro forma net loss per share:
Basic and diluted......................................... $ (.97) $ (.32)
============ ============
</TABLE>
The following potentially dilutive common shares were excluded from the pro
forma calculation because their effect was antidilutive:
<TABLE>
<CAPTION>
-----------------------
<S> <C> <C>
DECEMBER 31, MARCH 31,
---------- ----------
1999 2000
---------- ----------
Stock options............................................... 2,335,455 2,210,787
Warrants.................................................... 27,022 27,022
Unvested restricted stock................................... 35,659 28,527
</TABLE>
5. INVENTORY
Inventories consist of the following:
<TABLE>
<CAPTION>
------------------------------------
<S> <C> <C> <C>
DECEMBER 31, MARCH 31,
----------------------- ----------
1998 1999 2000
---------- ---------- ----------
Raw materials............................................... $1,596,000 $2,191,000 $1,758,000
Work in process............................................. 17,000 169,000 300,000
Finished products........................................... 692,000 552,000 795,000
---------- ---------- ----------
$2,305,000 $2,912,000 $2,853,000
========== ========== ==========
</TABLE>
F-13
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
6. FIXED ASSETS
Fixed assets consist of the following:
<TABLE>
<CAPTION>
------------------------------------
<S> <C> <C> <C>
DECEMBER 31, MARCH 31,
----------------------- ----------
1998 1999 2000
---------- ---------- ----------
Laboratory and production equipment......................... $1,584,000 $1,855,000 $2,236,000
Furniture and office equipment.............................. 783,000 868,000 889,000
Leasehold improvements...................................... 732,000 1,032,000 1,034,000
Leased laboratory, production and office equipment.......... 801,000 1,878,000 1,878,000
---------- ---------- ----------
Total....................................................... 3,900,000 5,633,000 6,037,000
Less: accumulated depreciation.............................. (2,305,000) (2,924,000) (3,106,000)
---------- ---------- ----------
$1,595,000 $2,709,000 $2,931,000
========== ========== ==========
</TABLE>
There was $90,000, $323,000 and $425,000 of accumulated amortization of leased
assets at December 31, 1998 and 1999, and March 31, 2000 respectively.
7. NOTES RECEIVABLE, OFFICERS
During 1998, in connection with the sale of 78,240 shares of restricted common
stock and the exercise of options to purchase 37,490 shares of common stock, the
Company agreed to loan to an officer an aggregate of $454,000 in a non-cash
transaction pursuant to promissory notes, of which $418,000 was used to purchase
the related common stock and is included as a reduction to stockholders' equity.
The remaining $36,000 balance of the loan, the proceeds of which were to pay
certain tax liabilities in connection with the exercise of the options, is
included in notes receivable, officers. The notes, which bear interest at 5.69%
per annum and which are each collateralized by a corresponding pledge of the
shares of common stock purchased under the restricted stock award and received
upon exercise of the stock options, are due and payable on the earlier of
February 18, 2002 or the last trading date under the Company's then applicable
insider trading policy during the trading period immediately after the second
quarterly earnings announcement made after the expiration of his lock-up
agreement. As long as the officer remains employed by the Company, the Company
will forgive all interest accrued on the notes on February 18 annually, or
through the date of any earlier termination of employment. (see Note 11)
In October 1998, the Company provided a mortgage loan and pledge agreement in
the amount of $1,300,000 to its President and Chief Executive Officer, who is
also Chairman of the Company's Board of Directors, to purchase a residence
within commuting distance of the Company's headquarters. The loan bears interest
at the Prime Rate less 1.5% (7.00% at December 31, 1999) and is collateralized
by the real estate acquired with the loan proceeds and 825,159 shares of
Series A Preferred Stock owned by this officer. The agreement requires that
aggregate collateral value of at least 150% of the outstanding loan principal be
maintained throughout the life of the loan. Payments in the amount of $8,220 are
due monthly to the Company and all remaining unpaid principal and accrued
interest is payable at the earlier of (i) the date on which the Chairman of the
Company and Chief Executive Officer ceases to hold those offices; (ii) if the
Company's cash and marketable investments total less than $10,000,000; or
(iii) on the last trading date under the Company's then applicable insider
trading policy during the trading period immediately after the second quarterly
earnings announcement made after the expiration of his lock-up agreement, or
(vi) upon the occurrence of an event of default under the loan and pledge
agreement.
F-14
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
In June 1999, the Company provided a loan to an officer of the Company in the
amount of $100,000. The note, which bears interest at the Prime Rate plus one
percent per annum and which is secured by marketable securities, is payable in
June 2004, subject to acceleration, and becomes due immediately if the officer's
employment is terminated other than by the Company without cause. As long as the
officer remains employed by the Company, the Company will forgive $20,000 and
all accrued interest on June 14 annually. Upon the officer's death or permanent
disability, the remaining principal of the loan plus all accrued interest will
be forgiven.
Aggregate accrued interest receivable under notes receivable, officers was
$30,000, $35,000 and $17,000 at December 31, 1998 and 1999 and March 31, 2000,
respectively.
In connection with the acquisition of 33% of Target Quest, LLC in July 1999, the
Company granted lines of credit to former members of the Limited Liability
Company to pay federal and state taxes incurred as a result of the sale of their
membership interests. The lines of credit are collaterized by common shares of
Dyax stock. Any amounts borrowed on the lines of credit are payable at the
earliest of (i) an occurrence of default, (ii) the first anniversary of the
closing of a public offering of Dyax common stock and (iii) any transaction
involving the sale or exchange of substantially all of the borrower's shares of
Dyax common stock. As of December 31, 1999 and March 31, 2000, the Company has
recorded notes receivable of $309,000 and $317,000, respectively, under the
lines of credit.
8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following:
<TABLE>
<CAPTION>
------------------------------------
<S> <C> <C> <C>
DECEMBER 31, MARCH 31,
----------------------- ----------
1998 1999 2000
---------- ---------- ----------
Accounts payable............................................ $2,101,000 $3,864,000 $2,311,000
Accrued wages and related taxes............................. 759,000 1,283,000 707,000
Accrued warranty and installation costs..................... 160,000 146,000 146,000
Other accrued liabilities................................... 292,000 557,000 370,000
---------- ---------- ----------
Total....................................................... $3,312,000 $5,850,000 $3,534,000
========== ========== ==========
</TABLE>
9. CAPITAL LEASES
The Company had a capital lease agreement providing the Company with a
$3,000,000 lease facility for qualified fixed assets. In 1998 and 1999, the
Company sold to the lessor and leased back $355,000 and $1,077,000,
respectively, of laboratory, production and office equipment under this lease
facility in non-cash transactions. The lease facility expired in December 1999.
A new capital lease agreement, signed in February 2000, provides a $2,000,000
lease facility, which includes prior commitments. The lease facility is
available for future draw downs until December 2000.
F-15
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
Minimum future payments under the Company's capital leases as of December 31,
1999 were as follows:
<TABLE>
<CAPTION>
----------
<S> <C>
2000........................................................ $ 464,000
2001........................................................ 464,000
2003........................................................ 463,000
2004........................................................ 348,000
2005 and thereafter......................................... 163,000
----------
Total future minimum lease payments......................... 1,902,000
Less: amount representing interest.......................... (314,000)
----------
Present value of future minimum lease payments.............. 1,588,000
Less: current portion....................................... (339,000)
----------
Capital leases-long term.................................... $1,249,000
==========
</TABLE>
10. COMMITMENTS AND CONTINGENCIES
The Company has operating leases for laboratory and office facilities in
Cambridge, Massachusetts through June 2002 and operating leases for production,
laboratory and office facilities in Charlottesville, Virginia through
April 2002. The Charlottesville lease has a renewal option with an escalation
clause. The Company also leases office space in the United Kingdom under an
operating lease which permits the Company to renew after each five-year period;
however, should the Company elect not to renew, there is a termination fee equal
to one year's rent, which has been included in the following commitment schedule
as part of the last year's payment under the current five-year term. In
addition, the Company leases various laboratory and office equipment and
facilities under operating leases with one to five year terms.
Minimum future lease payments under non-cancelable operating leases as of
December 31, 1999 are as follows:
<TABLE>
<CAPTION>
----------
<S> <C>
2000........................................................ $1,498,000
2001........................................................ $ 890,000
2002........................................................ $ 211,000
2003........................................................ $ 75,000
2004........................................................ $ 75,000
</TABLE>
Rent expense for the years ended December 31, 1997, 1998 and 1999 was
approximately $925,000, $1,161,000 and $1,498,000, respectively, and $317,000
and $383,000 for the three months ended March 31, 1999 and 2000, respectively.
The Company's first phage display patent in Europe was opposed by two parties in
late 1997. The oppositions primarily relate to whether the written description
of the inventions in the Company's European patent is sufficient under European
patent law. A hearing on these oppositions was held on April 6, 2000 and,
although the Company has not yet received the written opinion of the Opposition
Division, the patent was revoked. The Company plans to appeal this decision to
the Technical Board of Appeals. This appeal will suspend the Opposition
Division's decision and reinstate the Company's patent pending the decision of
the Technical Board of Appeals. Although Dyax will be able to enforce this
patent during the appeal, any infringement action that is filed will likely be
stayed pending the results of the appeal. The appeal could take several years to
resolve. The Company expects to receive a second European patent in 2000 for
phage display. The Company cannot assure that it will prevail in the appeal
proceedings or in any other opposition or litigation contesting the validity or
scope of the European patents. If the Company is not successful in the defense
of the European patent, or if additional valid and
F-16
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
enforceable patents do not result from the Company's pending European patent
applications, the Company will not be able to prevent other parties from using
phage display in Europe.
The Company is engaged in a United States court proceeding relating to patents
owned by a third party. The third party has sued the Company for patent
infringement of three United States patents. The amended complaint filed
March 13, 2000 alleges that the Company's licensing of its phage display patents
rights infringes these patents. In addition, plaintiffs have contended that Dyax
make, use, sell or offer to sell methods and products that infringe the patents.
The Company has moved to dismiss the action. Although the Company cannot predict
the outcome of this litigation, it believes that the lawsuit is unlikely to have
a material adverse effect on the business.
11. STOCKHOLDERS' EQUITY
COMMON STOCK: Effective as of March 23, 1998, the Company implemented a reverse
stock split for all common stock outstanding whereby each stockholder received
0.652 share for each share of common stock, $0.01 par value. All periods
presented were retroactively restated to reflect the reverse stock split.
PREFERRED STOCK: In March 1997, the Company issued 782,760 shares of Class A
Series 4 Preferred Stock, $0.01 par value per share, at $3.13 per share. Net
proceeds were $2,437,000 after deducting related expenses of $13,000.
Commencing in August 1998 and concluding in November 1998, the Company issued
5,752,944 shares of Class A Series 5 Preferred Stock, $0.01 par value per share,
at $5.45 per share. Net proceeds were $30,168,000 after deducting related
expenses of $1,186,000.
Class A, Series 1, 2, 3 and 4, preferred shares are convertible at the option of
the holder, at any time, into common shares on a 0.652 share of common stock for
one share of preferred stock, Series 5 is convertible on a one-for-one basis.
The conversion ratio may be adjusted to provide protection against future
dilution. Also, Class A preferred shares are automatically convertible into
common shares, on a basis of 0.652 share of common stock for one share of
Preferred Stock as to Series 1, 2, 3 and 4 and an equal number of common shares
for shares of Preferred Stock as to Series 5, upon the closing of a public
offering of common stock by the Company, where the price per share is at least
$15.00 per share, with net proceeds to the Company of at least $20,000,000.
Holders of Class A Preferred Stock are entitled to receive non-cumulative
dividends at the same rate as common stock holders. Holders of Class A Preferred
Stock are entitled to one vote per share and, for certain events such as certain
preferred stock transactions, modifying rights, preferences, privileges or
limitations of Class A Preferred Stock, amending the Certificate of
Incorporation or certain significant corporate transactions, a majority vote of
Class A Preferred Stock holders is required. In addition, Class A Series 3, 4
and 5 Preferred Stock holders are each entitled to vote as a separate class for
the election of one Director by each of these three Series. Holders of Class A
Series 1, 2, 3, 4 and 5 Preferred Stock have liquidation preferences in the
aggregate amounts of $4,247,000, $4,250,000, $4,000,000, $13,450,000 and
$31,354,000, respectively. As of March 31, 2000 the Company has reserved
sufficient shares of common stock for the conversion of all Series of Preferred
Stock into an aggregate of 11,584,459 shares of common stock.
STOCK OPTIONS: The Company's 1995 Equity Incentive Plan (the "Plan") is an
equity plan under which equity awards, including awards of incentive and
nonqualified stock options to purchase shares of common stock and restricted
shares to employees and consultants of the Company may be granted by action of
the Compensation Committee of the Board of Directors. Options are generally
granted at the current fair market value, although in certain circumstances
granted below fair market value, on the date of grant as determined by the Board
of Directors, generally vest ratably over a 48 month period, and expire within
ten years from date of grant. During 1999, the Board of Directors increased the
common stock options available for grant under the Plan to 3,364,200. On
October 9, 1998, the Company's Board of Directors authorized the
F-17
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
amendment of all stock options granted during 1998, 295,809 shares, under the
Plan to provide for such options to have an amended exercise price equal to the
then fair value of $2.00 per share, which amendment was deemed to be the
cancellation of the existing options and the grant of new options pursuant to
the plan. At March 31, 2000, there were 2,669,251 shares of common stock
reserved for issuance under outstanding and future grants under the Plan of
which 458,464 shares remained available for future grant. Since the Plan's
inception, options for 694,949 have been exercised.
Stock option activity for the 1995 Equity Incentive Plan is summarized as
follows:
<TABLE>
<CAPTION>
----------------------
<S> <C> <C>
WEIGHTED
AVG.
OPTION EXERCISE
SHARES PRICE
--------- -----
Outstanding at December 31, 1996............................ 500,744 $0.30
Granted..................................................... 629,050 1.28
Exercised................................................... (142,466) 0.33
Canceled.................................................... (16,617) 0.36
---------
Outstanding at December 31, 1997............................ 970,711 0.93
Granted..................................................... 1,067,571 2.95
Exercised................................................... (105,197) 0.78
Canceled.................................................... (329,942) 4.98
---------
Outstanding at December 31, 1998............................ 1,603,143 1.45
Granted..................................................... 906,220 2.04
Exercised................................................... (53,287) 1.02
Canceled.................................................... (120,621) 1.48
---------
Outstanding at December 31, 1999............................ 2,335,455 1.69
Granted..................................................... 36,300 5.87
Exercised................................................... (137,987) 1.65
Canceled.................................................... (22,981) 1.70
---------
Outstanding at March 31, 2000 (unaudited)................... 2,210,787 1.76
=========
</TABLE>
Summarized information about stock options outstanding at December 31, 1999 is
as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------- --------------------
WEIGHTED- WEIGHTED-
REMAINING AVERAGE AVERAGE
RANGE OF EXERCISE NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE
- --------------------- --------- -------- -------- --------- --------
0.3$0 to $0.99.... 387,034 6.4 $0.45 331,097 $0.40
1.5$3 ...... 345,420 7.8 $1.53 188,241 $1.53
2.0$0 to $2.50.... 1,603,001 9.3 $2.02 489,496 $2.05
--------- ---------
2,335,455 1,008,834
</TABLE>
F-18
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
The weighted average fair value of options granted under the Plan during 1997,
1998 and 1999, as determined under the minimum value method was $0.40, $0.73 and
$0.63, respectively. Total options exercisable at December 31, 1997, 1998, 1999
and March 31, 2000 were 233,165, 499,509, 1,008,834 and 982,538, respectively.
SFAS No. 123, "Accounting for Stock-Based Compensation", requires that companies
either recognize compensation expense for grants of stock, stock options and
other equity instruments to employees based on fair value, or provide pro forma
disclosure of net income in the notes to the financial statements. The Company
has adopted the disclosure provisions of SFAS No. 123 and applies APB Opinion
No. 25 and related interpretations in accounting for its plan. If compensation
costs for the Company's employee and director stock-based compensation plan had
been determined based on the fair value at the grant dates as calculated in
accordance with SFAS No. 123, the Company's net loss and net loss per share for
the years ended December 31, 1997, 1998 and 1999 would have increased to the pro
forma amounts shown below:
<TABLE>
<CAPTION>
----------------------------------------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31,
----------------------------------------
1997 1998 1999
----------- ----------- ------------
Net loss as reported........................................ $(5,823,000) $(7,152,000) $(13,187,000)
Pro forma net loss.......................................... $(5,843,000) $(7,277,000) $(13,412,000)
Basic and diluted net loss per share as reported............ $ (3.95) $ (4.22) $ (6.81)
Pro forma basic and diluted net loss per share.............. $ (3.97) $ (4.29) $ (6.92)
</TABLE>
The fair value of each stock option granted is estimated on the grant date using
the minimum value method with the following weighted average assumptions:
<TABLE>
<CAPTION>
------------------------------
<S> <C> <C> <C>
YEAR ENDED DECEMBER31,
------------------------------
1997 1998 1999
-------- -------- --------
Expected option term........................................ 6.0 6.0 6.0
Risk-free interest rate..................................... 6.31% 4.56% 6.19%
Expected dividend yield..................................... None None None
</TABLE>
Because the determination of the fair value of all options granted after the
Company becomes a public entity will include an expected volatility factor,
additional options grants are expected to be made subsequent to December 31,
1999 and most options vest over several years, the above pro forma effects are
not necessarily indicative of the pro forma effects on future years.
In 1997, 1998 and 1999 and the three months ended March 31, 2000, the Company
recorded $1,750,000, $561,000 (including $285,000 related to the sale of shares
of common stock to an officer of the Company), $4,124,000 and $170,000,
respectively, of deferred compensation related to stock option grants to
employees. The deferred compensation represents differences between the
estimated fair value of common stock on the date of grant and the exercise
price. The deferred compensation is being amortized and charged to operations
over the vesting period of the related options. Total stock option-related
compensation expense for 1997, 1998 and 1999 was $75,000, $681,000 and $939,000,
respectively, and $229,000 and $404,000 for the three months ended March 31,
1999 and 2000, respectively.
RESTRICTED STOCK PURCHASE AGREEMENTS: In March 1997, the Company issued 114,100
shares of common stock at a purchase price of $0.77 per share to an officer
under its 1995 Equity Incentive Plan, subject to a stock restriction agreement
whereby the Company has the right, but not the obligation, to repurchase the
unvested portion of the shares of common stock at the
F-19
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
original purchase price per share in the event of termination of the officer's
employment with the Company. Shares subject to this agreement vest monthly over
a 48-month period. At December 31, 1999 and March 31, 2000, there were 35,659
and 28,527, respectively, unvested common shares at a weighted average fair
value, as determined under the minimum value method, of $0.23 per share. The
restriction may be terminated at any time at the Company's election.
In February 1998, the Company issued 78,240 shares of its common stock at a
purchase price of $4.60 per share to an officer under its 1995 Equity Incentive
Plan, subject to a stock restriction agreement whereby the Company has the
right, but not the obligation, to repurchase the unvested portion of the shares
of common stock at the original purchase price per share upon termination of the
officer's employment with the Company. Shares subject to this agreement vest
monthly over a 24-month period, beginning in February 2000, except that unvested
shares will vest in full upon the closing of an initial public offering of the
Company's common stock or upon the sale of the Company during the officer's
employment with the Company or within 180 days after termination without cause.
At December 31, 1999 and March 31, 2000, there were 78,240 and 71,720,
respectively, unvested shares at a weighted average fair value, as determined
under the minimum value method, of $1.40 per share. The restriction may be
terminated at any time at the Company's election. The Company recorded $285,000
of deferred compensation during 1998 in connection with the sale of shares of
common stock to the officer based upon an estimated fair value at the date of
issuance of $8.25 per share. The deferred compensation amount is being charged
to operations either over a 24-month period beginning in February 2000 or in its
entirety upon the closing of an initial public offering of the Company's common
stock.
During the fourth quarter of 1999, the Company issued 47,500 shares of common
stock, under two separate agreements, at a purchase price of $2.00 per share, to
an officer under its 1995 Equity Incentive Plan, subject to stock restriction
agreements whereby the Company has the right, but not the obligation, to
repurchase the unvested portion of the shares of common stock at the original
purchase price per share in the event of termination of the officer's employment
with the Company. The first agreement involved 22,500 shares, which vest monthly
over a 24-month period with certain acceleration provisions. The acceleration
provisions include (i) an underwritten public offering of the Company's common
stock, and (ii) any merger, consolidation or other sale of the Company. The
second agreement involved 25,000 shares, which vested immediately. At
December 31, 1999 and March 31, 2000, there were 19,686 and 16,875,
respectively, unvested common shares at a weighted average fair value, as
determined under the minimum value method, of $0.61 per share. The restriction
may be terminated at any time at the Company's election.
WARRANTS: At December 31, 1997, 1998, 1999 and March 31, 2000, the Company had
outstanding warrants to purchase 27,022 shares of the Company's common stock at
$3.97 per share. In 1997, warrants for 18,910 shares expired and the remaining
warrants expire on August 10, 2000. An equal number of shares of common stock
have been reserved for the exercise of outstanding warrants at March 31, 2000.
1998 EMPLOYEE STOCK PURCHASE PLAN: In January 1998, the Company adopted the
Company's 1998 Employee Stock Purchase Plan (the "Purchase Plan"), under which
employees may in the future purchase shares of Common Stock at a discount from
fair market value. There are 97,800 shares of Common Stock reserved for issuance
under the Purchase Plan. To date the Company has not offered or issued shares of
Common Stock under the Purchase Plan. Rights to purchase Common Stock under the
Purchase Plan are granted at the discretion of the Compensation Committee, which
determines the frequency and duration of individual offerings under the Purchase
Plan and the dates when stock may be purchased. Eligible employees participate
voluntarily and may withdraw from any offering at any time before stock is
purchased. The purchase price per share of Common Stock in an offering is 85% of
the lesser of its fair market value at the beginning of the offering period or
on the applicable exercise date and may be paid through payroll deductions,
periodic lump sum payments or a combination of both.
F-20
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
12. EMPLOYEE SAVINGS AND RETIREMENT PLAN
The Company has an employee savings and retirement plan (the "Plan"), qualified
under section 401(k) of the Internal Revenue Code, covering substantially all of
the Company's employees. Employees may elect to contribute a portion of their
pretax compensation to the Plan up to the annual maximum allowed under the Plan.
The Plan does not provide for a fixed matching contribution by the Company,
however, for each plan year the Company may contribute to the Plan at its
discretion. No contributions to the Plan were made by the Company in 1997, 1998,
1999 or the three months ending March 31, 1999 or 2000.
13. INCOME TAXES
For the years ended December 31, 1997, 1998 and 1999, the Company had income tax
provisions of $0, $0 and $58,000, respectively.
Temporary differences that give rise to significant deferred tax assets as of
December 31, 1997, 1998 and 1999 are as follows:
<TABLE>
<CAPTION>
---------------------------------------
<S> <C> <C> <C>
1997 1998 1999
----------- ----------- -----------
Deferred Tax Asset:
Allowance for doubtful accounts............................. $ 32,000 $ 52,000 $ 52,000
Inventory costs............................................. 86,000 69,000 106,000
Depreciation and amortization............................... 97,000 139,000 120,000
Accrued expenses............................................ -- -- 140,000
Other....................................................... 116,000 96,000 79,000
Net operating loss carryforwards............................ 12,890,000 15,288,000 20,251,000
Research credit carryforwards............................... 742,000 897,000 1,168,000
Valuation allowance......................................... (13,963,000) (16,541,000) (21,916,000)
----------- ----------- -----------
Net deferred tax asset...................................... -- -- --
=========== =========== ===========
</TABLE>
As of December 31, 1999, the Company has federal net operating loss ("NOL") and
research and experimentation credit carryforwards of approximately $49,744,000
and $1,167,000, respectively, which may be available to offset future federal
income tax liabilities and expire at various dates through 2019. As required by
SFAS No. 109, management has evaluated the positive and negative evidence
bearing upon the realizabilty of its deferred tax assets, which are comprised
principally of net operating loss and research and experimentation credit
carryforwards. Management has determined that it is more likely than not the
Company will be unable to recognize the benefits of federal and state deferred
tax assets and, as a result, a valuation allowance of approximately $21,916,000
has been established at December 31, 1999.
Ownership changes, as defined in the Internal Revenue Code, may limit the amount
of net operating loss carryforwards that can be utilized annually to offset
future taxable income. Subsequent ownership changes could further affect the
limitation in future years.
As of December 31, 1999, the Company's UK subsidiary had NOL carryforwards of
approximately $1,361,000, which are indefinitely available to offset future
taxable income in the United Kingdom.
F-21
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
14. RELATED PARTY TRANSACTIONS
The President, Chief Executive Officer and Chairman of the Board of the Company
also serves as an outside director of and consultant to Genzyme Corporation
("Genzyme") and as an outside director of Genzyme Transgenics Corporation. In
1996, the Company entered into a sublease agreement with Genzyme for laboratory
and office facilities in Cambridge, Massachusetts, which was extended to
June 2001. A total of $590,000, $615,000 and $615,000 was recorded as rent
expense during 1997, 1998 and 1999, respectively. Rent expense of $154,000 was
recorded in both the three month periods ended March 31, 1999 and 2000. During
1996, the Company signed two patent license agreements with Genzyme under the
Company's standard license terms. The Company recorded license revenues of
$51,000, $50,000 and $50,000 in 1997, 1998 and 1999, respectively, and $13,000
in each of the three-month periods ended March 31, 1999 and 2000, respectively,
in connection with the signing and maintenance fees on these two agreements.
During 1998, the Company had two funded discovery projects with Genzyme
Transgenic Corporation and one funded discovery project with Genzyme Diagnostics
Corporation resulting in recorded revenues of $145,000 and $123,000 in 1997 and
1998, respectively. The funded discovery projects were all concluded during
1998.
In June 1998, the Company and Genzyme also entered into a joint development and
commercialization agreement for one of the Company's proprietary therapeutic
compounds for the treatment of chronic inflammatory diseases, with initial
development to be focused on the treatment of hereditary angioedema. Under the
agreement, the Company will initially fund up to $6.0 million dollars of
development costs and thereafter the parties will fund equally all development
costs. Through December 31, 1999, the Company funded approximately $1.8 million
of development costs, exclusive of any allocation of general and administrative
expenses. Genzyme has extended to the Company a $3.0 million line of credit,
which the Company may use to fund a portion of such development costs or for any
of the Company's other research and development programs. At December 31, 1999,
the Company had not utilized any of the available line of credit. In addition,
the Company will be entitled to receive significant milestone payments and up to
50% of the profits from sales of products developed under this collaboration.
The Company believes that the proposed collaboration with Genzyme will provide
Dyax with significant financial and other resources to continue preclinical and
clinical development of this proprietary compound. In addition, Genzyme
purchased $3.0 million of the Company's Class A Series 5 Preferred Stock at
$5.45 per share.
15. BUSINESS SEGMENTS
The Company discloses business segments under SFAS No. 131. The accounting
policies of the segments are the same as those described in Note 2, Accounting
Policies. Segment data does not include allocation of corporate administrative
costs to each of its operating segments. The Company evaluates the performance
of its segments and allocates resources to them based on earnings (losses)
before corporate administrative costs, interest and taxes.
The Company has two reportable segments: Separations and
Therapeutics/Diagnostics. The Separations Products segment develops,
manufactures, markets and sells chromatography separations equipment and media
cartridges under the Biotage trade name. The Therapeutics/Diagnostic segment
develops therapeutic and diagnostic products using the Company's proprietary
Phage Display technology, licenses this proprietary technology to third parties
and sells affinity ligand based separations products developed using the
Company's Phage Display technology.
The Company's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different technologies and marketing strategies.
F-22
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
The following table presents certain segment financial information and the
reconciliation of segment financial information to consolidated totals as of
the:
<TABLE>
<CAPTION>
---------------------------------------
<S> <C> <C> <C>
THERAPEUTICS/
YEAR ENDED DECEMBER 31, 1997 SEPARATIONS DIAGNOSTICS TOTAL
----------- ----------- -----------
Revenue from external customers............................. $ 7,188,000 $ 2,142,000 $ 9,330,000
Segment loss from operations................................ $(1,401,000) $(3,282,000) $(4,683,000)
Depreciation and amortization............................... $ (202,000) $ (106,000) $ (308,000)
Segment assets.............................................. $ 4,831,000 $ 1,089,000 $ 5,920,000
</TABLE>
<TABLE>
<CAPTION>
THERAPEUTICS/
SEPARATIONS DIAGNOSTICS TOTAL
YEAR ENDED DECEMBER 31, 1998 ----------- ------------- -----------
<S> <C> <C> <C>
Revenue from external customers............................. $ 9,641,000 $ 4,490,000 $14,131,000
Segment loss from operations................................ $(1,524,000) $(2,126,000) $(3,650,000)
Depreciation and amortization............................... $ (219,000) $ (221,000) $ (440,000)
Segment assets.............................................. $ 5,527,000 $ 2,252,000 $ 7,779,000
</TABLE>
<TABLE>
<CAPTION>
THERAPEUTICS/
SEPARATIONS DIAGNOSTICS TOTAL
YEAR ENDED DECEMBER 31, 1999 ----------- ------------- -----------
<S> <C> <C> <C>
Revenue from external customers............................. $12,596,000 $ 4,237,000 $16,833,000
Segment loss from operations................................ $(2,790,000) $(6,203,000) $(8,993,000)
Depreciation and amortization............................... $ (305,000) $ (276,000) $ (581,000)
Segment assets.............................................. $ 7,010,000 $ 2,257,000 $ 9,267,000
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------
<S> <C> <C> <C>
THERAPEUTICS/
THREE MONTHS ENDED MARCH 31, 1999 SEPARATIONS DIAGNOSTICS TOTAL
----------- ----------- -----------
Revenue from external customers............................. $ 2,840,000 $ 825,000 $ 3,665,000
Segment loss from operations................................ $ (496,000) $(1,398,000) $(1,894,000)
Depreciation and amortization............................... $ (62,000) $ (48,000) $ (110,000)
Segment assets.............................................. $ 5,660,000 $ 2,812,000 $ 8,472,000
</TABLE>
<TABLE>
<CAPTION>
THERAPEUTICS/
SEPARATIONS DIAGNOSTICS TOTAL
THREE MONTHS ENDED MARCH 31, 2000 ----------- ------------- -----------
<S> <C> <C> <C>
Revenue from external customers............................. $ 3,378,000 $ 1,429,000 $ 4,807,000
Segment loss from operations................................ $(1,004,000) $(2,043,000) $(3,047,000)
Depreciation and amortization............................... $ (89,000) $ (70,000) $ (159,000)
Segment assets.............................................. $ 6,681,000 $ 2,096,000 $ 8,777,000
</TABLE>
F-23
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------
1997 1998 1999 1999 2000
RECONCILIATIONS: ----------- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Income from operations:
Income from operations for
reportable segments............ $(4,683,000) $(3,650,000) $ (8,993,000) $ (1,894,000) $ (3,047,000)
Unallocated amounts:
Corporate expenses............. (1,405,000) (3,903,000) (5,315,000) (1,230,000) (1,602,000)
Investment income.............. -- -- 265,000 -- --
Interest income, net........... 265,000 401,000 856,000 261,000 158,000
----------- ----------- ------------ ------------ ------------
Consolidated net loss........ $(5,823,000) $(7,152,000) $(13,187,000) $ (2,863,000) $ (4,491,000)
=========== =========== ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------
1997 1998 1999 1999 2000
----------- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Depreciation and amortization:
Depreciation and amortization for
reportable segments............ $ (308,000) $ (440,000) $ (581,000) $ (110,000) $ (159,000)
Unallocated amounts:
Corporate depreciation and
amortization................. (8,000) (22,000) (70,000) (18,000) (27,000)
----------- ----------- ------------ ------------ ------------
Consolidated depreciation and
amortization................. $ (316,000) $ (462,000) $ (651,000) $ (128,000) $ (186,000)
=========== =========== ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, THREE MONTHS ENDED MARCH 31,
--------------------------------------- -----------------------------
1997 1998 1999 1999 2000
----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Segment assets.................... $ 5,920,000 $ 7,779,000 $ 9,267,000 $ 8,472,000 $ 8,777,000
Unallocated amounts:
Corporate assets................ 4,716,000 26,637,000 20,341,000 23,323,000 22,068,000
----------- ----------- ----------- ------------ ------------
Consolidated assets........... $10,636,000 $34,416,000 $29,608,000 $ 31,795,000 $ 30,845,000
=========== =========== =========== ============ ============
</TABLE>
The Company operates in the geographic segments of the United States ("U.S.")
and Europe as indicated in the table below.
<TABLE>
<CAPTION>
-----------------------------------------
<S> <C> <C> <C> <C>
1997
-----------------------------------------
U.S EUROPE ELIMINATION TOTAL
-------- -------- -------- --------
Revenues.................................................... $ 7,891 $2,228 $(789) $ 9,330
Net income (loss)........................................... (6,779) 910 46 (5,823)
Long-lived assets........................................... 1,240 127 -- 1,367
Total assets................................................ 9,538 1,398 (300) 10,636
</TABLE>
F-24
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
<TABLE>
<CAPTION>
1998
--------------------------------------------
U.S EUROPE ELIMINATION TOTAL
-------- -------- ----------- --------
<S> <C> <C> <C> <C>
Revenues.................................................... $ 12,941 $2,992 $(1,802) $14,131
Net income (loss)........................................... (7,129) (28) 5 (7,152)
Long-lived assets........................................... 1,820 162 -- 1,982
Total assets................................................ 34,148 1,650 (1,382) 34,416
</TABLE>
<TABLE>
<CAPTION>
1999
--------------------------------------------
U.S EUROPE ELIMINATION TOTAL
-------- -------- ----------- --------
<S> <C> <C> <C> <C>
Revenues.................................................... $15,372 $4,274 $(2,813) $16,833
Net income (loss)........................................... (12,940) (342) 95 (13,187)
Long-lived assets........................................... 4,264 436 -- 4,700
Total assets................................................ 29,064 2,380 (1,836) 29,608
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1999
--------------------------------------------
U.S EUROPE ELIMINATION TOTAL
-------- -------- ----------- --------
<S> <C> <C> <C> <C>
Revenues.................................................... $ 3,100 $1,392 $ (827) $ 3,665
Net income (loss)........................................... (2,945) 84 (2) (2,863)
Long-lived assets........................................... 2,257 16 -- 2,273
Total assets................................................ 31,302 2,241 (1,748) 31,795
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 2000
--------------------------------------------
U.S EUROPE ELIMINATION TOTAL
-------- -------- ----------- --------
<S> <C> <C> <C> <C>
Revenues.................................................... $ 4,749 $ 566 $ (508) $ 4,807
Net income (loss)........................................... (4,135) (314) (42) (4,491)
Long-lived assets........................................... 4,206 493 -- 4,699
Total assets................................................ 30,959 1,854 (1,968) 30,845
</TABLE>
16. COMPREHENSIVE INCOME
The Company adopted SFAS No. 130 in 1998. Accumulated other comprehensive income
(loss) is calculated as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DECEMBER 31, MARCH 31
--------------------------------- ---------------------
1997 1998 1999 1999 2000
--------- --------- --------- --------- ---------
Accumulated other comprehensive income (loss):
Foreign currency translation adjustment:
Balance at beginning of each period......... $ 30,000 $(141,000) $(123,000) $(123,000) $(108,000)
Change during each period................... (171,000) 18,000 15,000 (21,000) 153,000
--------- --------- --------- --------- ---------
Balance at end of each period............... $(141,000) $(123,000) $(108,000) $(144,000) $ 45,000
========= ========= ========= ========= =========
</TABLE>
F-25
<PAGE>
DYAX CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2000 AND
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 2000 IS UNAUDITED)
17. COLLABORATION AND LICENSE AGREEMENT
In March 2000, the Company entered into a collaboration and license agreement
with Human Genome Sciences, Inc. ("HGSI"). Under this agreement the Company and
HGSI will use Dyax's phage display technology to identify and optimize product
leads that bind to therapeutic targets selected by HGSI, and also to develop new
technologies for purifying targets. The Company granted HGSI a non-exclusive
license to our phage display technology and compound libraries to create leads
that may be used as peptide drugs, human monoclonal antibody drugs and IN VITRO
diagnostic products. With the exception of selected IN VIVO imaging rights, HGSI
will retain the rights to all products that result from this collaboration. In
exchange, HGSI will pay the Company a minimum of $16.0 million in committed
license fees and research funding during the first three years of the five-year
agreement, $6.0 million of which was paid to the Company in March 2000. The
Company will also be entitled to receive milestone payments on therapeutic
products and royalties on all products developed by HGSI under the agreement and
will share HGSI's revenues on any of those products it out-licenses. The
$6.0 million cash payment is being recognized as revenue over the five-year
collaboration term of the agreement. For the three months ended March 31, 2000,
the Company recognized $166,000 of revenue under the collaboration and license
agreement. The excess cash received over the revenue recognized is recorded as
deferred revenue in the accompanying consolidated balance sheet.
F-26
<PAGE>
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[LOGO]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The table below lists the costs and expenses, other than underwriting discounts
and commissions, payable by us in connection with the sale of the common stock
we are registering. All amounts are estimates except the registration fee and
the NASD fee.
<TABLE>
<CAPTION>
AMOUNT TO BE PAID
-----------------
<S> <C>
Registration fee............................................ $ 19,800
NASD filing fee............................................. $ 8,000
Nasdaq National Market listing fee.......................... $ 5,000
Printing and engraving...................................... $150,000
Legal fees and expenses..................................... $350,000
Accounting fees and expenses................................ $150,000
Transfer agent fees......................................... $ 20,000
Miscellaneous............................................... $ 97,200
Total....................................................... $800,000
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law allows us to indemnify our
directors, officers, employees and agents against actual and reasonable expenses
they incur in connection with any action, suit or proceeding brought against
them because they are a director, officer, employee or agent. Under Delaware
law, we may pay all these expenses, provided that: (1) the person in question
acted in good faith and in a manner reasonably believed to be not opposed to our
best interests; and (2) in the case of a criminal proceeding, the person had no
reasonable cause to believe the conduct in question was unlawful. We shall make
no indemnification in connection with any proceeding brought on our behalf where
the person involved is adjudged to be liable to us, except as may be ordered by
a court.
Article VIII of the our Restated Certificate of Incorporation provides that we
shall, to the fullest extent permitted by Section 145 of the Delaware General
Corporation Law, indemnify anyone that we have the power to indemnify against
any expenses, liabilities or other matters referred to in or covered by that
section. This indemnification is not exclusive of any other rights to which
those seeking indemnification may be entitled under any by-law, agreement, vote
of stockholders or disinterested directors, or otherwise. Both action in an
official capacity and action in another capacity while holding office may be
subject to indemnification. A person's right to indemnification does not cease
solely because that person ceases to be a director, officer, employee or agent,
or because that person dies.
Article IX of our Restated Certificate of Incorporation provides that no
director shall be personally liable to us or our stockholders for monetary
damages for any breach of fiduciary duty by a director as a director.
Notwithstanding that provision, Article IX provides that a director shall be
liable to the extent provided by applicable law:
- - for breach of the director's duty of loyalty to us or our stockholders;
- - for acts or omissions not in good faith, or acts involving intentional
misconduct or a knowing violation of law;
- - pursuant to Section 174 of the Delaware General Corporation Law; or
- - for any transaction from which the director derived improper personal benefit.
Article IX further states that if the Delaware General Corporation Law is
amended to allow further limitation of the liability of our directors or
officers, then the liability of those directors or officers shall be limited to
the fullest extent permitted by the Delaware General Corporation Law, as from
time to time amended. Article IX also stipulates that no amendment to or repeal
of Article IX shall apply to the liability or alleged liability of any director
or officer with respect to any acts or omissions occurring prior to such
amendment or repeal.
We carry Directors' and Officers' insurance that covers our directors and
officers against some liabilities they may incur when acting in their official
capacities.
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since May 15, 1997, we have issued and sold the following unregistered
securities:
(a) Issuances of Stock
On August 31, 1998, September 10, 1998, October 1, 1998, October 15, 1998,
November 13, 1998, and November 25, 1998, we sold an aggregate of 5,752,944
shares of Class A Series 5 Preferred Stock to HealthCare Ventures V, L.P.,
Hudson Trust, Rho Management Trust II, BancBoston Ventures, Inc., H&Q Healthcare
Investors, H&Q Life Sciences Investors, Zinsmeyer Trusts Partnership, Alta
BioPharma Partners, L.P., Alta Embarcadero BioPharma LLC, Dyax Chase Partners
(Alta Bio), LLC, Genzyme Corporation, Loeb Investors Co. 106C, New York Life
Insurance Company, CGC Investors, L.P., Charter Capital Growth, L.P., Charter
Growth Capital Co-Investment Fund, L.P., ING Baring (U.S.) Capital Corporation,
and individual investors, including Henry E. Blair, Robert Dishman, and certain
other persons not affiliated with us, at a purchase price of $5.45 per share for
an aggregate purchase price of $31,353,544.80.
On July 14, 1999, in connection with our acquisition of Target Quest B.V., we
issued an aggregate of 412,500 shares of our common stock to Bioquest B.V. in
exchange for all of the capital stock of the parent company of Target Quest B.V.
In addition, on July 14, 1999, we issued an aggregate of 379,152 shares of our
common stock to the nine holders of limited liability company interests of
Target Quest, LLC not owned by Target Quest B.V.
As of December 31, 1999 we had sold an aggregate of 239,840 shares of restricted
common stock to our employees under our Amended and Restated 1995 Equity
Incentive Plan, at prices ranging from $0.77 to $4.60 per share, for an
aggregate purchase price of $ .
(b) Grants and Exercises of Stock Options
As of December 31, 1999 we had granted options to purchase our common
stock under our Amended and Restated 1995 Equity Incentive Plan. Of these,
options to purchase shares have been exercised, options to purchase
shares have been cancelled, and options to purchase shares remain
outstanding. As of December 31, 1999, there were shares of common
stock reserved for future grants under the Amended and Restated 1995 Equity
Incentive Plan.
We engaged no underwriter in connection with any of the sales of securities
described above. Sales of common stock to employees have been made in reliance
upon the exemption for the registration requirements afforded by Section 4(2) of
the Securities Act and Rule 701 thereunder as sales of an issuer's securities
pursuant to a written contract relating to the compensation of such individuals.
Sales of shares of common stock and preferred stock were made in reliance upon
Section 4(2) of the Securities Act, and/or Regulation D promulgated thereunder.
At the time of issuance, all of the foregoing shares of common and preferred
stock were deemed to be restricted securities for the purposes of the Securities
Act, and the certificates representing those securities bore legends to that
effect.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) List of Exhibits
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
- -------------- ------------------------------------------------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1 Restated Certificate of Incorporation of the Registrant, as
amended through October 31, 1998.
3.2* Form of Restated Certificate of Incorporation of the
Registrant, as proposed to be amended and restated.
3.3 By-laws of the Registrant.
3.4* Form of Restated By-laws of the Registrant, as proposed to
be amended and restated.
4.1* Specimen Common Stock Certificate.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
- -------------- ------------------------------------------------------------
<C> <S>
5.1* Opinion of Palmer & Dodge LLP.
10.1 Amended and Restated 1995 Equity Incentive Plan.
10.2 1998 Employee Stock Purchase Plan.
10.3 Employment Letter Agreement, dated September 1, 1999,
between Stephen S. Galliker and the Registrant.
10.4 Restricted Stock Purchase Agreement, dated October 1999,
between Stephen S. Galliker and the Registrant.
10.5 Restricted Stock Purchase Agreement, dated November 1999,
between Stephen S. Galliker and the Registrant.
10.6 Letter Agreement, dated September 1, 1998, between Gregory
D. Phelps and the Registrant.
10.7 Executive Employment Agreement, dated February 18, 1998,
between Robert Dishman and the Registrant.
10.8 Employment Agreement, dated August 1995, between Robert
Ladner and the Registrant.
10.9 Consulting Agreement, dated October 15, 1997, between James
W. Fordyce and the Registrant.
10.10 Loan and Pledge Agreement, dated October 30, 1998, between
Henry E. Blair and the Registrant.
10.11 Secured Convertible Term Note, dated August 11, 1995,
between Sheridan G. Snyder and the Registrant; Security
Agreement, dated May 11, 1993, between Sheridan G. Snyder
and the Registrant; and Assignment Agreement, dated May 11,
1993, between Sheridan G. Snyder and Crestar Bank, N.A. as
amended by the Amendment to Security Agreement and to
Assignment Agreement, dated August 10, 1995, between
Sheridan G. Snyder, Crestar Bank, N.A. and the Registrant.
10.12 Sublease, dated January 1999, between Mitotix, Inc. and the
Registrant.
10.13 Lease, dated June 30, 1999, between Alan G. Dillard, Jr.,
and the Registrant.
10.14 Lease Agreement, dated as of February 12, 1998, between
AStec Partnership and the Registrant.
10.15 Lease Agreement, dated as of February 11, 1997, between
AStec Partnership and the Registrant.
10.16 Sublease Agreement, dated September 21, 1996, as amended on
December 31, 1997, between Genzyme Corporation and the
Registrant.
10.17 Second Amendment to Sublease, dated March 21, 2000, between
Genzyme Corporation and the Registrant.
10.18 Lease Agreement, dated April 8, 1991, between Bridge Gate
Real Estates Limited, Harforde Court Management Limited and
the Registrant.
10.19 Lease Agreement, dated February 20, 1998, between Old
Kendall Property LLC and the Registrant.
10.20 Amendment, dated February 26, 1999, to lease between
Cambridge Athenaeum LLC (successor-in-interest to Old
Kendall Property LLC) and the Registrant.
10.21 Master Lease Agreement, dated December 30, 1997, between
Transamerica Business Credit Corporation and the Registrant.
10.22 Form of Sale and Leaseback Agreement, dated December 30,
1997, between Transamerica Business Credit Corporation and
the Registrant.
10.23(+) Form of License Agreement (Therapeutic Field) between the
Licensee and the Registrant.
10.24(+) Form of License Agreement (Antibody Diagnostic Field)
between the Licensee and the Registrant.
10.25(+) Collaboration Agreement between Genzyme Corporation and Dyax
Corp., dated October 1, 1998.
10.26(+) Research and Development Agreement, dated March 10, 1997,
between Debiopharm S.A. and the Registrant.
10.27(+) Research and Development Marketing and Collaboration
Agreement, dated June 14, 1999, between Amersham Pharmacia
Biotech AB and the Registrant.
10.28(+) Joint Collaboration Agreement, dated October 1, 1997,
between CropTech Development Corporation and the Registrant.
10.29(+) Development Agreement for Affinity Chromatography
Purification Media, dated September 29, 1997, between
Genetics Institute, Inc. and the Registrant, with amendments
thereto.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
- -------------- ------------------------------------------------------------
<C> <S>
10.30(+) License, Technology Transfer, and Technology Services
Agreement, dated February 2, 2000, between Amgen Inc. and
the Registrant.
10.31(+) Collaboration and License Agreement, dated March 17, 2000,
between Human Genome Sciences, Inc., and the Registrant
10.32 Form of Indemnification Agreement by and between certain
directors and executive officers of the Registrant and the
Registrant.
21 Subsidiaries of the Registrant.
23.1 Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.2* Consent of Palmer & Dodge LLP. Included in the opinion filed
as Exhibit 5.1.
23.3 Consent of Yankwich and Associates, special patent counsel
to the Registrant.
24.1 Powers of Attorney. Included on the signature page of this
Registration Statement.
27.1 Financial Data Schedule.
</TABLE>
- ------------------------
* To be filed by amendment.
(+) This Exhibit has been filed separately with the Commission pursuant to an
application for confidential treatment. The confidential portions of this
Exhibit have been omitted and are marked by an asterisk.
None.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions referenced in Item 14 of this Registration Statement, or otherwise,
we have been advised that in the opinion of the SEC such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by a director,
officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether indemnification by us is against public policy as expressed
in the Securities Act. We will be governed by the final adjudication of such
issue.
We hereby undertake:
(1) to provide to the underwriters at the closing specified in the underwriting
agreement, certificates in such denominations and registered in such names as
required by the underwriter to permit prompt delivery to each purchaser;
(2) that, for purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective; and
(3) that, for purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the city of Cambridge,
Massachusetts, on the 18th day of May, 2000.
<TABLE>
<S> <C> <C>
DYAX CORP.
BY: /S/ HENRY E. BLAIR
-------------------------------------------------
Henry E. Blair
President and Chief Executive Officer
</TABLE>
POWER OF ATTORNEY
We, the undersigned officers and directors of Dyax Corp., hereby severally
constitute and appoint Henry E. Blair, Gregory D. Phelps, Pamela Hay and
Nathaniel S. Gardiner, and each of them singly, our true and lawful
attorneys-in-fact, with full power to them in any and all capacities, to sign
any amendments to this Registration Statement, and any related Rule 462(b)
registration statement or amendment thereto, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ HENRY E. BLAIR President, Chief Executive Officer, and
------------------------------------------- Chairman of the Board of Directors May 18, 2000
Henry E. Blair (Principal Executive Officer)
/s/ STEPHEN S. GALLIKER Executive Vice President of Finance and
------------------------------------------- Administration and Chief Financial May 18, 2000
Stephen S. Galliker Officer (Principal Financial Officer)
/s/ GREGORY D. PHELPS Director
------------------------------------------- May 18, 2000
Gregory D. Phelps
/s/ L. EDWARD CANNON Director
------------------------------------------- May 18, 2000
L. Edward Cannon
/s/ ROBERT A. DISHMAN Director
------------------------------------------- May 18, 2000
Robert A. Dishman
/s/ CONSTANTINE E. ANAGNOSTOPOULOS Director
------------------------------------------- May 18, 2000
Constantine E. Anagnostopoulos
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JAMES W. FORDYCE Director
------------------------------------------- May 18, 2000
James W. Fordyce
/s/ THOMAS L. KEMPNER Director
------------------------------------------- May 18, 2000
Thomas L. Kempner
/s/ HENRY R. LEWIS Director
------------------------------------------- May 18, 2000
Henry R. Lewis
/s/ JOHN W. LITTLECHILD Director
------------------------------------------- May 18, 2000
John W. Littlechild
/s/ ALIX MARDUEL Director
------------------------------------------- May 18, 2000
Alix Marduel
/s/ DAVID J. MCLACHLAN Director
------------------------------------------- May 18, 2000
David J. McLachlan
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
- -------------- ------------------------------------------------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1 Restated Certificate of Incorporation of the Registrant, as
amended through October 31, 1998.
3.2* Form of Restated Certificate of Incorporation of the
Registrant, as proposed to be amended and restated.
3.3 By-laws of the Registrant.
3.4* Form of Restated By-laws of the Registrant, as proposed to
be amended and restated.
4.1* Specimen Common Stock Certificate.
5.1* Opinion of Palmer & Dodge LLP.
10.1 Amended and Restated 1995 Equity Incentive Plan.
10.2 1998 Employee Stock Purchase Plan.
10.3 Employment Letter Agreement, dated September 1, 1999,
between Stephen S. Galliker and the Registrant.
10.4 Restricted Stock Purchase Agreement, dated October 1999,
between Stephen S. Galliker and the Registrant.
10.5 Restricted Stock Purchase Agreement, dated November 1999,
between Stephen S. Galliker and the Registrant.
10.6 Letter Agreement, dated September 1, 1998, between Gregory
D. Phelps and the Registrant.
10.7 Executive Employment Agreement, dated February 18, 1998,
between Robert Dishman and the Registrant.
10.8 Employment Agreement, dated August 1995, between Robert
Ladner and the Registrant.
10.9 Consulting Agreement, dated October 15, 1997, between James
W. Fordyce and the Registrant.
10.10 Loan and Pledge Agreement, dated October 30, 1998, between
Henry E. Blair and the Registrant.
10.11 Secured Convertible Term Note, dated August 11, 1995,
between Sheridan G. Snyder and the Registrant; Security
Agreement, dated May 11, 1993, between Sheridan G. Snyder
and the Registrant; and Assignment Agreement, dated May 11,
1993, between Sheridan G. Snyder and Crestar Bank, N.A. as
amended by the Amendment to Security Agreement and to
Assignment Agreement, dated August 10, 1995, between
Sheridan G. Snyder, Crestar Bank, N.A. and the Registrant.
10.12 Sublease, dated January 1999, between Mitotix, Inc. and the
Registrant.
10.13 Lease, dated June 30, 1999, between Alan G. Dillard, Jr.,
and the Registrant.
10.14 Lease Agreement, dated as of February 12, 1998, between
AStec Partnership and the Registrant.
10.15 Lease Agreement, dated as of February 11, 1997, between
AStec Partnership and the Registrant.
10.16 Sublease Agreement, dated September 21, 1996, as amended on
December 31, 1997, between Genzyme Corporation and the
Registrant.
10.17 Second Amendment to Sublease, dated March 21, 2000, between
Genzyme Corporation and the Registrant.
10.18 Lease Agreement, dated April 8, 1991, between Bridge Gate
Real Estates Limited, Harforde Court Management Limited and
the Registrant.
10.19 Lease Agreement, dated February 20, 1998, between Old
Kendall Property LLC and the Registrant.
10.20 Amendment, dated February 26, 1999, to lease between
Cambridge Athenaeum LLC (successor-in-interest to Old
Kendall Property LLC) and the Registrant.
10.21 Master Lease Agreement, dated December 30, 1997, between
Transamerica Business Credit Corporation and the Registrant.
10.22 Form of Sale and Leaseback Agreement, dated December 30,
1997, between Transamerica Business Credit Corporation and
the Registrant.
10.23(+) Form of License Agreement (Therapeutic Field) between the
Licensee and the Registrant.
10.24(+) Form of License Agreement (Antibody Diagnostic Field)
between the Licensee and the Registrant.
10.25(+) Collaboration Agreement between Genzyme Corporation and Dyax
Corp., dated October 1, 1998.
10.26(+) Research and Development Agreement, dated March 10, 1997,
between Debiopharm S.A. and the Registrant.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
- -------------- ------------------------------------------------------------
<C> <S>
10.27(+) Research and Development Marketing and Collaboration
Agreement, dated June 14, 1999, between Amersham Pharmacia
Biotech AB and the Registrant.
10.28(+) Joint Collaboration Agreement, dated October 1, 1997,
between CropTech Development Corporation and the Registrant.
10.29(+) Development Agreement for Affinity Chromatography
Purification Media, dated September 29, 1997, between
Genetics Institute, Inc. and the Registrant, with amendments
thereto.
10.30(+) License, Technology Transfer, and Technology Services
Agreement, dated February 2, 2000, between Amgen Inc. and
the Registrant.
10.31(+) Collaboration and License Agreement, dated March 17, 2000,
between Human Genome Sciences, Inc., and the Registrant
10.32 Form of Indemnification Agreement by and between certain
directors and executive officers of the Registrant and the
Registrant.
21 Subsidiaries of the Registrant.
23.1 Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.2* Consent of Palmer & Dodge LLP. Included in the opinion filed
as Exhibit 5.1.
23.3 Consent of Yankwich and Associates, special patent counsel
to the Registrant.
24.1 Powers of Attorney. Included on the signature page of this
Registration Statement.
27.1 Financial Data Schedule.
</TABLE>
- ------------------------
* To be filed by amendment.
(+) This Exhibit has been filed separately with the Commission pursuant to an
application for confidential treatment. The confidential portions of this
Exhibit have been omitted and are marked by an asterisk.
<PAGE>
Exhibit 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
DYAX CORP.
The undersigned, for the purpose of amending and restating the Amended
and Restated Certificate of Incorporation of Dyax Corp. (the "Corporation")
under the laws of the State of Delaware, hereby certifies as follows:
A. The Corporation was incorporated under the name Biotage, Inc.
pursuant to an original Certificate of Incorporation filed with the Secretary of
State of the State of Delaware on May 26, 1989.
B. The amendments to and the restatement of the Amended and Restated
Certificate of Incorporation of the Corporation herein certified have been
approved by the Board of Directors of the Corporation and duly adopted by the
stockholders of the Corporation in accordance with the provisions of Sections
228, 242 and 245 of the General Corporation Law of the State of Delaware. Prompt
written notice of the adoption of the amendments herein certified has been given
to those stockholders who have not consented in writing thereto, as provided in
Section 228 of the General Corporation Law of the State of Delaware.
C. The Amended and Restated Certificate of Incorporation of the
Corporation, as previously amended and restated, is hereby restated and further
amended to read as follows:
FIRST: The name of the Corporation is DYAX CORP.
SECOND: The address of the Corporation's registered office in the State of
Delaware is 1013 Centre Road, City of Wilmington, County of Newcastle, State of
Delaware 19805. The name of its registered agent at such address is Corporation
Service Company.
THIRD: The nature of the business or purposes to be conducted or promoted are:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
FOURTH: The authorized capitalization of the Corporation is as follows:
PART 1: AUTHORIZED SHARES
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is thirty-four million nine hundred
forty five thousand four hundred nineteen (34,945,419) shares, of which twenty
million (20,000,000) shares, par value $0.01 per share, are to be of a class
designated "Common Stock", and fourteen million nine hundred forty five thousand
four hundred nineteen (14,945,419) shares, par value $0.01 per share, are to be
of a class designated "Class A Preferred Stock".
1
<PAGE>
PART 2: ISSUANCE
Subject to the provisions of this Certificate of Incorporation and
except as otherwise provided by law, the shares of stock of the Corporation,
regardless of class, may be issued for such consideration and for such corporate
purposes as the Board of Directors may from time to time determine.
PART 3: COMMON STOCK
Subject to the provisions of any applicable law or of the by-laws of
the Corporation, as from time to time amended, with respect to the fixing of a
record date for the determination of stockholders entitled to vote, and except
as otherwise provided by law, by this Certificate of Incorporation or by the
resolution or resolutions providing for the issue of any series of the Class A
Preferred Stock, the holders of outstanding shares of Common Stock shall have
voting rights for the election of directors and for all other purposes, each
holder of record of shares of Common Stock being entitled to one vote for each
share of Common Stock standing in his name on the books of the Corporation,
which voting rights shall not be cumulative.
Subject to the rights of any one or more series of the Class A
Preferred Stock, the holders of Common Stock shall be entitled to receive such
dividends as from time to time may be declared by the Board of Directors out of
any funds of the Corporation legally available for the payment of such
dividends.
In the event of the liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, after payment shall have been
made to the holders of the Class A Preferred Stock of the full amount to which
they are entitled, the holders of Common Stock shall be entitled to share,
ratably according to the number of shares of Common Stock held by them, in all
remaining assets of the Corporation available for distribution to its
stockholders.
The number of authorized shares of Common Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of all shares of capital stock of
the Corporation then outstanding and entitled to vote thereon, voting together
as a single class, irrespective of the provisions of Section 242 of the General
Corporation Law of the State of Delaware that would otherwise require a vote of
the holders of Common Stock as a separate class.
PART 4: PREFERRED STOCK
The Board of Directors is authorized, subject to limitations prescribed
by law and the provisions of this Article Fourth, to provide by resolution for
the issuance of the shares of Class A Preferred Stock in one or more series, and
by filing a certificate pursuant to the applicable law of the State of Delaware,
to establish from time to time the number of shares to be included in
2
<PAGE>
each such series, and to fix the designations, powers, preferences and rights of
the shares of each such series and the qualifications, limitations or
restrictions thereof.
The authority of the Board with respect to each series of Class A
Preferred Stock shall include, but not be limited to, determination of the
following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate, if any, on the shares of that series,
whether dividends shall be cumulative, and if so, from which
date or dates, and the relative rights of priority, if any, of
payment of dividends on shares of the series;
(c) Whether that series shall have voting rights, in addition to
the voting rights provided by law, and, if so, the terms of
such voting rights;
(d) Whether that series shall have conversion privileges, and, if
so, the terms and conditions of such conversion, including
provision for adjustment of the conversion rate in such events
as the Board of Directors shall determine;
(e) Whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be
redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions
and at different redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so,
the terms and amount of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, and the relative rights of priority, if
any, of payment of shares of that series; and
(h) Any other relative rights, preferences and limitations of that
series.
PART 5: CLASS A SERIES 1, CLASS A SERIES 2, CLASS A SERIES 3, CLASS A SERIES 4
AND CLASS A SERIES 5 PREFERRED STOCK
1. DESIGNATION OF CLASS A SERIES 1 PREFERRED STOCK, CLASS A
SERIES 2 PREFERRED STOCK, CLASS A SERIES 3 PREFERRED STOCK, CLASS A SERIES 4 AND
CLASS A SERIES 5 PREFERRED STOCK. One million nine hundred forty-four thousand
five hundred (1,944,500) shares of Class A Preferred Stock are hereby designated
as "Class A Series 1 Preferred Stock", seven hundred four thousand (704,000)
shares of Class A Preferred Stock are hereby designated as "Class A Series 2
Preferred Stock", two million (2,000,000) shares of Class A Preferred Stock are
hereby designated as "Class A Series 3 Preferred Stock", four million seven
hundred ninety-two thousand three hundred thirty-two (4,792,332) shares of Class
A Preferred Stock are hereby designated "Class A Series 4 Preferred Stock", and
five million five hundred four thousand five hundred eighty seven (5,504,587)
shares of Class A Preferred Stock are hereby designated
3
<PAGE>
"Class A Series 5 Preferred Stock". As used herein, the term "Class A Preferred
Stock", used without reference to Class A Series 1 Preferred Stock, Class A
Series 2 Preferred Stock, Class A Series 3 Preferred Stock, Class A Series 4
Preferred Stock, or Class A Series 5 Preferred Stock means the Class A Series 1
Preferred Stock, the Class A Series 2 Preferred Stock, the Class A Series 3
Preferred Stock, the Class A Series 4 Preferred Stock, the Class A Series 5
Preferred Stock and any other series of Class A Preferred Stock that may be
established from time to time by the Board of Directors in accordance with this
Article Fourth, share for share alike and without distinction as to series,
except as otherwise expressly provided or as the context otherwise requires.
2. DIVIDENDS. When and as dividends are duly declared by the Board of
Directors of the Corporation, the holders of the Class A Preferred Stock shall
be entitled to receive, out of any funds legally available for that purpose,
dividends (other than dividends payable in shares of Common Stock) at the same
rate as dividends declared with respect to shares of Common Stock. In connection
with the determination of such dividends, each share of the Class A Preferred
Stock shall be deemed to represent that number of shares of Common Stock into
which it is convertible. Dividends declared on each series of the Class A
Preferred Stock shall be paid PARI PASSU with dividends declared on any other
series of Class A Preferred Stock and with any dividends declared on the Common
Stock.
3. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of the Class
A Preferred Stock then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its stockholders, before
any payment shall be made to the holders of any stock ranking on liquidation,
dissolution or winding up junior to the Class A Preferred Stock (including
holders of Common Stock) by reason of their ownership of such shares, an amount
equal to $2.186 per share for the Class A Series 1 Preferred Stock, $6.037 per
share for the Class A Series 2 Preferred Stock, $2.00 per share for the Class A
Series 3 Preferred Stock, $3.13 per share for the Class A Series 4 Preferred
Stock, and $5.45 per share for the Class A Series 5 Preferred Stock (subject in
each case to equitable adjustment in the event of any stock dividend, stock
split, combination, reorganization, recapitalization, reclassification or other
similar event affecting such shares) plus all declared but unpaid dividends. If
upon any such liquidation, dissolution or winding up of the Corporation the
remaining assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of shares of Class A
Preferred Stock the full amount to which they shall be entitled, the holders of
shares of Class A Preferred Stock and any class or series of stock ranking on
liquidation on a parity with the Series A Preferred Stock shall share PARI PASSU
in any distribution of the remaining assets and funds of the Corporation in
proportion to the respective liquidation amounts of the Class A Preferred Stock
which would otherwise be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such shares were paid
in full.
(b) After the payment of all preferential amounts required to be paid
to the holders of the Class A Preferred Stock upon the dissolution, liquidation
or winding up of the Corporation pursuant to the provisions of Section 3(a), the
remaining assets of the Corporation available for distribution, if any, to the
stockholders of the Corporation shall be allocated among the holders
4
<PAGE>
of shares of Common Stock, PRO RATA based upon the number of shares of Common
Stock then held by each.
(c) The merger or consolidation of the Corporation into or with another
corporation or other entity with the result that the stockholders of the
Corporation receive distributions of cash, securities or other property in
complete exchange for their shares of capital stock of the Corporation, or the
sale of all or substantially all the assets of the Corporation, or a
reorganization or reclassification of capital of the Corporation, shall be
deemed to be a liquidation, dissolution or winding up of the Corporation for
purposes of this Section 3, UNLESS (i) the holders of at least 50.1% of the then
outstanding shares of Class A Preferred Stock, and with respect to the shares of
Class A Series 5 Preferred Stock, the holders of 50.1% of the then outstanding
shares of Class A Series 5 Preferred Stock, elect to have such events not deemed
to be a liquidation, dissolution or winding up of the Corporation by giving
written notice thereof to the Corporation at least 15 days before the effective
date of such event or (ii) upon consummation of such event, the holders of
voting securities of the Corporation immediately prior to such transaction
continue to own directly or indirectly not less than a majority of the voting
power of the surviving corporation. If the notice specified in clause (i) above
is given, the provisions of Subsection 5(g) below shall apply. The amount
distributed to the holders of Class A Preferred Stock upon any such merger,
consolidation or sale shall, unless otherwise prohibited by law, be equal to
that amount per share that would be received by the holders of Class A Preferred
Stock if all the consideration paid in exchange for the assets or shares of
capital stock, as the case may be, of the Corporation were actually paid to the
Corporation and the Corporation were immediately thereafter liquidated and its
assets distributed pursuant to Sections 3(a) and (b) hereof. Such amount (the
"Special Liquidation Price") shall be the sum of any cash distributed plus the
value (as determined in good faith by the Board of Directors except that any
securities included therein, to the extent that there is a public trading market
therefor, shall be valued at the closing bid price of such securities in the
public market) of any property, rights or securities distributed, and shall be
paid by the Corporation to the holders of shares of Class A Preferred Stock in
complete redemption of such shares or, if less than all of such shares may then
be legally redeemed, PRO RATA in partial redemption of such shares based upon
the liquidation amounts of the shares of Class A Preferred Stock then held by
each holder. Payment of the Special Liquidation Price will be made upon actual
delivery to the Corporation or its successor of the certificates representing
shares of Class A Preferred Stock. On and after the date of the merger,
consolidation or sale, all rights of the holders of shares of Class A Preferred
Stock to be redeemed shall terminate except the right to receive the Special
Liquidation Price, and such shares shall no longer be deemed to be outstanding,
PROVIDED, HOWEVER, that if the Corporation defaults in the payment of the
Special Liquidation Price or is otherwise unable to legally redeem all of such
shares (which inability shall be deemed to be a default) with respect to any
share of Class A Preferred Stock, the rights of the holders thereof shall
continue until the Corporation cures such default.
4. VOTING.
(a) Except as otherwise expressly provided in this Section 4 or in
Section 7 hereof, or as required by law, each holder of outstanding shares of
the Class A Preferred Stock shall be
5
<PAGE>
entitled to the number of votes equal to the number of whole shares of Common
Stock into which the shares of the Class A Preferred Stock held by such holder
are convertible, at each meeting of stockholders of the Corporation (and written
actions of stockholders in lieu of meetings) with respect to any and all matters
presented to the stockholders of the Corporation for their action or
consideration. All voting for election of Directors shall be non-cumulative.
Except as otherwise expressly provided herein or as required by law, holders of
the Class A Preferred Stock shall vote together with the holders of Common Stock
as a single class.
(b) There shall be not more than ten directors of the Corporation
without the approval, by vote or written consent, of the holders of at least
50.1% of the then outstanding shares of Class A Preferred Stock.
(c) So long as shares of Class A Series 3 Preferred Stock are issued
and outstanding, one director of the Corporation (the "Series 3 Director") shall
be elected by the holders of Class A Series 3 Preferred Stock, voting as a
separate class. So long as shares of Class A Series 4 Preferred Stock are issued
and outstanding, one director of the Corporation (the "Series 4 Director") shall
be elected by the holders of Class A Series 4 Preferred Stock, voting as a
separate class. So long as shares of Class A Series 5 Preferred Stock are issued
and outstanding, one director of the Corporation (the "Series 5 Director") shall
be elected by the holders of Class A Series 5 Preferred Stock, voting as a
separate class. The remaining members of the Board of Directors shall be elected
by the affirmative vote of the holders of a majority of the outstanding shares
of all series of Class A Preferred Stock and Common Stock, voting together as a
class. All directors shall be elected at the annual meeting of stockholders and
shall serve until their respective successors are elected and qualified or until
their respective earlier resignation or removal. Any director who shall have
been elected by the holders of a class or series of stock may be removed during
his term of office, either for or without cause, by and only by, the affirmative
vote of the holders of a majority of the shares of the class or series of stock
who elected such director, given in writing or at a special meeting of such
stockholders duly called for that purpose. Any vacancy in the office of the
Series 3 Director, Series 4 Director, or Series 5 Director, as the case may be,
may be filled only by the holders of a majority of the outstanding shares of
Class A Series 3 Preferred Stock, Class A Series 4 Preferred Stock, or Class A
Series 5 Preferred Stock, respectively. After the close of business on the
Conversion Date on which the last issued and outstanding shares of Class A
Series 3 Preferred Stock, Class A Series 4 Preferred Stock or Class A Series 5
Preferred Stock, as the case may be, are converted pursuant to Section 5 or
Section 6, the respective director who had been elected by the Class A Series 3
Preferred Stock, Class A Series 4 Preferred Stock, or Class A Series 5 Preferred
Stock, as the case may be, shall be elected, and subject to removal, by the then
holders of Common Stock and Class A Preferred Stock, voting together as a single
class.
5. OPTIONAL CONVERSION. The holders of the Class A Preferred Stock
shall have conversion rights as follows (the "Conversion Rights"):
(a) RIGHT TO CONVERT. Each issued and outstanding share of Class A
Preferred Stock shall be convertible, at the option of the holder thereof, at
any time and from time to time, into such number of fully paid and nonassessable
shares of Common Stock as is determined (i) with respect to the Class A Series 1
Preferred Stock, by dividing $2.00 by the Series 1 Conversion Price (as defined
below) in effect at the time of conversion, (ii) with respect to the Class A
Series
6
<PAGE>
2 Preferred Stock, by dividing $2.00 by the Series 2 Conversion Price (as
defined below) in effect at the time of conversion, (iii) with respect to the
Class A Series 3 Preferred Stock, by dividing $2.00 by the Series 3 Conversion
Price (as defined below) in effect at the time of conversion, (iv) with respect
to the Class A Series 4 Preferred Stock, by dividing $3.13 by the Series 4
Conversion Price (as defined below) in effect at the time of conversion, and (v)
with respect to Class A Series 5 Preferred Stock, by dividing $5.45 by the
Series 5 Conversion Price (as defined below) in effect at the time of
conversion. The price at which shares of Common Stock shall be deliverable upon
conversion of Class A Preferred Stock without the payment of additional
consideration by the holder thereof (in each case, the "Conversion Price") shall
be (after giving effect to the 0.652-for-1 reverse stock split effected by an
amendment to the Certificate of Incorporation filed on or before March 23, 1998)
(i) $3.067485 per share (the "Series 1 Conversion Price") for Class A Series 1
Preferred Stock, (ii) $3.067485 per share (the "Series 2 Conversion Price") for
the Class A Series 2 Preferred Stock, (iii) $3.067485 per share (the "Series 3
Conversion Price") for the Class A Series 3 Preferred Stock, (iv) $4.800613 per
share (the "Series 4 Conversion Price") for the Class A Series 4 Preferred
Stock, (v) $5.45 per share (the "Series 5 Conversion Price") for the Class A
Series 5 Preferred Stock, and in each case shall be subject to adjustment as
provided below. Notwithstanding anything herein to the contrary, the shares of
Class A Series 5 Preferred Stock may only be converted hereunder after August
31, 1999.
In the event of a liquidation, dissolution or winding up of the
Corporation, the Conversion Rights shall terminate at the close of business on
the business day preceding the date fixed for the payment of any amounts
distributable on liquidation to the holders of the Class A Preferred Stock.
(b) FRACTIONAL SHARES. No fractional shares of Common Stock shall be
issued upon conversion of the Class A Preferred Stock. In lieu of any fractional
shares to which the holder would otherwise be entitled, the Corporation shall
pay cash equal to the product of such fraction multiplied by the market price of
one share of the Corporation's Common Stock on the Conversion Date, as such term
is defined in subsection 5(c)(i) below.
(c) MECHANICS OF CONVERSION.
(i) In order for a holder of the Class A Preferred Stock to
convert shares of the Class A Preferred Stock into shares of Common Stock, such
holder shall surrender the certificate or certificates for such shares of the
Class A Preferred Stock, at the office of the transfer agent for the Class A
Preferred Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with written notice that
such holder elects to convert all or any number of the shares of the Class A
Preferred Stock represented by such certificate or certificates. Such notice
shall state such holder's name or the names of the nominees in which such holder
wishes the certificate or certificates for shares of Common Stock to be issued
and the number of shares, class and series (if any) of the Class A Preferred
Stock to be converted. If required by the Corporation, certificates surrendered
for conversion shall be endorsed or accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the registered holder or his or its attorney duly authorized in writing. The
date of receipt of such certificates and notice by the transfer agent (or by the
Corporation if the Corporation serves as its own transfer agent) shall be the
conversion date (the
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"Conversion Date"), and the conversion shall be deemed effective as of the close
of business on the Conversion Date. The Corporation shall, as soon as
practicable after the Conversion Date, issue and deliver at such office to such
holder of the Class A Preferred Stock, or to his or its nominees, a certificate
or certificates for the number of shares of Common Stock to which such holder
shall be entitled, together with cash in lieu of any fraction of a share.
(ii) The Corporation shall at all times when the Class A
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Class A Preferred Stock, such number of its duly authorized shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding Class A Preferred Stock. Before taking any action which would cause
an adjustment reducing the Conversion Price below the then par value of the
shares of Common Stock issuable upon conversion of the Class A Preferred Stock,
the Corporation will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally
issue fully paid and nonassessable shares of Common Stock at such adjusted
Conversion Price.
(iii) Upon any such conversion, no adjustment to the
Conversion Price shall be made for any declared and unpaid dividends on the
Class A Preferred Stock surrendered for conversion or on the Common Stock
delivered upon conversion of the Class A Preferred Stock.
(iv) All shares of the Class A Preferred Stock which shall
have been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares, including
the rights, if any, to receive notices and to vote, shall immediately cease and
terminate at the close of business on the Conversion Date, except only the right
of the holders thereof to receive shares of Common Stock in exchange therefor
and payment of all declared and unpaid dividends thereon. Any shares of the
Class A Preferred Stock so converted shall be retired and canceled and shall not
be reissued, and the Corporation may from time to time take such appropriate
action as may be necessary to reduce accordingly the authorized shares of Class
A Preferred Stock and the respective series of such shares.
(d) ADJUSTMENTS TO CONVERSION PRICE FOR DILUTING ISSUES WITH RESPECT TO
THE CLASS A PREFERRED STOCK:
(i) SPECIAL DEFINITIONS. For purposes of this Subsection 5(d),
the following definitions shall apply:
(A) "OPTION" shall mean any outstanding rights,
options or warrants to subscribe for, purchase or otherwise acquire Common Stock
or Convertible Securities, excluding rights, warrants and options granted to
employees, consultants or scientific advisory board members of the Corporation
or any subsidiary thereof pursuant to an option plan or agreement adopted by the
Board of Directors with respect to up to 2,364,200 shares of Common Stock
(subject to appropriate adjustment for any further stock dividend, stock split,
combination or other similar recapitalization affecting such shares), or such
higher number as may be designated from time to time by the Board of Directors
and approved by the holders of a majority of the outstanding shares of Class A
Series 3 Preferred Stock and Class A Series 5 Preferred Stock, voting together
as a single Class.
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(B) "ORIGINAL ISSUE DATE" shall mean, as to a
series of Class A Preferred Stock, the date on which the first share of such
series was first issued.
(C) "CONVERTIBLE SECURITIES" shall mean any
evidences of indebtedness, shares (other than Class A Series 1 Preferred Stock,
Class A Series 2 Preferred Stock, Class A Series 3 Preferred Stock, Class A
Series 4 Preferred Stock and Class A Series 5 Preferred Stock) or other
securities directly or indirectly convertible into or exchangeable for Common
Stock.
(D) "ADDITIONAL SHARES OF COMMON STOCK" when used
with respect to a series of Class A Preferred Stock shall mean all shares of
Common Stock issued (or, pursuant to Subsection 5(d)(iii) below, deemed to be
issued) by the Corporation after the Original Issue Date of such series, other
than shares of Common Stock issued or issuable:
(I) upon conversion of shares of Class A Preferred Stock;
(II) as a dividend or distribution on Class A Preferred
Stock;
(III) by reason of a dividend, stock split, split-up or
other distribution on shares of Common Stock;
(IV) upon the exercise of options excluded from the
definition of "Option" in Subsection 5(d)(i)(A);
(V) in connection with the licensing or acquisition by
the Corporation of technology or intellectual
property;
(VI) upon the exercise of options or warrants with respect
to up to 200,000 shares of Common Stock in the
aggregate issued or issuable in exchange for options
or warrants to purchase shares of the common stock,
no par value per share, of Protein Engineering
Corporation issued on or before the Original Issue
Date of the Class A Series 3 Preferred Stock; or
(VII) the conversion of certain demand promissory notes of
the Corporation issued on or before the Original
Issue Date of the Class A Series 3 Preferred Stock
which shares shall not exceed 95,000 shares in the
aggregate.
(E) "COMMON STOCK DEEMED OUTSTANDING" means, at any given
time, the number of shares of Common Stock actually outstanding at such time,
plus the number of shares of Common Stock issuable at such time upon conversion
of the Class A Preferred Stock or other Convertible Securities then outstanding,
plus the number of shares of Common Stock issuable at any time upon the exercise
of all then outstanding options, warrants or other rights to purchase Common
Stock (whether or not excluded from the definition of the term "Option", in
Subsection 5(d)(i)(A)).
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(ii) NO ADJUSTMENT OF CONVERSION PRICES. No adjustment in the
number of shares of Common Stock into which the Class A Series 1 Preferred Stock
are convertible shall be made, by adjustment in the applicable Conversion Price
thereof or otherwise, if prior to such adjustment the Corporation receives
written notice from the holders of at least 50.1% of the outstanding shares of
Class A Series 1 Preferred Stock agreeing that no such adjustment shall be made.
No adjustment in the number of shares of Common Stock into which the Class A
Series 2 Preferred Stock are convertible shall be made, by adjustment in the
applicable Conversion Price thereof or otherwise, if prior to such adjustment
the Corporation receives written notice from the holders of at least 50.1% of
the outstanding shares of Class A Series 2 Preferred Stock agreeing that no such
adjustment shall be made. No adjustment in the number of shares of Common Stock
into which the Class A Series 3 Preferred Stock are convertible shall be made,
by adjustment in the applicable Conversion Price or otherwise, if prior to such
adjustment, the Corporation receives written notice from the holders of at least
50.1% of the outstanding shares of Class A Series 3 Preferred Stock agreeing
that no such adjustment shall be made. No adjustment in the number of shares of
Common Stock into which the Class A Series 4 Preferred Stock are convertible
shall be made, by adjustment in the applicable Conversion Price or otherwise, if
prior to such adjustment the Corporation receives written notice from the
holders of at least 50.1% of the outstanding shares of Class A Series 4
Preferred Stock agreeing that no such adjustment shall be made. No adjustment in
the number of shares of Common Stock into which the Class A Series 5 Preferred
Stock are convertible shall be made, by adjustment in the applicable Conversion
Price thereof or otherwise, if prior to such adjustment the Corporation receives
written notice from the holders of at least 50.1% of the outstanding shares of
Class A Series 5 Preferred Stock agreeing that no such adjustment shall be made.
Notwithstanding the foregoing, no adjustment in the number of shares of Common
Stock into which the Class A Series 1 Preferred Stock, Class A Series 2
Preferred Stock and the Class A Series 3 Preferred Stock are convertible shall
be made, by adjustment in the applicable Conversion Price thereof or otherwise,
if (i) such adjustment would be the same for all such series of Class A
Preferred Stock and (ii) prior to such adjustment, the Corporation receives
written notice from the holders of at least 50.1% of the aggregate number of
outstanding shares of all such series of Class A Preferred Stock agreeing that
no such adjustment shall be made. The Corporation shall provide written notice
of any such agreement with respect to the Class A Preferred Stock or any series
of the Class A Preferred Stock, as the case may be, to all registered holders of
such class or series. In addition, no adjustment shall be made in the applicable
Conversion Price as the result of the issuance of Additional Shares of Common
Stock or otherwise, unless the consideration per share (determined pursuant to
Subsection 5(d)(v)) for an Additional Share of Common Stock issued or deemed to
be issued by the Corporation is less than the applicable Conversion Price in
effect on the date of, and immediately prior to, the issue of such Additional
Shares of Common Stock.
(iii) ISSUE OF OPTIONS AND CONVERTIBLE SECURITIES DEEMED ISSUE
OF ADDITIONAL SHARES OF COMMON Stock. If the Corporation at any time or from
time to time after the Original Issue Date shall issue any Options or
Convertible Securities, then the maximum number of shares of Common Stock (as
set forth in the instrument relating thereto without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, the conversion or exchange of such Convertible Securities, shall be
deemed to be Additional Shares of Common Stock issued as of the time of such
issue or, in case such a record date shall have been fixed, as of the close of
business on such record date, provided that Additional Shares of
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<PAGE>
Common Stock shall not be deemed to have been issued unless the consideration
per share (determined pursuant to Subsection 5(d)(v) hereof) of such
Additional Shares of Common Stock would be less than the applicable
Conversion Price in effect on the date of and immediately prior to such
issue, or such record date, as the case may be, and provided further that in
any such case in which Additional Shares of Common Stock are deemed to be
issued:
(A) no further adjustment in the Conversion Price
shall be made upon the subsequent issue of Convertible Securities or shares of
Common Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Corporation, or decrease in the number of
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the Conversion Prices computed upon the original issue thereof (or upon
the occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities;
(C) no recomputation pursuant to clause (B) above
shall have the effect of increasing the Conversion Price to an amount which
exceeds the lower of (i) the applicable Conversion Price on the original
adjustment date, or (ii) the Conversion Price that would have resulted from any
issuance of Additional Shares of Common Stock between the original adjustment
date and such recomputation date; and
(D) upon the expiration or termination of any
unexercised Option, the Conversion Price shall be readjusted, and the Additional
Shares of Common Stock deemed issued as the result of the original issue of such
Option shall not be deemed issued for the purpose of such readjustment.
(iv) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF
ADDITIONAL SHARES OF COMMON STOCK. In the event the Corporation shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Subsection 5(d)(iii)), without consideration or
for a consideration per share (determined pursuant to Subsection 5(d)(v) hereof)
less than the applicable Conversion Price for any series of Class A Preferred
Stock in effect on the date of and immediately prior to such issue, then
forthwith upon such issue any such Conversion Price will be reduced to a
Conversion Price determined in accordance with the following formula:
New Conversion Price = P1Q1 + P2Q2
-----------
Ql + Q2
where:
Pl = Conversion Price in effect immediately prior to such issue;
Ql = Number of shares of Common Stock Deemed Outstanding (as
defined in Subsection 5(d)(i)(E)) immediately prior to such
issue;
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<PAGE>
P2 = Average price per share received by the Corporation upon
such issue; and
Q2 = Number of shares of Common Stock issued, or deemed to have
been issued, in the subject transaction;
PROVIDED that in computing each Conversion Price the result shall be rounded to
the nearest hundredth of a cent.
(v) DETERMINATION OF CONSIDERATION. For purposes of this
Subsection 5(d), the consideration received by the Corporation for the issue of
any Additional Shares of Common Stock shall be computed as follows:
(A) CASH AND PROPERTY: Such consideration shall:
(I) insofar as it consists of cash, be
computed at the aggregate of cash received by the Corporation, excluding amounts
paid or payable for accrued interest or accrued dividends, after deducting any
expenses of the Corporation in issuing Additional Shares;
(II) insofar as it consists of property
other than cash, be computed at the fair market value thereof at the time of
such issue, as determined in good faith by the Board of Directors; and
(III) insofar as it consists of securities,
be computed at the current market price, which shall be deemed to be the average
of the daily closing price for the 20 consecutive business days ending on the
fifth (5th) business day before the day of issuance in question; and
(IV) in the event Additional Shares of
Common Stock are issued together with other shares or securities or other assets
of the Corporation for consideration which covers both, be the proportion of
such consideration so received, computed as provided in clauses (I) through
(III) above, as determined in good faith by the Board of Directors.
(B) OPTIONS AND CONVERTIBLE SECURITIES. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Subsection 5(d)(iii),
relating to Options and Convertible Securities, shall be determined by dividing
(x) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
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<PAGE>
(y) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(e) ADJUSTMENT FOR STOCK SPLITS, STOCK DIVIDENDS, SUBDIVISIONS,
COMBINATIONS OR CONSOLIDATION OF COMMON STOCK. In the event the outstanding
shares of Common Stock shall be split, subdivided, combined or consolidated, by
reclassification or otherwise, into a greater or lesser number of shares of
Common Stock, and in the event that the Corporation shall issue shares of Common
Stock by way of a stock dividend or other distribution to the holders of Common
Stock, the number of shares of Common Stock into which each issued and
outstanding share of each series of Class A Preferred Stock shall be convertible
immediately prior to such split, subdivision, stock dividend, combination or
consolidation shall, concurrently with the effectiveness of such split,
subdivision, stock dividend, combination or consolidation, be increased or
decreased proportionately.
(f) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the applicable Conversion Price of shares of
Common Stock into which each issued and outstanding share of any series of Class
A Preferred Stock shall be convertible pursuant to this Section 5, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
such series of Class A Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of each series of Class A Preferred Stock,
furnish or cause to be furnished to such holder a similar certificate setting
forth (i) such adjustments and readjustments, (ii) the Conversion Price of
shares of Common Stock into which each issued and outstanding share of such
series of Class A Preferred Stock shall be convertible, and (iii) the number of
shares of Common Stock and the amount, if any, of other property which then
would be received upon the conversion of any class or series of Class A
Preferred Stock of which such holder is the record owner.
(g) MERGER OR SALE OF ASSETS. If at any time or from time to time there
shall be a merger or consolidation of the Corporation with or into another
corporation, or the sale of all or substantially all of the Corporation's assets
to any other person, then, as a part of such merger, consolidation or sale,
provision shall be made so that the holders of each series of Class A Preferred
Stock then outstanding shall thereafter be entitled to receive upon conversion
of such series of Class A Preferred Stock the number of shares of stock or other
securities or property of the Corporation, or of the successor corporation
resulting from such merger, consolidation or sale, to which a holder of Common
Stock issuable upon conversion would have been entitled on such merger,
consolidation, or sale. Notwithstanding the above, in the case of a merger,
consolidation, or sale of substantially all of the assets of the Corporation
prior to August 31, 1999 pursuant to which the holders of the Corporation's
capital stock immediately before such transaction hold less than 50% of the
capital stock of the successor corporation resulting from such transaction, then
at the option of the holders of no less than 50.1% of the Class A Series 5
Preferred Stock, all holders of Class A Series 5 Preferred Stock shall be
entitled to receive the number of shares of stock or other securities or
property of the Corporation, or of the successor corporation resulting from such
merger, consolidation or sale, to which each holder would have
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<PAGE>
been entitled to receive as if all of such Class A Series 5 Preferred Stock had
been converted into Common Stockimmediately prior to such merger, consolidation
or sale.
(h) NOTICE OF RECORD DATE. In the event:
(i) that the Corporation declares a dividend (or any other
distribution) on its Common Stock payable in Common Stock or other securities of
the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its outstanding shares
of Common Stock or a stock dividend or stock distribution thereon), or of any
consolidation or merger of the Corporation into or with another corporation, or
of the sale of all or substantially all of the assets of the Corporation; or
(iv) of the involuntary or voluntary dissolution, liquidation
or winding up of the Corporation; then the Corporation shall cause to be filed
at its principal office or at the office of the transfer agent of the Class A
Preferred Stock, and shall cause to be mailed to the holders of the Class A
Preferred Stock at their last addresses as shown on the records of the
Corporation or such transfer agent, at least ten days prior to the record date
specified in (A) below or twenty days before the date specified in (B) below, a
notice stating
(A) the record date of such dividend, distribution,
subdivision or combination, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up is expected
to become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, dissolution or winding up, or
(C) the events constituting a diluting issue or
issuance of Additional Shares, the consideration per share, the New Conversion
Price and the calculation thereof, and any additional information which would be
relevant to holders of Class A Series 5 Preferred Stock in making an informed
election under Section 5(d)(ii).
(i) MISCELLANEOUS CONVERSION PROVISIONS.
(i) If a state of facts shall occur that, without being
specifically controlled by the provisions of this Section 5, would not fairly
protect the conversion rights of the holders of the Class A Preferred Stock in
accordance with the essential intent and principles of such provisions, then the
Board of Directors shall make an adjustment in the application of such
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<PAGE>
provisions, in accordance with such essential intent and principles, so as to
protect such conversion rights.
(ii) The Corporation shall pay all documentary, stamp or other
transactional taxes attributable to the insurance or delivery of shares of
capital stock of the Corporation upon conversion of any shares of Class A
Preferred Stock; provided, however, that the Corporation shall not be required
to pay any taxes which may be payable in respect of any transfer involved in the
issuance or delivery of any certificate for such shares in a name other than
that of the Class A Preferred Stock holder in respect of which such shares of
Class A Preferred Stock are being issued.
(iii) In the event that a holder of Class A Preferred Stock
transfers such Class A Preferred Stock (the "Transferred Stock") to any third
party, no adjustment to the Conversion Price of such Transferred Stock shall be
made as a result of such transfer and the Conversation Price in effect with
respect to such Transferred Stock at the time of such transfer shall apply to
such third party with respect to such shares of Transferred Stock.
(iv) All certificates representing shares of Class A Preferred
Stock shall have affixed thereto a legend in substantially the following form:
"The shares represented by this certificate are convertible into shares of
Common Stock at a rate which may vary among different stockholders of the
Corporation. Information concerning the conversion rate applicable to the shares
represented by this certificate may be obtained from the Secretary of the
Corporation."
(v) Upon conversion of only a portion of the number of shares
covered by a Class A Preferred Stock Certificate, the Corporation shall issue
and deliver to or upon the written order of the holder of such Class A Preferred
Stock Certificate, at the expense of the Corporation, a new certificate covering
the number of shares of the Class A Stock representing the unconverted portion
of the Class A Preferred Stock Certificate, which new certificate shall entitle
the holder thereof to all the rights, powers and privileges of a holder of such
shares.
(vi) All shares of Common Stock which may be issued in
connection with the conversion provisions set forth herein will, upon issuance
by the Corporation, be validly issued, fully paid and nonassessable, not subject
to any preemptive or similar rights and free from all taxes, liens or charges
with respect thereto created or imposed by the Corporation.
6. AUTOMATIC CONVERSION.
(a) All outstanding shares of the Class A Preferred Stock shall be
deemed automatically converted into the number of shares of Common Stock into
which each issued and outstanding share of Class A Preferred Stock shall be
convertible pursuant to Section 5 of this Part 4 upon the closing of a fully
underwritten, firm commitment public offering pursuant to an effective
registration statement on Form S-1 or the then equivalent form covering the
offer and sale by the Corporation of its Common Stock under the Securities Act
of 1933, as amended ("Securities Act"), where the aggregate net proceeds to the
Corporation (after deduction of underwriting discounts and commissions) are not
less than $20,000,000 and the per share sales price of such securities equals or
exceeds (i) $10.00 per share if the closing of such offering
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<PAGE>
occurs prior to August 31, 1999; or (ii) $15.00 per share if the closing occurs
thereafter (each such amount to be equitably adjusted upon the occurrence of any
stock split, stock dividend, combination, reclassification or other similar
event) (an "Automatic Conversion Event"). On or after the date of occurrence of
an Automatic Conversion Event, the Corporation shall promptly provide notice by
mail, postage prepaid, of the occurrence of such event to each holder of record
of shares of the Class A Preferred Stock and within 10 days after receipt of
such notice, each holder of record of shares of the Class A Preferred Stock
shall surrender such holder's certificates evidencing such shares at the
principal office of the Corporation or at such other place as the Corporation
shall designate, and shall thereupon be entitled to receive certificates
evidencing the number of shares of Common Stock into which such shares of the
Class A Preferred Stock are converted and cash as provided in subsection 5(b) in
respect of any fraction of a share of Common Stock otherwise issuable upon such
conversion. On the date of the occurrence of an Automatic Conversion Event, each
holder of record of shares of the Class A Preferred Stock shall be deemed to be
the holder of record of the Common Stock issuable upon such conversion,
notwithstanding that the certificates representing such shares of the Class A
Preferred Stock shall not have been surrendered at the office of the
Corporation, that notice from the Corporation shall not have been received by
any holder of record of shares of the Class A Preferred Stock, or that the
certificates evidencing such shares of Common Stock shall not then be actually
delivered to such holder. Notwithstanding anything herein to the contrary, the
shares of Class A Series 5 Preferred Stock may only be converted hereunder after
August 31, 1999.
(b) All certificates evidencing shares of the Class A Preferred Stock
which are required to be surrendered for conversion in accordance with the
provisions hereof shall, from and after the date such certificates are so
required to be surrendered, be deemed to have been retired and canceled and the
shares of the Class A Preferred Stock represented thereby converted into Common
Stock for all purposes, notwithstanding the failure of the holder or holders
thereof to surrender such certificates on or prior to such date. The Corporation
may thereafter take such appropriate action as may be necessary to reduce the
authorized Class A Preferred Stock accordingly.
7. RESTRICTIONS AND LIMITATIONS.
(a) CERTAIN REQUIRED APPROVALS BY CLASS A PREFERRED STOCK. Except as
expressly provided herein or as required by law, so long as any shares of the
Class A Preferred Stock remain outstanding, the Corporation shall not, and shall
not permit any subsidiary (which shall mean any corporation or trust of which
the Corporation directly or indirectly owns at the time a majority of the
outstanding shares of such corporation or trust entitled to vote in the election
of directors) to, without the approval by vote or written consent by the holders
of at least 50.1% of the then outstanding shares of the Class A Preferred Stock,
each share of Class A Preferred Stock to be entitled to one vote in each
instance:
(i) Redeem, purchase or otherwise acquire for value any share
or shares of Class A Preferred Stock;
(ii) Authorize or issue, or obligate itself to authorize or
issue, any other equity security (or any debt security convertible into an
equity security) ranking on parity with or senior to the Class A Preferred Stock
as to dividends or liquidation preferences;
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<PAGE>
(iii) Increase or decrease (other than by conversion as
permitted hereby) the total number of authorized shares of Class A Preferred
Stock; or
(iv) Effect any sale, lease, assignment, transfer or other
conveyance of all or substantially all of the assets or capital stock of the
Corporation or any subsidiary thereof, or any consolidation or merger involving
the Corporation or any subsidiary thereof, or any reclassification or other
change of stock, or any recapitalization or any dissolution, liquidation or
winding up of the Corporation.
(b) CERTAIN AMENDMENTS OF CERTIFICATE OF INCORPORATION REQUIRING
APPROVAL BY CLASS A PREFERRED STOCK. The Corporation shall not amend its
Certificate of Incorporation without the approval, by vote or written consent,
by the holders of at least 50.1% of the then outstanding shares of Class A
Preferred Stock, each share of Class A Preferred Stock to be entitled to one
vote in each instance, if such amendment would adversely affect any of the
rights, preferences, privileges of or limitations provided for herein for the
benefit of any shares of Class A Preferred Stock. Without limiting the
generality of the next preceding sentence, the Corporation will not amend its
Certificate of Incorporation without the approval by the holders of at least
50.1% of the then outstanding shares of Class A Preferred Stock if such
amendment would:
(i) Change the dividend rights of the holders of Class A
Preferred Stock, or change the relative seniority of the dividend rights of the
holders of Class A Preferred Stock in relation to the holders of any other
capital stock of the Corporation;
(ii) Reduce the amount payable to the holders of Class A
Preferred Stock upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, or change the relative seniority of the
liquidation preferences of the holders of Class A Preferred Stock in relation to
the rights upon liquidation of the holders of any other capital stock of the
Corporation;
(iii) Change or modify the conversion rights of the holders of
Class A Preferred Stock provided for in Sections 5 and 6 of this Part 5;
(iv) Change or modify the rights, preferences, privileges or
limitations, if any, provided for herein relating to redemption of Class A
Preferred Stock; or
(v) Change any of the rights, preferences, privileges or
limitations provided for herein relating to the voting rights of the holders of
Class A Preferred Stock, other than the election of Class A directors by less
than all series of Class A Preferred Stock.
Notwithstanding the foregoing, the Corporation will not amend its
Certificate of Incorporation to change any of the rights, preferences,
privileges or limitations provided for herein relating to the election of the
Series 3 Director, Series 4 Director or Series 5 Director without the approval
of the holders of at least 50.1% of the then outstanding shares of the Class A
Series 3 Preferred Stock, Class A Series 4 Preferred Stock or Class A Series 5
Preferred Stock entitled to elect such director, voting separately as a class.
Furthermore, the Corporation shall not amend its Certificate of Incorporation if
such amendment would in any manner alter, change or modify, the designations,
powers, preferences, rights, privileges, qualifications, limitations or
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restrictions of the Class A Series 5 Preferred Stock without the approval of the
holders of at least 50.1% of the then outstanding shares of the Class A Series 5
Preferred Stock.
8. TRANSFER OF SHARES.
Nothing in this Restated Certificate of Incorporation shall be
deemed to prevent a transfer of Common Stock or Class A Preferred Stock to: (i)
a person or entity controlling, controlled by or under common control with the
holder of Class A Preferred Stock, (ii) a partner, limited partner, member or
shareholder of holder of Class A Preferred Stock, or (iii) any other holder of
Common Stock or Class A Preferred Stock, to the extent that such transfer would
not be in violation of federal or state securities laws.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: The Board of Directors is expressly authorized to exercise all powers
granted to the directors by law except insofar as such powers are limited or
denied herein or in the by-laws of the Corporation. In furtherance of such
powers, the Board of Directors shall have the right to make, alter or repeal the
by-laws of the Corporation.
SEVENTH: Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of the Corporation may be kept
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the by-laws of the Corporation.
Elections of directors need not be by written ballot unless the by-laws of the
Corporation shall so provide.
EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of
the General Corporation Law of the State of Delaware, as that section may be
amended and supplemented from time to time, indemnify any and all persons whom
it shall have power under that section to indemnify against any expenses,
liabilities or other matters referred to in or covered by that section. The
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in their official capacities and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
NINTH: No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director shall
be liable to the extent provided by applicable law (i) for breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is hereafter
amended to authorize a further limitation or elimination of the liability of
directors or officers, then the liability of a director or officer of the
Corporation shall, in addition to the limitation on personal liability provided
herein, be limited or eliminated to the fullest extent permitted by the Delaware
General Corporation Law, as from
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time to time amended. No amendment to or repeal of this Article Ninth shall
apply to or have any effect on the liability or alleged liability of any
director or officer of the Corporation for or with respect to any acts or
omissions of such director or officer occurring prior to such amendment or
repeal.
TENTH: The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Restated Certificate of Incorporation, in accordance
with the provisions and in the manner now or hereafter prescribed by statute,
and all rights conferred upon stockholders herein are granted subject to this
reservation.
Signed and attested this 31st day of August, 1998.
/s/ Henry E. Blair
--------------------------------
Henry E. Blair
President
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CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
DYAX CORP.
Pursuant to Section 242 of the General
CORPORATION LAW OF THE STATE OF DELAWARE
DYAX CORP. (hereinafter called the "Corporation"), a corporation
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "Delaware Law"), does hereby certify that (a) pursuant to an
Action by Unanimous Written Consent of Directors dated October 2, 1998, the
Board of Directors duly adopted resolutions pursuant to Section 242 of the
Delaware Law proposing certain amendments to the Restated Certificate of
Incorporation of the Corporation, as amended, and declaring said amendments to
be advisable; and (b) that in lieu of a meeting and vote of the Stockholders,
the Stockholders of the Corporation have given their written consent to said
amendments in accordance with the provisions of Section 228 of the Delaware Law
and a notice of such action has been sent to stockholders who did not execute
the Written Consent.
Pursuant to the foregoing resolutions:
1. The first sentence of Part 1 of Article FOURTH of the Corporation's
Restated Certificate of Incorporation, as amended, be and hereby is deleted and
the following sentence is inserted in lieu thereof: "The total number of shares
of all classes of stock which the Corporation shall have authority to issue is
thirty-five million three hundred twelve thousand three hundred ninety-one
(35,312,391) shares, of which twenty million (20,000,000) shares, par value
$0.01 per share, are to be of a class designated "Common Stock", and fifteen
million three hundred twelve thousand three hundred ninety-one (15,312,391)
shares, par value $0.01 per share, are to be of a class designated "Class A
Preferred Stock"."
2. The first sentence of Section 1 of Part 5 of Article FOURTH of the
Corporation's Restated Certificate of Incorporation, as amended, be and hereby
is deleted and the following sentence is inserted in lieu thereof:
"One million nine hundred forty-four thousand five hundred (1,944,500) shares of
Class A Preferred Stock are hereby designated as "Class A Series 1 Preferred
Stock", seven hundred four thousand (704,000) shares of Class A Preferred Stock
are hereby designated as "Class A Series 2 Preferred Stock ", two million
(2,000,000) shares of Class A Preferred Stock are hereby designated as "Class A
Series 3 Preferred Stock", four million seven hundred ninety-two thousand three
hundred thirty-two (4,792,332) shares of Class A Preferred Stock are hereby
designated "Class A Series 4 Preferred Stock", and five million eight hundred
seventy-one thousand five hundred fifty-nine (5,871,559) shares of Class A
Preferred Stock are hereby designated "Class A Series 5 Preferred Stock"."
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IN WITNESS WHEREOF, said Corporation has caused this Certificate to be
signed by its President this 31st day of October, 1998.
DYAX CORP.
By: /s/ Henry E. Blair
--------------------------------
Henry E. Blair
President and Chief Executive Officer
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EXHIBIT 3.3
BY-LAWS
OF
DYAX CORP.
ARTICLE I
STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. All meetings of stockholders
shall be held at such place within or without the State of Delaware as may be
designated from time to time by the Board of Directors or, if not so designated,
at the principal office of the corporation.
SECTION 2. ANNUAL MEETING. The annual meeting of stockholders
for the election of directors and the transaction of such other business as may
properly come before the meeting shall be held at 10 a.m. on the first Friday in
May of each year or on such other date or at such hour as may be specified by
resolution of the Board of Directors. If the date of the annual meeting shall
fall upon a legal holiday at the place of the meeting, the meeting shall be held
at the same hour on the next succeeding business day. If the annual meeting is
not held on the date designated therefor, the directors shall cause the meeting
to be held as soon thereafter as convenient.
SECTION 3. SPECIAL MEETINGS. Special meetings of the
stockholders may be called at any time by the President, the Chairman of the
Board, if any, or the Board of Directors, or by the Secretary or any other
officer upon the written request of one or more stockholders holding of record
at least a majority of the outstanding shares of stock of the corporation
entitled to vote at such meeting or at least a majority of the outstanding
shares of any series of the Company's Preferred Stock. Such written request
shall state the purpose or purposes of the proposed meeting. Business transacted
at any special meeting of stockholders shall be limited to matters relating to
the purpose or purposes stated in the notice of meeting.
SECTION 4. NOTICE OF MEETINGS. Except where some other notice
is required by law, written notice of each meeting of stockholders, stating the
place, date and hour thereof and the purposes for which the meeting is called,
shall be given by or under the direction of the Secretary, not less than ten nor
more than sixty days before the date fixed for such meeting, to each stockholder
entitled to vote at such meeting of record at the close of business on the day
fixed by the Board of Directors as a record date for the determination of the
stockholders entitled to vote at such meeting or, if no such date has been
fixed, of record at the close of business on the day before the day on which
notice is given. Notice shall be given personally to each stockholder or left at
his or her residence or usual place of business or mailed postage prepaid and
addressed to the stockholder at his or her address as it appears upon the
records of the corporation. In case of the death, absence, incapacity or refusal
of the Secretary, such notice may be given by a person designated either by the
Secretary or by the person or persons calling the meeting or by the Board of
Directors. A waiver of such notice in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be
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deemed equivalent to such notice. Attendance of a person at a meeting of
stockholders shall constitute a waiver of notice of such meeting, except when
the stockholder attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders need be
specified in any written waiver of notice. Except as required by statute, notice
of any adjourned meeting of the stockholders shall not be required.
SECTION 5. VOTING LIST. The officer who has charge of the
stock ledger of the corporation shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present. The stock
ledger shall be the only evidence as to who are the stockholders entitled to
examine the stock ledger, the list required by this section or the books of the
corporation, or to vote at any meeting of stockholders.
SECTION 6. QUORUM OF STOCKHOLDERS. At any meeting of the
stockholders, the holders of a majority in interest of all stock issued and
outstanding and entitled to vote upon a question to be considered at the
meeting, present in person or represented by proxy, shall constitute a quorum
for the consideration of such question, but a smaller group may adjourn any
meeting from time to time. When a quorum is present at any meeting, a majority
of the stock represented thereat and entitled to vote shall, except where a
larger or other vote is required by law, by the certificate of incorporation, or
by these by-laws, decide any question brought before such meeting. Any election
by stockholders shall be determined by a plurality of the vote cast by the
stockholders entitled to vote at the election.
SECTION 7. PROXIES AND VOTING. Unless otherwise provided in
the certificate of incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock held of record by such stockholder, but no proxy shall be voted or
acted upon after three years from its date, unless said proxy provides for a
longer period. Persons holding stock in a fiduciary capacity shall be entitled
to vote the shares so held, and persons whose stock is pledged shall be entitled
to vote, unless in the transfer by the pledgor on the books of the corporation
the pledgee shall have been expressly empowered to vote thereon, in which case
only the pledgee or the pledgee's proxy may represent said stock and vote
thereon. Shares of the capital stock of the corporation belonging to the
corporation or to another corporation, a majority of whose shares entitled to
vote in the election of directors is owned by the corporation, shall neither be
entitled to vote nor be counted for quorum purposes.
SECTION 8. CONDUCT OF MEETING. Meetings of the stockholders
shall be presided over by one of the following officers in the order of
seniority and if present and acting: the Chairman of the Board, if any, the
Vice-Chairman of the Board, if any, the President, a Vice-President, or, if none
of the foregoing is in office and present and acting, a chairman to be
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chosen by the stockholders. The Secretary of the corporation, if present, or an
Assistant Secretary, shall act as secretary of every meeting, but if neither the
Secretary nor an Assistant Secretary is present the chairman of the meeting
shall appoint a secretary of the meeting.
SECTION 9. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any annual or special meeting of stockholders of the
corporation may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, is signed by
the holders or by proxy for the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote on such action
were present and voted. Prompt notice of the taking of corporate action without
a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE II
DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the
corporation shall be managed by or under the direction of a Board of Directors,
who may exercise all of the powers of the corporation which are not by law
required to be exercised by the stockholders. In the event of a vacancy in the
Board of Directors, the remaining directors, except as otherwise provided by
law, may exercise the powers of the full Board until the vacancy is filled.
SECTION 2. NUMBER; ELECTION; TENURE AND QUALIFICATION. The
initial Board of Directors shall consist of two persons and shall be elected by
the incorporator. Thereafter, the number of directors which shall constitute the
whole Board shall be fixed by resolution of the Board of Directors, but in no
event shall be less than the number of directors provided in the certificate of
incorporation. Each director shall be elected by the stockholders at the annual
meeting and all directors shall hold office until the next annual meeting and
until their successors are elected and qualified, or until their earlier death,
resignation or removal. Except as may otherwise be provided in the certificate
of incorporation, the number of directors may be increased or decreased by
action of the Board of Directors. Directors need not be stockholders of the
corporation.
SECTION 3. ENLARGEMENT OF THE BOARD. The number of the Board
of Directors may be increased at any time, such increase to be effective
immediately, by vote of a majority of the directors then in office.
SECTION 4. VACANCIES. Except as may otherwise be provided in
the certificate of incorporation, unless and until filled by the stockholders,
any vacancy in the Board of Directors, however occurring, including a vacancy
resulting from an enlargement of the Board and an unfilled vacancy resulting
from the removal of any director for cause or without cause, may be filled by
vote of a majority of the directors then in office although less than a quorum,
or by the sole remaining director. A director elected to fill a vacancy shall
hold office until the next annual meeting of stockholders and until his or her
successor is elected and qualified or until his
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or her earlier death, resignation, or removal. Except as may otherwise be
provided in the certificate of incorporation, when one or more directors shall
resign from the Board, effective at a future date, a majority of the directors
then in office, including those who have so resigned, shall have the power to
fill such vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective. If at any time there are no
directors in office, then an election of directors may be held in accordance
with the General Corporation Law of the State of Delaware.
SECTION 5. RESIGNATION. Any director may resign at any time
upon written notice to the corporation. Such resignation shall take effect at
the time specified therein, or if no time is specified, at the time of its
receipt by the President or Secretary.
SECTION 6. REMOVAL. Except as may otherwise be provided by the
General Corporation Law or the certificate of incorporation, any director or the
entire Board of Directors may be removed, with or without cause, at an annual
meeting or at a special meeting called for that purpose, by the holders of a
majority of the shares then entitled to vote at an election of directors. The
vacancy or vacancies thus created may be filled by the stockholders at the
meeting held for the purpose of removal or, if not so filled, by the directors
in the manner provided in Section 4 of this Article II.
SECTION 7. COMMITTEES. The Board of Directors may, by
resolution or resolutions passed by a majority of the whole Board of Directors,
designate one or more committees, each committee to consist of one or more
directors of the corporation. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not such member or members constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
such absent or disqualified member.
A majority of all the members of any such committee may fix its rules
of procedure, determine its action and fix the time and place, whether within or
without the State of Delaware, of its meetings and specify what notice thereof,
if any, shall be given, unless the Board of Directors shall otherwise by
resolution provide. The Board of Directors shall have the power to change the
members of any such committee at any time, to fill vacancies therein and to
discharge any such committee, either with or without cause, at any time.
Any such committee, unless otherwise provided in the resolution of the
Board of Directors, or in these by-laws, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to
be affixed to all papers which may require it; but no such committee shall have
the power or authority denied it by Section 141 of the General Corporation Law
of the State of Delaware.
Each committee shall keep regular minutes of its meetings and make such
reports as the Board of Directors may from time to time request.
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SECTION 8. MEETINGS OF THE BOARD OF DIRECTORS. Regular
meetings of the Board of Directors may be held without call or formal notice at
such places either within or without the State of Delaware and at such times as
the Board may by vote from time to time determine. A regular meeting of the
Board of Directors may be held without call or formal notice immediately after
and at the same place as the annual meeting of the stockholders, or any special
meeting of the stockholders at which a Board of Directors is elected.
Special meetings of the Board of Directors may be held at any place
either within or without the State of Delaware at any time when called by the
Chairman of the Board of Directors, the President, Treasurer, Secretary, or any
director. Reasonable notice of the time and place of a special meeting shall be
given to each director unless such notice is waived by attendance or by written
waiver in the manner provided in these by-laws for waiver of notice by
stockholders. Notice may be given by, or by a person designated by, the
Secretary, the person or persons calling the meeting, or the Board of Directors.
No notice of any adjourned meeting of the Board of Directors shall be required.
In any case it shall be deemed sufficient notice to a director to send notice
(i) by mail at least three days before the meeting, (ii) by facsimile telecopier
with facsimile confirmation of transmission to the director, at least
forty-eight hours before the meeting, or (iii) by such other means or upon such
shorter notice as may hereafter expressly be provided by amendment to the
General Corporation Law of the State of Delaware, in each case addressed to such
director at his or her usual or last known business or home address.
Directors or members of any committee designated by the directors may
participate in a meeting of the Board of Directors or such committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation by
such means shall constitute presence in person at such meeting.
SECTION 9. QUORUM AND VOTING. A majority of the total number
of directors shall constitute a quorum, except that when a vacancy or vacancies
exist in the Board, a majority of the directors then in office (but not less
than one-third of the total number of the directors) shall constitute a quorum.
A majority of the directors present, whether or not a quorum is present, may
adjourn any meeting from time to time. The vote of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
Board of Directors, except where a different vote is required or permitted by
law, by the certificate of incorporation, or by these by-laws.
SECTION 10. COMPENSATION. The Board of Directors may fix fees
for their services and for their membership on committees, and expenses of
attendance may be allowed for attendance at each meeting. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity as an officer, agent or otherwise, and
receiving compensation therefor.
SECTION 11. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting, and without notice, if a
written consent thereto is signed by all members of
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the Board of Directors, or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board of
Directors or such committee.
ARTICLE III
OFFICERS
SECTION 1. TITLES. The officers of the corporation shall
consist of a President, a Secretary, a Treasurer, and such other officers with
such other titles as the Board of Directors shall determine, including without
limitation a Chairman of the Board, a Vice-Chairman of the Board, and one or
more Vice-Presidents, Assistant Treasurers, or Assistant Secretaries.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the Board of Directors at its first
meeting following the annual meeting of the stockholders. Each officer shall
hold office until his or her successor is elected and qualified, unless a
different term is specified in the vote electing such officer, or until his or
her earlier death, resignation or removal.
SECTION 3. QUALIFICATION. Unless otherwise provided by
resolution of the Board of Directors, no officer, other than the Chairman or
Vice-Chairman of the Board, need be a director. No officer need be a
stockholder. Any number of offices may be held by the same person, as the
directors shall determine.
SECTION 4. REMOVAL. Any officer may be removed, with or
without cause, at any time, by resolution adopted by the Board of Directors.
SECTION 5. RESIGNATION. Any officer may resign by delivering
a written resignation to the corporation at its principal office or to the
President or Secretary. Such resignation shall be effective upon receipt or at
such later time as may be specified therein.
SECTION 6. VACANCIES. The Board of Directors may at any time
fill any vacancy occurring in any office for the unexpired portion of the term
and may leave unfilled for such period as it may determine any office other than
those of President, Treasurer and Secretary.
SECTION 7. POWERS AND DUTIES. The officers of the corporation
shall have such powers and perform such duties as are specified herein and as
may be conferred upon or assigned to them by the Board of Directors, and shall
have such additional powers and duties as are incident to their office except to
the extent that resolutions of the Board of Directors are inconsistent
therewith.
SECTION 8. PRESIDENT AND VICE-PRESIDENTS. The President shall
be the chief executive officer of the corporation, shall preside at all meetings
of the stockholders and the Board of Directors unless a Chairman or
Vice-Chairman of the Board is elected by the Board, empowered to preside, and
present at such meeting, shall have general and active management of
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the business of the corporation and general supervision of its officers, agents
and employees, and shall see that all orders and resolutions of the Board of
Directors are carried into effect.
In the absence of the President or in the event of his or her
inability or refusal to act, the Vice-President if any (or in the event there
be more than one Vice-President, the Vice-Presidents in the order designated
by the directors, or in the absence of any designation, then in the order of
their election) shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions
upon the President. The Board of Directors may assign to any Vice-President
the title of Executive Vice-President, Senior Vice-President or any other
title selected by the Board of Directors.
SECTION 9. SECRETARY AND ASSISTANT SECRETARIES. The Secretary
shall attend all meetings of the Board of Directors and of the stockholders and
record all the proceedings of such meetings in a book to be kept for that
purpose, shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, shall maintain a
stock ledger and prepare lists of stockholders and their addresses as required
and shall have custody of the corporate seal which the Secretary or any
Assistant Secretary shall have authority to affix to any instrument requiring it
and attest by any of their signatures. The Board of Directors may give general
authority to any other officer to affix and attest the seal of the corporation.
The Assistant Secretary if any (or if there be more than one, the
Assistant Secretaries in the order determined by the Board of Directors of if
there be no such determination, then in the order of their election) shall, in
the absence of the Secretary or in the event of the Secretary's inability or
refusal to act, perform the duties and exercise the powers of the Secretary.
SECTION 10. TREASURER AND ASSISTANT TREASURERS. The Treasurer
shall have the custody of the corporate funds and securities, shall keep full
and accurate accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in the name
and to the credit of the corporation in such depositories as may be designated
by the Board of Directors. The Treasurer shall disburse the funds of the
corporation as may be ordered by the Board of Directors or the President, taking
proper vouchers for such disbursements, and shall render to the President and
the Board of Directors, at its regular meetings, or whenever they may require
it, an account of all transactions and of the financial condition of the
corporation.
The Assistant Treasurer if any (or if there be more than one, the
Assistant Treasurers in the order determined by the Board of Directors or if
there be no such determination, then in the order of their election) shall,
in the absence of the Treasurer or in the event of his or her inability or
refusal to act, perform the duties and exercise the powers of the Treasurer.
SECTION 11. BONDED OFFICERS. The Board of Directors may
require any officer to give the corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors upon such
terms and conditions as the Board of Directors may specify, including without
limitation a bond for the faithful performance of the duties of such officer and
for the restoration to the corporation of all property in his or her possession
or control belonging to the corporation.
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SECTION 12. SALARIES. Officers of the corporation shall be
entitled to such salaries, compensation or reimbursement as shall be fixed or
allowed from time to time by the Board of Directors.
ARTICLE IV
STOCK
SECTION 1. CERTIFICATES OF STOCK. One or more certificates of
stock, signed by the Chairman or Vice-Chairman of the Board of Directors or by
the President or Vice-President and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary, shall be issued to each stockholder
certifying, in the aggregate, the number of shares owned by the stockholder in
the corporation. Any or all signatures on any such certificate may be
facsimiles. In case any officer, transfer agent or registrar who shall have
signed or whose facsimile signature shall have been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he or she were such officer, transfer agent or registrar at the date of
issue.
Each certificate for shares of stock which are subject to any
restriction on transfer pursuant to the certificate of incorporation, the
by-laws, applicable securities laws, or any agreement among any number of
shareholders or among such holders and the corporation shall have conspicuously
noted on the face or back of the certificate either the full text of the
restriction or a statement of the existence of such restriction.
SECTION 2. TRANSFERS OF SHARES OF STOCK. Subject to the
restrictions, if any, stated or noted on the stock certificates, shares of stock
may be transferred on the books of the corporation by the surrender to the
corporation or its transfer agent of the certificate representing such shares
properly endorsed or accompanied by a written assignment or power of attorney
properly executed, and with such proof of authority or the authenticity of
signature as the corporation or its transfer agent may reasonably require. The
corporation shall be entitled to treat the record holder of stock as shown on
its books as the owner of such stock for all purposes, including the payment of
dividends and the right to vote with respect to that stock, regardless of any
transfer, pledge or other disposition of that stock, until the shares have been
transferred on the books of the corporation in accordance with the requirements
of these by-laws.
SECTION 3. LOST CERTIFICATES. A new certificate of stock may
be issued in the place of any certificate theretofore issued by the corporation
and alleged to have been lost, stolen, destroyed, or mutilated, upon such terms
in conformity with law as the Board of Directors shall prescribe. The directors
may, in their discretion, require the owner of the lost, stolen, destroyed or
mutilated certificate, or the owner's legal representatives, to give the
corporation a bond, in such sum as they may direct, to indemnify the corporation
against any claim that may be made against it on account of the alleged loss,
theft, destruction or mutilation of any such certificate, or the issuance of any
such new certificate.
SECTION 4. RECORD DATE. The Board of Directors may fix in
advance a record date for the determination of the stockholders entitled to
notice of or to vote at any meeting of
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stockholders or to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action. Such record date shall not be more than 60 nor less than 10 days before
the date of such meeting, nor more than 60 days prior to any other action to
which such record date relates.
If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. Unless otherwise fixed by the
Board of Directors, the record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting, when no prior
action by the Board of Directors is necessary, shall be the day on which the
first written consent is expressed. The record date for determining stockholders
for any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating to such purpose.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
SECTION 5. FRACTIONAL SHARE INTERESTS. The corporation may,
but shall not be required to, issue fractions of a share. If the corporation
does not issue fractions of a share, it shall (1) arrange for the disposition of
fractional interests by those entitled thereto, (2) pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such
fractions are determined, or (3) issue scrip or warrants in registered or bearer
form which shall entitle the holder to receive a certificate for a full share
upon the surrender of such scrip or warrants aggregating a full share. A
certificate for a fractional share shall, but scrip or warrants shall not unless
otherwise provided therein, entitle the holder to exercise voting rights, to
receive dividends thereon, and to participate in any of the assets of the
corporation in the event of liquidation. The Board of Directors may cause scrip
or warrants to be issued subject to the conditions that they shall become void
if not exchanged for certificates representing full shares before a specified
date, or subject to the conditions that the shares for which scrip or warrants
are exchangeable may be sold by the corporation and the proceeds thereof
distributed to the holders of scrip or warrants, or subject to any other
conditions which the Board of Directors may impose.
SECTION 6. DIVIDENDS. Subject to the provisions of the
certificate of incorporation, the Board of Directors may, out of funds legally
available therefor, at any regular or special meeting, declare dividends upon
the common stock of the corporation as and when they deem expedient.
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ARTICLE V
INDEMNIFICATION AND INSURANCE
SECTION 1. INDEMNIFICATION. The corporation shall, to the full
extent permitted by the General Corporation Law of the State of Delaware, as
amended from time to time, and the certificate of incorporation, indemnify each
person whom it may indemnify pursuant thereto.
SECTION 2. INSURANCE. The corporation shall have power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity or arising out of such person's status as such, whether or
not the corporation would have the power to indemnify such person against such
liability under the provisions of the General Corporation Law of the State of
Delaware.
SECTION 3. ADVANCEMENT OF EXPENSES. Expenses (including
attorneys' fees) incurred by a person entitled to indemnification pursuant to
the General Corporation Law of the State of Delaware and these by-laws, as each
may be amended from time to time, in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such person to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation as authorized in these by-laws.
ARTICLE VI
GENERAL PROVISIONS
SECTION 1. FISCAL YEAR. Except as otherwise designated from
time to time by the Board of Directors, the fiscal year of the corporation shall
begin on the first day of January and end on the last day of December.
SECTION 2. CORPORATE SEAL. The corporate seal shall be in
such form as shall be approved by the Board of Directors. The Secretary shall be
the custodian of the seal. The Board of Directors may authorize a duplicate seal
to be kept and used by any other officer.
SECTION 3. CERTIFICATE OF INCORPORATION. All references in
these by-laws to the certificate of incorporation shall be deemed to refer to
the certificate of incorporation of the corporation, as in effect from time to
time.
SECTION 4. EXECUTION OF INSTRUMENTS. The Chairman and
Vice-Chairman of the Board of Directors, if any, the President, any Vice
President, and the Treasurer shall have power to execute and deliver on behalf
and in the name of the corporation any instrument requiring the signature of an
officer of the corporation, including deeds, contracts, mortgages,
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bonds, notes, debentures, checks, drafts, and other orders for the payment of
money. In addition, the Board of Directors may expressly delegate such powers to
any other officer or agent of the corporation.
SECTION 5. VOTING OF SECURITIES. Except as the directors may
otherwise designate, the President or Treasurer may waive notice of, and act as,
or appoint any person or persons to act as, proxy or attorney-in-fact for this
corporation (with or without power of substitution) at any meeting of
stockholders or shareholders of any other corporation or organization the
securities of which may be held by this corporation.
SECTION 6. EVIDENCE OF AUTHORITY. A certificate by the
Secretary, or an Assistant Secretary, or a temporary secretary, as to any action
taken by the stockholders, directors, a committee or any officer or
representative of the corporation shall, as to all persons who rely on the
certificate in good faith, be conclusive evidence of that action.
SECTION 7. TRANSACTIONS WITH INTERESTED PARTIES. No contract
or transaction between the corporation and one or more of the directors or
officers, or between the corporation and any other corporation, partnership,
association, or other organization in which one or more of the directors or
officers are directors or officers, or have a financial interest, shall be void
or voidable solely for that reason, or solely because the director or officer is
present at or participates in the meeting of the Board of Directors or a
committee of the Board of Directors which authorizes the contract or transaction
or solely because the vote of any such director is counted for such purpose, if:
(1) The material facts as to the relationship or interest and as to the
contract or transaction are disclosed or are known to the Board of Directors or
the committee, and the Board or committee in good faith authorizes the contract
or transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(2) The material facts as to the relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified by the Board of Directors, a
committee of the Board of Directors, or the stockholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
SECTION 8. BOOKS AND RECORDS. The books and records of the
corporation shall be kept at such places within or without the State of Delaware
as the Board of Directors may from time to time determine.
SECTION 9. BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS.
The corporation elects, pursuant to paragraph (b)(3) of Section 203 of the
Delaware General
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Corporation Law (as such Section may be amended from time to time), not to be
governed by such Section 203. This Section 9 shall not be subject to any
amendment adopted by the Board of Directors.
ARTICLE VII
AMENDMENTS
SECTION 1. BY THE BOARD OF DIRECTORS. These by-laws may be
altered, amended or repealed or new by-laws may be adopted by the affirmative
vote of a majority of the directors present at any regular or special meeting of
the Board of Directors at which a quorum is present.
SECTION 2. BY THE STOCKHOLDERS. These by-laws may be altered,
amended or repealed or new by-laws may be adopted by the affirmative vote of the
holders of a majority of the shares of the capital stock of the corporation
issued and outstanding and entitled to vote at any regular meeting of
stockholders, or at any special meeting of stockholders provided notice of such
alteration, amendment, repeal or adoption of new by-laws shall have been stated
in the notice of such special meeting.
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EXHIBIT 10.1
DYAX CORP.
AMENDED AND RESTATED 1995 EQUITY INCENTIVE PLAN
(AS AMENDED THROUGH AUGUST 1999)
Section 1. PURPOSE
The purpose of the Dyax Corp. 1995 Equity Incentive Plan (the "Plan") is to
attract and retain key employees and directors and consultants of the Company
and its Affiliates, to provide an incentive for them to assist the Company to
achieve long-range performance goals, and to enable them to participate in the
long-term growth of the Company.
Section 2. DEFINITIONS
"Affiliate" means any business entity in which the Company owns directly or
indirectly 50% or more of the total combined voting power or has a significant
financial interest as determined by the Committee.
"Award" means any Option, Stock Appreciation Right, Performance Share,
Restricted Stock, Stock Unit or Other Stock-Based Award awarded under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor to such Code.
"Committee" means the Compensation Committee of the Board or such other
committee of the Board appointed by the Board to administer the Plan or a
specified portion thereof; provided, however, that in any instance the Board of
Directors may take away any action delegated to the Committee hereunder. If a
Committee is authorized to grant Awards to a Reporting Person or a "covered
employee" within the meaning of Section 162(m) of the Code, each member shall be
a "Non-Employee Director" or the equivalent within the meaning of Rule 16b-3
under the Exchange Act or an "outside director" or the equivalent within the
meaning of Section 162(m) of the Code, respectively.
"Common Stock" or "Stock" means the Common Stock, $0.01 par value, of the
Company.
"Company" means Dyax Corp. (formerly named Biotage, Inc.).
"Designated Beneficiary" means the beneficiary designated by a Participant,
in a manner determined by the Committee, to receive amounts due or exercise
rights of the
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Participant in the event of the Participant's death. In the absence of an
effective designation by a Participant, "Designated Beneficiary" shall mean the
Participant's estate.
"Effective Date" means July 13, 1995.
"Fair Market Value" means, with respect to Common Stock or any other
property, the fair market value of such property as determined by the Committee
in good faith or in the manner established by the Committee from time to time.
"Incentive Stock Option" means an option to purchase shares of Common Stock
awarded to a Participant under Section 6 that is intended to meet the
requirements of Section 422 of the Code or any successor provision.
"Nonstatutory Stock Option" means an option to purchase shares of Common
Stock awarded to a Participant under Section 6 that is not intended to be an
Incentive Stock Option.
"Option" means an Incentive Stock Option or a Nonstatutory Stock Option.
"Other Stock-Based Award" means an Award, other than an Option, Stock
Appreciation Right, Performance Share, Restricted Stock or Stock Unit, having a
Common Stock element and awarded to a Participant under Section 11.
"Participant" means a person selected by the Committee to receive an Award
under the Plan.
"Performance Cycle" or "Cycle" means the period of time selected by the
Committee during which performance is measured for the purpose of determining
the extent to which an award of Performance Shares has been earned.
"Performance Shares" mean shares of Common Stock, which may be earned by
the achievement of performance goals, awarded to a Participant under Section 8.
"Reporting Person" means a person subject to Section 16 of the Securities
Exchange Act of 1934 or any successor provision.
"Restricted Period" means the period of time selected by the Committee
during which an Award may be forfeited to the Company pursuant to the terms and
conditions of such Award.
"Restricted Stock" means shares of Common Stock subject to forfeiture
awarded to a Participant under Section 9.
"Stock Appreciation Right" or "SAR" means a right to receive any excess in
value of shares of Common Stock over the exercise price awarded to a Participant
under Section 7.
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"Stock Unit" means an award of Common Stock or units that are valued in
whole or in part by reference to, or otherwise based on, the value of Common
Stock, awarded to a Participant under Section 10.
Section 3. ADMINISTRATION
The Plan shall be administered by the Committee; provided, however, that in
any instance the Board of Directors may take any action delegated hereunder to
the Committee. The Committee shall have authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the operation of
the Plan as it shall from time to time consider advisable, and to interpret the
provisions of the Plan. The Committee's decisions shall be final and binding. To
the extent permitted by applicable law, the Committee may delegate to one or
more executive officers of the Company the power to make Awards to Participants
who are not Reporting Persons or covered employees and all determinations under
the Plan with respect thereto, provided that the Committee shall fix the maximum
amount of such Awards for all such Participants and a maximum for any one
Participant.
Section 4. ELIGIBILITY
All employees and, in the case of Awards other than Incentive Stock
Options, directors and consultants of the Company or any Affiliate, capable of
contributing significantly to the successful performance of the Company, other
than a person who has irrevocably elected not to be eligible, are eligible to be
Participants in the Plan. Incentive Stock Options may be awarded only to persons
eligible to receive such Options under the Code.
Section 5. STOCK AVAILABLE FOR AWARDS
(a) Subject to adjustment under subsection (b), Awards may be made under
the Plan for up to Three Million, Three Hundred Sixty-Four Thousand, Two
Hundred (3,364,200) shares of Common Stock. In no event shall the number of
shares of Common Stock that may be subject to Awards for any individual
exceed 750,000 shares of Common Stock in the aggregate except to the extent
of any adjustment under subsection (b). If any Award in respect of shares of
Common Stock expires or is terminated unexercised or is forfeited, the shares
subject to such Award, to the extent of such expiration, termination or
forfeiture, shall again be available for award under the Plan. Common Stock
issued through the assumption or substitution of outstanding grants from an
acquired company shall not reduce the shares available for Awards under the
Plan. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
(b) In the event that the Committee determines that any stock dividend,
extraordinary cash dividend, creation of a class of equity securities,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to purchase Common
Stock at a price substantially below fair market value, or other similar
transaction affects the Common Stock such that an adjustment is required in
order to preserve the benefits or potential benefits intended to be made
available under the Plan, then the Committee (subject, in the case of Incentive
Stock Options,
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to any limitation required under the Code) shall equitably adjust any or all of
(i) the number and kind of shares in respect of which Awards may be made under
the Plan, (ii) the number and kind of shares subject to outstanding Awards, and
(iii) the award, exercise or conversion price with respect to any of the
foregoing, and if considered appropriate, the Committee may make provision for a
cash payment with respect to an outstanding Award, provided that the number of
shares subject to any Award shall always be a whole number.
Section 6. STOCK OPTIONS
(a) Subject to the provisions of the Plan, the Committee may award
Incentive Stock Options and Nonstatutory Stock Options and determine the number
of shares to be covered by each Option, the option price therefor and the
conditions and limitations applicable to the exercise of the Option. The terms
and conditions of Incentive Stock Options shall be subject to and comply with
Section 422 of the Code or any successor provision and any regulations
thereunder. See subsection (b) below. No Incentive Stock Option may be granted
hereunder more than ten years after the Effective Date.
(b) The Committee shall establish the option price at the time each Option
is awarded, which price shall not be less than 100% of the Fair Market Value of
the Common Stock on the date of award with respect to Incentive Stock Options.
Nonstatutory Stock Options may be granted at such prices as the Committee may
determine.
(c) Each Option shall be exercisable at such times and subject to such
terms and conditions as the Committee may specify in the applicable Award or
thereafter. The Committee may impose such conditions with respect to the
exercise of Options, including conditions relating to applicable federal or
state securities laws, as it considers necessary or advisable.
(d) No shares shall be delivered pursuant to any exercise of an Option
until payment in full of the option price therefor is received by the Company.
Such payment may be made in whole or in part in cash or, to the extent permitted
by the Committee at or after the award of the Option, by delivery of a note or
shares of Common Stock owned by the optionee, including Restricted Stock, or by
retaining shares otherwise issuable pursuant to the Option, in each case valued
at their Fair Market Value on the date of delivery or retention, or such other
lawful consideration as the Committee may determine.
(e) The Committee may provide that, subject to such conditions as it
considers appropriate, upon the delivery or retention of shares to the Company
in payment of an Option, the Participant automatically be awarded an Option for
up to the number of shares so delivered.
Section 7. STOCK APPRECIATION RIGHTS
(a) Subject to the provisions of the Plan, the Committee may award SARs in
tandem with an Option (at or after the award of the Option), or alone and
unrelated to an Option. SARs in tandem with an Option shall terminate to the
extent that the related Option is exercised, and the related Option shall
terminate to the extent that the tandem SARs are
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exercised. SARs granted in tandem with Options shall have an exercise price not
less than the exercise price of the related Option. SARs granted alone and
unrelated to an Option may be granted at such exercise prices as the Committee
may determine.
(b) An SAR related to an Option, which SAR can only be exercised upon or
during limited periods following a change in control of the Company, may entitle
the Participant to receive an amount based upon the highest price paid or
offered for Common Stock in any transaction relating to the change in control or
paid during the thirty-day period immediately preceding the occurrence of the
change in control in any transaction reported in any stock market in which the
Common Stock is usually traded.
Section 8. PERFORMANCE SHARES
(a) Subject to the provisions of the Plan, the Committee may award
Performance Shares and determine the number of such shares for each Performance
Cycle and the duration of each Performance Cycle. There may be more than one
Performance Cycle in existence at any one time, and the duration of Performance
Cycles may differ from each other. The payment value of Performance Shares shall
be equal to the Fair Market Value of the Common Stock on the date the
Performance Shares are earned or, in the discretion of the Committee, on the
date the Committee determines that the Performance Shares have been earned.
(b) The Committee shall establish performance goals for each Cycle, for the
purpose of determining the extent to which Performance Shares awarded for such
Cycle are earned, on the basis of such criteria and to accomplish such
objectives as the Committee may from time to time select. During any Cycle, the
Committee may adjust the performance goals for such Cycle as it deems equitable
in recognition of unusual or non-recurring events affecting the Company, changes
in applicable tax laws or accounting principles, or such other factors as the
Committee may determine.
(c) As soon as practicable after the end of a Performance Cycle, the
Committee shall determine the number of Performance Shares that have been earned
on the basis of performance in relation to the established performance goals.
The payment values of earned Performance Shares shall be distributed to the
Participant or, if the Participant has died, to the Participant's Designated
Beneficiary, as soon as practicable thereafter. The Committee shall determine,
at or after the time of award, whether payment values will be settled in whole
or in part in cash or other property, including Common Stock or Awards.
Section 9. RESTRICTED STOCK
(a) Subject to the provisions of the Plan, the Committee may award shares
of Restricted Stock and determine the duration of the Restricted Period during
which, and the conditions under which, the shares may be forfeited to the
Company and the other terms and conditions of such Awards. Shares of Restricted
Stock may be issued for no cash consideration or such minimum consideration as
may be required by applicable law.
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(b) Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as permitted by the Committee, during
the Restricted Period. Shares of Restricted Stock shall be evidenced in such
manner as the Committee may determine. Any certificates issued in respect of
shares of Restricted Stock shall be registered in the name of the Participant
and unless otherwise determined by the Committee, deposited by the Participant,
together with a stock power endorsed in blank, with the Company. At the
expiration of the Restricted Period, the Company shall deliver such certificates
to the Participant or if the Participant has died, to the Participant's
Designated Beneficiary.
Section 10. STOCK UNITS
(a) Subject to the provisions of the Plan, the Committee may award Stock
Units subject to such terms, restrictions, conditions, performance criteria,
vesting requirements and payment rules as the Committee shall determine.
(b) Shares of Common Stock awarded in connection with a Stock Unit Award
shall be issued for no cash consideration or such minimum consideration as may
be required by applicable law.
Section 11. OTHER STOCK-BASED AWARDS
(a) Subject to the provisions of the Plan, the Committee may make other
awards of Common Stock and other awards that are valued in whole or in part by
reference to, or are otherwise based on, Common Stock, including without
limitation convertible preferred stock, convertible debentures, exchangeable
securities and Common Stock awards or options. Other Stock-Based Awards may be
granted either alone or in tandem with other Awards granted under the Plan
and/or cash awards made outside of the Plan.
(b) The Committee may establish performance goals, which may be based on
performance goals related to book value, subsidiary performance or such other
criteria as the Committee may determine, Restricted Periods, Performance Cycles,
conversion prices, maturities and security, if any, for any Other Stock-Based
Award. Other Stock-Based Awards may be sold to Participants at the face value
thereof or any discount therefrom or awarded for no consideration or such
minimum consideration as may be required by applicable law.
Section 12. GENERAL PROVISIONS APPLICABLE TO AWARDS
(a) Documentation. Each Award under the Plan shall be evidenced by a
writing delivered to the Participant specifying the terms and conditions thereof
and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or to comply with applicable tax and regulatory
laws and accounting principles.
(b) Committee Discretion. Each type of Award may be made alone, in addition
to or in relation to any other type of Award. The terms of each type of Award
need not be identical, and the Committee need not treat Participants uniformly.
Except as otherwise
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provided by the Plan or a particular Award, any determination with respect to an
Award may be made by the Committee at the time of award or at any time
thereafter.
(c) Settlement. The Committee shall determine whether Awards are settled in
whole or in part in cash, Common Stock, other securities of the Company, Awards
or other property. The Committee may permit a Participant to defer all or any
portion of a payment under the Plan, including the crediting of interest on
deferred amounts denominated in cash and dividend equivalents on amounts
denominated in Common Stock.
(d) Dividends and Cash Awards. In the discretion of the Committee, any
Award under the Plan may provide the Participant with (i) dividends or dividend
equivalents payable currently or deferred with or without interest, and (ii)
cash payments in lieu of or in addition to an Award.
(e) Termination of Employment. The Committee shall determine the effect on
an Award of the disability, death, retirement or other termination of employment
of a Participant and the extent to which, and the period during which, the
Participant's legal representative, guardian or Designated Beneficiary may
receive payment of an Award or exercise rights thereunder.
(f) Change in Control. In order to preserve a Participant's rights under an
Award in the event of a change in control of the Company (as defined by the
Committee), the Committee in its discretion may, at the time an Award is made or
at any time thereafter, take one or more of the following actions: (i) provide
for the acceleration of any time period relating to the exercise or realization
of the Award, (ii) provide for the purchase of the Award upon the Participant's
request for an amount of cash or other property that could have been received
upon the exercise or realization of the Award had the Award been currently
exercisable or payable, (iii) adjust the terms of the Award in a manner
determined by the Committee to reflect the change in control, (iv) cause the
Award to be assumed, or new rights substituted therefor, by another entity, or
(v) make such other provision as the Committee may consider equitable and in the
best interests of the Company.
(g) Loans. The Committee may authorize the making of loans or cash payments
to Participants in connection with any Award under the Plan, which loans may be
secured by any security, including Common Stock, underlying or related to such
Award (provided that such Loan shall not exceed the Fair Market Value of the
security subject to such Award), and which may be forgiven upon such terms and
conditions as the Committee may establish at the time of such loan or at any
time thereafter.
(h) Withholding Taxes. The Participant shall pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of Awards under the Plan no later than the date of
the event creating the tax liability. In the Committee's discretion, such tax
obligations may be paid in whole or in part in shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at their Fair
Market Value on the date of delivery. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to the Participant.
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(i) Foreign Nationals. Awards may be made to Participants who are foreign
nationals or employed outside the United States on such terms and conditions
different from those specified in the Plan as the Committee considers necessary
or advisable to achieve the purposes of the Plan or to comply with applicable
laws.
(j) Amendment of Award. The Committee may amend, modify or terminate any
outstanding Award, including substituting therefor another Award of the same or
a different type, changing the date of exercise or realization and converting an
Incentive Stock Option to a Nonstatutory Stock Option, provided that the
Participant's consent to such action shall be required unless the Committee
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
Section 13. MISCELLANEOUS
(a) No Right To Employment. No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as giving a
Participant the right to continued employment. The Company expressly reserves
the right at any time to dismiss a Participant free from any liability or claim
under the Plan, except as expressly provided in the applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed under
the Plan until he or she becomes the holder thereof. A Participant to whom
Common Stock is awarded shall be considered the holder of the Stock at the time
of the Award except as otherwise provided in the applicable Award.
(c) Effective Date. Subject to the approval of the stockholders of the
Company, the Plan shall be effective on the Effective Date. Before such
approval, Awards may be made under the Plan expressly subject to such approval.
(d) Amendment of Plan. The Committee may amend, suspend or terminate the
Plan or any portion thereof at any time, subject to any stockholder approval
that the Committee determines to be necessary or advisable.
(e) Governing Law. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of the State of Delaware.
-----------------------------------------
This Plan was approved by the Board of Directors on July 13, 1995.
This Plan was approved by the stockholders on August 9, 1995.
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This Plan was amended by the Board of Directors on October 17, 1996 to increase
the number of shares available for Awards hereunder, and such amendment was
approved by the stockholders effective as of October 23, 1996.
This Plan was further amended by the Board of Directors on May 14, 1997.
This Plan was further amended by the Board of Directors on January 30, 1998 to
make certain technical amendments, and such amendment was approved by the
stockholders effective as of March 23, 1998.
This Plan was further amended by the Board of Directors on August 5, 1999, to
increase the number of shares available for awards hereunder, and such
amendment was approved by the stockholders as of October 29, 1999.
9
<PAGE>
EXHIBIT 10.2
DYAX CORP.
1998 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The purpose of this 1998 Employee Stock Purchase Plan (the "Plan") is
to provide employees of Dyax Corp. (the "Company"), who wish to become
shareholders of the Company, an opportunity to purchase Common Stock of the
Company (the "Shares"). The Plan is intended to qualify as an "employee stock
purchase plan" within the meaning of Section 423 of the Internal Revenue Code of
1986, as amended (the "Code").
2. ELIGIBLE EMPLOYEES.
Subject to the provisions of Sections 7, 8 and 9 below, any individual
who is a full-time employee (as defined below) of the Company, or any of its
subsidiaries (as defined in Section 424(f) of the Code) the employees of which
are designated by the Board of Directors as eligible to participate in the Plan,
is eligible to participate in any Offering of Shares (as defined in Section 3
below) made by the Company hereunder. Full-time employees shall include all
employees whose customary employment is:
(a) 20 hours or more per week and
(b) more than five months
in the calendar year during which said Offering Date occurs or in the calendar
year immediately preceding such year.
3. OFFERING DATES.
From time to time, the Company, by action of the Board of Directors,
will grant rights to purchase Shares to employees eligible to participate in the
Plan pursuant to one or more offerings (each of which is an "Offering" on a date
or series of dates (each of which is an "Offering Date") designated for this
purpose by the Board of Directors.
4. PRICES.
The price per share for each grant of rights hereunder shall be the
lesser of:
(a) eighty-five percent (85%) of the fair market value of a
Share on the Offering Date on which such right was granted; or
(b) eighty-five percent (85%) of the fair market value of a
Share on the date such right is exercised.
<PAGE>
At its discretion, the Board of Directors may determine a higher price for a
grant of rights.
5. EXERCISE OF RIGHTS AND METHOD OF PAYMENT.
(a) Rights granted under the Plan will be exercisable
periodically on specified dates as determined by the Board of Directors.
(b) The method of payment for Shares purchased upon exercise
of rights granted hereunder shall be through regular payroll deductions or by
lump sum cash payment or both, as determined by the Board of Directors. No
interest shall be paid upon payroll deductions unless specifically provided for
by the Board of Directors.
(c) Any payments received by the Company from a participating
employee and not utilized for the purchase of Shares upon exercise of a right
granted hereunder shall be promptly returned to such employee by the Company
after termination of the right to which the payment relates.
6. TERM OF RIGHTS.
The total period from an Offering Date to the last date on which rights
granted on that Offering Date are exercisable (the "Offering Period") shall in
no event be longer than twenty-seven (27) months. The Board of Directors when it
authorizes an Offering may designate one or more exercise periods during the
Offering Period. Rights granted on an Offering Date shall be exercisable in full
on the Offering Date or in such proportion on the last day of each exercise
period as the Board of Directors determines.
7. SHARES SUBJECT TO THE PLAN.
No more than 150,000 Shares may be sold pursuant to rights granted
under the Plan. Appropriate adjustments in the above figure, in the number of
Shares covered by outstanding rights granted hereunder, in the exercise price of
the rights and in the maximum number of Shares which an employee may purchase
(pursuant to Section 9 below) shall be made to give effect to any mergers,
consolidations, reorganizations, recapitalizations, stock splits, stock
dividends or other relevant changes in the capitalization of the Company
occurring after the effective date of the Plan, provided that no fractional
Shares shall be subject to a right and each right shall be adjusted downward to
the nearest full Share. Any agreement of merger or consolidation will include
provisions for protection of the then existing rights of participating employees
under the Plan. Either authorized and unissued Shares or issued Shares
heretofore or hereafter reacquired by the Company may be made subject to rights
under the Plan. If for any reason any right under the Plan terminates in whole
or in part, Shares subject to such terminated right may again be subjected to a
right under the Plan.
8. LIMITATIONS ON GRANTS.
(a) No employee shall be granted a right hereunder if such
employee, immediately after the right is granted, would own stock or rights to
purchase stock possessing five percent (5%) or more of the total combined voting
power or value of all
<PAGE>
classes of stock of the Company, or of any subsidiary, computed in accordance
with Section 423(b)(3) of the Code.
(b) No employee shall be granted a right which permits his
right to purchase shares under all employee stock purchase plans of the Company
and its subsidiaries to accrue at a rate which exceeds twenty-five thousand
dollars ($25,000) (or such other maximum as may be prescribed from time to time
by the Code) of the fair market value of such Shares (determined at the time
such right is granted) for each calendar year in which such right is outstanding
at any time in accordance with the provisions of Section 423(b)(8) of the Code.
(c) No right granted to any participating employee under an
Offering, when aggregated with rights granted under any other Offering still
exercisable by the participating employee, shall cover more shares than may be
purchased at an exercise price equal to fifteen percent (15%) of the employee's
annual rate of compensation on the date the employee elects to participate in
the Offering or such lesser percentage as the Board of Directors may determine.
9. LIMIT ON PARTICIPATION.
Participation in an Offering shall be limited to eligible employees who
elect to participate in such Offering in the manner, and within the time
limitations, established by the Board of Directors when it authorizes the
Offering.
10. CANCELLATION OF ELECTION TO PARTICIPATE.
An employee who has elected to participate in an Offering may cancel
such election as to all (but not part) of the unexercised rights granted under
such Offering by giving written notice of such cancellation to the Company
before the expiration of any exercise period. Any amounts paid by the employee
for the Shares or withheld for the purchase of Shares from the employee's
compensation through payroll deductions shall be paid to the employee, without
interest, unless otherwise determined by the Board of Directors, upon such
cancellation.
11. TERMINATION OF EMPLOYMENT.
Upon the termination of employment for any reason, including the death
of the employee, before the date on which any rights granted under the Plan are
exercisable, all such rights shall immediately terminate and amounts paid by the
employee for the Shares or withheld for the purchase of Shares from the
employee's compensation through payroll deductions shall be paid to the employee
or to the employee's estate, without interest unless otherwise determined by the
Board of Directors.
12. EMPLOYEES' RIGHTS AS SHAREHOLDERS.
- 3 -
<PAGE>
No participating employee shall have any rights as a shareholder in the
Shares covered by a right granted hereunder until such right has been exercised,
full payment has been made for the corresponding Shares and the Share
certificate is actually issued.
13. RIGHTS NOT TRANSFERABLE.
Rights under the Plan are not assignable or transferable by a
participating employee and are exercisable only by the employee.
14. AMENDMENTS TO OR DISCONTINUATION OF THE PLAN.
The Board of Directors of the Company shall have the right to amend,
modify or terminate the Plan at any time without notice; provided, however, that
the then existing rights of all participating employees shall not be adversely
affected thereby, and provided further that, subject to the provisions of
Section 7 above, no such amendment to the Plan shall, without the approval of
the shareholders of the Company, increase the total number of Shares which may
be offered under the Plan.
15. EFFECTIVE DATE AND APPROVALS.
This Plan became effective on January 30, 1998, the date it was adopted
by the Board of Directors, provided that it is approved by the shareholders of
the Company within twelve (12) months before or after the date of adoption.
The Company's obligation to offer, sell and deliver its Shares under
the Plan is subject to (i) the approval of any governmental authority required
in connection with the authorized issuance or sale of such Shares, (ii)
satisfaction of the listing requirements of any national securities exchange on
which the Shares are then listed and (iii) compliance, in the opinion of the
Company's counsel with, all applicable federal and state securities and other
laws.
16. TERM OF PLAN.
No rights shall be granted under the Plan after January 30, 2008.
17. ADMINISTRATION OF THE PLAN.
The Board of Directors or any committee or person(s) to whom it
delegates its authority (the "Administrator") shall administer, interpret and
apply all provisions of the Plan as it deems necessary to meet special
circumstances not anticipated or covered expressly by the Plan. Nothing
contained in this Section shall be deemed to authorize the Administrator to
alter or administer the provisions of the Plan in a manner inconsistent with the
provisions of Section 423 of the Code.
- 4 -
<PAGE>
EXHIBIT 10.3
September 1, 1999
Mr. Stephen S. Galliker
14 Sheep Pasture Way
East Sandwich, MA 02563
Dear Steve:
This letter sets forth our understanding of your employment by Dyax Corp. in the
position of Executive Vice President, Finance and Administration, and Chief
Financial Officer reporting directly to the Chief Executive Officer. You will be
responsible for all finance and administration matters, including human
resources and employee benefits. In addition, you will share responsibility for
investor relations with me and participate in business development activities
with senior management.
I understand that you will begin working with us full-time on or before October
1, 1999 (the "Effective Date").
Dyax will pay you a base salary of $185,000 per year ($15,416.67 per month),
which is subject to review on an annual basis by the Compensation Committee of
the Board of Directors (the "Committee"), but it shall in no event be reduced
below the initial base salary. In addition, for the 1999 calendar year, you will
be eligible for a pro-rated bonus for the portion of the current calendar year
that you are employed by Dyax (using an annual target bonus amount of $50,000)
based on specific individual and corporate objectives set by the Chief Executive
Officer, with the Committee to determine achievement of the bonus at the end of
the year. The eligible amount of the bonus for which you will be eligible in
subsequent calendar years will be reasonably adjusted by the Committee to
reflect Company performance, but such amount shall in no event be reduced below
$50,000 per year. All payments shall be made to you in accordance with Dyax's
standard payroll practices.
In the event of a Change of Control that adversely affects your position and
responsibilities as an executive of Dyax and results in termination of your
employment, whether by Dyax for Cause or by you for Good Reason, Dyax agrees
that fifty percent of all shares that are subject to stock options granted to
you at any time through the termination of your employment but that are not yet
exercisable as of the date of your termination shall become exercisable
immediately upon such termination. For purposes of the foregoing condition,
"Change of Control" shall mean a change in ownership of more than 50% of the
voting stock of Dyax in one transaction or a series of related transactions by
one investor or affiliated group of investors, except as a result of any private
or public debt or equity financing the net cash proceeds of which inure to Dyax,
and
<PAGE>
"Good Reason" shall mean, solely in connection with termination by you of
your employment by Dyax subsequent to a Change in Control, a termination based
on (i) the assignment to you of any duties inconsistent with your position,
duties, responsibilities and status with Dyax immediately prior to the Change in
Control, or a change in your reporting responsibilities, titles or offices as in
effect immediately prior to the Change in Control, (ii) a reduction by Dyax in
your base salary as in effect immediately before the Change in Control, or (iii)
Dyax's requiring you to be based anywhere other than within thirty (30) miles of
your office location prior to the Change in Control, except for required
business travel to an extent substantially consistent with your business travel
obligations before the Change of Control; provided, however, that
notwithstanding the foregoing, if in the opinion of Dyax's independent auditors
the terms of the foregoing acceleration of exercisability would render
pooling-of-interest accounting treatment unavailable to an acquirer of Dyax in
connection with a pending Change of Control transaction which the Board of
Directors of Dyax wishes to be so treated, then such acceleration shall only be
given effect to the maximum extent, if any, consistent with such treatment, but
otherwise shall be inoperative and shall have no force or effect in connection
with such transaction.
Subject to approval by the Committee, Dyax agrees to grant you two options to
purchase shares of Dyax Common Stock. The first option will be an option to
purchase 75,000 shares vesting in equal monthly installments over 48 months
beginning on the Effective Date. The second option will be an option to purchase
52,500 shares vesting in equal monthly installments over 24 months beginning on
the Effective Date. Such options shall be granted at an exercise price equal to
the fair market value on the date of grant, as determined by the Committee, and
shall be subject to Dyax's 1995 Equity Incentive Plan and the standard terms and
conditions of its stock options, except that all options exercisable as of the
date of termination shall continue to be exercisable from that date until twelve
months thereafter. The maximum number of such options permitted under the
Internal Revenue Code shall be treated as incentive stock options, except as may
be required by law to be treated as nonstatutory stock options upon grant or
upon exercise, including treatment as nonstatutory stock options if such options
are exercised more than 90 days after termination of employment.
Subject to approval of the Committee, Dyax shall also grant you the opportunity
to purchase from Dyax up to 47,500 shares of Dyax Common Stock at a purchase
price per share equal to the exercise price for your options. Of these shares,
25,000 will be fully vested and subject to a right of first refusal of Dyax in
the event of any proposed transfer of the shares. Dyax will have the right to
repurchase the remaining 22,500 shares at the price that you paid for those
shares if you should cease to be employed by Dyax. This repurchase right will
lapse in substantially equal monthly installments over a 24-month period,
beginning on the Effective Date.
Until the earlier of the termination of this agreement or such time as you shall
relocate your permanent residence from Sandwich. Massachusetts to a location in
the reasonable proximity of the Dyax corporate office located in Cambridge,
Massachusetts, Dyax will pay to you a housing
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<PAGE>
reimbursement allowance to be used by you to cover your out-of-pocket costs of
obtaining local housing in the reasonable proximity of the Dyax corporate
office. The actual amount of such housing reimbursement allowance payable to you
will be determined monthly based on the actual costs incurred by you under the
applicable rental property lease or other property agreement and shall not
exceed $15,000 per year before applicable withholding taxes. The housing
reimbursement allowance shall be paid in accordance with Dyax's standard payroll
practices and all amounts shall be subject to standard payroll tax withholding.
In addition, we shall provide you the use of temporary office space at the
offices of Henry Blair at 275 Mill Way, Barnstable, Massachusetts (including
telephone and computer access to Dyax's Cambridge, Massachusetts office) during
the period until October 1, 1999, and we shall use reasonable efforts (subject
to availability) to continue to provide such office space on occasion
thereafter, for use in a manner consistent with your responsibilities at Dyax's
corporate office.
You will be eligible to participate in the Company's employee benefits, in the
same manner provided generally to the Company's senior executives, including
health and dental insurance, paid vacation time, 401(k) Savings Plan, disability
insurance and life insurance. Dyax requires that you execute the Company's
standard Employee Confidentiality Agreement (copy attached), and comply with
federal and state employment laws and regulations.
You will be an employee at will. However, in the event your employment is
terminated by the Company without cause, Dyax agrees to continue to pay you your
monthly base salary for a period of six months as severance, so long as you have
not obtained compensable work in any capacity; provided, however, that if you
are employed in a position in which your aggregate compensation is materially
less than the salary and bonus provided to you hereunder for compensation, then
for the period from the date of commencement of such employment until the end of
the six-month severance period Dyax shall pay you the difference between the
aggregate of such compensation in your new position and your monthly base salary
at Dyax. All earned but unpaid bonuses and accrued vacation time shall also be
paid upon termination. However, vesting of all of your options will terminate as
of the date of termination. If your employment is terminated for cause by the
Company or is terminated by you for any reason, your compensation, benefits and
stock option vesting shall cease as of the termination date. For purposes of
this offer, "cause" shall mean the gross neglect in the performance of your
duties or the commission of an act of dishonesty or moral turpitude in
connection with your employment, as determined by the Board of Directors.
Subject to the foregoing, either party may terminate this agreement at any time.
You represent and warrant to us that by entering into and performing this
agreement you will not be in breach of any previously existing agreement to
which you are a party or by which you are bound. The Company represents and
warrants to you that by entering into and performing this agreement it will not
be in breach of any previously existing agreement to which it is a party or by
which it is bound. This agreement supercedes and replaces in its entirety our
letter agreement dated August 25, 1999.
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<PAGE>
If this agreement accurately sets forth our understanding of your employment by
Dyax, please sign both copies of this letter and return one copy to me.
/s/ Henry E. Blair
- ----------------------------------
Henry E. Blair
Chairman and Chief Executive Officer
AGREED TO:
/s/ Stephen S. Galliker
- ----------------------------------
Stephen S. Galliker
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<PAGE>
DYAX EMPLOYEE CONFIDENTIALITY AGREEMENT
THIS AGREEMENT (the "Agreement") is made this __ day of August, 1999.
BETWEEN
DYAX CORP., a Delaware corporation, having its principal place of
business at One Kendall Square, Bldg. 600, 5th Floor, Cambridge, MA
02139, and its affiliates, ("Dyax"), and
Stephen S. Galliker (the "Employee").
1. EMPLOYEE RESTRICTIONS.
In consideration of, and as a condition of the Employee's continued
employment with Dyax, the Employee agrees as follows:
(a) CONFIDENTIAL INFORMATION: As of the date of the Employee's employment by
Dyax and thereafter, the Employee shall treat as strictly confidential all
proprietary, secret, unpublished and confidential information and materials
which relate to the business or interests of Dyax, including, but not limited
to, the business plans, technical projects, trade secrets, know-how, operations,
customer lists, research datum or results, inventions, formulas, cell lines,
chemical and biological compounds, products and processes developed by or for
Dyax (the "Confidential Information"). The Employee shall not disclose or use
Confidential Information in any manner or form other than in performance of the
services required during his/her employment by Dyax.
(b) ASSIGNMENT OF RIGHTS: Any and all information, data, inventions,
discoveries, formulas, biological or chemical materials, notebooks and other
work product which the Employee conceives, develops or acquires during his/her
employment with Dyax, and for a period of six (6) months after the termination
date of his/her employment with Dyax, which directly or indirectly relates to
work performed for Dyax (the "Proprietary Property"), shall be the sole and
exclusive property of Dyax. The Employee shall promptly execute any and all
documents necessary to assign this property to Dyax.
(c) INTELLECTUAL PROPERTY: During the Employee's employment at Dyax, the
Employee shall promptly assist with and execute any and all applications,
assignments or other documents which an officer or director of Dyax shall deem
necessary or useful in order to obtain and maintain patent, trademark or other
intellectual property protection for Dyax's products or services. After the
termination date of his/her employment with Dyax the Employee shall use
reasonable efforts to assist Dyax on intellectual property matters as they
relate to his/her employment, and Dyax shall reasonably compensate the Employee
for his/her time and expense.
(d) DYAX PROPERTY: Upon termination of the Employee's employment with Dyax, the
Employee shall return and deliver to Dyax all copies of Confidential Information
(as defines in
<PAGE>
(a) above) and all Proprietary Property (as defined in (b) above
and all other property furnished to the Employee by Dyax, including, without
limitation, documents, records, notebooks and equipment. The Employee shall not
take with him/her any such property, except as expressly authorized in writing
by an officer or director of Dyax.
(e) NON-SOLICITATION: As of the date of the Employee's employment by Dyax and
for a period of one (1) year after the termination date of his/her employment at
Dyax, the Employee shall not directly or indirectly solicit on behalf of himself
or others (i) the employment of any employees or exclusive consultants of Dyax,
or (ii) any of the business being conducted by Dyax or being actively pursued by
Dyax with any customer or partner.
2. SCOPE OF THIS AGREEMENT
(a) The provisions of this Agreement shall survive the termination of the
Employee's employment with Dyax.
(b) The Employee acknowledges that the restrictions contained in this Agreement
are reasonable in view of the nature of the business in which Dyax is engaged
and the Employee's knowledge of Dyax business.
(c) Dyax is permitted to assign its rights and obligations under this Agreement.
(d) The Employee also acknowledges that any breach of this Agreement any cause
Dyax irreparable harm for which Dyax would be entitled to the issuance by a
court of competent jurisdiction of an injunction, restraining order or other
equitable relief in favor of restraining the Employee from committing or
continuing any violation of this Agreement. Any right to obtain such equitable
relief will not be deemed a waiver of any right to assert any other remedy or
request any other relief which Dyax may have under this Agreement or otherwise
at law or in equity.
(e) If in any jurisdiction any provision of this Agreement or its application to
any party or circumstance is restricted, prohibited or determined unenforceable,
the remaining provisions of this Agreement shall remain unaffected and
enforceable. In addition, if any provision of this Agreement shall be held to be
excessively broad as to time, duration, geographical scope, activity or subject,
the provision shall be construed so as to be enforceable to the extent
compatible with the applicable law.
2
<PAGE>
(f) This Agreement shall be governed and construed in accordance with the laws
of the Commonwealth of Massachusetts.
AGREED:
EMPLOYEE DYAX CORP.
------------------------------ -------------------------
(signature) (signature)
Stephen S. Galliker Chairman & CEO
------------------------------- -------------------------
(name) (title)
3
<PAGE>
<PAGE>
EXHIBIT 10.4
DYAX CORP.
RESTRICTED STOCK PURCHASE AGREEMENT
This Restricted Stock Purchase Agreement (this "Agreement") is entered
into as of October __, 1999 (the "Effective Date"), by and between Dyax Corp., a
Delaware corporation (the "Company"), and Stephen S. Galliker, Trustee under the
Stephen S. Galliker Living Trust dated July 24, 1997 ("Purchaser").
RECITALS
A. The Purchaser has commenced employment with the Company as Executive
Vice President, Finance and Administration, and Chief Financial Officer pursuant
to a letter agreement, dated August 25, 1999, which provides in part that the
Company shall issue and sell certain "Restricted Stock" to Executive on the
terms herinafter set forth.
B. The Company desires to issue and sell, and Purchaser desires to
purchase, shares of Common Stock of the Company, on the terms and conditions
hereinafter set forth, as "Restricted Stock" issued pursuant to the Company's
1995 Equity Incentive Plan (as amended to date, the "Plan"). Capitalized terms
not otherwise defined herein have the meanings given to them in the Plan.
Accordingly, it is agreed between the parties as follows:
1. Purchaser hereby agrees to purchase from the Company, and the
Company agrees to sell to the Purchaser, 25,000 shares of the Company's Common
Stock, par value $0.01 per share, at a purchase price equal to $2.00 per share,
payable in cash at the closing (hereinafter sometimes collectively referred to
as the "Stock"). The closing hereunder shall be deemed to have occurred on the
Effective Date or at such later date as the Company receives payment of the
purchase price.
2. (a) Purchaser shall not sell or otherwise transfer any
shares of Stock unless prior to any sale or other transfer thereof, Purchaser
(or his personal representative, as the case may be) shall provide the
Company with written notice, in the manner provided in Section 14 hereof,
describing the number of shares of Stock intended to be sold or transferred,
the price and the general terms of the proposed sale or transfer.
(b) The Company shall have the right (the "First Refusal
Right") at any time within sixty (60) days after the notice required by Section
2(a) above to purchase from Purchaser (or his personal representative, as the
case may be) up to but not exceeding the number of shares of the Stock specified
in, and at the price (the "First Refusal Price") and upon the general terms
specified in such notice.
(c) If the First Refusal Right is not exercised with respect
to some or all the shares of the Stock specified in the notice required by
Section 2(a) hereof, then for a period of
<PAGE>
120 days, Purchaser (or his personal representative, as the case may be) shall
be free to sell, or otherwise transfer, up to but not exceeding the number of
shares of the Stock specified in the notice required by Section 2(a) hereof,
minus the number of shares of the Stock with respect to which the First Refusal
Right was exercised, at a price and upon general terms no more favorable to
purchasers or transferees thereof than specified in the notice required by
Section 2(a) hereof.
(d) In the event that any shares of the Stock which are free
to be sold or otherwise transferred within said 120-day period, such shares of
the Stock shall again be subject to the First Refusal Right and Purchaser (or
his personal representative, as the case may be) shall comply with all the
provisions of this Section 2 prior to selling or otherwise transferring any such
shares of the Stock.
(e) Failure to exercise the First Refusal Right with respect
to any shares of the Stock shall not constitute a waiver of the First Refusal
Right with respect to any other shares of the Stock.
(f) The First Refusal Right shall continue after the
Purchaser's death or the termination of the Purchaser's association with the
Company for any reason, or no reason, and shall terminate only (1) upon the
closing of an underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended that (i) causes an
"Automatic Conversion Event," as such term is defined in the Company's Restated
Certificate of Incorporation in effect on the date hereof, or otherwise (ii)
results in the conversion of all of the Company's outstanding Preferred Stock
into Common Stock by agreement of the requisite number of holders thereof; or
(2) upon the consolidation, merger or sale of all, or substantially all of the
assets of the Company in which securities of the acquiring company (or any
affiliate of the acquiring company) are issued to the Purchaser in exchange for
the Stock, provided that such securities are issued by a publically held
corporation.
3. The First Refusal Right shall be exercised by written notice
signed by an officer of the Company and delivered or mailed as provided in
Section 14 hereof. The First Refusal Price shall be payable, at the option of
the Company, in cancellation of all or a portion of any outstanding indebtedness
of Purchaser to the Company or in cash (by check) or both.
4. The Company may assign its rights under Section 2 hereof.
5. If, from time to time during the term of the First Refusal
Right:
(a) There is any stock dividend or liquidating dividend of
cash or property, stock split or other change in the character or amount of any
of the outstanding securities of the Company; or
(b) There is any consolidation, merger or sale of all or
substantially all, of the assets of the Company, unless such consolidation,
merger or sale is with a publicly-owned corporation and the aggregate market
value of the securities or other property the stockholders of the Company
receive is in excess of Twenty Million Dollars ($20,000,000), then, in such
event, any and all new, substituted or additional securities or other property
(other than cash) to which Purchaser is entitled by reason of his ownership of
Stock shall be immediately subject to the First
2
<PAGE>
Refusal Right and be included in the word "Stock" for all purposes of the First
Refusal Right with the same force and effect as the shares of Stock subject to
the First Refusal Right under the terms of Section 2 hereof. Stock acquired as
provided in clauses (a) or (b) above shall be deemed to have been acquired at
the time of acquisition of the Stock on which such Stock was distributed.
6. All certificates representing any shares of Stock subject
to the provisions of this Agreement shall have endorsed thereon the following
legends:
(a) "Any disposition of any interest in the securities
represented by this certificate is subject to restrictions, and the securities
represented by this certificate are subject to a first refusal right contained
in a certain agreement between the record holder hereof and the corporation, a
copy of which will be mailed to any holder of this certificate without charge
after receipt by the corporation of a written request therefor."
(b) Any legend required to be placed thereon by federal or
state securities laws.
7. Purchaser acknowledges that he is aware that the Stock to be
issued to him by the Company pursuant to this Agreement has not been registered
under the Securities Act of 1933, as amended. Purchaser also warrants and
represents to the Company as follows:
(a) Purchaser is purchasing the Stock solely for his own
account for investment and not with a view to or for sale or distribution of the
Stock or any portion thereof and not with any present intention of selling,
offering to sell or otherwise disposing of or distributing the Stock or any
portion thereof. Purchaser also represents that the entire legal and beneficial
interest of the Stock which Purchaser is purchasing is being purchased for, and
will be held for the account of, the Purchaser only and neither in whole nor in
part for any other person.
(b) Purchaser has heretofore discussed the Company and its
plans, operations and financial condition with its officers and the Purchaser
has heretofore received all such information as Purchaser deems necessary and
appropriate to enable Purchaser to evaluate the financial risk inherent in
making an investment in the Stock of the Company and Purchaser further
represents and warrants that Purchaser has received satisfactory and complete
information concerning the business and financial condition of the Company in
response to all inquiries in respect thereof.
(c) Purchaser realizes that his purchase of the Stock will be
a highly speculative investment and that Purchaser is able, without impairing
his financial condition, to hold the Stock for an indefinite period of time and
to suffer a complete loss on his investment.
(d) The Company has disclosed (or hereby does disclose) to
Purchaser in writing:
(i) the sale of the Stock which he is
purchasing has not been registered under
the Securities Act of 1933, as amended
(the "Act"), and the Stock must be held
indefinitely unless a transfer
3
<PAGE>
is subsequently registered under the Act
or an exemption from such registration is
available;
(ii) the share certificate representing the
Stock will be stamped with the legends
restricting transfer specified in this
Agreement between the Company and the
Purchaser; and
(iii) the Company will make a notation in its
records of the aforementioned
restrictions on transfer and legends.
(e) Purchaser understands that the shares of Stock are
restricted securities within the meaning of Rule 144 promulgated under the Act;
that the exemption from registration under Rule 144 will not be available in any
event for at least one year from the date of sale of the Stock to him, and even
then will not be available unless (i) a public trading market then exists for
the Stock of the Company, (ii) adequate current public information concerning
the Company is then available to the public, (iii) he has been the beneficial
owner and he has paid the full purchase price for the Stock at least one year
prior to the sale, and (iv) other terms and conditions of Rule 144 are complied
with; and that any sale of the Stock may be made by him only in limited amounts
in accordance with such terms and conditions, as amended from time to time.
(f) Without in any way limiting its representations set forth
above, Purchaser further agrees that he shall in no event make any disposition
of all or any portion of the Stock which he is purchasing unless and until:
(i) There is then in effect a Registration
Statement under the Act covering such
proposed disposition and such disposition
is made in accordance with said
Registration Statement: or
(ii) (A) He shall have notified the Company
of the proposed disposition and shall
have furnished the Company with a
detailed statement of circumstances
surrounding the proposed disposition,
(B) he shall have furnished the Company
with an opinion of his own counsel to
the effect that such disposition will
not require registration of such shares
under the Act, and (C) such opinion of
his counsel shall have been concurred in
by counsel for the Company and the
Company shall have advised him of such
concurrence.
8. The Company shall not be required (a) to transfer on its books
any shares of Stock of the Company which shall have been sold or transferred in
violation of any of the provisions set forth in this Agreement or (ii) to treat
as owner of such shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares shall have been so transferred.
In the event of a sale of Stock by Purchaser pursuant to Section 2(c) hereof,
Purchaser shall furnish to the Company proof that such sale was made in
compliance with the provisions of Section 2(c) hereof as to price and general
terms of such sale.
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<PAGE>
9. Subject to the provisions of this Agreement, Purchaser shall,
during the term of this Agreement, exercise all rights and privileges of a
shareholder of the Company with respect to the Stock.
10. Nothing in this Agreement shall affect in any manner whatsoever
the right or power of the Company, or a parent or subsidiary of the Company, to
terminate Purchaser's provision of services to the Company, for any reason, with
or without cause.
11. If Purchaser makes an election under Section 83(b) of the Code,
he will provide a copy thereof to the Company within thirty days of the filing
of such election with the Internal Revenue Service.
12. Purchaser shall pay to the Company, or make provision
satisfactory to the Committee for payment of, any taxes required by law to be
withheld in respect of the Restricted Stock no later than the date of the event
creating the tax liability. In the Committee's discretion, such tax obligations
may be paid in whole or in part in shares of Common Stock, including the
Restricted Stock, valued at Fair Market Value on the date of delivery. The
Company and its Affiliates may, to the extent permitted by law, deduct any such
tax obligations from any payment of any kind otherwise due to Purchaser.
13. Any determination by the Committee under, or interpretation of
the terms of, this Agreement or the Plan will be final and binding on
Purchaser.
14. Any notice required or permitted hereunder by any party hereto
shall be given in writing and shall be deemed effectively given upon personal
delivery or upon deposit in the United States Post Office, by registered or
certified mail with postage and fees prepaid, addressed to the other party
hereto at such other party's address hereinafter shown below such other party's
signature or at such other address as such other party may have designated by
ten days' advance written notice to such party.
15. This Agreement shall inure to the benefit of the successors and
assigns of the Company and be binding upon Purchaser and his heirs, executors,
administrators, successors and assigns.
16. This Agreement shall be governed by and interpreted under the
laws of the State of Delaware.
17. This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
[The remainder of this page left blank intentionally.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
DYAX CORP.
By: /s/ Henry E. Blair
---------------------------------
Henry E. Blair
President
Address: One Kendall Square
Building 600
Cambridge, MA 02139
PURCHASER:
STEPHEN S. GALLIKER LIVING TRUST
/s/ Stephen S. Galliker
---------------------------------------
Stephen S. Galliker, Trustee
Address: 14 Sheep Pasture Way
East Sandwich, MA 02563
<PAGE>
EXHIBIT 10.5
DYAX CORP.
RESTRICTED STOCK PURCHASE AGREEMENT
This Restricted Stock Purchase Agreement (this "Agreement") is entered
into as of November __, 1999 (the "Effective Date"), by and between Dyax Corp.,
a Delaware corporation (the "Company"), and Stephen S. Galliker ("Purchaser").
RECITALS
A. In consideration for the reduction of the stock option award of
75,000 shares to which the Purchaser is entitled pursuant to a letter agreement
between the Company and the Purchaser dated August 25, 1999 to 52,500 shares,
the Company is granting this award of restricted stock.
B. The Company desires to issue and sell, and Purchaser desires to
purchase, shares of Common Stock of the Company, on the terms and conditions
hereinafter set forth, as "Restricted Stock" issued pursuant to the Company's
1995 Equity Incentive Plan (as amended to date, the "Plan"). Capitalized terms
not otherwise defined herein have the meanings given to them in the Plan.
Accordingly, it is agreed between the parties as follows:
1. Purchaser hereby agrees to purchase from the Company, and
the Company agrees to sell to Purchaser, 22,500 shares (hereinafter sometimes
collectively referred to as the "Stock") of the Company's Common Stock, par
value $0.01 per share, for a purchase price of $2.00 per share, payable at
the closing in cash. The closing hereunder shall be deemed to have occurred
on the Effective Date or at such later date, not later than fifteen days
thereafter, as the Company receives payment of the purchase price.
2. For the purposes of this Section 2, the shares of Stock
purchased pursuant to this Agreement shall vest in twenty-four (24)
substantially equal monthly installments (any fractional shares to be
cumulated and to become exercisable at the end of the earliest succeeding
monthly period in which a whole share equivalent is accumulated) beginning on
October 1, 1999, with all shares being fully vested on November 1, 2001;
provided, however, that such vesting shall be accelerated and all of the
Stock shall become fully vested on the occurrence of a Vesting Event.
"Vesting Event" shall mean (i) an underwritten public offering of the
Company's capital stock or (ii) any merger, consolidation or other sale of
the Company involving a transaction or series of simultaneous transactions in
which the stockholders of the Company immediately before the transaction(s)
own less than 50% of the capital stock of the resulting or purchasing entity
immediately after completion of the transaction(s). All of the shares of
Stock being purchased by Purchaser pursuant to this Agreement that are not
vested (the "Unvested Shares") shall be subject to the repurchase right
("Repurchase Right") set forth in this Section 2.
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<PAGE>
(a) If Purchaser shall cease to employed by the Company, then
the Company may exercise the Repurchase Right, as provided in Section 2(b)
below, at the $2.00 purchase price per share set forth in Section 1 above (the
"Repurchase Price") with respect to all the Unvested Shares as of the date of
such termination. Notwithstanding the foregoing, all shares of Stock shall be
subject to the First Refusal Right set forth in Section 3 hereof.
(b) In the event Purchaser shall cease to be employed by the
Company (including a parent or subsidiary of the Company, if any), the Company
shall have the right, at any time within sixty (60) days after the date
Purchaser's employment ceases, to exercise the Repurchase Right, which consists
of the right to purchase from Purchaser (or his personal representative, as the
case may be) all Unvested Shares at the Repurchase Price.
(c) If Purchaser is required to transfer his shares of Stock
by operation of law (other than death of Purchaser) or by order or decree of any
court, then the Company shall have the option, exercisable at any time during
the period of sixty (60) days after receiving notice thereof, to purchase all of
the Unvested Shares for the Repurchase Price and upon the terms as set forth in
Section 4. Failure of the Company to elect to purchase Purchaser's Unvested
Shares of Stock under this Section 2 shall not affect the right to purchase the
same shares under Section 3(a) in the event of a proposed sale, assignment,
transfer, exchange, pledge or other disposition by or to any receiver,
petitioner, assignee, transferee or other person obtaining an interest in said
shares.
(d) Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a parent or subsidiary of the
Company, to terminate Purchaser's provision of services to the Company, for any
reason, with or without cause.
3. (a) So long as the First Refusal Right has not terminated as
set forth in Section 3(f) below, Purchaser shall not sell or otherwise transfer
any shares of Stock unless prior to any sale or other transfer thereof,
Purchaser (or his personal representative, as the case may be) shall provide the
Company with written notice, in the manner provided in Section 14 hereof,
describing the number of shares of Stock intended to be sold or transferred, the
price and the general terms of the proposed sale or transfer.
(b) The Company shall have the right (the "First Refusal
Right") at any time within sixty (60) days after the notice required by Section
3(a) above to purchase from Purchaser (or his personal representative, as the
case may be) up to but not exceeding the number of shares of the Stock specified
in, and at the price (the "First Refusal Price") and upon the general terms
specified in such notice.
(c) If the First Refusal Right is not exercised with respect
to some or all the shares of the Stock specified in the notice required by
Section 3(a) hereof, then for a period of 120 days, Purchaser (or his personal
representative, as the case may be) shall be free to sell, or otherwise
transfer, up to but not exceeding the number of shares of the Stock specified in
the notice required by Section 3(a) hereof, minus the number of shares of the
Stock with respect to which the First Refusal Right was exercised, at a price
and upon general terms no more favorable to purchasers or transferees thereof
than specified in the notice required by Section 3(a) hereof.
2
<PAGE>
(d) In the event that any shares of the Stock which are free
to be sold or otherwise transferred within said 120-day period are not so
transferred, such shares of the Stock shall again be subject to the First
Refusal Right and Purchaser (or his personal representative, as the case may be)
shall comply with all the provisions of this Section 3 prior to selling or
otherwise transferring any such shares of the Stock.
(e) Failure to exercise the First Refusal Right with respect
to any shares of the Stock shall not constitute a waiver of the First Refusal
Right with respect to any other shares of the Stock.
(f) The First Refusal Right shall continue after the
Purchaser's death or the termination of the Purchaser's association with the
Company for any reason, or no reason, and shall terminate only (1) upon the
closing of an underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended that (i) causes an
"Automatic Conversion Event," as such term is defined in the Company's Restated
Certificate of Incorporation in effect on the date hereof, or otherwise (ii)
results in the conversion of all of the Company's outstanding Preferred Stock
into Common Stock by agreement of the requisite number of holders thereof; or
(2) upon the consolidation, merger or sale of all, or substantially all of the
assets of the Company in which securities of the acquiring company (or any
affiliate of the acquiring company) are issued to the Purchaser in exchange for
the Stock, provided that such securities are issued by a publicly held
corporation.
4. The Repurchase Right and the First Refusal Right shall be
exercised by written notice signed by an officer of the Company and delivered or
mailed as provided in Section 14 hereof. The Repurchase Price or the First
Refusal Price, as the case may be, shall be payable, at the option of the
Company, in cancellation of all or a portion of any outstanding indebtedness of
Purchaser to the Company or in cash (by check) or both.
5. The Company may assign its rights under Sections 2 and 3 hereof.
6. If, from time to time during the term of the Repurchase Right or
the First Refusal Right:
(a) There is any stock dividend or liquidating dividend of
cash or property, stock split or other change in the character or amount of any
of the outstanding securities of the Company; or
(b) There is any consolidation, merger or sale of all or
substantially all, of the assets of the Company unless such consolidation,
merger or sale is with a publicly-owned corporation and the aggregate market
value of the securities or other property the stockholders of the Company
receive is in excess of Twenty Million Dollars ($20,000,000), then, in such
event, any and all new, substituted or additional securities or other property
(other than cash) to which Purchaser is entitled by reason of his ownership of
Stock shall be immediately subject to the Repurchase Right or the First Refusal
Right, as the case may be, and be included in the word "Stock" for all purposes
of the Repurchase Right and the First Refusal Right with the same force and
effect as the shares of Stock subject to the Repurchase Right and the First
Refusal Right under the terms of Section 2 and 3 hereof. While the total
Repurchase Price shall remain the
3
<PAGE>
same after each such event, the Repurchase Price per share of Stock upon
exercise of the Repurchase Right shall be appropriately adjusted. Stock
acquired as provided in clauses (a) or (b) above shall be deemed to have been
acquired at the time of acquisition of the Stock on which such Stock was
distributed.
7. All certificates representing any shares of Stock subject to
the provisions of this Agreement shall have endorsed thereon the following
legends:
(a) "Any disposition of any interest in the securities
represented by this certificate is subject to restrictions, and the securities
represented by this certificate are subject to a repurchase right and a first
refusal right contained in a certain agreement between the record holder hereof
and the corporation, a copy of which will be mailed to any holder of this
certificate without charge after receipt by the corporation of a written request
therefor."
(b) Any legend required to be placed thereon by federal or
state securities laws.
8. Purchaser acknowledges that he is aware that the Stock to be
issued to him by the Company pursuant to this Agreement has not been
registered under the Securities Act of 1933, as amended. Purchaser also
warrants and represents to the Company as follows:
(a) Purchaser is purchasing the Stock solely for his own
account for investment and not with a view to or for sale or distribution of the
Stock or any portion thereof and not with any present intention of selling,
offering to sell or otherwise disposing of or distributing the Stock or any
portion thereof. Purchaser also represents that the entire legal and beneficial
interest of the Stock which Purchaser is purchasing is being purchased for, and
will be held for the account of, Purchaser only and neither in whole nor in part
for any other person.
(b) Purchaser has heretofore discussed the Company and its
plans, operations and financial condition with its officers and Purchaser has
heretofore received all such information as Purchaser deems necessary and
appropriate to enable Purchaser to evaluate the financial risk inherent in
making an investment in the Stock of the Company and Purchaser further
represents and warrants that Purchaser has received satisfactory and complete
information concerning the business and financial condition of the Company in
response to all inquiries in respect thereof.
(c) Purchaser realizes that his purchase of the Stock will be
a highly speculative investment and that Purchaser is able, without impairing
his financial condition, to hold the Stock for an indefinite period of time and
to suffer a complete loss on his investment.
(d) The Company has disclosed (or hereby does disclose) to
Purchaser in writing:
(i) the sale of the Stock which he is
purchasing has not been registered under
the Securities Act of 1933, as amended
(the "Act"), and the Stock must be held
indefinitely unless a transfer is
subsequently registered under the Act or
an exemption from such registration is
available;
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<PAGE>
(ii) the share certificate representing the
Stock will be stamped with the legends
restricting transfer specified in this
Agreement between the Company and
Purchaser; and
(iii) the Company will make a notation in its
records of the aforementioned
restrictions on transfer and legends.
(e) Purchaser understands that the shares of Stock are
restricted securities within the meaning of Rule 144 promulgated under the Act;
that the exemption from registration under Rule 144 will not be available in any
event for at least one year from the date of sale of the Stock to him, and even
then will not be available unless (i) a public trading market then exists for
the Stock of the Company, (ii) adequate current public information concerning
the Company is then available to the public, (iii) he has been the beneficial
owner and he has paid the full purchase price for the Stock at least one year
prior to the sale, and (iv) other terms and conditions of Rule 144 are complied
with; and that any sale of the Stock may be made by only in limited amounts in
accordance with such terms and conditions, as amended from time to time.
(f) Without in any way limiting its representations set forth
above, Purchaser further agrees that he shall in no event make any disposition
of all or any portion of the Stock which he is purchasing unless and until:
(i) There is then in effect a Registration
Statement under the Act covering such
proposed disposition and such disposition
is made in accordance with said
Registration Statement: or
(ii) (A) He shall have notified the Company
of the proposed disposition and shall
have furnished the Company with a
detailed statement of circumstances
surrounding the proposed disposition,
(B) he shall have furnished the Company
with an opinion of his own counsel to
the effect that such disposition will
not require registration of such shares
under the Act, and (C) such opinion of
his counsel shall have been concurred in
by counsel for the Company and the
Company shall have advised him of such
concurrence.
9. The Company shall not be required (a) to transfer on its
books any shares of Stock of the Company which shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement
or (ii) to treat as owner of such shares or to accord the right to vote as
such owner or to pay dividends to any transferee to whom such shares shall
have been so transferred. In the event of a sale of Stock by Purchaser
pursuant to Section 3(c) hereof, Purchaser shall furnish to the Company proof
that such sale was made in compliance with the provisions of Section 3(c)
hereof as to price and general terms of such sale.
10. Subject to the provisions of this Agreement, Purchaser
shall, during the term of this Agreement, exercise all rights and privileges
of a shareholder of the Company with respect to the Stock.
5
<PAGE>
11. Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a parent or subsidiary of
the Company, to terminate the Purchaser's provision of services to the
Company, for any reason, with or without cause.
12. If Purchaser makes an election under Section 83(b) of the
Code, he will provide a copy thereof to the Company within thirty days of the
filing of such election with the Internal Revenue Service.
13. Purchaser shall pay to the Company, or make provision
satisfactory to the Committee for payment of, any taxes required by law to be
withheld in respect of the Restricted Stock no later than the date of the
event creating the tax liability. In the Committee's discretion, such tax
obligations may be paid in whole or in part in shares of Common Stock,
including the Restricted Stock, valued at Fair Market Value on the date of
delivery. The Company and its Affiliates may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to
Purchaser.
14. Any determination by the Committee under, or
interpretation of the terms of, this Agreement or the Plan will be final and
binding on Purchaser.
15. Any notice required or permitted hereunder by any party
hereto shall be given in writing and shall be deemed effectively given upon
personal delivery or upon deposit in the United States Post Office, by
registered or certified mail with postage and fees prepaid, addressed to the
other party hereto at such other party's address hereinafter shown below such
other party's signature or at such other address as such other party may have
designated by ten days' advance written notice to such party.
16. This Agreement shall inure to the benefit of the
successors and assigns of the Company and be binding upon Purchaser and his
heirs, executors, administrators, successors and assigns.
17. This Agreement shall be governed by and interpreted under
the laws of the State of Delaware.
18. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.
[The remainder of this page left blank intentionally.]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
DYAX CORP.
By: /s/ Henry E. Blair
-----------------------------------
Henry E. Blair
President
Address: One Kendall Square
Building 600, 5th Floor
Cambridge, MA 02139
PURCHASER:
/s/ Stephen S. Galliker
---------------------------------------
Stephen S. Galliker, individually
Address: 14 Sheep Pasture Way
East Sandwich, MA 02563
<PAGE>
Exhibit 10.6
DYAX CORP.
One Kendall Square, Bldg. 600, 5th Floor
Cambridge, MA 02139
September 1, 1998
Mr. Gregory D. Phelps
75 Farley Pond Lane
Needham, MA 02192
Dear Greg:
This letter sets forth our understanding of the basis on which you will now be
employed by Dyax Corp. as an executive reporting to the Chief Executive Officer.
Subject to your agreement to the terms of your employment in this letter, the
Board has elected you Vice Chairman. I understand that you will begin working
with us immediately on a substantially full-time basis (i.e. not less than three
days per week).
Dyax will pay you a base salary of $200,000 per year ($16,667 per month), which
is subject to adjustment on an annual basis by the Compensation Committee of the
Board of Directors (the "Committee"). In addition, for the 1998 calendar year,
you will be eligible for a bonus of $50,000 based on specific individual and
corporate objectives set by me, with the Committee to determine achievement of
the bonus at the end of the year. All payments shall be made to you in
accordance with Dyax's standard payroll practices.
The Committee has also granted you additional options to purchase 100,000 shares
of Dyax Common Stock vesting monthly in equal installments over 48 months
beginning with the date of your employment. Subject to your commencing
employment with the Company, I will recommend to the Committee that such
options, and the option for 48,000 shares of Dyax Common Stock previously
granted to you (the "Consulting Option"), will be substituted with new options
granted with an exercise price per share at the fair market value on the date of
grant, as determined by the Committee. In addition, I will recommend that all of
the shares subject to the substitute option for the Consulting Option will be
exercisable immediately without further vesting. All such options will be
subject to Dyax's 1995 Equity Incentive Plan and Dyax's standard terms for
options thereunder. The maximum number of such options permitted under the
Internal Revenue Code shall be treated as incentive stock options, except to the
extent that they may be required by law to be treated as nonstatutory options
upon exercise or subsequent sale of the underlying shares.
I will also recommend that in the event of a change of control of Dyax which
adversely affects your position and responsibilities as an executive of the
Company and results in termination of your employment, whether by the Company
for any reason or by yourself for good reason, Dyax agrees that fifty percent of
all shares that are subject to stock options granted to you at any time through
the termination of your employment but that are not yet exercisable as of the
date of such termination shall become exercisable immediately upon such
termination. For purposes of this offer, "change of control" shall mean a change
in ownership of more than 50% of the voting
<PAGE>
stock of the Company in one transaction or a series of related transactions by
one investor or affiliated group of investors, except as a result of any private
or public debt or equity financing the net cash proceed of which inure to Dyax;
and "termination for good reason" shall mean termination subsequent to a change
in control of the Company, and without your express written consent, based on
(i) the assignment to you of any duties inconsistent with your position, duties,
responsibilities and status with the Company immediately prior to a change in
control, or a change in your reporting responsibilities, titles or offices as in
effect immediately prior to a change in control, (ii) a reduction by the Company
in your base salary as in effect immediately before the change in control, or
(iii) the Company's requiring you to be based anywhere other than within thirty
(30) miles of your present office location, except for required travel on the
Company's business to an extent substantially consistent with your business
travel obligations before the change of control.
You will also be eligible to participate in the Company's employee benefits,
including health and dental insurance and 401(k) Savings Plan. Dyax requires
that you execute the Company's standard Employee Confidentiality Agreement (copy
attached), and comply with federal and state employment laws and regulations.
You will no longer be entitled to the cash compensation set forth in your
existing consulting agreement dated May 4, 1998 for the period after July 12,
1998. However, your acknowledgement of your new relationship as an employee of
the Company by signing this letter is not intended to supercede or otherwise
amend the terms of your prior stock options described in your consulting
agreement, which shall continue to vest so long as you are providing services to
the Company as an employee.
If this letter accurately sets forth our understanding of the basis for your
future employment by Dyax, please sign both copies of this letter and the
enclosed Employee Confidentiality Agreement and return one copy of each to me.
We are very pleased that you are now joining Dyax as an employee.
DYAX CORP.
/s/ Henry E. Blair
- ------------------------------------------
Henry E. Blair
Chairman and Chief Executive Officer
Acknowledged:
/s/ Gregory D. Phelps
- ------------------------------------------
Gregory D. Phelps
2
<PAGE>
DYAX EMPLOYEE CONFIDENTIALITY AGREEMENT
THIS AGREEMENT (the "Agreement") is made this July 13, 1998.
BETWEEN
DYAX CORP., a Delaware corporation, having its principal place of business
at One Kendall Square, Bldg. 600, 5th Floor, Cambridge, MA 02139, and its
affiliates, ("Dyax"), and
Gregory D. Phelps (the "Employee").
1. EMPLOYEE RESTRICTIONS.
In consideration of, and as a condition of the Employee's continued
employment with Dyax, the Employee agrees as follows:
(a) Confidential Information: As of the date of the Employee's employment by
Dyax and thereafter, the Employee shall treat as strictly confidential all
proprietary, secret, unpublished and confidential information and materials
which relate to the business or interests of Dyax, including, but not limited
to, the business plans, technical projects, trade secrets, know-how, operations,
customer lists, research datum or results, inventions, formulas, cell lines,
chemical and biological compounds, products and processes developed by or for
Dyax (the "Confidential Information"). The Employee shall not disclose or use
Confidential Information in any manner or form other than in performance of the
services required during his/her employment by Dyax.
(b) Assignment of Rights: Any and all information, data, inventions,
discoveries, formulas, biological or chemical materials, notebooks and other
work product which the Employee conceives, develops or acquires during his/her
employment with Dyax, and for a period of six (6) months after the termination
date of his/her employment with Dyax, which directly or indirectly relates to
work performed for Dyax (the "Proprietary Property"), shall be the sole and
exclusive property of Dyax. The Employee shall promptly execute any and all
documents necessary to assign this property to Dyax.
(c) Intellectual Property: During the Employee's employment at Dyax, the
Employee shall promptly assist with and execute any and all applications,
assignments or other documents which an officer or director of Dyax shall deem
necessary or useful in order to obtain and maintain patent, trademark or other
intellectual property protection for Dyax's products or services. After the
termination date of his/her employment with Dyax the Employee shall use
reasonable efforts to assist Dyax on intellectual property matters as they
relate to his/her employment, and Dyax shall reasonably compensate the Employee
for his/her time and expense.
(d) Dyax Property: Upon termination of the Employee's employment with Dyax, the
Employee shall return and deliver to Dyax all copies of Confidential Information
(as defines in (a) above) and all Proprietary Property (as defined in (b) above
and all other property furnished to the Employee by Dyax, including, without
limitation, documents, records, notebooks and
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<PAGE>
equipment. The Employee shall not take with him/her any such property, except as
expressly authorized in writing by an officer or director of Dyax.
(e) Non-Solicitation: As of the date of the Employee's employment by Dyax and
for a period of one (1) year after the termination date of his/her employment at
Dyax, the Employee shall not directly or indirectly solicit on behalf of himself
or others (i) the employment of any employees or exclusive consultants of Dyax,
or (ii) any of the business being conducted by Dyax or being actively pursued by
Dyax with any customer or partner.
2. SCOPE OF THIS AGREEMENT
(a) The provisions of this Agreement shall survive the termination of the
Employee's employment with Dyax.
(b) The Employee acknowledges that the restrictions contained in this Agreement
are reasonable in view of the nature of the business in which Dyax is engaged
and the Employee's knowledge of Dyax business.
(c) Dyax is permitted to assign its rights and obligations under this Agreement.
(d) The Employee also acknowledges that any breach of this Agreement amy cause
Dyax irreparable harm for which Dyax would be entitled to the issuance by a
court of competent jurisdiction of an injunction, restraining order or other
equitable relief in favor of restraining the Employee from committing or
continuing any violation of this Agreement. Any right to obtain such equitable
relief will not be deemed a waiver of any right to assert any other remedy or
request any other relief which Dyax may have under this Agreement or otherwise
at law or in equity.
(e) If in any jurisdiction any provision of this Agreement or its application to
any party or circumstance is restricted, prohibited or determined unenforceable,
the remaining provisions of this Agreement shall remain unaffected and
enforceable. In addition, if any provision of this Agreement shall be held to be
excessively broad as to time, duration, geographical scope, activity or subject,
the provision shall be construed so as to be enforceable to the extent
compatible with the applicable law.
(f) This Agreement shall be governed and construed in accordance with the laws
of the Commonwealth of Massachusetts.
AGREED:
EMPLOYEE DYAX CORP.
-------------------------- --------------------------
(signature) (signature)
Chairman & CEO
--------------------------
(title)
4
<PAGE>
EXHIBIT 10.7
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is entered into
effective as of February 18, 1998 (the "Effective Date") between Dyax Corp. (the
"Company"), a Delaware corporation with its principal executive offices at One
Kendall Square, Building 600, Cambridge, MA 02139, and Robert A. Dishman
("Executive") residing at 37 Garland Road, Concord, Massachusetts 01742.
ARTICLE 1.
EMPLOYMENT OF EXECUTIVE
1.1. EMPLOYMENT. Subject to the terms and conditions of this
Agreement, the Company agrees to employ Executive in a full time capacity to
serve as Executive Vice President of the Company and to perform such specific
duties as may reasonably be assigned to Executive from time to time by the Board
of Directors of the Company for the period commencing on the Effective Date and
continuing until terminated as herein provided. Executive hereby accepts such
employment for the term hereof.
1.2. NO CONFLICTING COMMITMENTS. During the period of Executive's
full time employment with the Company, Executive will not undertake any
commitments which might impair Executive's performance of his duties as a full
time employee of the Company.
1.3. NO RELOCATION. Although Executive is not expected to relocate
to the Company's facilities in Charlottesville, Virginia in connection with his
employment, Executive will spend sufficient time at the Company's facilities in
Charlottesville to effectively manage that business.
ARTICLE 2.
COMPENSATION
For all services to be rendered by Executive to the Company pursuant to
this Agreement, the Company shall pay to Executive the compensation and provide
for Executive the benefits set forth below:
2.1. BASE SALARY. The Company shall pay to Executive a base salary at
the annual rate of Two Hundred Thousand Dollars ($200,000) during the first
twelve months of this Agreement, prorated during the period Executive is
employed hereunder and payable in substantially equal monthly installments.
Thereafter, Executive's salary will be reviewed and set annually by the Board of
Directors of the Company or a duly appointed committee thereof, provided,
however, that Executive's annual salary shall not be less than Two Hundred
Thousand Dollars ($200,000) as long as Executive is an Executive Vice President
of the Company.
<PAGE>
2.2. FRINGE BENEFITS. In addition to Executive's base salary, the
Company shall provide Executive and Executive's dependents medical insurance and
other such benefits as are generally made available by the Company to its other
full time executive employees.
2.3. STOCK OPTIONS. The vesting, exercise and other terms of any stock
options which have been previously granted to Executive by the Company, as well
as other stock options which may hereafter be granted to Executive at the
discretion of the Board of Directors of the Company or a duly appointed
committee thereof, shall continue in accordance with the terms of the respective
stock option grant, unless otherwise provided for herein. The Company agrees to
accelerate the vesting of the incentive stock option granted to Executive on
October 30, 1997 with respect to 60,000 shares of the Company's Common Stock
(the "1997 Option") so the option shall become fully exercisable with respect to
all of the shares as of the Effective Date.
2.4. RESTRICTED STOCK AWARD. The Company agrees to grant Executive a
Restricted Stock Award under its 1995 Equity Incentive Plan pursuant to which
Executive shall have the right to purchase 120,000 shares (the "Restricted
Shares") of the Company's Common Stock as Restricted Stock, at the price of
$3.00 per share, in accordance with the terms of the Restricted Stock Purchase
Agreement attached hereto as EXHIBIT A (the "Purchase Agreement").
2.5. LOANS TO EXECUTIVE. Subject to exercise in full by Executive of
the 1997 Option and Executive's purchase of the Restricted Stock, the Company
agrees to make two loans (the "Loans") to Executive, one in the amount of
$93,600 and the other in the amount of $360,000, on the following terms and
conditions:
2.5.1 The Loans shall be subject to Executive's delivery to the Company
of (i) duly executed promissory notes in substantially the forms
attached hereto as EXHIBITS B-1 AND B-2 in the respective amounts of
each of the Loans and (ii) duly executed pledge agreements (the "Pledge
Agreements") for each of the Loans in substantially the forms attached
hereto as EXHIBITS C-1 AND C-2, (iii) the stock certificates evidencing
the shares issued upon exercise of the 1997 Option and the Restricted
Shares, and (iv) stock powers duly executed in blank with respect to
such shares.
2.5.2 If Executive's employment with the Company is terminated and the
Loans are accelerated in accordance with their terms, the $360,000 Loan
shall be paid and discharged first by surrender of any shares of Common
Stock still constituting Unvested Shares (as defined in the Purchase
Agreement) as of the date of acceleration at a rate of $3.00 per share,
and all other amounts due under such Loan as of the date of
acceleration, as well as all amounts due with respect to the $93,600
Loan upon its acceleration, shall be paid and discharged, at
Executive's election, in cash or by surrender of shares of Common Stock
of the Company at the then fair market value thereof, or any
combination thereof. For purposes of this Agreement, the fair market
value of the Company's capital stock shall mean (i) with respect to
securities registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the average of the high and low sale
prices of such securities reported on the Nasdaq Stock Market, or if
such securities are not reported on such market, the average of the
high and
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low bid quotations reported by the National Association of Securities
Dealers ("NASD"), which in each case shall be determined by Dyax in
good faith and may be based upon the reports published in the Eastern
Edition of The Wall Street Journal or any other reporting service
reasonably relied upon by Dyax; and (ii) with respect to securities not
registered under the Exchange Act, the fair market value as determined
in good faith by the Board of Directors of Dyax.
2.5.3 So long as Executive is employed by the Company, on each
anniversary of the Loans during the term thereof the Company shall
forgive the accrued interest due thereon through the date of such
anniversary. If Executive's employment is terminated before any such
anniversary, the Company shall forgive the accrued interest (i) on the
$360,000 Loan through the date of termination and (ii) on the $93,600
Loan through the date of termination or, in the case of a termination
pursuant to Sections 3.1.1, 3.1.2 or 3.1.4, through the second
anniversary of the date of issue of such Loan if such second
anniversary is later than the date of termination.
ARTICLE 3.
TERMINATION
3.1. TERMINATION. Executive's employment hereunder shall terminate
upon the occurrence of any of the following events:
3.1.1. Executive's death or legal incapacity; or
3.1.2. The termination of Executive's employment hereunder by
the Board of Directors of the Company, at its option, to be exercised
by written notice to Executive, upon Executive's other incapacity or
inability to further perform services as contemplated herein for a
period aggregating 90 days or more within any six-month period because
Executive's physical or mental health shall have become impaired so as
to make it impossible or impractical to perform the duties and
responsibilities contemplated hereunder; or
3.1.3. The termination of Executive's employment hereunder by
the Board of Directors of the Company, at its option, to be exercised
by written notice to Executive, in the event of Executive's gross
neglect of duties hereunder or commission of an act of dishonesty or
moral turpitude in connection with employment, as determined in good
faith by the Board of Directors; or
3.1.4. The termination of Executive's employment hereunder by
the Board of Directors of the Company, at its option which may be
exercised with or without cause, to be exercised by written notice to
Executive; or
3.1.5. The termination of Executive's employment hereunder by
Executive, to be exercised by delivery of thirty (30) days prior
written notice from Executive to the Company.
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3.2. PAYMENTS UPON TERMINATION. Notwithstanding any other provisions
in this Agreement to the contrary:
3.2.1. If Executive's employment with the Company terminates
pursuant to Sections 3.1.1., 3.1.2., 3.1.3., or 3.1.5., all payments
and benefits provided to Executive under this Agreement shall cease as
of the date of termination of employment.
3.2.2. If Executive's employment with the Company terminates
pursuant to Section 3.1.4., (i) the payment of Executive's base salary
and all benefits provided to Executive under this Agreement shall
continue for an initial period of six (6) months after the date of
termination of employment; (ii) in the event that Executive has not
obtained alternative, comparable employment by the end of the initial
period of six months, the payment of Executive's base salary and all
benefits provided to Executive under this Agreement shall continue for
an additional period of six (6) months after the initial period
specified in clause (i) of this Section, provided, however, that the
amount of any compensation or benefits payable to Executive shall be
reduced by any compensation or consulting income earned by Executive
during such additional six month period; and (iii) all stock options
(as referenced in Section 2.3) held by Executive at his termination
date shall become immediately exercisable and shall remain exercisable
for a period of ninety (90) days following his termination date.
3.3. NO DUTY TO MITIGATE. Executive shall not be required to mitigate
the amount of any payment provided for in Section 3.2.2.(i) by seeking other
employment or otherwise, and the amount of any payment or benefit provided for
in Section 3.2.2.(i) shall not be reduced by any compensation earned by
Executive as the result of employment by another employer after the date of
termination.
ARTICLE 4.
COVENANTS AGAINST COMPETITION WITH THE COMPANY
4.1. NON-SOLICITATION OF EMPLOYEES. Executive agrees that during the
term of Executive's employment with the Company and for a period of twelve (12)
months after the later of (i) termination of Executive's employment with the
Company for any reason or (ii) cessation of payments to Executive pursuant to
Section 3.2.2., Executive shall not directly or indirectly recruit, solicit or
otherwise induce or attempt to induce any employees of the Company to leave the
employment of the Company.
4.2. NON-COMPETITION. In the event Executive's employment with the
Company is terminated by the Company for any reason other than a termination
without cause under Section 3.1.4., Executive agrees that during the term of
Executive's employment with the Company and for a period of twelve (12) months
after the effective date of his termination (the "Non- competition Period")
Executive shall not directly or indirectly, sell, attempt to sell or otherwise
market to customers of the Company products or services which are competitive
with those offered, sold or provided by the Company or any of its subsidiaries.
If Executive's employment
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with the Company is terminated by the Company without cause under Section
3.1.4., the Non-competition Period shall be limited to the period during which
the Company is making payments to Executive pursuant to Section 3.2.2.,
provided, however, that the Company may at its option continue to make such
payments for a maximum of twelve (12) months following the effective date of
Executive's termination.
ARTICLE 5.
CONFIDENTIAL INFORMATION
5.1. MAINTENANCE OF CONFIDENTIALITY. Executive agrees that Executive
will not (except as required in the course of employment with the Company), both
during the term of Executive's employment with the Company and for a period of
five (5) years thereafter, communicate or divulge to, or use for Executive's own
benefit or the benefit of any other person, firm or organization, any
confidential and proprietary information of the Company and its subsidiaries.
5.2. OWNERSHIP OF CONFIDENTIAL INFORMATION. Records, files, memoranda,
reports, price lists, customer lists, drawings, plans, sketches and documents
and the like , relating to the business of the Company, which Executive shall
use or prepare or come into contact with in the course of, in connection with,
or as a result of employment with the Company, shall remain the Company's sole
and exclusive property.
ARTICLE 6.
OWNERSHIP OF INVENTIONS
6.1. "INVENTION" DEFINED. As used in this Agreement, "Invention" means
any invention, discovery or innovation with regard to chromatography, chemistry,
enzymology, biotechnology, genetic engineering or recombinant DNA technology,
whether or not patentable, made, conceived, or first actually reduced to
practice by Executive, alone or jointly with others, in the course of, in
connection with, or as a result of his service as an executive of the Company,
including any art, method, process, machine, manufacture, design or composition
of matter, or any improvement thereof, or any variety of plant or microorganism.
6.2. DISCLOSURE OF INVENTIONS. Each Invention made, conceived or first
actually reduced to practice by Executive, whether alone or jointly with others,
in the course of, in connection with, or as a result of his service as an
executive of the Company, shall be promptly disclosed in writing to the Company
(or such officer of the Company as the Board of Directors may designate). Such
report shall be sufficiently complete in technical detail and appropriately
illustrated by sketch or diagram to convey to one skilled in the art to which
the Invention pertains, a clear understanding of the nature, purpose,
operations, and to the extent known, the physical, chemical, biological or
electrical characteristics of the Invention.
6.3. OWNERSHIP OF INVENTIONS. Each Invention, as herein defined,
shall be the sole and exclusive property of the Company.
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<PAGE>
6.4. ASSIGNMENT OF TITLE. Executive agrees to execute an assignment to
the Company or its nominee of Executive's entire right, title and interest in
and to any Invention, without compensation beyond that provided in this
Agreement. Executive further agrees, upon the request of the Company and at its
expense, that Executive will execute any other instrument and document necessary
or desirable in applying for and obtaining patents in the United States and in
any foreign country with respect to any Invention. Executive further agrees,
whether or not Executive is then an employee of the Company, to cooperate to the
extent and in the manner reasonably requested by the Company in the prosecution
or defense of any claim involving a patent covering any Invention or any
litigation or other claim or proceeding involving any invention covered by this
Agreement, but all expenses thereof shall be paid by the Company.
ARTICLE 7.
MISCELLANEOUS
7.1. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
7.2. BINDING EFFECT. This Agreement shall inure to benefit of and be
binding upon the parties hereto and their respective lawful successors and
assigns and upon Executive's heirs and personal representatives.
7.3. ASSIGNMENT. Neither this Agreement nor any rights or obligations
hereunder shall be assignable by either party hereto without the prior written
consent of the other party.
7.4. NOTICES. All notices, requests, demands or other communications
to be given pursuant to this Agreement shall be in writing and shall be deemed
to have been duly given if delivered by hand or mailed by registered or
certified mail, return receipt requested, postage prepaid, as follows.
If to the Company, to:
Dyax Corp.
One Kendall Square, Building 600
Cambridge, Massachusetts 02139
Attention: Chief Executive Officer
If to Executive, to:
37 Garland Road
Concord, Massachusetts 01742
with a copy to:
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Joseph B. Darby III, Esq.
Sherburne, Powers & Needham, P.C.
One Beacon Street
Boston, Massachusetts 02108
or such other address as either party hereto shall have designated by notice in
writing to the other party.
7.5. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the attached
exhibits constitute the entire agreement and understanding between the parties
hereto with respect the subject matter hereof and supersedes all prior
agreements and understanding relating to such subject matter, including without
limitation the Executive Employment Agreement dated April 1, 1994 between the
parties. This Agreement may be amended, supplemented or otherwise modified at
any time, but only by an instrument in writing signed by the parties hereto.
7.6. GOVERNING LAW. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts.
7.7. SEVERABILITY. In case any provision hereof shall, for any reason,
be held to be invalid or unenforceable in any respect, such invalidity or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid or unenforceable provision had not been
included herein. If any provision hereof shall, for any reason, be held by a
court to be excessively broad as to duration, geographical scope, activity or
subject matter, it shall be construed by limiting and reducing it to make it
enforceable to the extent compatible with applicable law as then in effect.
7.8. SURVIVAL. Section 2.5, 3.2.2 and Articles 4, 5 and 6 shall
survive the termination of this Agreement for the periods of time indicated
therein or indefinitely if no period of time is indicated.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement as of the date first above written.
DYAX CORP.
By: /s/ Henry E. Blair
---------------------------
Henry E. Blair
Chairman, President & CEO
/s/ Robert A. Dishman
- -------------------------------
Robert A. Dishman, individually
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<PAGE>
EXHIBIT A
DYAX CORP.
RESTRICTED STOCK PURCHASE AGREEMENT
This Restricted Stock Purchase Agreement (this "Agreement") is dated as
of February __, 1998 (the "Effective Date"), by and between Dyax Corp., a
Delaware corporation (the "Company"), and Robert A. Dishman ("Purchaser").
RECITALS
A. The Company and Purchaser have entered into an Executive
Employment Agreement (the "Employment Agreement") of even date herewith which
provides in part that the Company shall issue and sell certain "Restricted
Stock" to Executive on the terms herinafter set forth.
B. The Company desires to issue and sell, and Purchaser desires to
purchase, shares of Common Stock of the Company, on the terms and conditions
hereinafter set forth, as "Restricted Stock" issued pursuant to the Company's
1995 Equity Incentive Plan (as amended to date, the "Plan"). Capitalized terms
not otherwise defined herein have the meanings given to them in the Plan.
Accordingly, it is agreed between the parties as follows:
1. Purchaser hereby agrees to purchase from the Company, and the
Company agrees to sell to Purchaser, 120,000 shares (hereinafter sometimes
collectively referred to as the "Stock") of the Company's Common Stock, par
value $0.01 per share, for a purchase price of $3.00 per share, payable at the
closing in cash or by delivery of a secured promissory note of Purchaser in form
and on terms satisfactory to the Company. The closing hereunder shall be deemed
to have occurred on the Effective Date or at such later date, not later than
fifteen days thereafter, as the Company receives payment of the purchase price.
2. For the purposes of this Section 2, the shares of Stock purchased
pursuant to this Agreement shall vest in twenty-four (24) substantially equal
monthly installments (any fractional shares to be cumulated and to become
exercisable at the end of the earliest succeeding monthly period in which a
whole share equivalent is accumulated) beginning on the twenty-fifth monthly
anniversary of the Effective Date, with all shares being fully vested on the
fourth anniversary of the Effective Date; provided, however, that such vesting
shall be accelerated and all of the Stock shall become fully vested on the
occurrence of a Vesting Event. "Vesting Event" shall mean (i) an underwritten
public offering of the Company's capital stock or (ii) any merger, consolidation
or other sale of the Company involving a transaction or series of simultaneous
transactions in which the stockholders of the Company immediately before the
transaction(s) own less than 50% of the capital stock of the resulting or
purchasing entity immediately after completion of the transaction(s).
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(a) All of the shares of Stock being purchased by Purchaser
pursuant to this Agreement that are not vested (the "Unvested Shares") shall be
subject to the repurchase right ("Repurchase Right") set forth in this Section
2. If Purchaser shall cease to employed by the Company, then the Company may
exercise the Repurchase Right, as provided in Section 2(b) below, at the $3.00
purchase price per share set forth in Section 1 above (the "Repurchase Price")
with respect to all the Unvested Shares as of the date of such termination;
provided, however, that if Executive is terminated by the Company without cause
pursuant to Section 3.1.4 of the Employment Agreement, then (i) no repurchase
shall occur before 180 days after the date of such termination and (ii) the
Repurchase Right shall terminate if a Vesting Event occurs before 180 days after
such termination. Notwithstanding the foregoing, all shares of Stock shall be
subject to the First Refusal right set forth in Section 3 hereof.
(b) In the event Purchaser shall cease to be employed by the
Company (including a parent or subsidiary of the Company, if any), the Company
shall have the right, at any time within sixty (60) days after the date
Purchaser's employment ceases, to exercise the Repurchase Right, which consists
of the right to purchase from Purchaser (or his personal representative, as the
case may be) all Unvested Shares at the Repurchase Price; provided, however,
that if Purchaser's employment has been terminated without cause pursuant to
Section 3.1.4 of the Employment Agreement, then the Repurchase Right may only be
exercised by the Company after 180 days, and before 240 days, after the date of
such termination.
(c) If Purchaser is required to transfer his shares of Stock
by operation of law (other than death of Purchaser) or by order or decree of any
court, then the Company shall have the option, exercisable at any time during
the period of sixty (60) days after receiving notice thereof, to purchase all of
the Unvested Shares for the Repurchase Price and upon the terms as set forth in
Section 4. Failure of the Company to elect to purchase Purchaser's Unvested
Shares of Stock under this Section 2 shall not affect the right to purchase the
same shares under Section 3(a) in the event of a proposed sale, assignment,
transfer, exchange, pledge or other disposition by or to any receiver,
petitioner, assignee, transferee or other person obtaining an interest in said
shares.
(d) Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a parent or subsidiary of the
Company, to terminate Purchaser's provision of services to the Company, for any
reason, with or without cause.
3. (a) So long as the First Refusal Right has not terminated as
set forth in Section 3(f) below, Purchaser shall not sell or otherwise transfer
any shares of Stock unless prior to any sale or other transfer thereof,
Purchaser (or his personal representative, as the case may be) shall provide the
Company with written notice, in the manner provided in Section 14 hereof,
describing the number of shares of Stock intended to be sold or transferred, the
price and the general terms of the proposed sale or transfer.
(b) The Company shall have the right (the "First Refusal
Right") at any time within sixty (60) days after the notice required by Section
3(a) above to purchase from Purchaser (or his personal representative, as the
case may be) up to but not exceeding the number of shares
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of the Stock specified in, and at the price (the "First Refusal Price") and upon
the general terms specified in such notice.
(c) If the First Refusal Right is not exercised with respect
to some or all the shares of the Stock specified in the notice required by
Section 3(a) hereof, then for a period of 120 days, Purchaser (or his personal
representative, as the case may be) shall be free to sell, or otherwise
transfer, up to but not exceeding the number of shares of the Stock specified in
the notice required by Section 3(a) hereof, minus the number of shares of the
Stock with respect to which the First Refusal Right was exercised, at a price
and upon general terms no more favorable to purchasers or transferees thereof
than specified in the notice required by Section 3(a) hereof.
(d) In the event that any shares of the Stock which are free
to be sold or otherwise transferred within said 120-day period are not so
transferred, such shares of the Stock shall again be subject to the First
Refusal Right and Purchaser (or his personal representative, as the case may be)
shall comply with all the provisions of this Section 3 prior to selling or
otherwise transferring any such shares of the Stock.
(e) Failure to exercise the First Refusal Right with respect
to any shares of the Stock shall not constitute a waiver of the First Refusal
Right with respect to any other shares of the Stock.
(f) The First Refusal Right shall continue after Purchaser's
death or the termination of Purchaser's employment with the Company for any
reason, or no reason, and shall terminate only upon the closing of an
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
shares of Common Stock of the Company to the public at a public offering price
of not less than $4.50 per share (as adjusted for stock splits, stock dividends,
distributions or subdivisions) and resulting in gross proceeds to the Company of
not less than Ten Million Dollars ($10,000,000).
(g) Notwithstanding the foregoing, Purchaser may transfer any
vested shares of Stock (a "Permitted Transfer") to or for the benefit of any
Permitted Transferee (as defined below) without complying with the provisions of
Sections 3(a) and 3(b), provided that such shares shall remain subject to this
Agreement and such Permitted Transferee shall, as a condition to such transfer,
deliver to the Company a written instrument confirming that such transferee
shall be bound by all of the terms and conditions of this Agreement. For the
purposes of this Agreement, a "Permitted Transferee" shall mean (i) any pledgee
pursuant to a pledge of the shares of Stock made pursuant to a bona fide loan
transaction that creates a security interest; or (b) any spouse, child or
grandchild, or to a trust for their benefit or for the benefit of Purchaser,
whether such transfer is made upon death or by intervivos transfer.
4. The Repurchase Right and the First Refusal Right shall be
exercised by written notice signed by an officer of the Company and delivered or
mailed as provided in Section 14 hereof. The Repurchase Price or the First
Refusal Price, as the case may be, shall be payable,
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at the option of the Company, in cancellation of all or a portion of any
outstanding indebtedness of Purchaser to the Company or in cash (by check) or
both.
5. The Company may assign its rights under Sections 2 and 3 hereof.
6. If, from time to time during the term of the Repurchase Right or
the First Refusal Right:
(a) There is any stock dividend or liquidating dividend of
cash/or property, stock split or other change in the character or amount of any
of the outstanding securities of the Company; or
(b) There is any consolidation, merger or sale of all or
substantially all, of the assets of the Company unless such consolidation,
merger or sale is with a publicly-owned corporation and the aggregate market
value of the securities or other property the stockholders of the Company
receive is in excess of Ten Million Dollars ($10,000,000), then, in such event,
any and all new, substituted or additional securities or other property (other
than cash) to which Purchaser is entitled by reason of his ownership of Stock
shall be immediately subject to the Repurchase Right or the First Refusal Right,
as the case may be, and be included in the word "Stock" for all purposes of the
Repurchase Right and the First Refusal Right with the same force and effect as
the shares of Stock subject to the Repurchase Right and the First Refusal Right
under the terms of Section 2 and 3 hereof. While the total Repurchase Price
shall remain the same after each such event, the Repurchase Price per share of
Stock upon exercise of the Repurchase Right shall be appropriately adjusted.
Stock acquired as provided in clauses (a) or (b) above shall be deemed to have
been acquired at the time of acquisition of the Stock on which such Stock was
distributed.
7. All certificates representing any shares of Stock subject to
the provisions of this Agreement shall have endorsed thereon the following
legends:
(a) "Any disposition of any interest in the securities
represented by this certificate is subject to restrictions, and the securities
represented by this certificate are subject to a repurchase right and a first
refusal right contained in a certain agreement between the record holder hereof
and the corporation, a copy of which will be mailed to any holder of this
certificate without charge after receipt by the corporation of a written request
therefor."
(b) Any legend required to be placed thereon by federal or state
securities laws.
8. Purchaser acknowledges that he is aware that the Stock to be
issued to him by the Company pursuant to this Agreement has not been registered
under the Securities Act of 1933, as amended. In this connection, Purchaser
warrants and represents to the Company as follows:
(a) Purchaser is purchasing the Stock solely for its own account
for investment and not with a view to or for sale or distribution of the Stock
or any portion thereof and not with
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any present intention of selling, offering to sell or otherwise disposing of or
distributing the Stock or any portion thereof. Purchaser also represents that
the entire legal and beneficial interest of the Stock which Purchaser is
purchasing is being purchased for, and will be held for the account of,
Purchaser only and neither in whole nor in part for any other person.
(b) Purchaser has heretofore discussed the Company and its
plans, operations and financial condition with its officers and Purchaser has
heretofore received all such information as Purchaser deems necessary and
appropriate to enable Purchaser to evaluate the financial risk inherent in
making an investment in the Stock of the Company and Purchaser further
represents and warrants that Purchaser has received satisfactory and complete
information concerning the business and financial condition of the Company in
response to all inquiries in respect thereof.
(c) Purchaser realizes that its purchase of the Stock will be
a highly speculative investment and that Purchaser is able, without impairing
its financial condition, to hold the Stock for an indefinite period of time and
to suffer a complete loss on his investment.
(d) The Company has disclosed (or hereby does disclose) to
Purchaser in writing:
(i) the sale of the Stock which it is purchasing has not
been registered under the Securities Act of 1933, as
amended (the "Act"), and the Securities must be held
indefinitely unless a transfer of them is subsequently
registered under the Act or an exemption from such
registration is available;
(ii) the share certificate representing the Stock will be
stamped with the legends restricting transfer specified
in this Agreement between the Company and Purchaser;
and
(iii) the Company will make a notation in its records of the
aforementioned restrictions on transfer and legends.
(e) Purchaser understands that the shares of Stock are restricted
securities within the meaning of Rule 144 promulgated under the Act; that the
exemption from registration under Rule 144 will not be available in any event
for at least two years from the date of sale of the Stock to it, and even then
will not be available unless (i) a public trading market then exists for the
Stock of the Company, (ii) adequate current public information concerning the
Company is then available to the public, (iii) it has been the beneficial owner
and it has paid the full purchase price for the Stock at least two years prior
to the sale, and (iv) other terms and conditions of Rule 144 are complied with;
and that any sale of the Stock may be made by it only in limited amounts in
accordance with such terms and conditions, as amended from time to time.
(f) Without in any way limiting its representations set forth
above, Purchaser further agrees that it shall in no event make any disposition
of all or any portion of the Stock
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which it is purchasing unless and until:
(i) There is then in effect a Registration Statement under
the Act covering such proposed disposition and such
disposition is made in accordance with said
Registration Statement: or
(ii) (A) It shall have notified the Company of the proposed
disposition and shall have furnished the Company with a
detailed statement of circumstances surrounding the
proposed disposition, (B) it shall have furnished the
Company with an opinion of its own counsel to the
effect that such disposition will not require
registration of such shares under the Act, and (C) such
opinion of its counsel shall have been concurred in by
counsel for the Company and the Company shall have
advised it of such concurrence.
9. The Company shall not be required (a) to transfer on its books any
shares of Stock of the Company which shall have been sold or transferred in
violation of any of the provisions set forth in this Agreement or (ii) to treat
as owner of such shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares shall have been so transferred.
In the event of a sale of Stock by Purchaser pursuant to Section 3(c) hereof,
Purchaser shall furnish to the Company proof that such sale was made in
compliance with the provisions of Section 3(c) hereof as to price and general
terms of such sale.
10. Subject to the provisions of this Agreement, Purchaser shall,
during the term of this Agreement, exercise all rights and privileges of a
shareholder of the Company with respect to the Stock.
11. If Purchaser makes an election under Section 83(b) of the Code, he
will provide a copy thereof to the Company within thirty days of the filing of
such election with the Internal Revenue Service.
12. Purchaser shall pay to the Company, or make provision satisfactory
to the Committee for payment of, any taxes required by law to be withheld in
respect of the Restricted Stock no later than the date of the event creating the
tax liability. In the Committee's discretion, such tax obligations may be paid
in whole or in part in shares of Common Stock, including the Restricted Stock,
valued at Fair Market Value on the date of delivery. The Company and its
Affiliates may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to Purchaser.
13. Any determination by the Committee under, or interpretation
of the terms of, this Agreement or the Plan will be final and binding on
Purchaser.
14. Any notice required or permitted hereunder by any party hereto
shall be given in writing and shall be deemed effectively given upon personal
delivery or upon deposit in the
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United States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to the other party hereto at such other party's address
hereinafter shown below such other party's signature or at such other address as
such other party may have designated by ten days' advance written notice to such
party.
15. This Agreement shall inure to the benefit of the successors and
assigns of the Company and be binding upon Purchaser and his heirs, executors,
administrators, successors and assigns.
16. This Agreement shall be governed by and interpreted under the
laws of the State of Delaware.
17. This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
DYAX CORP.
By:
------------------------------------
Henry E. Blair
President
Address: One Kendall Square
Building 600, 5th Floor
Cambridge, MA 02139
PURCHASER:
----------------------------------------
Robert A. Dishman, individually
Address: 37 Garland Road
Concord, MA 01742
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EXHIBIT B-1
PROMISSORY NOTE
$93,600.00 Cambridge, Massachusetts
February 18, 1998
For value received, the undersigned Robert A. Dishman of Concord,
Massachusetts 01742 (the "Borrower") promises to pay to Dyax Corp. ("Dyax"), the
principal sum of Ninety-Three Thousand Six Hundred Dollars ($93,600.00), with
interest on the unpaid principal balance at a rate of five and
sixty-nine/hundredths percent (5.69%) per annum, or if higher, at such rate as
may be necessary from time to time to avoid the imputation of interest under
sections 1274 or 7872 of the Internal Revenue Code of 1986 (or corresponding
provisions of subsequent laws), as amended. Interest shall accrue from the date
hereof on the unpaid principal balance and shall be due and payable annually on
each February 18. The principal amount of this note and all accrued and unpaid
interest thereon shall be due and payable on February 18, 2002; provided,
however, that if a Vesting Event (as defined in the Restricted Stock Purchase
Agreement (the "Purchase Agreement") dated as of February 18, 1998 between the
Borrower and Dyax) has occurred, the foregoing shall be due and payable on the
later of (i) the Vesting Event and (ii) February 18, 2000. Except as otherwise
provided in Section 2.5.3 of the Executive Employment Agreement (the "Employment
Agreement") dated as of February 18, 1998 between the Borrower and Dyax,
payments of principal and interest shall be made in lawful money of the United
States of America at the principal office of Dyax in Massachusetts, or by check
mailed to such other place as the holder hereof shall designate.
At the option of the holder, this note shall immediately become due and
payable upon occurrence of any of the following events (each an "Event of
Default"): (i) default in the payment of any installment of principal or
interest due hereunder and not otherwise forgiven under the Employment
Agreement; (ii) termination of the Borrower's employment as an officer of Dyax
other than a termination pursuant to Sections 3.1.1 or 3.1.2 of the Employment
Agreement or a termination without cause pursuant to Section 3.1.4 of the
Employment Agreement.
The unpaid balance hereof may be paid in part or in full at any time
without penalty. All prepayments shall be applied first to the payment of
principal.
This note is secured pursuant to a certain Pledge Agreement (as the
same may be amended from time to time, hereinafter referred to as the "Pledge
Agreement"), dated as of February 18, 1998 granted by the Borrower in favor of
Dyax, and Dyax by its acceptance hereof, shall be entitled to the benefits, and
subject to the terms, of the Pledge Agreement.
The undersigned agrees to pay, upon maturity (by acceleration or
otherwise), costs of collection, including reasonable attorneys' fees.
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No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right of such
holder; nor shall any delay, omission or waiver on any occasion be deemed a bar
to or waiver of the same or any other right on any future occasion. The
undersigned and every indorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral if at any time there be available to the holder
collateral for this note, and to the additions or releases of any other parties
or persons primarily or secondarily liable.
All rights and obligations hereunder shall be governed by and construed
in accordance with the law of the Commonwealth of Massachusetts and this note
shall be deemed to be under seal.
-------------------------------
Robert A. Dishman, individually
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EXHIBIT B-2
PROMISSORY NOTE
$360,000.00 Cambridge, Massachusetts
February 18, 1998
For value received, the undersigned Robert A. Dishman of Concord,
Massachusetts 01742 (the "Borrower") promises to pay to Dyax Corp. ("Dyax"), the
principal sum of Three Hundred Sixty Thousand Dollars ($360,000.00), with
interest on the unpaid principal balance at a rate of five and
sixty-nine/hundredths percent (5.69%) per annum, or if higher, at such rate as
may be necessary from time to time to avoid the imputation of interest under
sections 1274 or 7872 of the Internal Revenue Code of 1986 (or corresponding
provisions of subsequent laws), as amended. Interest shall accrue from the date
hereof on the unpaid principal balance and shall be due and payable annually on
each February 18. The principal amount of this note and all accrued and unpaid
interest thereon shall be due and payable on February 18, 2002; provided,
however, that if a Vesting Event (as defined in the Restricted Stock Purchase
Agreement (the "Purchase Agreement") dated as of February 18, 1998 between the
Borrower and Dyax) has occurred, the foregoing shall be due and payable on the
later of (i) the Vesting Event and (ii) February 18, 2000. Except as otherwise
provided in Section 2.5.3 of the Executive Employment Agreement (the "Employment
Agreement") dated as of February 18, 1998 between the Borrower and Dyax,
payments of principal and interest shall be made in lawful money of the United
States of America at the principal office of Dyax in Massachusetts, or by check
mailed to such other place as the holder hereof shall designate.
At the option of the holder, this note shall immediately become due and
payable upon occurrence of any of the following events (each an "Event of
Default"): (i) default in the payment of any installment of principal or
interest due hereunder and not otherwise forgiven under the Employment
Agreement; (ii) termination of the Borrower's employment as an officer of Dyax
other than a termination without cause pursuant to Section 3.1.4 of the
Employment Agreement; and (iii) in the case of any termination without cause
pursuant to Section 3.1.4 of the Employment Agreement, the earlier of (A) a
Vesting Event, and (B) the date of Dyax's repurchase of any of the Borrower's
Unvested Shares (as defined in the Purchase Agreement).
The unpaid balance hereof may be paid in part or in full at any time
without penalty. All prepayments shall be applied first to the payment of
principal.
This note is secured pursuant to a certain Pledge Agreement (as the
same may be amended from time to time, hereinafter referred to as the "Pledge
Agreement"), dated as of February 18, 1998 granted by the Borrower in favor of
Dyax, and Dyax by its acceptance hereof, shall be entitled to the benefits, and
subject to the terms, of the Pledge Agreement.
The undersigned agrees to pay, upon maturity (by acceleration or
otherwise), costs of
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collection, including reasonable attorneys' fees.
No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right of such
holder; nor shall any delay, omission or waiver on any occasion be deemed a bar
to or waiver of the same or any other right on any future occasion. The
undersigned and every indorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral if at any time there be available to the holder
collateral for this note, and to the additions or releases of any other parties
or persons primarily or secondarily liable.
All rights and obligations hereunder shall be governed by and construed
in accordance with the law of the Commonwealth of Massachusetts and this note
shall be deemed to be under seal.
-------------------------------
Robert A. Dishman, individually
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<PAGE>
EXHIBIT C-1
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") dated as of February 18, 1998
is made by Robert A. Dishman (the "Borrower"), residing at 37 Garland Road,
Concord, Massachusetts 01742, in favor of Dyax Corp. ("Dyax"), a Delaware
corporation with its principal place of business at One Kendall Square, Building
600, Cambridge, Massachusetts 02139.
RECITALS
1. Dyax has agreed to make a $93,600 loan (the "Loan") to the
Borrower on or after the date hereof evidenced by a promissory note of the
Borrower in the original principal amount of $93,600 (the "Note").
2. Dyax is willing to make the Loan upon the condition, among others,
that the Borrower enter into this Agreement to secure the Liabilities (as
defined in Section 11 hereof).
NOW, THEREFORE, for and in consideration of the premises and the Loan
made by Dyax and other good and valuable consideration, the receipt of which is
hereby acknowledged, and intending to be legally bound hereby, the Borrower
represents, warrants, covenants and agrees as follows:
1. PLEDGE. To secure the prompt, punctual, and faithful performance
of all and each of the present and future Liabilities of the Borrower to Dyax,
the Borrower hereby grants to Dyax, a security interest in and to, and assigns,
pledges, and delivers to Dyax certificates representing certain shares of the
Common Stock of Dyax issued to the Borrower as of the date hereof or issuable to
the Borrower hereafter ("Pledged Securities"), together with appropriate undated
stock powers duly executed in blank, and all products, proceeds, substitutions,
additions, interest, dividends, and other distributions in respect thereto, as
described in Section 2 below (all of which are referred to hereinafter as the
"Collateral").
2. STOCK DIVIDENDS, DISTRIBUTIONS, ETC. If, while this Agreement is
in effect, the Borrower shall become entitled to receive or shall receive any
stock certificate (including, without limitation, any certificate representing a
stock dividend or a distribution in connection with any reclassification,
increase or reduction of capital, or issued in connection with any
reorganization), whether as an addition to, in substitution of or in exchange
for any shares of any Pledged Securities, or otherwise, the Borrower agrees to
accept the same as agent for Dyax and to hold the same in trust on behalf of and
for the benefit of Dyax and to deliver the same forthwith to Dyax in the exact
form received, with the indorsement of the Borrower when necessary and/or with
appropriate undated stock powers duly executed in blank, to be held by Dyax as
part of the Collateral. In case any distribution of capital shall be made on or
in respect of the Pledged Securities or any property shall be distributed upon
or with respect to the Pledged Securities pursuant to the recapitalization or
reclassification of the capital of Dyax or pursuant
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<PAGE>
to the reorganization thereof, the property so distributed shall be delivered to
Dyax as Collateral. All sums of money and property so paid or distributed in
respect of the Pledged Securities which are received by the Borrower shall,
until paid or delivered to Dyax, be held by the Borrower in trust as Collateral.
3. CASH DIVIDENDS; VOTING RIGHTS. Unless a Default (as defined in
Section 6) has occurred and is continuing, the Borrower shall be entitled to
receive all cash dividends paid in respect of the Pledged Securities, to vote
the Pledged Securities and to give consents, waivers and ratifications, and to
take other action in respect of the Pledged Securities. After the occurrence and
during the continuance of any Default, Dyax shall have the right, upon notice to
the Borrower, to receive all cash dividends paid in respect of the Pledged
Securities and to exercise voting rights as specified in Section 7 below.
4. BORROWER'S REPRESENTATIONS. The Borrower hereby represents,
warrants and covenants as follows:
(a) The Borrower has the full power, authority and legal right
to enter into this Agreement to be bound hereby and to perform and observe the
terms and conditions hereof, and is in compliance with all applicable material
laws, rules and regulations.
(b) This Agreement has been duly executed and delivered by the
Borrower and constitutes the legal, valid and binding obligation of the Borrower
enforceable against him in accordance with its terms, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency
and similar laws affecting creditors' rights generally and to moratorium laws
from time to time in effect and to general principles of equity.
(c) The execution, delivery and performance by the Borrower of
this Agreement does not and will not (i) violate or constitute a default under
any provision of any agreement, note or instrument which is binding upon the
Borrower or by which his properties are bound or materially affected, or any
law, rule or regulation, order writ, injunction or decree of any court or
governmental instrumentality or any contractual restriction binding on the
Borrower, or (ii) require any filing with or consent or other act by or in
respect of any governmental authority or other person or entity (other than the
filing of the appropriate number of UCC-1 financing statements covering the
Pledged Securities, if necessary, and any consent obtained by the Borrower prior
to the date hereof) or (iii) constitute a default thereunder or result in the
imposition or require the creation of any lien or charge (other than those
created, continued or otherwise contemplated hereby) upon the assets of the
Borrower.
(d) The Pledged Securities consist of not fewer than 60,000
shares of Common Stock of Dyax and are held and owned by the Borrower free and
clear of all liens, encumbrances, attachments, security interests, pledges and
charges, other than those in favor of Dyax.
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<PAGE>
5. BORROWER'S COVENANTS. The Borrower shall
(a) if the Collateral is in the form of a certificated security,
within the meaning of the Uniform Commercial Code, as adopted in the
Commonwealth of Massachusetts (the "Code"), surrender possession of the
Collateral to Dyax;
(b) if the Collateral is in the form of an uncertificated
security, within the meaning of the Code, cause Dyax to record this pledge in
the records of Dyax relating to the Pledged Securities;
(c) execute all such instruments, documents, and papers, and
will do all such acts as Dyax may reasonably request now and from time to time
hereafter with respect to the perfection of the security interest granted herein
and the assignment effected hereby, including without limitation making payments
of the proceeds of the Loan and such additional amounts as are necessary to
cause the current pledgee of the certificates for the Pledged Securities to
deliver such certificates to Dyax;
(d) keep the Collateral free and clear of all liens,
encumbrances, attachments, security interests, pledges, and charges, except in
favor of Dyax or created by Dyax;
(e) deliver to Dyax, if and when received by the Borrower, any
item representing or constituting any of the Collateral or, except as otherwise
provided herein, proceeds of Collateral;
(f) not cause or permit any of the Collateral presently
evidenced by a written certificate to be converted to uncertificated securities,
except on request of Dyax; and
(g) not exercise any right with respect to the Collateral which
would dilute or otherwise adversely affect Dyax's rights to the Collateral.
6. DEFAULT. Upon the occurrence of a Default, any and all Liabilities
of the Borrower to Dyax shall become immediately due and payable at the option
of Dyax and without further notice or demand, in addition to which Dyax may
exercise Dyax's rights and remedies upon Default, as set forth hereinafter. For
purposes of this Agreement, a "Default" under this Agreement shall mean any of
the following events: (i) an Event of Default under any Note, (ii) any
representation or warranty made by the Borrower in this Agreement being untrue
in any material respect when made, or (iii) failure of the Borrower to observe
or perform any other covenant, agreement or other term of this Agreement and the
continuation of such failure without it having been duly cured for a period of
thirty (30) days after written notice thereof given by Dyax to the Borrower.
7. EFFECT OF DEFAULT. Upon the occurrence of any Default, and at
any time thereafter, unless and until the Default may be cured, Dyax shall have
the right to apply the Collateral toward the satisfaction of the Liabilities, to
sell or otherwise dispose of the Collateral and/or enforce and collect the
Collateral for application towards (but not necessarily in complete
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satisfaction) of the Liabilities, in addition to all of the rights and remedies
of a secured party upon default under the Code. The Borrower shall remain liable
to Dyax for any deficiency remaining following such application to any
Liabilities. Any and all shares of the Pledged Securities may be registered in
the name of Dyax or its nominee, and Dyax or its nominee may thereafter without
further notice exercise all voting and corporate rights at any meeting of any
issuer and exercise any and all rights of conversion, exchange, subscription or
any other rights, privileges or options pertaining to any shares of the Pledged
Securities as if it were the absolute owner thereof, including without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other readjustment of any issuer or upon the exercise by any issuer or Dyax or
such nominee of any right, privilege or option pertaining to any shares of the
Pledged Securities, and, in connection therewith, to deposit and deliver any and
all of the Pledged Securities with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as it may
determine, all without liability except to account for property actually
received by it, but Dyax shall have no duty to exercise any of the aforesaid
rights, privileges or options and shall not be responsible for any failure to do
so or delay in so doing so long as it acts in good faith. The Borrower
acknowledges that any exercise by Dyax of Dyax's rights upon default may be
subject to compliance by Dyax with state and/or federal law governing the sale
of securities. Except as otherwise provided herein, the net proceeds which Dyax
shall receive from the sale of the Collateral, in accordance with the provisions
hereof, shall be applied in the following manner: First, to the payment of all
costs and expenses incurred by Dyax in connection with the administration and
enforcement of, or the preservation of any rights under, or otherwise in
connection with this Agreement (including, without limitation, the costs and
expenses of retaking, holding, preparing for sale or selling of any Collateral
and the reasonable fees and disbursements of its counsel and agents); Second, to
the payment of all other Liabilities in such order of priority as Dyax may
determine in its sole discretion; and Third, as otherwise provided by applicable
law.
8. PRIVATE PLACEMENTS.
(a) The Borrower recognizes that Dyax may be unable to effect a
public sale of any or all of the Pledged Securities by reason of certain
prohibitions contained in the federal securities laws and applicable state or
foreign securities law, but may resort to one or more private sales thereof to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such securities for their own account for investment and not with a
view to the distribution or resale thereof. The Borrower acknowledges and agrees
that any such private sale may result in prices and other terms less favorable
to the seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. Dyax shall be under no obligation to
delay a sale of any of the Pledged Securities for the period of time necessary
to permit the issuer of such securities to register such securities for public
sale under the federal securities law, or under applicable state securities law,
even if the issuer would agree to do so.
(b) The Borrower further agrees to use commercially reasonable
efforts to do or cause to be done all such other acts and things (other than
effect the registration of the Pledged
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Securities under applicable federal, state or foreign laws) as may be necessary
to make such sale or sales of any portion or all of the Pledged Securities valid
and binding and in compliance with any and all applicable laws, regulations,
orders, writs, injunctions, decrees or awards of any and all courts, arbitrators
or governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at the Borrower's expense. The Borrower further
agrees that a breach of any of the covenants contained in this Section 8 will
cause irreparable injury to Dyax, and that Dyax will have no adequate remedy at
law in respect of such breach and, as a consequence, agrees that each and every
covenant contained in this Section 8 shall be specifically enforceable against
the Borrower.
9. APPOINTMENT OF DYAX AS ATTORNEY-IN-FACT. In furtherance of the
remedies provided in Sections 7 and 8, the Borrower hereby designates Dyax as
and for the attorney-in-fact of the Borrower after the occurrence and during the
continuance of a Default to endorse in favor of Dyax any of the Collateral, to
cause the transfer of any of the Collateral in such name as Dyax may from time
to time determine, to cause the issuance of certificates for book entry and/or
uncertificated securities, and to make demand and to initiate actions to
accomplish the purposes of this Agreement. In connection with any action to
enforce any of the Collateral, Dyax may make such compromise or settlement with
respect to the Collateral as Dyax determines to be appropriate. After and during
the continuance of a Default, and in furtherance of the remedies provided in
Sections 7 and 8, Dyax shall also have and may exercise at any time all rights,
remedies, powers, and discretions of the Borrower with respect to and under the
Collateral. The within designation, being coupled with an interest, is
irrevocable until the within instrument is terminated by a written instrument
executed by a duly authorized officer of Dyax. Dyax shall not be liable for any
act or omission to act pursuant to this Paragraph except for any act or omission
to act which is in actual bad faith or which is grossly negligent.
10. CUMULATIVE REMEDIES. The rights, remedies, powers, privileges, and
discretions of Dyax hereunder (hereinafter, "Dyax's Rights And Remedies") shall
be cumulative and not exclusive of any rights or remedies which it otherwise may
have. No delay or omission by Dyax in exercising or enforcing any of Dyax's
Rights and Remedies shall operate as, or constitute, a waiver thereof. No waiver
by Dyax of any Default or of any default under any other agreement shall operate
as a waiver of any other default hereunder or under any other agreement. No
exercise of any of Dyax's Rights and Remedies and no other agreement or
transaction of whatever nature entered into between Dyax and the Borrower at any
time shall preclude any other exercise of Dyax's Rights and Remedies. No waiver
by Dyax of any of Dyax's Rights and Remedies on any one occasion shall be deemed
a waiver on any subsequent occasion, nor shall it be deemed a continuing waiver.
All of Dyax's Rights and Remedies and all of Dyax's rights, remedies, powers,
privileges, and discretions under any other agreement or transaction are
cumulative and not alternative or exclusive and may be exercised by Dyax at such
time or times and in such order of preference as Dyax in its sole discretion may
determine.
11. DEFINITION OF LIABILITIES. "Liabilities" shall mean (i) all
indebtedness, obligations and liabilities of the Borrower, whether of principal,
interest, fees, expenses or otherwise, now existing or hereafter contracted or
incurred under or in connection with the Loan and any and all extensions,
renewals, refinancings and refunding of any such indebtedness in
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whole or in part, (ii) all costs and expenses incurred by Dyax in the collection
of any of such Borrower indebtedness, including without limitation reasonable
attorneys' fees and legal expenses, and (iii) all future advances made by Dyax
for the protection or preservation of the Collateral or any portion thereof.
12. WAIVERS BY BORROWER. The Borrower
(a) waives presentment, demand, notice, and protest with respect
to the Liabilities and the Collateral; and
(b) waives any delay on the part of Dyax; and
(c) assents to any indulgence or waiver which Dyax may grant or
give to the Borrower or any other person liable or obliged to Dyax for or on the
Liabilities; and
(d) agrees that no release of any property securing the
Liabilities shall affect the rights of Dyax with respect to the Collateral
hereunder; and
(e) if entitled thereto, waives the right to notice and/or
hearing prior to Dyax's exercising of Dyax's rights and remedies hereunder upon
default.
13. PARTIAL RELEASE UPON PAY-DOWN OF THE NOTE. Upon written notice
from the Borrower that he wishes to sell some or all of the Pledged Securities
and apply the proceeds of such sale to amounts due under the Note, Dyax agrees
to deliver promptly to a broker designated by the Borrower and reasonably
satisfactory to Dyax certificates representing such Pledged Securities, provided
that such instructions include or are accompanied by irrevocable instruction
from the Borrower (with signature guarantee) to the broker requiring that the
net proceeds from the sale of such Pledged Securities be delivered by check
payable to Dyax and that a certificate for any shares of the Pledged Securities
remaining unsold be returned to Dyax.
14. DUTIES OF DYAX. Dyax shall have no duty as to the collection or
protection of the Collateral or any income or distribution thereon, beyond the
safe custody of such of the Collateral as may come into the possession of Dyax
and shall have no duty as to the preservation of rights against prior parties or
any other rights pertaining thereto. Dyax's Rights and Remedies may be exercised
without resort or regard to any other source of satisfaction of the Liabilities.
15. BINDING AGREEMENT. This Agreement shall be binding upon the
Borrower and upon the Borrower's representatives, successors, and assigns, and
shall enure to the benefit of Dyax and its successors and assigns.
16. COMPLETE AGREEMENT. This Agreement and all other instruments
executed in connection herewith incorporate all discussions and negotiations
among Dyax and the Borrower concerning the matters included herein and in such
other instruments. No such discussions or negotiations shall limit, modify, or
otherwise affect the provisions hereof. No modification,
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<PAGE>
amendment, or waiver of any provision of this Agreement shall be effective
unless executed in writing by the party to be charged with such modification,
amendment and waiver, and if such party be Dyax, then by a duly authorized
officer thereof other than the Borrower.
17. USE OF ORIGINALS. This Agreement and all other documents in Dyax's
possession which relate to the Liabilities may be reproduced by Dyax by any
photographic, photostatic, microfilm, micro-card, miniature photographic,
xerographic, or similar process, and, with the exception of instruments
constituting the Collateral, Dyax may destroy the original from which any
document was so reproduced. Any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is an existence and whether or not such
reproduction was made in the regular course of business) and any enlargement,
facsimile, or further reproduction shall likewise be admissible in evidence.
18. NOTICES. All notices, requests, demands and other communications
to be given pursuant to this Agreement shall be in writing and shall be deemed
to have been duly given if delivered by hand or overnight courier or mailed by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the party to receive notice at its or his respective address set
forth in the first paragraph of this Agreement or such other address as such
party shall have designated by notice in writing to the other party in
accordance with this section.
19. GOVERNING LAW. This Agreement, and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the laws of the Commonwealth of Massachusetts. The Borrower
submits to the jurisdiction of the courts of said Commonwealth for all purposes
with respect to this Agreement and the Borrower's relationships with Dyax.
20. SEALED INSTRUMENT. It is intended that this Agreement take effect
as a sealed instrument.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has executed the foregoing Pledge
Agreement as of the date first above written.
-------------------------------
Robert A. Dishman, individually
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<PAGE>
EXHIBIT C-2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") dated as of February 18, 1998
is made by Robert A. Dishman (the "Borrower"), residing at 37 Garland Road,
Concord, Massachusetts 01742, in favor of Dyax Corp. ("Dyax"), a Delaware
corporation with its principal place of business at One Kendall Square, Building
600, Cambridge, Massachusetts 02139.
RECITALS
(a) Dyax has agreed to make a $360,000 loan (the "Loan") to the
Borrower on or after the date hereof evidenced by a promissory note of the
Borrower in the original principal amount of $360,000 (the "Note").
(b) Dyax is willing to make the Loan upon the condition, among
others, that the Borrower enter into this Agreement to secure the Liabilities
(as defined in Section 11 hereof).
NOW, THEREFORE, for and in consideration of the premises and the Loan
made by Dyax and other good and valuable consideration, the receipt of which is
hereby acknowledged, and intending to be legally bound hereby, the Borrower
represents, warrants, covenants and agrees as follows:
1. PLEDGE. To secure the prompt, punctual, and faithful performance
of all and each of the present and future Liabilities of the Borrower to Dyax,
the Borrower hereby grants to Dyax, a security interest in and to, and assigns,
pledges, and delivers to Dyax certificates representing certain shares of the
Common Stock of Dyax issued to the Borrower as of the date hereof or issuable to
the Borrower hereafter ("Pledged Securities"), together with appropriate undated
stock powers duly executed in blank, and all products, proceeds, substitutions,
additions, interest, dividends, and other distributions in respect thereto, as
described in Section 2 below (all of which are referred to hereinafter as the
"Collateral").
2. STOCK DIVIDENDS, DISTRIBUTIONS, ETC. If, while this Agreement is
in effect, the Borrower shall become entitled to receive or shall receive any
stock certificate (including, without limitation, any certificate representing a
stock dividend or a distribution in connection with any reclassification,
increase or reduction of capital, or issued in connection with any
reorganization), whether as an addition to, in substitution of or in exchange
for any shares of any Pledged Securities, or otherwise, the Borrower agrees to
accept the same as agent for Dyax and to hold the same in trust on behalf of and
for the benefit of Dyax and to deliver the same forthwith to Dyax in the exact
form received, with the indorsement of the Borrower when necessary and/or with
appropriate undated stock powers duly executed in blank, to be held by Dyax as
part of the Collateral. In case any distribution of capital shall be made on or
in respect of the Pledged Securities or any property shall be distributed upon
or with respect to the Pledged Securities pursuant to the recapitalization or
reclassification of the capital of Dyax or pursuant
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<PAGE>
to the reorganization thereof, the property so distributed shall be delivered to
Dyax as Collateral. All sums of money and property so paid or distributed in
respect of the Pledged Securities which are received by the Borrower shall,
until paid or delivered to Dyax, be held by the Borrower in trust as Collateral.
3. CASH DIVIDENDS; VOTING RIGHTS. Unless a Default (as defined in
Section 6) has occurred and is continuing, the Borrower shall be entitled to
receive all cash dividends paid in respect of the Pledged Securities, to vote
the Pledged Securities and to give consents, waivers and ratifications, and to
take other action in respect of the Pledged Securities. After the occurrence and
during the continuance of any Default, Dyax shall have the right, upon notice to
the Borrower, to receive all cash dividends paid in respect of the Pledged
Securities and to exercise voting rights as specified in Section 7 below.
4. BORROWER'S REPRESENTATIONS. The Borrower hereby represents,
warrants and covenants as follows:
(a) The Borrower has the full power, authority and legal right
to enter into this Agreement to be bound hereby and to perform and observe the
terms and conditions hereof, and is in compliance with all applicable material
laws, rules and regulations.
(b) This Agreement has been duly executed and delivered by the
Borrower and constitutes the legal, valid and binding obligation of the Borrower
enforceable against him in accordance with its terms, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency
and similar laws affecting creditors' rights generally and to moratorium laws
from time to time in effect and to general principles of equity.
(c) The execution, delivery and performance by the Borrower of
this Agreement does not and will not (i) violate or constitute a default under
any provision of any agreement, note or instrument which is binding upon the
Borrower or by which his properties are bound or materially affected, or any
law, rule or regulation, order writ, injunction or decree of any court or
governmental instrumentality or any contractual restriction binding on the
Borrower, or (ii) require any filing with or consent or other act by or in
respect of any governmental authority or other person or entity (other than the
filing of the appropriate number of UCC-1 financing statements covering the
Pledged Securities, if necessary, and any consent obtained by the Borrower prior
to the date hereof) or (iii) constitute a default thereunder or result in the
imposition or require the creation of any lien or charge (other than those
created, continued or otherwise contemplated hereby) upon the assets of the
Borrower.
(d) The Pledged Securities consist of not fewer than 120,000
shares of Common Stock of Dyax and are held and owned by the Borrower free and
clear of all liens, encumbrances, attachments, security interests, pledges and
charges, other than those in favor of Dyax.
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<PAGE>
5. BORROWER'S COVENANTS. The Borrower shall
(a) if the Collateral is in the form of a certificated security,
within the meaning of the Uniform Commercial Code, as adopted in the
Commonwealth of Massachusetts (the "Code"), surrender possession of the
Collateral to Dyax;
(b) if the Collateral is in the form of an uncertificated
security, within the meaning of the Code, cause Dyax to record this pledge in
the records of Dyax relating to the Pledged Securities;
(c) execute all such instruments, documents, and papers, and
will do all such acts as Dyax may reasonably request now and from time to time
hereafter with respect to the perfection of the security interest granted herein
and the assignment effected hereby, including without limitation making payments
of the proceeds of the Loan and such additional amounts as are necessary to
cause the current pledgee of the certificates for the Pledged Securities to
deliver such certificates to Dyax;
(d) keep the Collateral free and clear of all liens,
encumbrances, attachments, security interests, pledges, and charges, except in
favor of Dyax or created by Dyax;
(e) deliver to Dyax, if and when received by the Borrower, any
item representing or constituting any of the Collateral or, except as otherwise
provided herein, proceeds of Collateral;
(f) not cause or permit any of the Collateral presently
evidenced by a written certificate to be converted to uncertificated securities,
except on request of Dyax; and
(g) not exercise any right with respect to the Collateral which
would dilute or otherwise adversely affect Dyax's rights to the Collateral.
6. DEFAULT. Upon the occurrence of a Default, any and all Liabilities
of the Borrower to Dyax shall become immediately due and payable at the option
of Dyax and without further notice or demand, in addition to which Dyax may
exercise Dyax's rights and remedies upon Default, as set forth hereinafter. For
purposes of this Agreement, a "Default" under this Agreement shall mean any of
the following events: (i) an Event of Default under any Note, (ii) any
representation or warranty made by the Borrower in this Agreement being untrue
in any material respect when made, or (iii) failure of the Borrower to observe
or perform any other covenant, agreement or other term of this Agreement and the
continuation of such failure without it having been duly cured for a period of
thirty (30) days after written notice thereof given by Dyax to the Borrower.
7. EFFECT OF DEFAULT. Upon the occurrence of any Default, and at any
time thereafter, unless and until the Default may be cured, Dyax shall have the
right to apply the Collateral toward the satisfaction of the Liabilities, which
application shall be done in accordance
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<PAGE>
with Section 2.5.2 of the Executive Employment Agreement of even date between
the Borrower and Dyax with respect to any Unvested Shares (as defined in such
agreement), to sell or otherwise dispose of the Collateral and/or enforce and
collect the Collateral for application towards (but not necessarily in complete
satisfaction) of the Liabilities, in addition to all of the rights and remedies
of a secured party upon default under the Code. The Borrower shall remain liable
to Dyax for any deficiency remaining following such application to any
Liabilities. Any and all shares of the Pledged Securities may be registered in
the name of Dyax or its nominee, and Dyax or its nominee may thereafter without
further notice exercise all voting and corporate rights at any meeting of any
issuer and exercise any and all rights of conversion, exchange, subscription or
any other rights, privileges or options pertaining to any shares of the Pledged
Securities as if it were the absolute owner thereof, including without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other readjustment of any issuer or upon the exercise by any issuer or Dyax or
such nominee of any right, privilege or option pertaining to any shares of the
Pledged Securities, and, in connection therewith, to deposit and deliver any and
all of the Pledged Securities with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as it may
determine, all without liability except to account for property actually
received by it, but Dyax shall have no duty to exercise any of the aforesaid
rights, privileges or options and shall not be responsible for any failure to do
so or delay in so doing so long as it acts in good faith. The Borrower
acknowledges that any exercise by Dyax of Dyax's rights upon default may be
subject to compliance by Dyax with state and/or federal law governing the sale
of securities. Except as otherwise provided herein, the net proceeds which Dyax
shall receive from the sale of the Collateral, in accordance with the provisions
hereof, shall be applied in the following manner: First, to the payment of all
costs and expenses incurred by Dyax in connection with the administration and
enforcement of, or the preservation of any rights under, or otherwise in
connection with this Agreement (including, without limitation, the costs and
expenses of retaking, holding, preparing for sale or selling of any Collateral
and the reasonable fees and disbursements of its counsel and agents); Second, to
the payment of all other Liabilities in such order of priority as Dyax may
determine in its sole discretion; and Third, as otherwise provided by applicable
law.
8. PRIVATE PLACEMENTS.
(a) The Borrower recognizes that Dyax may be unable to effect a public
sale of any or all of the Pledged Securities by reason of certain prohibitions
contained in the federal securities laws and applicable state or foreign
securities law, but may resort to one or more private sales thereof to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such securities for their own account for investment and not with a
view to the distribution or resale thereof. The Borrower acknowledges and agrees
that any such private sale may result in prices and other terms less favorable
to the seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. Dyax shall be under no obligation to
delay a sale of any of the Pledged Securities for the period of time necessary
to permit the issuer of such securities to register such securities for public
sale under the federal securities law, or under applicable state securities law,
even if the issuer would agree to do so.
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<PAGE>
(b) The Borrower further agrees to use commercially reasonable efforts
to do or cause to be done all such other acts and things (other than effect the
registration of the Pledged Securities under applicable federal, state or
foreign laws) as may be necessary to make such sale or sales of any portion or
all of the Pledged Securities valid and binding and in compliance with any and
all applicable laws, regulations, orders, writs, injunctions, decrees or awards
of any and all courts, arbitrators or governmental instrumentalities, domestic
or foreign, having jurisdiction over any such sale or sales, all at the
Borrower's expense. The Borrower further agrees that a breach of any of the
covenants contained in this Section 8 will cause irreparable injury to Dyax, and
that Dyax will have no adequate remedy at law in respect of such breach and, as
a consequence, agrees that each and every covenant contained in this Section 8
shall be specifically enforceable against the Borrower.
9. APPOINTMENT OF DYAX AS ATTORNEY-IN-FACT. In furtherance of the
remedies provided in Sections 7 and 8, the Borrower hereby designates Dyax as
and for the attorney-in-fact of the Borrower after the occurrence and during the
continuance of a Default to endorse in favor of Dyax any of the Collateral, to
cause the transfer of any of the Collateral in such name as Dyax may from time
to time determine, to cause the issuance of certificates for book entry and/or
uncertificated securities, and to make demand and to initiate actions to
accomplish the purposes of this Agreement. In connection with any action to
enforce any of the Collateral, Dyax may make such compromise or settlement with
respect to the Collateral as Dyax determines to be appropriate. After and during
the continuance of a Default, and in furtherance of the remedies provided in
Sections 7 and 8, Dyax shall also have and may exercise at any time all rights,
remedies, powers, and discretions of the Borrower with respect to and under the
Collateral. The within designation, being coupled with an interest, is
irrevocable until the within instrument is terminated by a written instrument
executed by a duly authorized officer of Dyax. Dyax shall not be liable for any
act or omission to act pursuant to this Paragraph except for any act or omission
to act which is in actual bad faith or which is grossly negligent.
10. CUMULATIVE REMEDIES. The rights, remedies, powers, privileges, and
discretions of Dyax hereunder (hereinafter, "Dyax's Rights And Remedies") shall
be cumulative and not exclusive of any rights or remedies which it otherwise may
have. No delay or omission by Dyax in exercising or enforcing any of Dyax's
Rights and Remedies shall operate as, or constitute, a waiver thereof. No waiver
by Dyax of any Default or of any default under any other agreement shall operate
as a waiver of any other default hereunder or under any other agreement. No
exercise of any of Dyax's Rights and Remedies and no other agreement or
transaction of whatever nature entered into between Dyax and the Borrower at any
time shall preclude any other exercise of Dyax's Rights and Remedies. No waiver
by Dyax of any of Dyax's Rights and Remedies on any one occasion shall be deemed
a waiver on any subsequent occasion, nor shall it be deemed a continuing waiver.
All of Dyax's Rights and Remedies and all of Dyax's rights, remedies, powers,
privileges, and discretions under any other agreement or transaction are
cumulative and not alternative or exclusive and may be exercised by Dyax at such
time or times and in such order of preference as Dyax in its sole discretion may
determine.
11. DEFINITION OF LIABILITIES. "Liabilities" shall mean (i) all
indebtedness, obligations and liabilities of the Borrower, whether of principal,
interest, fees, expenses or
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otherwise, now existing or hereafter contracted or incurred under or in
connection with the Loan and any and all extensions, renewals, refinancings and
refunding of any such indebtedness in whole or in part, (ii) all costs and
expenses incurred by Dyax in the collection of any of such Borrower
indebtedness, including without limitation reasonable attorneys' fees and legal
expenses, and (iii) all future advances made by Dyax for the protection or
preservation of the Collateral or any portion thereof.
12. WAIVERS BY BORROWER. The Borrower
(a) waives presentment, demand, notice, and protest with respect
to the Liabilities and the Collateral; and
(b) waives any delay on the part of Dyax; and
(c) assents to any indulgence or waiver which Dyax may grant or
give to the Borrower or any other person liable or obliged to Dyax for or on the
Liabilities; and
(d) agrees that no release of any property securing the
Liabilities shall affect the rights of Dyax with respect to the Collateral
hereunder; and
(e) if entitled thereto, waives the right to notice and/or
hearing prior to Dyax's exercising of Dyax's rights and remedies hereunder upon
default.
13. PARTIAL RELEASE UPON PAY-DOWN OF THE NOTE. Upon written notice
from the Borrower that he wishes to sell some or all of the Pledged Securities
and apply the proceeds of such sale to amounts due under the Note, Dyax agrees
to deliver promptly to a broker designated by the Borrower and reasonably
satisfactory to Dyax certificates representing such Pledged Securities, provided
that such instructions include or are accompanied by irrevocable instruction
from the Borrower (with signature guarantee) to the broker requiring that the
net proceeds from the sale of such Pledged Securities be delivered by check
payable to Dyax and that a certificate for any shares of the Pledged Securities
remaining unsold be returned to Dyax.
14. DUTIES OF DYAX. Dyax shall have no duty as to the collection or
protection of the Collateral or any income or distribution thereon, beyond the
safe custody of such of the Collateral as may come into the possession of Dyax
and shall have no duty as to the preservation of rights against prior parties or
any other rights pertaining thereto. Dyax's Rights and Remedies may be exercised
without resort or regard to any other source of satisfaction of the Liabilities.
15. BINDING AGREEMENT. This Agreement shall be binding upon the
Borrower and upon the Borrower's representatives, successors, and assigns, and
shall enure to the benefit of Dyax and its successors and assigns.
16. COMPLETE AGREEMENT. This Agreement and all other instruments
executed in connection herewith incorporate all discussions and negotiations
among Dyax and the Borrower
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<PAGE>
concerning the matters included herein and in such other instruments. No such
discussions or negotiations shall limit, modify, or otherwise affect the
provisions hereof. No modification, amendment, or waiver of any provision of
this Agreement shall be effective unless executed in writing by the party to be
charged with such modification, amendment and waiver, and if such party be Dyax,
then by a duly authorized officer thereof other than the Borrower.
17. USE OF ORIGINALS. This Agreement and all other documents in Dyax's
possession which relate to the Liabilities may be reproduced by Dyax by any
photographic, photostatic, microfilm, micro-card, miniature photographic,
xerographic, or similar process, and, with the exception of instruments
constituting the Collateral, Dyax may destroy the original from which any
document was so reproduced. Any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is an existence and whether or not such
reproduction was made in the regular course of business) and any enlargement,
facsimile, or further reproduction shall likewise be admissible in evidence.
18. NOTICES. All notices, requests, demands and other communications
to be given pursuant to this Agreement shall be in writing and shall be deemed
to have been duly given if delivered by hand or overnight courier or mailed by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the party to receive notice at its or his respective address set
forth in the first paragraph of this Agreement or such other address as such
party shall have designated by notice in writing to the other party in
accordance with this section.
19. GOVERNING LAW. This Agreement, and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the laws of the Commonwealth of Massachusetts. The Borrower
submits to the jurisdiction of the courts of said Commonwealth for all purposes
with respect to this Agreement and the Borrower's relationships with Dyax.
20. SEALED INSTRUMENT. It is intended that this Agreement take effect
as a sealed instrument.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has executed the foregoing Pledge
Agreement as of the date first above written.
-------------------------------
Robert A. Dishman, individually
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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into effective
as of August ____, 1995 (the "Effective Date"), between Biotage, Inc.
("Biotage"), a Delaware corporation with its principal executive offices at 1500
Avon Street, Ext., Charlottesville, Virginia 22901, and Robert Ladner (the
"Executive"), residing, at 3827 Green Valley Road, Ijahmvalle, Maryland, 21754.
ARTICLE 1. RECITALS
1.1. BACKGROUND. Biotage desires to obtain the services of Executive
to serve as Senior Vice President and Senior Science Officer of Protein
Engineering Corporation, a Massachusetts corporation and the wholly-owned
subsidiary of Biotage ("PEC"). Executive is willing to devote his time and
render services to Biotage upon the terms and conditions set forth below.
ARTICLE 2. PROVISION OF SERVICES
2.1. RETENTION OF EXECUTIVE, TERM. Subject to the terms and conditions
hereof, Biotage agrees to retain Executive to perform the duties described in
Section 2.2 for the period commencing on the Effective Date and terminating on
the third anniversary of the Effective Date, unless earlier terminated as herein
provided.
2.2. DUTIES. During the term of this Agreement, Executive agrees to
devote his full time and efforts to his duties hereunder and to serve as Senior
Vice President and Senior Science Officer of PEC. Executive agrees to perform
the duties incident to the aforementioned office, including without limitation
(a) continuing to develop PEC's technology platform, (b) management of PEC's
patent activities and other proprietary property and rights, (c) establishing
and overseeing external collaborations and (d) preparing and submitting grant
applications to various governmental and private funding agencies. Executive
shall report to the President of PEC. The duties and title of Executive shall
not be reduced without the agreement of Executive.
ARTICLE 3. PAYMENTS
For all services to be rendered by Executive to Biotage pursuant to
this Agreement, Biotage shall pay to Executive the amounts and provide for
Executive the benefits set forth below:
3.1. BASE SALARY. Biotage shall pay to Executive a base salary (the
"Base Salary") of $125,000 per annum, payable in regular installments in
accordance with Biotage's usual payment practices. The Base Salary shall be
reviewed by the President of PEC at the end of
<PAGE>
each twelve (12) month period during the term of this Agreement; provided,
however, that notwithstanding the foregoing, under no circumstances shall the
Base Salary be reduced below the amount specified in the preceding sentence
during the term of this Agreement.
3.2. STOCK OPTIONS. Concurrently with the execution and delivery of
this Agreement, Biotage will grant to Executive an option to purchase 55,000
shares of the Common stock, $.01 par value per share (the "Common Stock"), of
Biotage at an option price equal to the current fair market value of such Common
Stock. The options shall become exercisable with respect to 13,750 shares on the
Effective Date and, with respect to the remaining 41,250 shares, 859 shares per
month for forty-seven months commencing on September 1, 1995 and 877 shares in
the forty-eighth month following the Effective Date. The options shall be
subject to the terns and conditions set forth in Biotage's 1995 Equity Incentive
Plan (the "Plan") and shall contain other terms and conditions as may be imposed
by the Compensation Committee of the Board of Directors of Biotage.
3.3. FRINGE BENEFITS. In addition to Executive's Base Salary, Biotage
shall provide Executive medical Insurance (single coverage) with the right to
purchase family coverage under the Biotage group insurance plan, together with
such other benefits, including life and disability insurance, profit sharing and
pension benefits, as are generally made available by Biotage to its full-time
executive employees. Upon Executive's written request, Biotage shall reimburse
Executive for that portion of the total cost of obtaining medical insurance from
the employer of Executive's spouse which is attributable to Executive.
3.4. VACATION. Executive shall be entitled to four (4) weeks of paid
vacation per year, plus at least ten (10) paid national holidays as may be
provided generally to Biotage's employees.
3.5. PARTICIPATION IN FUTURE EQUITY INCENTIVE PLANS. Executive shall
be entitled to participate, to the extent and in the manner determined by
Biotage's Board of Directors in its absolute discretion, in any stock option,
stock purchase or other equity incentive plans established by Biotage, it any,
it being the understanding of Biotage and Executive that such participation
would be for the purpose of providing Executive additional opportunities for
equity participation in Biotage.
ARTICLE 4. EARLY TERMINATION
4.1. EARLY TERMINATION. Executive's services hereunder shall
terminate prior to the expiration of the term of this Agreement upon the
occurrence of any of the following events:
4.1.1. Executive's death or legal incapacity; or
4.1.2. The termination of Executive's services hereunder by the
Board of Directors of Biotage, at its option, to be exercised by
written notice to Executive, upon Executive's other incapacity or
inability to further perform
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<PAGE>
services as contemplated herein for a period aggregating ninety
(90) days or more within any six (6) month period because
Executive's physical or mental health shall have become impaired
so as to make it impossible or impractical to perform the duties
and responsibilities contemplated hereunder, or
4.1.3. The termination of Executive's services hereunder by the
Board of Directors of Biotage, at its option, to be exercised by
written notice to Executive, in the event of Executive's gross
neglect of duties hereunder or commission of an act of dishonesty
or moral turpitude in connection with employment, as determined
by such Board of Directors; or
4.1.4. The termination of Executive's services hereunder by the
Board of Directors of Biotage, at its option, which may be
exercised with or without cause, to he exercised by delivery of
ninety (90) days prior written notice from Biotage to Executive;
or
4.1.5. The termination of Executive's services hereunder by
Executive to be exercised by delivery of ninety (90) days prior
written notice from Executive to Biotage.
4.2. PAYMENTS UPON EARLY TERMINATION. Notwithstanding any other
provisions in this Agreement or any stock option agreement or stock restriction
agreement between Executive and Biotage to the contrary:
4.2.1. If Executive's services to Biotage terminate pursuant to
Section 4.1.1. or 4.1.2., (a) all payments and benefits provided to
Executive under this Agreement shall cease as of the date of
termination and (b) all stock options and restricted stock in Biotage,
if any, held by Executive on that date shall become immediately
exercisable or vest, as the case may be, on that date.
4.2.2. If Executive's services to Biotage terminate pursuant to
Section 4.1.3. or 4.1.5, (a) all payments and benefits provided
Executive under this Agreement shall cease as of the date of
termination of employment and (b) all further vesting on all stock
options and restricted stock in Biotage, if any, held by Executive on
that date shall immediately cease as of the date of termination, and
thereafter, such stock options shall be exercisable and such restricted
stock shall be subject to repurchase by Biotage in accordance with
their respective terms.
4.2.3. If Executive's services to Biotage terminate pursuant to
Section 4.l.4., (a) all payments and benefits provided to Executive
under this Agreement shall continue until the date (the "Severance
Date") twelve (12) months after the date of termination, (b) fifty
percent (50%) of all unvested stock options and restricted stock in
Biotage, if any, held by Executive on that date shall become
immediately exercisable or vest, as the case may be, on that date and
(c) all further vesting on all
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<PAGE>
of the remaining stock options and restricted stock in Biotage, if any,
held by Executive on the date of termination of employment shall
immediately cease, and thereafter, such stock options shall be
exercisable and such restricted stock shall be subject to repurchase by
Biotage in accordance with their respective terms.
ARTICLE 5. COVENANTS AGAINST COMPETITION WITH BIOTAGE
5.1. NON-SOLICITATION COVENANT. During the term that Executive
provides services to Biotage under this Agreement and for a period of twelve
(12) months immediately following the termination of such services for any
reason, Executive shall not directly or indirectly induce or attempt to induce
any employees of Biotage to leave the employment of Biotage.
5.2. NON-COMPETITION COVENANT. Executive agrees that (i) during the
term that Executive provides services to Biotage under this Agreement and (ii)
for a period (the "Non- competition Period") of twelve (12) months following the
termination of such services pursuant to Section 4.1.3 or 4.1.5, Executive shall
not directly or indirectly, except as a passive investor in publicly held
companies, engage in competition with Biotage or any of its subsidiaries, or own
or control any interest in, or act as director, officer or employee of, or
consultant to, any firm, corporation or institution directly or indirectly
engaged in competition with Biotage or any of its subsidiaries (including,
without limitation, PEC).
ARTICLE 6. INVENTIONS AND CONFIDENTIAL INFORMATION
6.1. CONFIDENTIALITY AGREEMENT. Executive agrees to execute an
Employee Confidentiality and Invention Agreement with Biotage, a copy of which
is attached hereto as Exhibit A and incorporated herein by reference and made a
part of this Agreement.
ARTICLE 7. RIGHT TO INFORMATION
Executive is entitled to receive, upon the written request of
Executive, such notices and other information with respect to any meetings of
the Board of Directors of Biotage as are delivered to the Directors of Biotage;
provided, however, that it is acknowledged and agreed by the parties hereto that
Executive shall not by reason of this Agreement have access to any confidential
information concerning the individual employees of Biotage.
ARTICLE 8. MISCELLANEOUS
8.1. OBLIGATION OF SUCCESSORS. Any successor to substantially all of
Biotage's assets and business, whether by merger, consolidation, purchase of
assets or otherwise, shall succeed to the rights and obligations of Biotage
hereunder.
8.2. NOTICES. All notices, requests, demands and other communications
to be given pursuant to this Agreement shall be in writing and shall be deemed
to have been duly given
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to a party if delivered by hand or mailed by registered or certified mail,
return receipt requested, postage prepaid, to such party at its address set
forth above in the first paragraph or at such other address as either party
hereto shall have designated by notice in writing to the other party.
8.3. COMPLETE AGREEMENT; AMENDMENTS. This Agreement, including all
Exhibits referred to herein and attached hereto, constitutes the entire
agreement between the parties with respect to the subject matter hereof and may
not be modified or amended except in a writing signed by both parties.
8.4. APPLICABLE LAW. This Agreement shall be considered to have been
made in the United States, and shall be interpreted in accordance with the laws
of the Commonwealth of Virginia, United States of America, and the parties
hereby submit to the jurisdiction of the courts of that state.
8.5. SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, it shall not affect any other term or provision of this
Agreement. If any provision in this Agreement shall be held to be excessively
broad, it shall be construed by limiting it so as to be enforceable to the
extent compatible with applicable law.
8.6. BINDING EFFECT. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, successors,
assigns and person representatives.
8.7. ASSIGNMENT. Except as otherwise provided in Section 8.1, neither
this Agreement nor any rights hereunder shall be assignable by any party hereto
without the prior written consent of the other party.
8.8. SURVIVAL. Articles 5 and 6 shall survive the termination of this
Agreement for the periods of time indicated therein.
8.9. CAPTIONS. Captions of sections have been added only for
convenience and shall not be deemed to be a part of this Agreement.
8.10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement as of the date first above written.
BIOTAGE, INC.
By: /s/ Henry E. Blair
-----------------------
Title: Chairman
/s/ Robert Ladner
---------------------------
Robert Ladner
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EXHIBIT 10.9
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is entered into effective
as of October 15, 1997 (the "Effective Date") between DYAX CORP. ("Dyax"), a
Delaware corporation, with its principal executive offices at One Kendall
Square, Bldg. 600, 5th Fl., Cambridge, MA 02139, and JAMES W. FORDYCE
("Consultant"), of 370 Lake Ave., Greenwich, CT 06880.
ARTICLE 1. RECITALS
1.1. Dyax, on behalf of itself and its subsidiaries and successors,
whether now existing or hereafter acquired or established (severally and
collectively, the "Company") desires to obtain the services of Consultant, and
Consultant is willing to render his services in assisting the strategic
direction of the Company's technology and business (the "Field of Interest"),
upon the terms and conditions set forth below.
1.2. Consultant has executed a Consultant Confidentiality and
Inventions Agreement with the Company dated effective as of the Effective Date
(the "Confidentiality Agreement"), a copy of which is attached hereto as
EXHIBIT 1.
1.3. Capitalization terms used in this Agreement but not defined
herein shall have the meaning assigned in the Confidentiality Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Company and Consultant hereby agree as follows:
ARTICLE 2. ENGAGEMENT AND SCOPE OF WORK
2.1. ENGAGEMENT. Subject to the following terms and conditions,
the Company hereby retains the Consultant to serve as a member of the Company's
Strategic Advisory Board and to perform such consulting and advisory services in
the Field of Interest as the Company may from time to time reasonably request,
and Consultant accepts such engagement. such consulting and advisory services
are referred to herein as the "Services".
2.2. COMMITMENT. Consultant agrees to make himself available to render
the Services from time to time as requested by the Company at such times and
locations as may be mutually agreed, provided that the Consultant shall not be
required to devote time equivalent to more than one day per month to the
performance of the Services.
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ARTICLE 3. PAYMENTS AND INVOICES
3.1. MONTHLY RETAINER RATE. For all services under this Agreement,
Dyax will pay consultant a fee at the rate of US$1,250 per month. Consultant
acknowledges and agrees that the foregoing schedule of fees shall be full
compensation for Consultant's services during the term of this Agreement. Fees
will be paid monthly in arrears.
3.2. STOCK OPTIONS. Subject to the approval of the Board of Directors,
the Company shall grant Consultant a nonstatutory stock option to purchase
15,000 shares of the Company's Common Stock pursuant to the Company's 1995
Equity Incentive Plan (the "Option") at the then fair market value of the
Company's Common Stock as determined in good faith by the Company's Board of
Directors. So long as Consultant is providing Services to the Company, the
Option shall become exercisable over a period of four years in accordance with
the Company's customary schedule for members of its other advisory boards.
Consultant's options shall be subject to the terms of the Company's standard
form of Nonstatutory Stock Option Certificate, and his acceptance thereof shall
evidence his acceptance of the terms and conditions of the Option set forth
therein.
3.3. EXPENSES. Travel and related expenses incurred by Consultant in
connection with the performance of Services under this Agreement will be
reimbursed at actual costs by the Company in accordance with general policies
and procedures established by the Company from time to time. No reimbursement
will be made for any expenses other than travel and related expenses incurred by
Consultant during the performance of services under this Agreement unless such
expenses are approved in advance by the Company. All approvals by the Company
must be given or confirmed in writing; expense approvals can be requested from
the President or any Executive Vice President of the Company.
ARTICLE 4. CONFIDENTIALITY AND INVENTIONS
4.1. CONFIDENTIALITY AND INVENTIONS. Consultant has executed, or in
connection with this Agreement is executing the "Confidentiality Agreement" with
the Company, and he agrees to be bound by the terms of the Confidentiality
Agreement.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF CONSULTANT
5.1. COMPLIANCE WITH EMPLOYER'S POLICIES. Consultant is responsible
for ensuring that any consulting agreement Consultant enters into is not in
conflict with the patent, consulting or other policies of his employer, and that
Consultant is responsible for disclosing the activities contemplated by any such
consulting agreement to the employer. Consultant represents and warrants (i)
that Consultant has determined that this Agreement complies with all such
policies of the employer and (ii) that Consultant has made such disclosure.
Consultant agrees to keep the employer informed of any changes in his activities
hereunder and to obtain any necessary formal approvals, consents, waivers and
other agreements or actions from or by the employer as may be required by the
employer in connection with this Agreement and the Confidentiality Agreement.
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5.2. ABSENCE OF RESTRICTIONS. Except for the consultants existing and
future fiduciary and confidentiality obligations to others, Consultant is
presently under no contractual or other restrictions or obligation which is
inconsistent with Consultant's execution of this Agreement or the
Confidentiality Agreement or the performance of the Services, and during the
Term, Consultant will not enter into any agreement, either written or oral, in
conflict with this Agreement or the Confidentiality Agreement.
ARTICLE 6. TERM AND TERMINATION
6.1. TERM. This Agreement shall have an initial term of twelve (12)
months ending on the first anniversary of the Effective Date and may be extended
by mutual agreement for additional one year periods.
6.2. Termination. This Agreement may be terminated by either the
Company or Consultant upon not less than thirty (30) days prior written notice
to the other party. The provisions of the Confidentiality Agreement shall
survive for a period of 3 years following any termination of this Agreement.
ARTICLE 7. MISCELLANEOUS
7.1. INDEPENDENT CONTRACTOR. Consultant is an independent contractor
under this Agreement. He is not an employee or agent of the Company and as a
result will not be entitled to participate in, or receive any benefit or right
as an employee under any employee benefit or welfare plan of the Company nor
have authority to represent or bind the Company in any manner in dealings with
third parties. Consultant shall have sole responsibility for payment of all
federal, state and local taxes or contributions imposed or required under
unemployment insurance, social security and income tax laws and for filing all
required tax forms with respect to any amounts paid by the Company to Consultant
hereunder. Consultant shall indemnify and hold the Company harmless against any
claim or liability (including penalties) resulting from failure of Consultant to
pay such taxes or contributions or file any such tax forms.
7.2. NOTICES. All notices, requests, demands and other communications
to be given pursuant to this Agreement shall be in writing and shall be deemed
to have been duly given to a party if delivered by hand or mailed by registered
or certified mail, return receipt requested, postage prepaid, to such party at
its address set forth in the first paragraph or at such other address as such
party shall have designated by notice in writing to the other party.
7.3. NO CONFLICTING AGREEMENTS. Consultant represents that his
performance of all the terms of this Agreement does not and will not breach any
agreement or obligation to keep in confidence proprietary information acquired
by him in confidence or in trust. Consultant has not entered into, and
Consultant agrees he will not enter into, any agreement either written or oral
in conflict herewith. Notwithstanding the foregoing, the Company acknowledges
that it is the nature of Consultant's business that at some time in the future,
Consultant may make an investment(s) in a company(ies) which is in a similar
and/or competing business as the Company. It is understood by the Company that
the general knowledge Consultant obtains from his consulting relationship with
the Company may
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influence his future investment decisions and that this does not constitute a
violation of this Agreement.
7.4. SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, it shall not affect any other term or provisions of this
Agreement. If any provision in this Agreement shall be held to be excessively
broad, it shall be construed by limiting it so as to be enforceable to the
extent with applicable law.
7.5. CAPTIONS. Captions of sections have been added only for
convenience and shall not be deemed to be a part of this Agreement.
7.6. BINDING EFFECT. Consultant's obligations under this Agreement
shall be binding upon his heirs, executors and administrators and shall inure to
the benefit of the Company's successor's and assigns.
7.7. COMPLETE AGREEMENT; AMENDMENTS. This Agreement, together with the
Confidentiality Agreement, constitutes the entire agreement between the parties
with respect to the subject matter hereof and may not be modified or amended
except in a writing signed by both parties.
7.8. RIGHTS OF PUBLICITY. The Company shall have the right to use
Consultant's name and likeness in any publicity materials prepared by it and in
presentations to current or prospective clients, investors and others.
Consultant shall not have the right to use the Company's name in any
publications or publicity or materials prepared by him without obtaining the
prior written consent of the Company.
7.9. APPLICABLE LAW. This Agreement shall be considered to have been
made in the United States, and shall be interpreted in accordance with the laws
of the Commonwealth of Massachusetts, United States of America, and the parties
hereby submit to the jurisdiction of the courts of that state.
7.10. NONWAIVER PROVISION. The waiver by either party hereto of any
right hereunder or the failure to perform or of a breach by the other party
shall not be deemed a waiver of any other right hereunder or of any breach or
failure by said other party whether similar nature or otherwise.
7.11. ASSIGNMENT. Neither this Agreement nor any rights hereunder shall
be assignable by either party hereto without the prior written consent of the
other party.
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7.12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed to be one and the same instrument.
IN WITNESS HEREOF, the Company and the Consultant have duly executed
and delivered this Agreement as of the date first written above.
DYAX CORP. JAMES W. FORDYCE
By: /s/ Henry E. Blair By: /s/ James W. Fordyce
------------------ --------------------
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EXHIBIT 1
CONSULTANT CONFIDENTIALITY AND INVENTIONS AGREEMENT
In consideration of my engagement as a consultant to Dyax Corp. or any
of its predecessors, successors or subsidiaries (collectively, the "Company"),
and for other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, I agree as follows:
CONFIDENTIALITY
I understand that the Company continually obtains and develops valuable
proprietary and confidential information concerning it business, business
relationships and financial affairs (the "Confidential Information") and
valuable Biological Materials which may become known to me in connection with my
consulting arrangement with the Company. By way of illustration, but not
limitation, Confidential Information may include Inventions (as hereafter
defined), trade secrets, technical information, know-how, research and
development activities of the Company, product and marketing plans, customer and
supplier information and information disclosed to the Company or to me by third
parties of a proprietary or confidential nature or under an obligation of
confidence. Confidential Information is contained in various media, including
without limitation, patent applications, computer programs in object and/or
source code, flow charts and other program documentation, manuals, plans,
drawings, designs, technical specifications, laboratory notebooks, supplier and
customer lists, internal financial data and other documents and records of the
Company. "Biological Materials" may include, without limitation, any and all
reagents, substances, chemical compounds, subcellular constituents, cells or
cell lines, organisms and progeny, mutants, derivatives or replications thereof
or therefrom.
I acknowledge that all Biological Materials and all Confidential
Information, whether or not in writing and whether or not labeled or identified
as confidential or proprietary, is and shall remain the exclusive property of
the Company or the third party providing such information to me or the Company.
I agree that I shall not, during the term of my consulting arrangement with the
Company and thereafter, publish, disclose or otherwise make available to any
third party, other than employees of the Company, and Confidential Information
or Biological Materials except as expressly authorized in writing by the
Company. I agree that I shall use such Confidential Information and Biological
Materials only in the performance of my consulting arrangement with the Company,
and not for my own benefit or for the benefit of any other person or business
entity.
I agree to exercise all reasonable precautions to protect the
confidentiality of Confidential Information and Biological Materials in my
possession and not to remove any Biological Materials from the Company's
premises. Upon the termination of my consulting arrangement with the Company, or
at any time upon the Company's request, I shall return immediately to the
Company any and all materials containing any Confidential Information then in my
possession or under my control.
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Confidential Information shall not include information which (a) is or
becomes generally known within the Company's industry through no fault of mine;
(b) was known to me at the time it was disclosed as evidenced by my written
records at the time of disclosure; (c) is lawfully and in good faith made
available to me by third party who did not derive it from the Company and who
imposes no obligation of confidence on me; or (d) is required to be disclosed by
a governmental authority or by order of a court of competent jurisdiction,
provided that such disclosure is subject to all applicable governmental or
judicial protection available for like material and reasonable advance notice is
given to the Company.
ASSIGNMENT OF INVENTIONS
I agree promptly to disclose to the Company any and all ideas,
concepts, discoveries, inventions, developments, original works of authorship,
software programs, software and systems documentation, trade secrets, technical
data, know-how and Biological Materials that are conceived, devised, invented,
developed or reduced to practice or tangible medium by me, under my direction or
jointly with others in the Field of Interest which may arise out of my
consulting relationship with the Company (collectively, "Inventions").
I hereby assign to the Company all of my right, title and interest to
the Inventions and any and all related patent rights, copyrights and
applications and registrations therefor. During and after my consulting
arrangement with the Company, I shall cooperate with the Company, at the
Company's expense, in obtaining proprietary protection for the Inventions and I
shall execute all documents which the Company shall reasonably request in order
to perfect the Company's rights in the Inventions. I hereby appoint the Company
my attorney to execute and deliver any such documents on my behalf in the event
I should fail or refuse to do so within a reasonable period following the
Company's request.
Notwithstanding the foregoing, any discoveries, improvements and
inventions, made or conceived by me prior to my consultancy with the Company, or
not otherwise covered by the foregoing, are expressly reserved and excepted from
the provisions of this agreement.
GENERAL
In the event that any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
other provisions of this Agreement, and all other provisions shall remain in
full force and effect. If any of the provisions of this Agreement is held to be
excessively broad, it shall be reformed and construed by limiting and reducing
it so as to be enforceable to the maximum extent permitted by law.
No delay or omission by the Company in exercising any right under this
Agreement will operate as a waiver of that or any other right. No waiver or
consent given by the Company on any occasion will be construed as a bar to or
continuing waiver of any right on any other occasion.
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I acknowledge that the restrictions contained in this agreement are
necessary for the protection of the business and goodwill of the Company and are
reasonable for such purpose. I agree that any breach of this agreement by me
will cause irreparable damage to the Company and that in the event of such
breach, the Company will have, in addition to any and all remedies of law, the
right to an injunction, specific performance, or other equitable relief, to
prevent the violation of my obligations hereunder.
This Agreement shall be construed as a sealed instrument and shall in
all events and for all purposes by governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts without regard to any choice
of law principle that would dictate the application of the laws of another
jurisdiction. This Agreement supersedes all prior agreements, written or oral,
with respect to the subject matter of this Agreement.
AGREED:
Signature:
--------------------
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Exhibit 10.10
LOAN AND PLEDGE AGREEMENT
THIS LOAN AND PLEDGE AGREEMENT (this "Agreement") dated as of October 30,
1998 is made by Henry E. Blair (the "Borrower"), residing at 275 Mill Way,
Barnstable, Massachusetts 02630, in favor of Dyax Corp. ("Dyax"), a Delaware
corporation with its principal place of business at One Kendall Square, Building
600, Cambridge, Massachusetts 02139.
RECITALS
A. The Borrower desires to borrow $1,300,000 from Dyax in order to finance
the purchase of (i) shares of stock in the cooperative corporation which owns
the building located at 68 Beacon Street, Boston, Massachusetts, which shares
will entitle the Borrower to occupy an apartment in such building ( the
"Apartment") and (ii) Unit 228 at the Brimmer Street Garage Condominium (the
"Brimmer Street Unit", and together with the Apartment, the "Real Estate").
B. Dyax is willing to make the Loan (as defined below) upon the condition,
among others, that the Borrower enter into this Agreement and grant the security
interest and pledge hereinafter described to secure the Liabilities (as defined
in Section 16 hereof).
NOW, THEREFORE, for and in consideration of the premises and the Loan made
by Dyax and other good and valuable consideration, the receipt of which is
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:
1. Loan. Subject to the terms hereof, Dyax will make, on or after the date
hereof, two loans (severally and collectively referred to herein as the "Loan")
to the Borrower in the aggregate principal amounts of $600,000 and $700,000,
respectively. The Loan shall be payable in full on the fifth anniversary of the
date hereof (the "Maturity Date").
2. Notes. The Loan shall be evidenced by promissory notes of the Borrower
in the original principal amounts of $600,000 and $700,000, respectively
(severally and collectively referred to herein as the "Notes"), payable to Dyax
with a final maturity date of the Maturity Date, such Notes to be substantially
in the form of Exhibit A and Exhibit B attached hereto. The Notes shall be dated
the date of the Loan and shall have the blanks therein appropriately completed.
3. Interest Rate. The Loan shall bear interest on the outstanding
principal amount thereof at a percentage rate per annum equal to the Base Rate
of BankBoston, N.A. less one and one half percent (1.5%), but in any event not
less than the applicable federal rate necessary to avoid imputation of interest
under sections 1274 or 7872 of the Internal Revenue Code of 1986 (or
corresponding provisions of subsequent laws), as amended.
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4. Payments and Prepayments of the Loan. Two monthly payments of Three
Thousand Seven Hundred Ninety Three and 76/100 Dollars ($3,793.76) and Four
Thousand Four Hundred Twenty Six and 05/100 Dollars ($4,426.05), respectively,
shall be due and payable on the first day of each month beginning on December 1,
1998, and such monthly payments shall be applied first to the payment of
interest and any remainder shall be applied to reduce the outstanding principal
amount of the Loan. The balance of any unpaid principal and all accrued and
unpaid interest thereon shall be due and payable on the Maturity Date. The
Borrower may prepay the Loan and the Notes in whole or in part at any time
without premium or penalty, together with all unpaid interest thereon and all
other amounts due hereunder.
5. Conditions Precedent to Loan. The obligation of Dyax to make the Loan
is subject to the condition precedent that Dyax shall have received, in form and
substance satisfactory to Dyax and its counsel, the following:
(a) this Agreement and the Notes, duly executed by the Borrower;
(b) the Pledged Collateral with stock powers for the Pledged Collateral
duly executed by the Borrower;
(c) a certain Cooperative Pledge Agreement, dated as of the date hereof,
granted by the Borrower in favor of Dyax, which Cooperative Pledge Agreement
grants a security interest in the shares of stock of the cooperative corporation
owning the Apartment, duly executed by the Borrower and the collateral pledged
thereunder with stock powers for such pledged collateral duly executed by the
Borrower;
(d) a certain Mortgage, dated as of the date hereof, from the Borrower to
Dyax, which Mortgage grants a lien on the Brimmer Street Unit, duly executed by
the Borrower; and
(e) such other documents, and completion of such other matters, as Dyax
may deem necessary or appropriate.
6. Security Interest and Pledge. To secure the prompt, punctual, and
faithful performance of all and each of the present and future Liabilities of
the Borrower to Dyax, the Borrower hereby grants to Dyax, a security interest in
and to, and assigns, pledges, and delivers to Dyax certificates representing all
shares of the Class A Preferred Stock of Dyax issued to the Borrower as of the
date hereof or issuable to the Borrower hereafter ("Pledged Securities"),
together with appropriate undated stock powers duly executed in blank, and all
products, proceeds, substitutions, additions, interest, dividends, and other
distributions in respect thereto, as described in Section 7 below (all of which
are referred to hereinafter as the "Collateral").
7. Stock Dividends, Distributions, Etc. If, while this Agreement is in
effect, the Borrower shall become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a stock
dividend or a distribution in connection with any reclassification, increase or
reduction of capital, or issued in connection with any reorganization), whether
as an addition to, in substitution of or in exchange for any shares of any
Pledged Securities, or otherwise, the Borrower agrees to accept the same as
agent for Dyax and
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to hold the same in trust on behalf of and for the benefit of Dyax and to
deliver the same forthwith to Dyax in the exact form received, with the
indorsement of the Borrower when necessary and/or with appropriate undated stock
powers duly executed in blank, to be held by Dyax as part of the Collateral. In
case any distribution of capital shall be made on or in respect of the Pledged
Securities or any property shall be distributed upon or with respect to the
Pledged Securities pursuant to the recapitalization or reclassification of the
capital of Dyax or pursuant to the reorganization thereof, the property so
distributed shall be delivered to Dyax as Collateral. All sums of money and
property so paid or distributed in respect of the Pledged Securities which are
received by the Borrower shall, until paid or delivered to Dyax, be held by the
Borrower in trust as Collateral.
8. Cash Dividends; Voting Rights. Unless a Default (as defined in Section
11) has occurred and is continuing, the Borrower shall be entitled to receive
all cash dividends paid in respect of the Pledged Securities, to vote the
Pledged Securities and to give consents, waivers and ratifications, and to take
other action in respect of the Pledged Securities. After the occurrence and
during the continuance of any Default, Dyax shall have the right, upon notice to
the Borrower, to receive all cash dividends paid in respect of the Pledged
Securities and to exercise voting rights as specified in Section 12 below.
9. Borrower's Representations. The Borrower hereby represents, warrants
and covenants as follows:
(a) The Borrower has the full power, authority and legal right to
enter into this Agreement to be bound hereby and to perform and observe the
terms and conditions hereof, and is in compliance with all applicable material
laws, rules and regulations.
(b) This Agreement has been duly executed and delivered by the
Borrower and constitutes the legal, valid and binding obligation of the Borrower
enforceable against him in accordance with its terms, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency
and similar laws affecting creditors' rights generally and to moratorium laws
from time to time in effect and to general principles of equity.
(c) The execution, delivery and performance by the Borrower of this
Agreement does not and will not (i) violate or constitute a default under any
provision of any agreement, note or instrument which is binding upon the
Borrower or by which his properties are bound or materially affected, or any
law, rule or regulation, order writ, injunction or decree of any court or
governmental instrumentality or any contractual restriction binding on the
Borrower, or (ii) require any filing with or consent or other act by or in
respect of any governmental authority or other person or entity (other than the
filing of the appropriate number of UCC-1 financing statements covering the
Pledged Securities, if necessary, and any consent obtained by the Borrower prior
to the date hereof) or (iii) constitute a default thereunder or result in the
imposition or require the creation of any lien or charge (other than those
created, continued or otherwise contemplated hereby) upon the assets of the
Borrower.
(d) The Pledged Securities consist of not fewer than 431,056 shares
of Class A Series 1 Preferred Stock, 246,040 shares of Class A Series 3
Preferred Stock, 129,713 shares of Class A Series 4 Preferred Stock and 18,350
shares of Class A Series 5 Preferred Stock, of
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Dyax and are held and owned by the Borrower free and clear of all liens,
encumbrances, attachments, security interests, pledges and charges, other than
those in favor of Dyax.
(e) The Borrower as of the date hereof has a net worth, defined as
the fair market value of total assets, exclusive of assets subject to contingent
liabilities, less total liabilities, of at least $10,000,000.
10. Borrower's Covenants. The Borrower shall
(a) if the Collateral is in the form of a certificated security,
within the meaning of the Uniform Commercial Code, as adopted in the
Commonwealth of Massachusetts (the "Code"), surrender possession of the
Collateral to Dyax;
(b) if the Collateral is in the form of an uncertificated security,
within the meaning of the Code, cause Dyax to record this pledge in the records
of Dyax relating to the Pledged Securities;
(c) execute all such instruments, documents, and papers, and will do
all such acts as Dyax may reasonably request now and from time to time hereafter
with respect to the perfection of the security interest granted herein and the
assignment effected hereby, including without limitation making payments of the
proceeds of the Loan and such additional amounts as are necessary to cause the
current pledgee of the certificates for the Pledged Securities to deliver such
certificates to Dyax;
(d) keep the Collateral free and clear of all liens, encumbrances,
attachments, security interests, pledges, and charges, except in favor of Dyax
or created by Dyax;
(e) deliver to Dyax, if and when received by the Borrower, any item
representing or constituting any of the Collateral or, except as otherwise
provided herein, proceeds of Collateral;
(f) not cause or permit any of the Collateral presently evidenced by
a written certificate to be converted to uncertificated securities, except on
request of Dyax;
(g) not exercise any right with respect to the Collateral which
would dilute or otherwise adversely affect Dyax's rights to the Collateral;
(h) make a payment on the Loan or grant to Dyax a security interest
in and to, and assign, pledge and deliver to Dyax certificates representing
additional marketable securities issued to the Borrower, if necessary, in order
to ensure that at all times the value of the Collateral is not less than 150% of
the outstanding principal balance of the Loan; and
(i) deliver to Dyax annually on September 30 a certificate stating
that (i) the Borrower as of the date thereof has a net worth, defined as the
fair market value of total assets, exclusive of assets subject to contingent
liabilities, less total liabilities, of at least $10,000,000 and (ii) the value
of the Collateral as of the date thereof is not less than 150% of the
outstanding principal balance of the Loan.
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11. Default. Upon the occurrence of a Default, any and all Liabilities of
the Borrower to Dyax shall become immediately due and payable at the option of
Dyax and without further notice or demand, in addition to which Dyax may
exercise Dyax's rights and remedies upon Default, as set forth hereinafter. For
purposes of this Agreement, a "Default" under this Agreement shall mean any of
the following events: (i) an Event of Default under any Note, (ii) any
representation or warranty made by the Borrower in this Agreement being untrue
in any material respect when made, or (iii) failure of the Borrower to observe
or perform any other covenant, agreement or other term of this Agreement and the
continuation of such failure without it having been duly cured for a period of
thirty (30) days after written notice thereof given by Dyax to the Borrower.
12. Effect of Default. Upon the occurrence of any Default, and at any time
thereafter, unless and until the Default may be cured, Dyax shall have the right
to apply the Collateral toward the satisfaction of the Liabilities, to sell or
otherwise dispose of the Collateral and/or enforce and collect the Collateral
for application towards (but not necessarily in complete satisfaction) of the
Liabilities, in addition to all of the rights and remedies of a secured party
upon default under the Code. The Borrower shall remain liable to Dyax for any
deficiency remaining following such application to any Liabilities. Any and all
shares of the Pledged Securities may be registered in the name of Dyax or its
nominee, and Dyax or its nominee may thereafter without further notice exercise
all voting and corporate rights at any meeting of any issuer and exercise any
and all rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining to any shares of the Pledged Securities as if
it were the absolute owner thereof, including without limitation, the right to
exchange at its discretion any and all of the Pledged Securities upon the
merger, consolidation, reorganization, recapitalization or other readjustment of
any issuer or upon the exercise by any issuer or Dyax or such nominee of any
right, privilege or option pertaining to any shares of the Pledged Securities,
and, in connection therewith, to deposit and deliver any and all of the Pledged
Securities with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine, all
without liability except to account for property actually received by it, but
Dyax shall have no duty to exercise any of the aforesaid rights, privileges or
options and shall not be responsible for any failure to do so or delay in so
doing so long as it acts in good faith. The Borrower acknowledges that any
exercise by Dyax of Dyax's rights upon default may be subject to compliance by
Dyax with state and/or federal law governing the sale of securities. Except as
otherwise provided herein, the net proceeds which Dyax shall receive from the
sale of the Collateral, in accordance with the provisions hereof, shall be
applied in the following manner: First, to the payment of all costs and expenses
incurred by Dyax in connection with the administration and enforcement of, or
the preservation of any rights under, or otherwise in connection with this
Agreement (including, without limitation, the costs and expenses of retaking,
holding, preparing for sale or selling of any Collateral and the reasonable fees
and disbursements of its counsel and agents); Second, to the payment of all
other Liabilities in such order of priority as Dyax may determine in its sole
discretion; and Third, as otherwise provided by applicable law.
13. Private Placements.
(a) The Borrower recognizes that Dyax may be unable to effect a public
sale of any or all of the Pledged Securities by reason of certain prohibitions
contained in the federal
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securities laws and applicable state or foreign securities law, but may resort
to one or more private sales thereof to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the distribution or
resale thereof. The Borrower acknowledges and agrees that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner. Dyax shall be under no obligation to delay a sale of any of the Pledged
Securities for the period of time necessary to permit the issuer of such
securities to register such securities for public sale under the federal
securities law, or under applicable state securities law, even if the issuer
would agree to do so.
(b) The Borrower further agrees to use commercially reasonable efforts to
do or cause to be done all such other acts and things (other than effect the
registration of the Pledged Securities under applicable federal, state or
foreign laws) as may be necessary to make such sale or sales of any portion or
all of the Pledged Securities valid and binding and in compliance with any and
all applicable laws, regulations, orders, writs, injunctions, decrees or awards
of any and all courts, arbitrators or governmental instrumentalities, domestic
or foreign, having jurisdiction over any such sale or sales, all at the
Borrower's expense. The Borrower further agrees that a breach of any of the
covenants contained in this Section 13 will cause irreparable injury to Dyax,
and that Dyax will have no adequate remedy at law in respect of such breach and,
as a consequence, agrees that each and every covenant contained in this Section
13 shall be specifically enforceable against the Borrower.
14. Appointment of Dyax as Attorney-in-Fact. In furtherance of the
remedies provided in Sections 12 and 13, the Borrower hereby designates Dyax as
and for the attorney-in-fact of the Borrower after the occurrence and during the
continuance of a Default to endorse in favor of Dyax any of the Collateral, to
cause the transfer of any of the Collateral in such name as Dyax may from time
to time determine, to cause the issuance of certificates for book entry and/or
uncertificated securities, and to make demand and to initiate actions to
accomplish the purposes of this Agreement. In connection with any action to
enforce any of the Collateral, Dyax may make such compromise or settlement with
respect to the Collateral as Dyax determines to be appropriate. After and during
the continuance of a Default, and in furtherance of the remedies provided in
Sections 12 and 13, Dyax shall also have and may exercise at any time all
rights, remedies, powers, and discretions of the Borrower with respect to and
under the Collateral. The within designation, being coupled with an interest, is
irrevocable until the within instrument is terminated by a written instrument
executed by a duly authorized officer of Dyax. Dyax shall not be liable for any
act or omission to act pursuant to this Paragraph except for any act or omission
to act which is in actual bad faith or which is grossly negligent.
15. Cumulative Remedies. The rights, remedies, powers, privileges, and
discretions of Dyax hereunder (hereinafter, "Dyax's Rights and Remedies") shall
be cumulative and not exclusive of any rights or remedies which it otherwise may
have. No delay or omission by Dyax in exercising or enforcing any of Dyax's
Rights and Remedies shall operate as, or constitute, a waiver thereof. No waiver
by Dyax of any Default or of any default under any other agreement shall operate
as a waiver of any other default hereunder or under any other agreement. No
exercise of any of Dyax's Rights and Remedies and no other agreement or
transaction of
6
<PAGE>
whatever nature entered into between Dyax and the Borrower at any time shall
preclude any other exercise of Dyax's Rights and Remedies. No waiver by Dyax of
any of Dyax's Rights and Remedies on any one occasion shall be deemed a waiver
on any subsequent occasion, nor shall it be deemed a continuing waiver. All of
Dyax's Rights and Remedies and all of Dyax's rights, remedies, powers,
privileges, and discretions under any other agreement or transaction are
cumulative and not alternative or exclusive and may be exercised by Dyax at such
time or times and in such order of preference as Dyax in its sole discretion may
determine.
16. Definition of Liabilities. "Liabilities" shall mean (i) all
indebtedness, obligations and liabilities of the Borrower, whether of principal,
interest, fees, expenses or otherwise, now existing or hereafter contracted or
incurred under or in connection with the Loan and any and all extensions,
renewals, refinancings and refunding of any such indebtedness in whole or in
part, (ii) all costs and expenses incurred by Dyax in the collection of any of
such Borrower indebtedness, including without limitation reasonable attorneys'
fees and legal expenses, and (iii) all future advances made by Dyax for the
protection or preservation of the Collateral or any portion thereof.
17. Waivers by Borrower. The Borrower
(a) waives presentment, demand, notice, and protest with respect to
the Liabilities and the Collateral; and
(b) waives any delay on the part of Dyax; and
(c) assents to any indulgence or waiver which Dyax may grant or give
to the Borrower or any other person liable or obliged to Dyax for or on the
Liabilities; and
(d) agrees that no release of any property securing the Liabilities
shall affect the rights of Dyax with respect to the Collateral hereunder; and
(e) if entitled thereto, waives the right to notice and/or hearing
prior to Dyax's exercising of Dyax's rights and remedies hereunder upon default.
18. Partial Release Upon Pay-Down of the Notes. Upon written notice from
the Borrower that he wishes to sell some or all of the Pledged Securities and
apply the proceeds of such sale to amounts due under the Notes, Dyax agrees to
deliver promptly to a broker designated by the Borrower and reasonably
satisfactory to Dyax certificates representing such Pledged Securities, provided
that such instructions include or are accompanied by irrevocable instruction
from the Borrower (with signature guarantee) to the broker requiring that the
net proceeds from the sale of such Pledged Securities be delivered by check
payable to Dyax and that a certificate for any shares of the Pledged Securities
remaining unsold be returned to Dyax.
19. Duties of Dyax. Dyax shall have no duty as to the collection or
protection of the Collateral or any income or distribution thereon, beyond the
safe custody of such of the Collateral as may come into the possession of Dyax
and shall have no duty as to the preservation of rights against prior parties or
any other rights pertaining thereto. Dyax's Rights and Remedies may be exercised
without resort or regard to any other source of satisfaction of the Liabilities.
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<PAGE>
20. Binding Agreement. This Agreement shall be binding upon the Borrower
and upon the Borrower's representatives, successors, and assigns, and shall
enure to the benefit of Dyax and its successors and assigns.
21. Complete Agreement. This Agreement and all other instruments executed
in connection herewith incorporate all discussions and negotiations among Dyax
and the Borrower concerning the matters included herein and in such other
instruments. No such discussions or negotiations shall limit, modify, or
otherwise affect the provisions hereof. No modification, amendment, or waiver of
any provision of this Agreement shall be effective unless executed in writing by
the party to be charged with such modification, amendment and waiver, and if
such party be Dyax, then by a duly authorized officer thereof other than the
Borrower.
22. Use of Originals. This Agreement and all other documents in Dyax's
possession which relate to the Liabilities may be reproduced by Dyax by any
photographic, photostatic, microfilm, micro-card, miniature photographic,
xerographic, or similar process, and, with the exception of instruments
constituting the Collateral, Dyax may destroy the original from which any
document was so reproduced. Any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is an existence and whether or not such
reproduction was made in the regular course of business) and any enlargement,
facsimile, or further reproduction shall likewise be admissible in evidence.
23. Notices. All notices, requests, demands and other communications to be
given pursuant to this Agreement shall be in writing and shall be deemed to have
been duly given if delivered by hand or overnight courier or mailed by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the party to receive notice at its or his respective address set
forth in the first paragraph of this Agreement or such other address as such
party shall have designated by notice in writing to the other party in
accordance with this section.
24. Governing Law. This Agreement, and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the laws of the Commonwealth of Massachusetts. The Borrower
submits to the jurisdiction of the courts of said Commonwealth for all purposes
with respect to this Agreement and the Borrower's relationships with Dyax.
25. Sealed Instrument. It is intended that this Agreement take effect as a
sealed instrument.
8
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IN WITNESS WHEREOF, the undersigned has executed the foregoing Loan and
Pledge Agreement as of the date first above written.
/s/ Henry E. Blair
------------------------------
Henry E. Blair, individually
9
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Exhibit A
PROMISSORY NOTE
$600,000.00 Cambridge, Massachusetts
October 30, 1998
For value received, the undersigned Henry E. Blair of Barnstable,
Massachusetts 02630 (the "Borrower"), promises to pay to Dyax Corp. ("Dyax"),
the principal sum of Six Hundred Thousand Dollars ($600,000.00), with interest
on the unpaid principal balance at a rate calculated as follows: the Base Rate
of BankBoston, N.A. less one and one half percent (1.5%) per annum, but in any
event not less than the applicable federal rate necessary to avoid imputation of
interest under sections 1274 or 7872 of the Internal Revenue Code of 1986 (or
corresponding provisions of subsequent laws), as amended. Interest shall accrue
from the date hereof on the unpaid principal balance. A monthly payment of Three
Thousand Seven Hundred Ninety Three and 76/100 Dollars ($3,793.76) shall be due
and payable on the first day of each month beginning on December 1, 1998, and
such monthly payments shall be applied first to the payment of interest and any
remainder shall be applied to reduce the principal balance hereof. The balance
of any unpaid principal and all accrued and unpaid interest thereon shall be due
and payable on October 30, 2003. Except as otherwise agreed to by the Borrower
and the holder, payments of principal and interest shall be made in lawful money
of the United States of America at the principal office of Dyax in
Massachusetts, or by check mailed to such other place as the holder hereof shall
designate.
This note shall immediately become due and payable upon notice to the
Borrower after a vote taken at any time by the directors of Dyax who are not
Dyax employees, or a vote of the Compensation Committee of Dyax, to accelerate
payment of this note upon a determination, in the sole discretion of such
directors or such committee, that acceleration is in the best interest of Dyax,
including without limitation under the following circumstances: (i) termination
of the Borrower's service as Chairman and Chief Executive Officer of Dyax for
any reason; provided, however, that in the case of death or disability payment
shall not be due for at least twelve (12) months after termination; (ii) at any
time that Dyax's cash and marketable investments total less than $10,000,000;
and (iii) at any time that Dyax anticipates filing a registration statement for
an initial public offering of its Common Stock.
If there occurs a default in the performance of any of the terms,
agreements, covenants or conditions contained in this note or the Mortgages (as
hereinafter defined) or the Cooperative Pledge Agreement (as hereinafter
defined) or the Loan and Pledge Agreement (as hereinafter defined) or any other
documents now or hereafter executed as security for this note or in furtherance
of Dyax's protections under the Mortgages (collectively, the "Loan Documents")
continuing beyond, in each case, any applicable grace period as may be provided
therein for the payment of such amount or the performance of such term,
agreement, covenant or condition, then at the option of the holder of this note
the entire indebtedness evidenced hereby, with interest
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<PAGE>
accrued thereon, if any, shall become due and payable, and no omission on the
part of the holder hereof to exercise such option when entitled to do so shall
be construed as a waiver of such right so long as such default shall remain
uncured.
The unpaid balance hereof may be paid in part or in full at any time
without penalty. All prepayments shall be applied first to the payment of
interest.
This note is secured by (i) a certain leasehold mortgage (the
"Leasehold Mortgage") of even date herewith from the Borrower to Dyax , which
Leasehold Mortgage grants a lien on the interest of the Borrower in apartment
#7E in the building located at 68 Beacon Street, Boston, Massachusetts (the
"Apartment"), all as more particularly described in such Leasehold Mortgage;
(ii) a certain mortgage (together with the Leasehold Mortgage, the "Mortgages")
of even date herewith from the Borrower to Dyax, which mortgage grants a lien on
Unit 228 at the Brimmer Street Garage Condominium, Boston, Massachusetts
(together with the Apartment, the "Real Estate"), all as more particularly
described in such mortgage; (iii) a certain pledge agreement (the "Cooperative
Pledge Agreement") of even date herewith granted by the Borrower in favor of
Dyax; and (iv) a certain loan and pledge agreement (the "Loan and Pledge
Agreement") of even date herewith granted by the Borrower in favor of Dyax. Dyax
by its acceptance hereof, shall be entitled to the benefits, and subject to the
terms, of the Mortgages, the Cooperative Pledge Agreement and the Loan and
Pledge Agreement.
If the Borrower conveys, transfers, assigns, encumbers, pledges or
otherwise disposes of any legal or beneficial interest in the Real Estate or in
the equity of redemption in the Real Estate or any part thereof without Dyax's
prior written consent, Dyax may, at its option, require immediate payment of the
entire indebtedness evidenced hereby, with accrued interest thereon, if any, as
provided herein.
The undersigned agrees to pay, upon maturity (by acceleration or
otherwise), costs of collection, including reasonable attorneys' fees.
No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right of such
holder; nor shall any delay, omission or waiver on any occasion be deemed a bar
to or waiver of the same or any other right on any future occasion. The
undersigned and every indorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral if at any time there be available to the holder
collateral for this note, and to the additions or releases of any other parties
or persons primarily or secondarily liable.
All rights and obligations hereunder shall be governed by and construed
in accordance with the law of the Commonwealth of Massachusetts and this note
shall be deemed to be under seal.
------------------------------
Henry E. Blair, individually
11
<PAGE>
Exhibit B
PROMISSORY NOTE
$700,000.00 Cambridge, Massachusetts
October 30, 1998
For value received, the undersigned Henry E. Blair of Barnstable,
Massachusetts 02630 (the "Borrower"), promises to pay to Dyax Corp. ("Dyax"),
the principal sum of Seven Hundred Thousand Dollars ($700,000.00), with interest
on the unpaid principal balance at a rate calculated as follows: the Base Rate
of BankBoston, N.A. less one and one half percent (1.5%) per annum, but in any
event not less than the applicable federal rate necessary to avoid imputation of
interest under sections 1274 or 7872 of the Internal Revenue Code of 1986 (or
corresponding provisions of subsequent laws), as amended. Interest shall accrue
from the date hereof on the unpaid principal balance. A monthly payment of Four
Thousand Four Hundred Twenty Six and 05/100 Dollars ($4,426.05) shall be due and
payable on the first day of each month beginning on December 1, 1998, and such
monthly payments shall be applied first to the payment of interest and any
remainder shall be applied to reduce the principal balance hereof. The balance
of any unpaid principal and all accrued and unpaid interest thereon shall be due
and payable on October 30, 2003. Except as otherwise agreed to by the Borrower
and the holder, payments of principal and interest shall be made in lawful money
of the United States of America at the principal office of Dyax in
Massachusetts, or by check mailed to such other place as the holder hereof shall
designate.
This note shall immediately become due and payable upon notice to the
Borrower after a vote taken at any time by the directors of Dyax who are not
Dyax employees, or a vote of the Compensation Committee of Dyax, to accelerate
payment of this note upon a determination, in the sole discretion of such
directors or such committee, that acceleration is in the best interest of Dyax,
including without limitation under the following circumstances: (i) termination
of the Borrower's service as Chairman and Chief Executive Officer of Dyax for
any reason; provided, however, that in the case of death or disability payment
shall not be due for at least twelve (12) months after termination; (ii) at any
time that Dyax's cash and marketable investments total less than $10,000,000;
and (iii) at any time that Dyax anticipates filing a registration statement for
an initial public offering of its Common Stock.
If there occurs a default in the performance of any of the terms,
agreements, covenants or conditions contained in this note or the Mortgage (as
hereinafter defined) or the Loan and Pledge Agreement (as hereinafter defined)
or any other documents now or hereafter executed as security for this note or in
furtherance of Dyax's protections under the Mortgage (collectively, the "Loan
Documents") continuing beyond, in each case, any applicable grace period as may
be provided therein for the payment of such amount or the performance of such
term, agreement, covenant or condition, then at the option of the holder of this
note the entire indebtedness evidenced hereby, with interest accrued thereon, if
any, shall become due and payable, and no omission on the part
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<PAGE>
of the holder hereof to exercise such option when entitled to do so shall be
construed as a waiver of such right so long as such default shall remain
uncured.
The unpaid balance hereof may be paid in part or in full at any time
without penalty. All prepayments shall be applied first to the payment of
interest.
This note is secured by (i) a certain mortgage (the "Mortgage") of even
date herewith from the Borrower to Dyax, which mortgage grants a lien on Unit
228 at the Brimmer Street Garage Condominium, Boston, Massachusetts (the "Real
Estate"), all as more particularly described in such mortgage and (ii) a certain
loan and pledge agreement (the "Loan and Pledge Agreement") of even date
herewith granted by the Borrower in favor of Dyax. Dyax by its acceptance
hereof, shall be entitled to the benefits, and subject to the terms, of the
Mortgage and the Loan and Pledge Agreement.
If the Borrower conveys, transfers, assigns, encumbers, pledges or
otherwise disposes of any legal or beneficial interest in the Real Estate or in
the equity of redemption in the Real Estate or any part thereof without Dyax's
prior written consent, Dyax may, at its option, require immediate payment of the
entire indebtedness evidenced hereby, with accrued interest thereon, if any, as
provided herein.
The undersigned agrees to pay, upon maturity (by acceleration or
otherwise), costs of collection, including reasonable attorneys' fees.
No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right of such
holder; nor shall any delay, omission or waiver on any occasion be deemed a bar
to or waiver of the same or any other right on any future occasion. The
undersigned and every indorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral if at any time there be available to the holder
collateral for this note, and to the additions or releases of any other parties
or persons primarily or secondarily liable.
All rights and obligations hereunder shall be governed by and construed
in accordance with the law of the Commonwealth of Massachusetts and this note
shall be deemed to be under seal.
------------------------------
Henry E. Blair, individually
13
<PAGE>
COOPERATIVE PLEDGE AGREEMENT
THIS COOPERATIVE PLEDGE AGREEMENT dated as of October 30, 1998 is made by
Henry E. Blair (the "Pledgor"), residing at 275 Mill Way, Barnstable,
Massachusetts 02630, in favor of Dyax Corp ("Dyax"), a Delaware corporation with
its principal place of business at One Kendall Square, Building 600, Cambridge,
Massachusetts 02139.
W I T N E S S E T H:
WHEREAS, Pledgor desires to purchase 152 shares of Common Stock, evidenced
by Certificate No. ____, of 68 Beacon Street, Inc. (the "Company") a
Massachusetts corporation, which shares entitle the owner to lease an apartment
in the building located at 68 Beacon Street, Boston, Massachusetts (the
"Apartment").
WHEREAS, pursuant to a Loan and Pledge Agreement dated the date hereof
(the "Loan and Pledge Agreement"), Dyax agreed to make a loan (the "Loan") to
the Pledgor on or after the date hereof evidenced by a promissory note of the
Pledgor in the original principal amount of $600,000 (the "Note") to finance the
acquisition of the shares; and
WHEREAS, pursuant to the terms of the Loan and Pledge Agreement, the
Pledgor is required to execute and deliver this Agreement and grant the security
interest hereinafter described;
NOW, THEREFORE, in consideration of the willingness of Dyax to make the
Loan to the Pledgor, and for other good and valuable consideration, receipt of
which is hereby acknowledged, it is hereby agreed as follows:
1. Security Interest. The Pledgor hereby deposits with and pledges to Dyax
all of the shares of capital stock of the Company (the "Pledged Stock") (the
Pledged Stock and any additional securities or collateral pledged hereunder are
sometimes herein referred to collectively as the "Pledged Collateral"), and the
Pledgor hereby grants to Dyax a security interest in all of the Pledged
Collateral as security for the due and punctual payment performance of the
secured obligations described in section 2 hereof.
2. Secured Obligations. The security interest hereby granted shall secure
the due and punctual payment and performance of the following liabilities and
obligations of the Pledgor (herein called the "Secured Obligations"):
(a) Principal of and premium, if any, and interest on the Note;
(b) All costs and expenses incurred by Dyax in the collection of any
of the Secured Obligations, including without limitation reasonable attorneys'
fees and legal expenses; and
(c) all future advances made by Dyax for the protection or
preservation of the Pledged Collateral or any portion thereof.
3. Representations of the Pledgor. The Pledgor hereby represents, warrants
and covenants as follows:
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<PAGE>
(a) The Pledgor has the full power, authority and legal right to
enter into this Agreement to be bound hereby and to perform and observe the
terms and conditions hereof, and is in compliance with all applicable material
laws, rules and regulations.
(b) This Agreement has been duly executed and delivered by the
Pledgor and constitutes the legal, valid and binding obligation of the Pledgor
enforceable against him in accordance with its terms, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency
and similar laws affecting creditors' rights generally and to moratorium laws
from time to time in effect and to general principles of equity.
(c) The Pledged Stock consists of not fewer than 152 shares of
Common Stock, evidenced by Certificate No. ____, of the Company.
(d) The Pledgor as of the date hereof has a net worth, defined as
the fair market value of total assets, exclusive of assets subject to contingent
liabilities, less total liabilities, of at least $10,000,000.
4. Covenants of the Pledgor. The Pledgor shall
(a) if the Pledged Collateral is in the form of a certificated
security, within the meaning of the Uniform Commercial Code, as adopted in the
Commonwealth of Massachusetts (the "Code"), surrender possession of the Pledged
Collateral to Dyax;
(b) if the Pledged Collateral is in the form of an uncertificated
security, within the meaning of the Code, cause the Company to record this
pledge in the records of the Company relating to the Pledged Stock;
(c) execute all such instruments, documents, and papers, and will do
all such acts as Dyax may reasonably request now and from time to time hereafter
with respect to the perfection of the security interest granted herein and the
assignment effected hereby, including without limitation making payments of the
proceeds of the Loan and such additional amounts as are necessary to cause the
current pledgee of the certificates for the Pledged Stock to deliver such
certificates to Dyax;
(d) deliver to Dyax, if and when received by the Borrower, any item
representing or constituting any of the Pledged Collateral or, except as
otherwise provided herein, proceeds of Pledged Collateral;
(f) not cause or permit any of the Pledged Collateral presently
evidenced by a written certificate to be converted to uncertificated securities,
except on request of Dyax;
(g) not exercise any right with respect to the Pledged Collateral
which would dilute or otherwise adversely affect Dyax's rights to the Pledged
Collateral;
(h) make a payment on the Loan or grant to Dyax a security interest
in and to, and assign, pledge and deliver to Dyax certificates representing
additional marketable securities issued to the Borrower, if necessary, in order
to ensure that at all times the value of the Pledged Collateral is not less than
150% of the outstanding principal balance of the Loan;
(i) deliver to Dyax annually on September 30 a certificate stating
that (i) the Borrower as of the date thereof has a net worth, defined as the
fair market value of total assets, exclusive of assets subject to contingent
liabilities, less total liabilities, of at least $10,000,000 and (ii) the value
of the Pledged Collateral as of the date thereof is not less than 150% of the
outstanding principal balance of the Loan.
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5. Special Warranties and Covenants of the Pledgor. The Pledgor hereby
represents, warrants and covenants to Dyax that, except for the lien of the
Company pursuant to a certain Proprietary Lease and as set forth in the Addendum
annexed hereto and made a part hereof:
(a) The Pledged Collateral is duly and validly pledged with Dyax in accordance
with law, and the Pledgor warrants and will defend Dyax's right, title and
security interest in and to the Pledged Collateral against the claims and
demands of all persons whomsoever.
(b) The Pledgor has good title to the Pledged Collateral, free and clear of
all claims, mortgages, pledges, liens, security interests and other
encumbrances of every nature whatsoever.
(c) All of the Pledged Stock has been duly and validly issued and is fully
paid and nonassessable.
(d) The execution, delivery and performance by the Pledgor of this Agreement
does not and will not (i) violate or constitute a default under any
provision of any agreement, note or instrument which is binding upon the
Pledgor or by which his properties are bound or materially affected, or
any law, rule or regulation, order writ, injunction or decree of any court
or governmental instrumentality or any contractual restriction binding on
the Pledgor, or (ii) require any filing with or consent or other act by or
in respect of any governmental authority or other person or entity (other
than the filing of the appropriate number of UCC-1 financing statements
covering the Pledged Stock, if necessary, and any consent obtained by the
Pledgor prior to the date hereof) or (iii) constitute a default thereunder
or result in the imposition or require the creation of any lien or charge
(other than those created, continued or otherwise contemplated hereby)
upon the assets of the Pledgor.
(e) The Pledgor will not sell, convey or otherwise dispose of any of the
Pledged Collateral, nor will the Pledgor create, incur or permit to exist
any pledge, mortgage, lien, charge, encumbrance or any security interest
whatsoever with respect to any of the Pledged Collateral or the proceeds
thereof, other than liens on and security interests in Pledged Collateral
created hereby.
(f) The Pledgor will not consent to or approve the issuance of any additional
shares of capital stock of any class of the Company.
6. Distributions. In case, upon the dissolution, winding up, liquidation
or reorganization of the Company whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
any other marshalling of the assets and liabilities of the Company or otherwise,
any sum shall be paid or any property shall be distributed upon or with respect
to any of the Pledged Collateral, such sum (less the amounts due to the Company,
if any) shall be paid over to Dyax to be held as collateral security for the
Secured Obligations. In case any stock dividend shall be declared on any of the
Pledged Collateral, or any share of stock or fraction thereof shall be issued
pursuant to any stock split involving any of the Pledged Collateral, or any
distribution of capital (excluding ordinary cash dividends) shall be made on any
of the Pledged Collateral, or any property shall be distributed
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upon or with respect to the Pledged Collateral pursuant to recapitalization or
reclassification of the capital of the Company, the shares or other property so
distributed shall be delivered to Dyax to be held as collateral security for the
Secured Obligations.
7. Events of Default. There shall exist a default under this Agreement
upon the happening of any default (herein called "Events of Default") in the due
and punctual payment of any principal of or premium, if any, or interest on the
Secured Obligations as and when the same shall become due and payable (whether
at maturity or at a date fixed for any prepayment or installment or by
declaration or acceleration or otherwise) or a breach of any covenant contained
in this Agreement or in the leasehold mortgage on the apartment given to secure
the Note and such default shall continue beyond the expiration of the applicable
period of grace, if any.
8. Rights and Remedies of Dyax. Upon the occurrence of any Event of
Default, such default not having previously been remedied or cured, Dyax shall
have the following rights and remedies, subject to the Addendum attached hereto:
(a) All rights and remedies provided by law, including, without limitation,
those provided by the Uniform Commercial Code;
(b) All rights and remedies provided in this Agreement; and
(c) All rights and remedies provided in the Note, the leasehold mortgage, this
Agreement, or in any other agreement, document or instrument pertaining to
the Secured Obligations.
9. Right to Transfer into Name of Dyax, etc. Notwithstanding anything to
the contrary contained herein, Dyax will not, unless Dyax shall have purchased
such Pledged Collateral at public or private sale or disposition thereof, (i)
cause any or all of the Pledged Collateral to be transferred into its name or
into the name of its nominee or (ii) exercise the voting power with respect to
any Pledged Collateral. Except as provided in the preceding sentence of this
section 9, the Pledgor shall be entitled to exercise as the Pledgor shall deem
fit, but in a manner not inconsistent with the terms hereof or of the Secured
Obligations, the voting power with respect to the Pledged Collateral.
10. Right of Dyax to Exercise Rights of Payment, etc. Subject to the
Addendum attached hereto, in case there shall exist an Event of Default, Dyax
shall be entitled to receive and retain, as collateral security for the Secured
Obligation, any and all dividends or other distributions at any time and from
time to time declared or made upon any of the Pledged Collateral, and to
exercise any and all rights of payment, conversion, exchange, subscription or
any other rights, privileges or options pertaining to the Pledged Collateral as
if it were the absolute owner thereof, including without limitation, the right
to exchange, at its discretion, any and all of the Pledged Collateral upon the
merger, consolidation, reorganization, recapitalization or other readjustment of
the Company or, upon the exercise of any such right, privilege or option
pertaining to the Pledged Collateral, and in connection therewith, to deposit
and deliver any and of the Pledged Collateral with any committee, depositary,
transfer registrar or other designated agency upon such terms and conditions as
Dyax may determine, all without liability except to account for property
actually received, but Dyax shall have a duty to exercise any of the
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aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing.
11. Right of Dyax to Dispose of Collateral, etc. Upon the occurrence of an
Event of Default, such default not having previously been remedied or cured,
Dyax shall have the right at any time or times thereafter to sell, resell,
assign and deliver the Pledged Collateral in a single parcel at any exchange or
broker's board or at public or private sale. Unless the Pledged Collateral is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Dyax will give the Pledgor at least twenty-one (21)
days prior written notice at the address of the pledgor specified in section 18
hereof, of the time and place of any public sale thereof or of the time after
which any private sale or any other intended disposition thereof is to be made.
Any such notice shall be deemed to meet any requirement hereunder or under any
applicable law (including the Uniform Commercial Code) that reasonable
notification be given of the time and place of such sale or other disposition.
Such notice may be given without any demand of performance or other demand, all
such demands being hereby expressly waived by the Pledgor. Such written notice
also will be given to the Company at least twenty-one (21) days prior to the
sale or other intended disposition. All such sales shall be at such commercially
reasonable price as Dyax shall deem best and either for cash or on credit or for
future delivery (without assuming any responsibility for credit risk). At any
such sale Dyax may purchase the Pledged Collateral to be sold thereat upon such
terms as Dyax may deem best. Upon any such sale the Pledged Collateral so
purchased shall be held by the purchaser, subject to the Addendum attached
hereto, but absolutely free from any other claims or rights of whatsoever kind
or nature, including any equity of redemption and any similar rights, all such
equity of redemption and any similar rights being hereby expressly waived and
released by the Pledgor. In the event any consent, approval or authorization of
any governmental agency will be necessary to effectuate any such sale, the
Pledgor shall execute, and hereby agrees to cause the Company to execute, all
such applications or other instruments as may be required. The proceeds of any
such sale, together with any other additional collateral security at the time
received and held hereunder, shall be received and applied: first, to all
amounts due to the Company; second, to the payment of all costs, and expenses of
such sale, including reasonable attorneys' fees; third, to the payment of the
Secured Obligations in such order of priority as Dyax shall determine, and any
surplus thereafter remaining shall be to the Pledgor or to whomever may be
legally entitled thereto including, if applicable, any subordinated creditor of
the Company or the Pledgor).
The Pledgor recognizes that Dyax may be unable to effect a public sale of
the Pledged Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, but may be compelled to resort to one or more private
sales to a restricted group of purchasers, each of whom will be obligated to
agree, among other things, to acquire such Pledged Collateral for its own
account, for investment and not with a view to the distribution or resale
thereof. The Pledgor acknowledges that private sales so made may be at prices
and upon other terms less favorable seller than if such Pledged Collateral were
sold at public sales, and that Dyax has no obligation to delay sale of any such
Pledged Collateral for the period of time necessary to permit such Pledged
Collateral to be registered for public sales under the Securities Act of 1933.
The Pledgor agrees that any such private sales shall not be deemed to have been
made in a commercially unreasonable mariner solely because they shall have been
made under the foregoing circumstances.
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12. Collection of Amounts Payable on Account of Pledged Collateral, etc.
Upon the occurrence of any Event of Default, Dyax may, but without obligation to
do so, demand, sue for and/or collect any money or property at any time due,
payable or receivable, to which it may be entitled hereunder, on account of or
in exchange for any of the Pledged Collateral and shall have the right, for and
in the name, place and stead of the Pledgor, to execute endorsements,
assignments or other instruments of conveyance or transfer with respect to all
or any of the Pledged Collateral.
13. Care of Pledged Collateral in Dyax's Possession. Beyond the exercise
of reasonable care to assure the safe custody of the Pledged Collateral while
held hereunder, Dyax shall have no duty or liability to collect any sums due in
respect thereof or to protect or preserve rights pertaining thereto, and shall
be relieved of all responsibility for the Pledged Collateral upon surrendering
the same to the Pledgor.
14. Waivers, etc. The Pledgor hereby waives presentment, demand, notice,
protest and, except as is otherwise provided herein, all other demands and
notices in connection with this Agreement or the enforcement of Dyax's rights
hereunder or in connection with the Secured Obligations or any Pledged
Collateral; consents to and waives notice of the granting of renewals,
extensions of time for payment or other indulgences to the Company or the
Pledgor or to any third party, or substitution, release or surrender of any
collateral security for the Secured Obligation, the addition or release of
persons primarily or secondarily liable on the Secured Obligation or on any
collateral security for the Secured Obligation, the acceptance of partial
payments on any Secured Obligation or on any collateral security for the Secured
Obligation and/or the settlement or compromise thereof. No delay or omission on
the part of Dyax in exercising any right hereunder shall operate as a waiver of
such right or of any other right no waiver by Dyax or by any other holder of the
Secured Obligations of any default shall be effective unless in writing nor
operate rate as a waiver of any other default or of the same default on a future
occasion. The Pledgor further waives any right it may have under the
constitution of the Commonwealth of Massachusetts or under the Constitution of
the United States of America, to notice (other than any requirement of notice
provided herein) or to a judicial hearing prior to exercise of any right or
remedy provided by this Agreement to Dyax and waives its rights, if any, to set
aside or invalidate any sale duly consummated in accordance with the foregoing
provisions on the grounds (if such be the case) that the sale was consummated
without a prior judicial hearing. The Pledgor's waivers under this section have
been made voluntarily, intelligently and knowingly and after the Pledgor has
been apprised and counseled by its attorneys as to the nature thereof and its
possible alternative rights.
15. Termination; Assignment, etc. This Agreement and the security interest
in the Pledged Collateral created hereby shall terminate when all the Secured
Obligations have been paid and finally discharged in full. No waiver by Dyax or
by any other holder of the Secured obligation of any default shall be effective
unless in writing nor operate as a waiver of any other default or of the same
default on a future occasion. In the event of a sale or assignment by Dyax of
the Secured obligation held by it, Dyax may assign or transfer its rights and
interest under this Agreement in whole to the purchaser or purchasers of such
Secured Obligations, whereupon such purchaser or purchasers shall become vested
with all of the powers and rights of Dyax hereunder, and Dyax shall thereafter
be forever released and fully discharged from any liability or responsibility
hereunder with respect to the rights and interest so assigned.
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16. Reinstatement. Notwithstanding the provisions of section 15, this
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any amount received by Dyax in respect of the Secured Obligations
is rescinded or must otherwise be restored or returned by Dyax upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company or the Pledgor or upon the appointment of any intervenor or conservator
of, or trustee or similar official for, the Company or the Pledgor or any
substantial part of their respective properties, or otherwise, all as though
such payments had not been made.
17. Restrictions on Transfer. Notwithstanding any provision in this
Agreement, any sale, assignment, conveyance, or transfer of any kind or nature
shall be subject to the Mortgage Loans, Cooperative Documents and Recognition
Agreement identified in the Addendum annexed hereto and made part hereof.
18. Notices. Except as otherwise provided herein, all notices to the
Pledgor, the Company or to Dyax shall be in writing and shall be deemed to have
been sufficiently given or served for all purposed hereof if personally
delivered or mailed by certified mail, return receipt requested, postage
prepaid, as follows:
(a) if to the Pledgor:
Henry E. Blair
Unit 7E
68 Beacon Street
Boston, MA 02108
(b) if to Dyax:
Dyax Corp.
One Kendall Square, Building 600
Cambridge, MA 02139
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(c) if to the Company:
68 Beacon Street, Inc.
c/o John Cupuano
R.M. Bradley
250 Boylston Street, 4th Floor
Boston, MA 02116
or at such other address as the party to whom such notice is directed may have
designated in writing to the other party hereto.
19. Miscellaneous. This Agreement shall be binding upon Dyax and his
representatives, successors and assigns, and inure to the benefit of Dyax and
its successors and assigns, and the term "Dyax" shall be deemed to include any
other holder or holders of the Secured Obligations. In case any provision in
this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
20. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement,
including the validity hereof and the rights and obligations of the parties
hereunder, shall be construed in accordance with and governed by the laws of the
Commonwealth of Massachusetts. The Pledgor, to the extent that he may lawfully
do so, hereby consents to service of process, and to be sued, in the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts, as well as to the jurisdiction of all courts to which
an appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of any of its obligations hereunder or with respect
to the transactions contemplated hereby, and expressly waives any and all
objections it may have as to venue in any such courts. The Pledgor further
agrees that a summons and complaint commencing an action or proceeding in any of
such courts shall be properly served and shall confer personal jurisdiction if
served personally or by certified mail to it at its address provided in section
18 hereof or as otherwise provided under the laws of the Commonwealth of
Massachusetts. The Pledgor irrevocably waives all right to a trial by jury in
any suit, action or other proceeding instituted by or against the Pledgor in
respect of its obligations hereunder or the transactions contemplated hereby.
21. Addendum. The provisions of this Agreement are modified by an Addendum
annexed hereto and made a part hereof. In the event of any inconsistency between
the provisions of this Agreement and the Addendum, the provisions of the
Addendum and the documents referenced therein shall control.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as a
sealed instrument as of the date first above written.
/s/ Henry E. Blair
------------------------------
Henry E. Blair, Individually
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ADDENDUM TO PLEDGE AND ASSIGNMENT BETWEEN
Henry E. Blair and Dyax Corp.
All of Dyax's rights in and to said shares and lease, as hereinafter set
forth, are subject to the rights and priorities of 68 Beacon Street, Inc. as set
forth in its Articles of Incorporation, as amended, By-Laws, Rules and
Regulations and Proprietary Lease (the "Cooperative Documents") and the
Recognition Agreement of even date executed in connection herewith. The
presently existing provisions of such documents will control in the event of any
conflict between those provisions and the provisions herein.
Dated: October 30, 1998
/s/ Henry E. Blair
-------------------------------
Henry E. Blair, Individually
<PAGE>
EXHIBIT 10.11
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH IT IS
CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND NEITHER
MAY BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS SUCH SECURITY HAS BEEN
REGISTERED UNDER THE ACT AND SUCH LAWS OR (1)
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO MAKER IS
FURNISHED TO MAKER TO THE EFFECT THAT REGISTRATION UNDER THE ACT
IS NOT REQUIRED.
SECURED CONVERTIBLE TERM NOTE
Charlottesville, Virginia
$500,000 August 11, 1995
FOR VALUE RECEIVED, Biotage, Inc., a Delaware corporation (the
"Maker"), hereby promises to pay to Sheridan G. Snyder (hereinafter referred to
as the "Holder"), or registered assigns, on or before the Maturity Date (as
hereinafter defined), as set forth herein, the principal amount of Five Hundred
Thousand Dollars ($500,000), or such part thereof as then remains unpaid,
together with interest from the date hereof on the unpaid principal balance of
this Note from time to time outstanding at a rate of interest equal to the Prime
Rate (as hereinafter defined) plus one percent (1%) per annum for the period
beginning on the date hereof and continuing for the remainder of the term
hereof. Interest shall accrue from and after the date hereof, and shall be
payable on the last day of each month commencing on August 31, 1995 and
continuing monthly thereafter until maturity. As used herein, (i) the "Maturity
Date" shall mean the earliest to occur of (a) the date of closing by Maker of a
firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), covering the offer and sale of shares of common stock for the
account of Maker at a price per share of not less than $6.00 (subject to
equitable adjustment in the event of any stock split, stock dividend,
combination, reorganization, reclassification or other similar event) and which
results in proceeds to Maker, net of commissions and discounts, of not less than
$10,000,000, (b) the fifth anniversary of the date of this Note as set forth
above and (c) an Event of Default (as such term is defined below) and (ii) the
"Prime Rate" shall mean that rate of interest announced or published by Crestar
Bank, Charlottesville, Virginia as being its prime rate of interest, whether or
not such rate is actually charged.
1. Payment in Cash.
Principal and interest shall be payable in lawful money of the United
States of America, by check, at the business address of the Holder or at such
other place as the legal Holder may designate from time to time in writing to
Maker. Interest shall be computed on the basis of actual days elapsed over a
365-day year.
<PAGE>
2. Prepayment.
Upon ten (10) days prior written notice to the Holder of this Note, Maker
shall have the right, at any time prior to the Maturity Date or conversion of
this Note pursuant to Section 4 hereof, to prepay all of the outstanding
principal amount of this Note, and accrued and unpaid interest thereon, without
premium or penalty, subject to the rights of the Holder of this Note to convert
amounts outstanding under this Note pursuant to Section 4 below at any time
prior to the date specified in such notice for prepayment; provided, however,
that notwithstanding the foregoing, in no event shall any prepayment of
principal be made by Maker with respect to any portion of this Note unless and
until Maker shall have offered to prepay a like proportion of all Notes (as such
term is defined below).
3. Description of Notes.
This Note is one of several Notes to be issued by PEC (the "PEC Notes"),
and by Maker (the "Biotage Notes" and, collectively with the PEC Notes, the
"Notes"), of like tenor issued or to be issued as a condition to the
consummation of the transactions contemplated by the Agreement and Plan of
Merger dated as of August 4, 1995 (the "Merger Agreement") by and among Maker
and the parties named therein having an aggregate original principal balance of
$3,130,292.65. This Note is secured pursuant to, and entitled to the benefits of
(including the security described in), a certain Security Agreement dated as of
May 11, 1993 by and between Maker and the Holder (as the same may be amended
from time to time, hereinafter referred to as the "Security Agreement"). The
Holder of this Note, by his acceptance hereof, shall be entitled to the
benefits, and subject to the terms, of the Security Agreement.
4. Conversion.
If at any time after the consummation of the transactions contemplated by
the Merger Agreement and prior to the Maturity Date, Maker consummates the offer
and sale of Equity Securities (each, an "Equity Financing"), the Holder shall
have the right at the Holder's option, to convert all or any part of the
principal amount of this Note into such Holder's pro rata share of the Equity
Securities being offered in the Equity Financing at a conversion price equal to
the price per share of the Equity Securities sold in the Equity Financing. As
used herein, the term "Equity Securities" shall mean securities of Maker which
are issued for cash and which are either (i) equity securities or (ii)
securities having rights or options to acquire equity securities, but shall not
include (a) securities issued from time to time by Maker in connection with the
licensing or acquisition by Maker of technology or intellectual property, (b)
securities issued from time to time to employees or consultants of Maker
pursuant to any stock option plan, stock purchase or other equity plan of Maker
approved by a majority of Maker's Board of Directors or (c) shares of Class A
Series 3 Preferred Stock of Maker issued on or before September 30, 1995. The
Holder's pro rata portion of Equity Securities being offered in any Equity
Financing shall equal the result obtained by multiplying (A) twenty five percent
(25%) of the aggregate number of Equity Securities being offered in the Equity
Financing by (B) a fraction, the numerator of which shall be equal to the amount
of principal outstanding under this Note with respect to which the Holder has
exercised conversion rights as provided herein and the denominator of which
shall be equal to the aggregate amount of principal outstanding under all of the
Notes. In the event that the
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<PAGE>
Holder shall elect to convert this Note as described in this Section 4, the
Holder shall be subject to all of the terms and conditions applicable to the
purchasers buying the Equity Securities in the Equity Financing.
5. Mechanics of Conversion.
Maker shall give the Holder twenty (20) days' prior written notice (the
"Company Notice") of the occurrence of an Equity Financing, which notice shall
set forth the anticipated closing date of the Equity Financing and the Holder's
conversion price with respect thereto. The Holder may exercise its right of
conversion by (i) surrendering this Note duly endorsed at the office of Maker
and (ii) delivering written notice to Maker within ten (10) days of its receipt
of the Company Notice, specifying the principal amount of this Note which the
Holder wishes to be converted and the name or names in which the certificate or
certificates for Equity Securities are to be issued. Maker shall, as soon as
practical following the closing of the Equity Financing, issue and deliver to
the Holder a certificate or certificates for the number of Equity Securities to
which the Holder shall be entitled as aforesaid, together with the payment in
cash of all accrued but unpaid interest on this Note through the closing date of
the Equity Financing; provided, however, that if the person in whose name such
certificate or certificates are requested to be registered is other than the
registered owner of this Note, Maker may require, prior to issuance of a
certificate in the name of such other person, that it receive reasonable
transfer documentation (including opinions) or other evidence that the issuance
of certificates in such other name as requested does not and will not cause a
violation of the Securities Act, any similar Federal statute at the time in
effect or any applicable state securities laws. Such conversion shall be deemed
to have been made on the closing date of the Equity Financing, and the person or
persons entitled to receive the shares of stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
as of such date. If less than the entire outstanding principal amount of this
Note is being converted, a new Note shall be delivered to the Holder for the
unconverted principal balance and shall be of a like tenor as to all terms as
this Note.
6. Securities Act.
Upon conversion of this Note, the registered Holder will be required to
execute and deliver to Maker an instrument, in form satisfactory to Maker,
representing that the Equity Securities issuable upon conversion hereof are
being acquired for investment and not with a view to distribution within the
meaning of the Securities Act.
7. No Fractional Shares and Certificates.
No fractional shares shall be issued upon conversion of this Note and the
number of shares of Equity Securities to be issued shall be rounded down to the
nearest whole share and the Holder shall be entitled to receive in cash an
amount equal to the conversion price then in effect multiplied by the fractional
share.
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<PAGE>
8. Events of Default.
If any Event of Default (as defined in the Security Agreement) shall occur
and be continuing, then any Holder of this Note may, by notice to Maker, declare
the entire unpaid principal amount of this Note, and all interest accrued and
unpaid hereon to be forthwith due and payable, whereupon the Note and all such
accrued interest shall become and be forthwith due and payable.
9. Note Register.
(a) Maker shall keep at its principal executive offices a register
(herein sometimes referred to as the "Note Register"), in which, subject to such
reasonable regulations as it may prescribe, but at its expense (other than
transfer taxes, if any), Maker shall provide for the registration and transfer
of this Note. The person or entity in whose name any registered Note shall be
registered shall be deemed and treated as the owner and holder hereof for all
purposes hereunder.
(b) Whenever this Note shall be surrendered at the principal
executive office of Maker for transfer or exchange, accompanied by a written
instrument of transfer in form reasonably satisfactory to Maker duly executed by
the Holder hereof or its attorney duly authorized in writing, Maker shall
execute and deliver in exchange therefor a new note or notes, as may be
requested by such Holder, in the same aggregate unpaid principal amount and
payable on the same terms as the principal amount of the note or notes so
surrendered; each such new Note shall be dated as of the date to which interest
has been paid on the unpaid principal amount of the note or notes so surrendered
and shall be in such principal amount and registered in such name or names as
such Holder may designate in writing; provided, however, that if the person in
whose name a Note is requested to be registered is other than the registered
owner of this Note, Maker may require, prior to issuance of a Note in the name
of such other person, that it receive reasonable transfer documentation
(including opinions) or other evidence that the issuance of a Note in such other
name as requested does not and will not cause a violation of the Securities Act,
any similar Federal statute at the time in effect or any applicable state
securities laws.
(c) Upon receipt by Maker of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Note and of indemnity
reasonably satisfactory to it, and upon reimbursement to Maker of all reasonable
expenses incidental thereto, and upon surrender and cancellation of this Note
(in case of mutilation), Maker will make and deliver in lieu of this Note a new
Note of like tenor and unpaid principal amount and dated as of the date to which
interest has been paid on the unpaid principal amount of this Note in lieu of
which such new Note is made and delivered.
10. General.
(a) Governing Law. This Note shall be governed by and construed in
accordance with the law of the Commonwealth of Virginia, excluding the body of
law relating to conflict of laws. Notwithstanding anything to the contrary
contained herein, in no
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<PAGE>
event may the effective rate of interest collected or received by the Holder
exceed that which may be charged, collected or received by the Holder under
applicable law.
(b) Interpretation. If any term or provision of this Note shall be
held invalid, illegal or unenforceable, the validity of all other terms and
provisions hereof shall in no way be affected thereby.
(c) Amendment. The terms of this Note and the other Notes may be
amended or waiver of compliance of any term hereof or thereof may be obtained by
Maker with the written consent of holders of greater than sixty-six and
two-thirds percent (66 2/3%) of the unpaid aggregate principal amount of all of
the Notes outstanding at the time of the amendment or waiver, whether or not the
Holder hereof shall agree to such amendment or waiver; provided, however, that
no such amendment or waiver shall be effective to reduce the principal amount
hereof or the rate of interest payable hereunder or to otherwise provide terms
herein more favorable to the Holder than the terms provided in the other Notes.
(d) Successors and Assigns; Transferability. This Note shall be
binding upon Maker and its successors and assigns and shall inure to the benefit
of the Holder and its successors and permitted assigns (which shall include
permitted transferees). This Note or any interest therein may not be assigned
except in accordance with the terms hereof.
(e) Notices. All notices, requests, consents and demands shall be
made in writing and shall be mailed postage prepaid, or delivered by hand, to
Maker or to the Holder thereof at their respective addresses set forth below or
to such other address as may be furnished in writing to the other party hereto:
If to the Holder: At the address shown below.
If to Maker: Biotage, Inc.
1500 Avon Street Ext.
Charlottesville, VA 22901
Attention: President
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by registered
or certified mail, on the 5th business day following the day such mailing is
made.
(f) Saturdays, Sundays, Holidays. If any date that may at any time
be specified in this Note as a date for the making of any payment of interest
under this Note shall fall on Saturday, Sunday or on a day which in Virginia
shall be a legal holiday, then the date for the making of that payment shall be
the next subsequent day which is not a Saturday, Sunday or legal holiday.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first above written.
BIOTAGE, INC.
By: /s/ Robert Dishman
--------------------------
Title: President
Name of Holder: Sheridan Snyder
Address of Holder: Sheridan G. Snyder
Route 1
Box 117
Afton, VA 22920
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<PAGE>
SECURITY AGREEMENT
THIS AGREEMENT is made as of May 11, 1993, between BIOTAGE, INC., a
Delaware corporation (the "Debtor") and SHERIDAN G. SNYDER (the "Secured
Party").
Recitals
A. The Secured Party has agreed to extend a line of credit to the Debtor
in the principal sum of up to $500,000.00 plus interest.
B. The Secured Party is willing to make advances under the line of credit,
but only upon the condition, among others, that the Debtor execute and deliver
this Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agrees as
follows:
SECTION 1. -- DEFINED TERMS
The following terms used herein shall have the following meanings unless
the context otherwise requires:
Accounts. All accounts as defined in the Uniform Commercial Code, whether
now owned or hereafter acquired by Debtor, and all proceeds and products
thereof.
Collateral. All Accounts, Equipment, Intellectual Property and Inventory
provided as security under this Agreement.
Equipment. All of the Debtor's furniture, fixtures and equipment,
including all equipment as defined in the Uniform Commercial Code, and
including, but not limited to, any leases, rental agreements, chattel paper,
rental payments and insurance proceeds together with all accessories,
accessions, attachments, parts, replacements, substitutions, improvements,
repairs installed in or affixed to any equipment, whether now or owned or
hereafter acquired by Debtor, and all proceeds and products thereof.
Intellectual Property. All patents, patent applications, trademark,
tradenames, copyrights, technology, know-how, processes, computer programs,
databases, systems and software, and other intellectual and proprietary rights,
including all contract rights and licenses with respect thereto, together with
all good will associated therewith whether now owned or hereafter acquired by
the Debtor including, but not limited to, all of the Debtor's right, title and
interest in and to the Debtor's license (the "Patent License") of United States
Patent No. 4,250,035 issued February 10, 1981, entitled "Radial Compression of
Packed Beds", and all reissues, continuations and extensions thereof, as well as
all foreign patents and patent applications corresponding thereto.
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<PAGE>
Inventory. All goods and personal property of every nature which are held
for sale or furnished or are to be furnished under contracts of service or sale
or lease, supplies, stock-in-trade, all raw materials, work-in-process, finished
goods, and all returned, reclaimed and repossessed goods, whether now in the
Debtor's possession or control, in transit, in storage, or hereafter acquired by
way of replacement, substitutions, addition or otherwise and all other inventory
as defined in the Uniform Commercial Code, whether now owned or hereafter
acquired by Debtor, and all proceeds and products thereof.
Obligations. All indebtedness of the Debtor to the Secured Party evidence
by a Credit Line Note of even date made by Debtor payable to the Secured Party
in the principal sum of up to $500,000.00, including all renewals, extensions
and modifications thereof, and the agreements and warranties of the Debtor
contained in this Agreement.
SECTION 2. -- COLLATERAL.
2.1. Security Agreement. As Collateral to secure the prompt payment and
performance of the Obligations, the Debtor hereby grants to the Secured Party a
security interest in the Accounts, the Equipment, the Intellectual Property and
the Inventory, including all proceeds of any of the foregoing. Debtor will not
sell, assign, encumber or otherwise transfer the Collateral or the proceeds
therefrom other than to the Secured Party or in the ordinary course of Debtor's
business without the prior written consent of the Secured Party. Upon request of
the Secured Party, Debtor shall promptly perform all acts reasonably necessary
to further evidence or perfect the security interest of the Secured Party in the
Collateral and to obtain for the Secured Party the benefits of a secured party
under the laws of the State of Virginia.
2.2. Consent of Licensor. The Debtor shall, upon execution and delivery of
this Agreement, use its best efforts to obtain the consent of the Licensor under
the Patent License to the grant of the foregoing security interest, which
consent shall be substantially in the form of Exhibit A hereto.
SECTION 3. -- REPRESENTATIONS
The Debtor represents and warrants to the Secured Party, and such
representations and warranties shall be continuing so long as any Obligations
shall remain outstanding as follows:
3.1. Due Authorization. The Debtor has the power and authority to enter
into this Agreement and perform its obligations hereunder and by proper action
has duly authorized the execution and delivery of this Agreement and the
performance of its obligations hereunder.
3.2. Binding Agreement. This Agreement constitutes the valid and legally
binding obligation of the Debtor, enforceable in accordance with its terms.
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<PAGE>
3.3. Ownership of Collateral. (a) Debtor now owns, or will use the
advances secured hereby to become the owner of, the Collateral and will have the
right to grant to the Secured Party a security interest therein.
(b) The Debtor owns, or is licensed to use, all Intellectual
Property necessary for the conduct of its business. As of the date hereof, no
material claim has been asserted and it pending by any person or entity with
respect to the use by the Debtor of any Intellectual Property or challenging or
questioning the validity or effectiveness of any Intellectual Property necessary
for the conduct of the Debtor's business.
3.4. Location of Collateral. The Collateral and all records relating
thereto are located at 1500 Avon Street Extended, Charlottesville, Virginia
22901. The Debtor will not change the location of the Collateral or any part
thereof, without giving the Secured Party at least 30 days' prior written
notice.
3.5. Collateral Free of Encumbrances. The Debtor has not previously
assigned, mortgaged, or encumbered any Collateral, and the Collateral is not
subject to a prior security interest or lien in favor of any person other than
the Secured Party. The Debtor will defend the Collateral against all claims and
demands of all persons at any time claiming any interest therein.
3.6. Setoffs, Counterclaims and Defenses to Accounts. The Accounts hereby
assigned are valid obligations, correct in amount, do not arise from or relate
to the sale of farm products by a farmer, and there are no set offs,
counterclaims or defenses of any kind thereto. The Debtor will immediately
notify the Secured Party of any account to which such representations are
untrue.
SECTION 4. -- COVENANTS
The Debtor covenants and agrees that so long as any of the Obligations
remain outstanding:
4.1. Financing Statements. The Debtor will execute financing statements
and continuation statements in form satisfactory to the Secured Party and the
Debtor will reimburse the Secured Party for all expenses incurred in the filing
of financing statements, continuation statements and termination statements. The
Debtor agrees the Secured Party may file a carbon, photographic copy or other
reproduction of any financing statement.
4.2. Maintenance of Records. The Debtor will keep and maintain, at its own
cost and expense, satisfactory, complete and current records of the Collateral,
including, but not limited to, all shipments received, deliveries made,
contracts performed, payments received, credits granted thereon and other
dealings therewith. Upon request by the Secured Party, the Debtor will provide
it with written reports of the status of the Collateral, or any part thereof, as
of the period specified. These reports shall be in such form and in such detail
as the Secured Party shall reasonably direct. The Debtor will not change the
location of its books and records without giving the Secured Party at least
thirty (30) days' prior written notice. The Debtor will protect its records
against fire, theft, loss or any other manner of destruction or loss.
4.3. Taxes. The Debtor will pay promptly when due all taxes, charges and
assessments, including penalties and interest, which are or may become a lien on
the
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<PAGE>
Collateral or any part thereof, except to the extent that they may be contested
in good faith and by appropriate proceedings.
4.4. Change of Name, Residence, Place of Business. The Debtor will not
change its name, operate under any assumed name or change its residence,
corporate structure or principal place of business, without giving the Secured
Party at least thirty (30) days' prior written notice.
4.5. Inspection of Books and Records. The Secured Party, or its agents,
may at any time, and from time to time, inspect the Collateral and the books and
records of the Debtor pertaining to the Collateral. It is specifically agreed
that the Secured Party shall have, and the Debtor hereby grants to the Secured
Party, a security interest in all books of accounts and records (including
computer software) of the Debtor and shall have access to them at any time for
inspection, verification, examination and audit. If requested by the Secured
Party, the Debtor will stamp all chattel paper hereby assigned in a form and
manner satisfactory to the Secured Party with an appropriate reference to the
effect that the chattel paper has been assigned to the Secured Party, and the
Debtor will similarly stamp its account ledgers and other books and records
pertaining to the assigned Accounts.
4.6. Expenses. The Debtor shall be liable for, and agrees to pay the
Secured Party any and all expenses incurred or paid by the Secured Party in
protecting or enforcing its rights under this Agreement, including reasonable
attorney's fees, whether incurred in collecting specific Accounts or otherwise.
At its option, the Secured Party may discharge taxes, liens, security interests
or other encumbrances on the Collateral. The Debtor agrees to reimburse the
Secured Party on demand for any payments so made, and until such reimbursement,
the amount of any such payment, with interest at the rate provided for in the
Obligations from date of payment until reimbursement, shall be added to the
indebtedness owed by the Debtor and shall be secured by this Security Agreement.
4.7. Insurance. The Debtor will continuously insure the Collateral with a
responsible company or companies satisfactory to the bank against fire with
extended coverage) in the full insurable value of the Collateral and against
such other casualties in such amounts as the Secured Party shall reasonably
require. This insurance policy (or policies) shall have attached thereto a
standard loss payable clause, without contribution, in favor of the Secured
Party, as its interest may appear, and shall otherwise be in form acceptable to
the Secured Party, and the Debtor will use its best efforts to have such policy
(or policies) provided that it (they) may not be cancelled without ten (10)
days' prior written notice to the Secured Party. The Debtor will deliver the
policy or policies, properly endorsed, as additional security, and where a
renewal policy is necessary in the performance of this covenant, the Debtor will
deliver it, as security, at least ten (10) days before the expiration of the
existing insurance. The Debtor hereby assigns to the Secured Party any return of
unearned premiums which may be due upon cancellation of any such policy or
policies for any reason whatsoever and directs the insurer(s) to pay to the
Secured Party any amounts so due. The Debtor hereby irrevocably appoints the
Secured Party as its attorney-in-fact, with full power of substitution to
execute loss claims and other applications for payment of benefits under any
insurance policy in the name of either the Debtor or the Secured Party, receive
all monies and endorse drafts, checks, and other instruments for the
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<PAGE>
payment of any proceeds off any insurance or in order to Collect any return of
unearned premiums. This appointment shall be deemed a power coupled with an
interest and shall not be terminable by the Debtor so long as the Debtor remains
indebted to the Secured Party, and shall not terminate on disability or the
Debtor.
4.8. Compliance with Federal and State Laws. The Debtor will comply wish
all federal and State Laws applicable to its business, whether now in effect or
hereafter enacted, and all statutes and regulations issued by the state or
states in which the Debtor conducts business, and upon request the Debtor will
provide the Secured Party with such evidence of compliance as the Secured Party
may reasonably request.
4.9. Audit. The Debtor will cause its books to be reviewed at least
annually and will furnish to the Secured Party within ninety (90) days after the
end of its fiscal year financial statements relating to Debtor's operations at
the Facility duly prepared and reviewed by an independent certified public
accountant, including balance sheets and profit and loss statements. The Debtor
will furnish the Secured Party within forty-five (45) days after the close of
each quarter a similar profit and loss statement for, and a balance sheet as of
the end of, such quarter, such statements to be duly certified by the president,
treasurer, or chief accounting officer of the Debtor.
4.10. Other Loans and Security Interests. If the Debtor obtains any loan
from anyone other than the Secured Party, or if the Debtor obtains an extension
or renewal of any present indebtedness to anyone other than the Secured Party,
except trade indebtedness, the Debtor will notify the Secured Party of such fact
in writing within three (3) days.
4.11. Qualification to do Business. The Debtor will, at the request of the
Secured Party, qualify to do business and obtain all requisite licenses and
permits in each state in which such action may be necessary in order to maintain
any action to collect any debt.
4.12. Compromises and Discounts. Without the prior written consent of the
Secured Party, the Debtor will not grant any extension of time in the payment of
any Accounts or compromise, compound or settle the same for less than the full
amount thereof, or release wholly or partially any person liable for payment
thereof, or allow any credit or discount whatsoever in the amount of any Account
as invoiced except for ordinary trade discounts or allowances for prompt
payment. The Debtor, moreover, will not agree to any material modification of
any Account herein assigned (whether specifically listed or not) without the
prior written consent of the Secured Party.
4.13 Promissory Notes, Trade Acceptances, and Other Instruments. If any of
the Debtor's Accounts are or should become evidenced by chattel paper or
promissory notes, trade acceptances, or other instruments, the Debtor will
promptly notify the Secured Party and upon request by the Secured Party will
immediately deliver the same to the Secured Party, appropriately endorsed or
assigned with recourse to the Secured Party's order, and regardless of the form
of such endorsement or assignment the Debtor hereby waives presentment, demand,
notice of dishonor, protest and notice of protest and all other notices with
respect thereto and agrees to take all necessary steps to preserve rights
against prior parties to instruments and chattel paper.
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<PAGE>
4.13. Collection of Accounts. The Bank hereby authorizes the Debtor to
collect the Accounts, subject to direction and control, but the Secured Party
may, without cause or notice, curtail or terminate said authority at any time.
Upon notice by the Secured Party, whether oral or in writing, to the Debtor, the
Debtor shall forthwith upon receipt of all checks, drafts, cash, and other
remittances in payment of or on account of the Accounts, deposit the same in one
or more special accounts maintained with the Secured Party over which the
Secured Party alone shall have the power of withdrawal. The remittance of the
proceeds of such Accounts shall not, however, constitute payment or liquidation
of such Accounts until the Secured Party shall receive good funds for such
proceeds. Funds placed in such special accounts shall be held by the Secured
Party as security for all obligations secured hereunder. These proceeds shall be
deposited in precisely the form received, except for the endorsement of the
Debtor where necessary to permit collection of items, which endorsement the
Debtor agrees to make, and which endorsement the Secured Party is also hereby
authorized, as attorney-in-fact, to make on behalf of the Debtor. In the event
the Secured Party has notified the Debtor to make deposits to a special account,
pending such deposit, the Debtor agrees that it will not commingle any such
checks, drafts, cash or other remittances with any funds or other property of
the Debtor, but will hold them separate and apart therefrom, and upon an express
trust for the Secured Party until deposit thereof is made in the special
account. The Secured Party will, from time to time, apply the whole or any part
of the Collateral funds on deposit in this special account against such
obligations as is secured hereby as the Secured Party may in its sole discretion
elect. At the sole election of the Secured Party, any portion of said funds on
deposit in the special account which the Secured Party shall elect not to apply
to the Obligations may be paid over by the Secured Party to the Debtor. The
Secured Party, and any officer or agent of the Secured Party, is hereby
constituted and appointed as true and lawful attorney-in-fact of the Debtor with
full power at any time, whether or not the Debtor be in default under this or
any other agreement: (a) to notify any and all account debtors to make payment
directly to the Secured Party and otherwise to notify the account debtors of
this assignment; (b) to ask for, demand, collect, institute and maintain suits
for, receive, compound, compromise and give acquittances for any and all sums
owing, which are now, or may hereafter become, due upon said Accounts, and to
enforce payment thereof either in its name or in the Debtor's name; (c) to
endorse the name of the Debtor on checks, drafts or other items tendered or
received in payment of said Accounts, and (d) to enter upon the premises of the
Debtor at any time for the purpose of reducing to possession the Accounts
(including chattel paper) and all cash or non-cash proceeds thereof, or for the
purpose of inspecting the Inventory and inspecting and/or auditing the books,
records and procedures of the Debtor. This power of attorney is coupled with an
interest and shall be irrevocable as long as any Obligations shall remain
outstanding, and shall not terminate on disability of the Debtor.
SECTION 5. - DEFAULT
5.1. Events of Default. The occurrence of any one or more of the following
events shall constitute an Event of Default hereunder:
(a) Default in the payment of any of the Obligations, or in the
performance of any covenant or agreement contained or referred to herein;
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(b) Any warranty, representation or financial statement made or
furnished to the Secured Party by or on behalf of the Debtor proves to have been
false in any material respect when made or furnished;
(c) The dissolution, termination of existence, or insolvency of the
Debtor, the application by the Debtor for the appointment of a receiver or
custodian for the Debtor or the Debtor's property, any assignment for the
benefit of creditors by the Debtor or the commencement of a voluntary case under
any bankruptcy or insolvency law by the Debtor or any guarantor or surety for
the Debtor.
(d) The failure of the Debtor or any guarantor or surety for Debtor
within 60 days after the commencement of any involuntary case against it under
any bankruptcy or insolvency law to have such proceedings dismissed or stayed.
5.2. Remedies. (a) Upon any such Event of Default and at any time
thereafter, the Secured Party may declare all of the Obligations immediately due
and payable without notice, protest, presentment or demand, all of which are
hereby expressly waived by the Debtor, and may proceed to enforce payment of the
same and exercise any and all of the rights and remedies provided by the Uniform
Commercial Code as well as all other rights and remedies possessed the Secured
Party. The Secured Party will give the Debtor reasonable notice of the time and
place of any public sale of the Collateral or any part thereof or of the time
after which any private sale or any other intended disposition thereof is to be
made. The requirements of reasonable notice shall be met if such notice is
mailed, postage prepaid, to the debtor at 1500 Avon Street Extended,
Charlottesville, Virginia 22901 at least five (5) days before the time of the
sale or disposition, but nothing contained herein shall be construed to mean
that any other notice of a shorter period of time does not constitute reasonable
notice for the sale of the Collateral, or any part thereof. Expenses of
retaking, holding, preparing for sale, selling or the like shall include the
Secured Party's reasonable attorney's fees and legal expenses. In such event of
default, the Debtor shall upon request by the Secured Party assemble the
Collateral or any designated part thereof and make it available to the Secured
Party at such place as is designated by the Secured Party.
(b) License to Use Intellectual Property. If an Event of Default
shall have occurred and be continuing and for the purpose of enabling the
Secured Party to exercise its rights and remedies under this Agreement at such
time as the Secured Party shall be entitled to exercise such rights and
remedies, the Debtor hereby grants to the Secured Party an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to the Debtor), to use, assign, license or sublicense any of the
Debtor's Intellectual Property, now owned or hereafter acquired by the Debtors
and wherever the same may be located, including in such license reasonable
access to all media in which any of the licensed items may be recorded or
stored; provided, however, that the Secured Party shall comply with all
pre-existing quality control standards and trademark use requirements of the
Debtor. The proceeds from, or other realization upon, any such license shall
constitute Collateral. No agreements hereafter acquired or agreed to or entered
into by the Debtor shall prohibit, restrict or impair the rights granted under
this Section.
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<PAGE>
(c) The security interests, rights and remedies granted by the
Debtor to the Secured Party herein are in addition to any other rights,
collateral or other remedies which the Debtor or any other person has granted or
may hereafter grant to the Secured Party by any other instrument or through the
delivery of any document, instrument, chattel paper, or other collateral.
SECTION 6. - MISCELLANEOUS
6.1. Headings. The titles and section headings herein are included for
convenience only and shall not be deemed to be a part of this Agreement.
6.2. Nature of Rights. Each and every right granted to the Secured Party
hereunder or under any other document delivered hereunder or in connection
herewith or allowed it by law or equity shall be cumulative and may be exercised
from time to time. No failure on the part of the Secured Party to exercise, and
no delay in exercising, any right shall operate as a waiver thereof, nor shall
any single or partial exercise by the Secured Party of any right preclude any
other or future exercise thereof or the exercise of any other right. The terms
of this Agreement shall be binding upon the successors and assigns of the
parties hereto.
6.3. Construction. This Agreement shall be governed and construed in
accordance with the internal substantive laws of the Commonwealth of Virginia
without giving effect to the conflict of law rules thereof. Wherever possible
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement.
DEBTOR: BIOTAGE, INC.
By: /s/ Mark Kachur
---------------------------
Title:Pres/CEO
------------------------
SECURED PARTY: /s/ Sheridan G. Snyder
------------------------------
Sheridan G. Snyder
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<PAGE>
EXHIBIT A
CONSENT
The undersigned MILLIPORE CORPORATION, a Massachusetts corporation, as
licenser (the "Licensor") has previously entered into a certain License
Agreement, dated March 30, 1990 (the "License Agreement") with BIOTAGE,
INCORPORATED, a Delaware corporation, as licensee ("Licensee").
Pursuant to the provisions of a certain security agreement, dated May 11,
1993 (the "Security Agreement") between the Licensee and Sheridan G. Snyder
("Snyder") the Licensee proposes to grant a security interest in and to, among
other things, all of Licensee's right, title and interest in and to the License
Agreement to secure repayment of the obligations of the Licensee to Snyder under
the terms and provisions of a line of credit to the Licensee in the principal
sum of up to $500,000 plus interest (the "Credit Line Note").
Pursuant to the provisions of a certain assignment agreement, dated May
11, 1993 (the "Assignment Agreement"), between Snyder and Crestar Bank, N.A.
(the "Bank"), Snyder proposes to pledge, assign and grant to the Bank a security
interest in all rights, remedies, claims, interests and benefits now or
hereafter existing or arising in favor of the Bank under (i) the Credit Line
Note; and (ii) all proceeds receivable by Snyder from, and all security for all
of the foregoing including, but not limited to all collateral given to Snyder
pursuant to the Security Agreement.
FOR VALUE RECEIVED, the Licensor hereby agrees as follows:
1. The Licenser hereby consents to the transfer of the rights in and to
the License Agreement as set forth in the Security Agreement and the Assignment
Agreement, respectively, and further consents to the exercise by Snyder, or by
the Bank as his assignee (either individually or collectively the "Secured
party"), of the rights of the Secured Party under the Security Agreement or
Assignment Agreement as the case may be, as such rights may accrue and become
enforceable from time to time.
2. Licenser agrees that if Licensee shall be in default under she License
Agreement, Licenser agrees that any Secured Party shall have the right, but not
the obligation, to remedy or cause so be remedied such default, whether the same
consists of the failure to pay any monetary amount or failure to do or perform
any other matter or thing which Licensee is required to do or perform, and
Licensor shall accept such performance on the part of the Secured Party as
though the same had been done or performed by Licensee. If an event of default
shall occur under the License Agreement, written notice shall be sent by
Licensor to Snyder and the Bank at the following addresses:
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If to Snyder:
Sheridan G. Snyder
Route 1, Box 117
Afton, Virginia 22920
If to the Bank:
Crestar Bank
Post Office Box 8088
Charlottesville, Virginia 22906
Licensor agrees to take no action to terminate the License Agreement until
Licensor has given the Secured Party the following opportunities:
A. If such default shall be in the payment of any monetary amount
payable under the License Agreement, the Secured Party shall be allowed a period
of thirty (30) days after the receipt of such notice within which to remedy such
default;
B. If such default shall be in observing or performing any other
covenant or condition to be observed or performed by the Licensee under the
License Agreement, and such default can be remedied by the Secured Party, the
Secured Party shall be given the opportunity to remedy such default within such
period as may be necessary to remedy such default with diligence and continuity;
and
C. If a Secured Party or a person designated by a Secured Party
shall become the owner of the interest of the Licensee upon the exercise of any
remedy provided for in the Security Agreement or the Assignment Agreement, such
Secured Party or other person shall have the right to assign to any person such
interest, but only upon the written consent of the Licenser, which consent shall
not be unreasonably withheld.
3. If the License Agreement shall terminate for any reason, the Licenser
shall give the Secured Party written notice of such termination. The Secured
Party shall thereupon have the right exercisable by notice to Licenser within
sixty (60) days after the date of such notice of termination, to enter into a
new license for the subject matter of the License Agreement. The tern of such
new license shall begin on the date of termination of the License Agreement and
shall continue for the remainder of the original term of the License Agreement,
and such new agreement shall contain the same terms and conditions; provided,
however, that the Secured Party shall have remedied any default by the Licensee
under the terms of the License Agreement, as a condition to the obligation of
the Licensor to enter into such new agreement.
4. The Licensor represents and warrants to the Secured Party that the
License Agreement is in full force and effect and has not been amended or
modified and that there are no existing defaults thereunder.
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IN WITNESS WHEREOF, the undersigned has caused this Consent to be executed
by its duly-authorized representative as of the date set forth below.
MILLIPORE CORPORATION
Date: By:
------------------------ ---------------------------
Its:
--------------------------
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<PAGE>
THIS ASSIGNMENT AGREEMENT is made as of May 11, 1993, by SHERIDAN G.
SNYDER, a resident of Charlottesville, Virginia (the "Assignor"), to CRESTAR
BANK, N.A. (the "Bank").
Pursuant to a Credit Line Note of even date made by Biotage, Inc. a
Delaware Corporation (the "Borrower") payable to the order of the Assignor in
the principal sum of up to $500,000.00 (the "Company Note"), Assignor agreed to
extend a line of credit to the Borrower in a principal amount up to $500,000.00.
Pursuant to a Commercial Note of even date made by the Assignor payable to the
order of the Bank in the principal sum of up to $500,000.00 (the "Assignor's
Note"), the Bank has agreed to make loans to Assignor in order to fund the
Company Note.
As security for the payment of all of Assignor's obligations under the
Commercial Note, the Assignor intends to assign to the Bank (i) the Company
Note; and (ii) all proceeds receivable by Assignor from, and all security and
collateral for, all of the foregoing.
NOW, THEREFORE, in order to induce the Bank to make loans to Assignor, the
parties agree as follows:
(1) Assignment. Assignor hereby pledges and assigns to, and grants a
security interest to the Bank in, all rights, remedies, claims, interests and
benefits now or hereafter existing or arising in favor of the Assignor under (i)
the Company Note; and (ii) all proceeds receivable by the Assignor from, and all
security for all of the foregoing including, but not limited to all collateral
given to Assignor pursuant to a Security Agreement of even date between the
Borrower and the Assignor. The assignment made hereby shall include any and all
modifications, extensions and renewals of the obligations of Borrower under the
above described instruments.
(2) Debt Secured. This Assignment is given for the purpose of securing:
(a) Payment of the indebtedness evidenced by the Assignor's Note,
including any renewals or extensions thereof.
(b) Payment of all other sums with interest thereon becoming due and
payable to the Bank under the provisions hereof.
(c) Performance and discharge of all obligations, covenants and
agreements of the Assignor herein and in the Assignor's Note.
(3) Nature of Assignment. The assignment made hereby is executed as
collateral security, and the execution and delivery hereof shall not in any way
impair or diminish any obligations of the Assignor to the Bank under the
Assignor's Note or any obligations of the Assignor or of the Borrower to the
Assignor under the Company Note or the security Agreement, nor shall any of such
obligations be imposed upon the Bank. The Bank shall not be required to make any
inquiry as to the nature or sufficiency of any payment received by the Bank, or
to present or file any claim, or to take any other action to collect or enforce
the payment of any amounts which may have been assigned to the Bank or to which
it may be
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<PAGE>
entitled hereunder at any time. Assignor shall indemnify and hold harmless the
Bank from any liability, loss, damage or expense the Bank may incur under the
Company Note or Security Agreement by reason of this assignment. Upon the
payment of the principal of, and all interest on the Assignor's Note and the
performance and observance of the provisions thereof, the assignment made hereby
and all rights herein assigned to the Bank shall cease and terminate and all the
right, title and interest of the Bank in and to the above described assigned
property shall revert to the Assignor or to such person or persons as may be
legally entitled thereto, and the Bank shall at the request of the Assignor or
any such person, deliver to the Assignor an instrument, in recordable form,
canceling and discharging this Assignment.
(4) Consent and Covenants of Borrower. At the request of the Assignor,
Borrower consents to the provisions of this Agreement and agrees during the term
of this Agreement: (i) to deliver directly to the Bank, at the address provided
for herein duplicate copies of all notices and other instruments or
communications required or permitted to be given or made by the Borrower
pursuant to the Company Note or Security Agreement; and (ii) to render
performance to the Bank of all its obligations under the Company Note or
Security Agreement which are required under the terms thereof to be rendered to
the Assignor. Borrower further agrees that it will not assert any offset,
counterclaim, reduction or defense in any proceeding brought under this
Assignment or otherwise. The Bank agrees with the Assignor and Borrower to apply
all remittances so received as provided in, or in accordance with instructions
received pursuant to, the Company Note or the Security Agreement.
(5) Assignor's Covenants. (a) The Assignor agrees that the Assignment made
hereby and the designation and direction to Borrower hereinabove set forth and
consented to by Borrower are irrevocable and that the Assignor will not, while
this Assignment is in effect or thereafter until the Assignor has received from
the Bank notice of the termination of this Assignment, take any action which is
inconsistent with this Assignment, or make or suffer to be made any other
assignment, designation or direction of the subject matter hereof, and that any
such assignment, designation or direction shall be void. The Assignor will from
time to time, upon request of the Bank, execute all instruments of further
assurance as the Bank may reasonably specify.
(b) The Assignor agrees not to cancel, modify, extend or in any way
alter the terms of the Security Agreement or the Company Note, not to anticipate
the payments thereunder except as provided therein, or to waive, excuse, condone
or in any manner release or discharge Borrower from the obligations, covenants,
conditions and agreements by Borrower to be performed, including the obligation
to make the payments called for thereunder in the manner and at the place and
time specified therein; and the Assignor does by these presents expressly
release, relinquish and surrender unto the Bank all the Assignor's right, power
and authority to cancel, amend, modify or in any way alter the terms or
provisions of the Security Agreement and the Company Note.
(6) Representations and Warranties of Assignor. The Assignor represents
and warrants that the Security Agreement and the Company Note are in effect and
are not in
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<PAGE>
default; and the Assignor further represents and warrants that it has not
executed any other assignment of, or in any way affected, the subject matter of
this Agreement.
(7) Rights Upon Default. Upon or at any time after default in the payment
of any obligation, covenant or agreement herein or under the Assignor's Note,
the Bank may declare all sums payable hereunder or under the Assignor's Note
immediately due and payable. The Bank may exercise any other rights available at
law or in equity, may fix or modify payments under the Company Note and may
issue in its own name and collect amounts due under the Company Note, including
reasonable attorney's fees as provided therein.
(8) Appointment of Attorney-in-Fact. The Assignor hereby irrevocably
constitutes and appoints the Bank, or any officer of the Bank whom the Bank
shall designate, as his true and lawful attorney-in-fact, during the entire term
of this Agreement, with full power of substitution, for him and in his name to
demand, require, receive, collect, compound and give discharges and releases of
all claims for any and all proceeds of the Company Note and all other moneys due
or to become due under the Security Agreement and to endorse any checks and
other instruments or orders in connection therewith, and, if any event of
default specified in the Assignor's Note shall occur; (a) to settle, compromise,
compound or adjust any such claims; (b) to exercise and enforce any and all
claims, rights or remedies of every kind and description of the Assignor arising
out of the Company Note and Security Agreement; (c) to file, commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction, to collect any such sums assigned by the Assignor
hereunder or to enforce any rights with respect thereto and all other claims,
rights and remedies of every kind and description of the Assignor arising out of
the Company Note and Security Agreement; and (d) generally to sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of such claims, rights and remedies as fully and completely as though the Bank
were the absolute owner thereof for all purposes, and at such times and in such
manner as may seem to the Bank to be necessary or advisable in its absolute
discretion.
(9) Successors and Assigns. This Assignment shall be binding upon, inure
to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns.
(10) Notices. All notices, demands, approvals, consents, requests and
other communications hereunder shall be in writing and, unless otherwise
provided herein, shall be deemed to have been given when delivered in person or
mailed by first class registered or certified mail, postage prepaid, addressed
as follows:
(i) if to the Assignor, to
Sheridan G. Snyder
2611 West Main Street, Suite 1
Waynesboro, VA 22980
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<PAGE>
(ii) if to the Bank at
High and Park Streets
P.O. Box 8088
Charlottesville, Virginia 22906
Attn: Ms. Linda W. Hitchings
Vice President
(iii) if to Borrower, to
Biotage, Inc.
1500 Avon Street Extended
Charlottesville, VA 22901
The Assignor, the Bank and Borrower may, by notice given hereunder,
designate any further or different addresses to which subsequent notices,
demands, approvals, consents, requests or other communications shall be sent by
person to whose attention the same shall be directed.
(11) Severability. If any clause, provision or section of this Assignment
be held illegal or invalid by any court, the illegality or invalidity of such
clause, provision or section shall not affect any of the remaining clauses,
provisions or sections hereof, and this Assignment shall be construed and
enforced as if such illegal or invalid clause, provision or section had not been
contained herein. In case any agreement or obligation contained in this
Assignment be held to be in violation of law, then such agreement or obligation
of the parties hereto to the full extent permitted by law.
(12) Headings. The headings of the several sections of this Assignment are
inserted for convenience only, and do not comprise a part hereof.
(13) Applicable Law. This Assignment shall be governed by the applicable
laws of the Commonwealth of Virginia.
(14) Execution by Borrower. The Borrower has signed this Agreement for the
sole purpose of being bound by the consents and covenants set forth in paragraph
4 of this Agreement.
IN WITNESS WHEREOF, the parties have cause this Assignment to be executed
as of the date first above written.
ASSIGNOR: /s/ Sheridan G. Snyder
------------------------------
SHERIDAN G. SNYDER
THE BANK: CRESTAR BANK
By: /s/ Linda W. Hitchings
---------------------------
Its: Vice President
-----------------------
THE BORROWER: BIOTAGE, INC. a Delaware
Corporation
By: /s/ Mark Kachur
---------------------------
Its: Pres/CEO
-----------------------
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<PAGE>
THE BORROWER: BIOTAGE, INC., a Delaware corporation
By: /s/ Mark Kachur
---------------------------
Its: Pres/CEO
-----------------------
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<PAGE>
AMENDMENT TO SECURITY AGREEMENT
AND TO ASSIGNMENT AGREEMENT
This Amendment to Security Agreement and to Assignment Agreement (this
"Amendment") is made as of August 10, 1995 among Biotage, Inc., a Delaware
corporation (the "Borrower"), Sheridan G. Snyder (the "Assignor") and Crestar
Bank, N.A. (the "Bank").
Recitals
A. The Assignor has extended a line of credit to the Borrower evidenced by
a Credit Line Note dated as of May 11, 1993 in the principal amount of
$500,000.00 (the "Company Note") secured by a security agreement (the "Security
Agreement") of even date therewith pledging substantially all of the personal
property of the Borrower, including without limitation all after acquired
intellectual property.
B. The Assignor has assigned all of his rights, remedies, claims and
interests under the Company Note and the Security Agreement to the Bank pursuant
to an assignment agreement (the "Assignment") dated as of May 11, 1993 between
the Assignor and the Bank.
C. In order to permit the Borrower to raise over $1.5 million of
additional equity financing and to acquire certain technology through the
acquisition of Protein Engineering Corporation ("PEC"), and subject to the terms
and conditions of this Amendment, the Assignor and the Bank are prepared to
amend the Security Agreement and the Assignment to substitute the Company Note
with a new term note of the Borrower and to release certain collateral that
would otherwise be subject to the lien of the Security Agreement pursuant to the
after-acquired property provisions thereof.
NOW, THEREFORE, the parties agree as follows:
(1) The Company Note will be surrendered immediately by the Bank, on
behalf of the Bank and the Assignor, to the Borrower in exchange for a new
secured convertible term note of the Borrower in substantially the form of
Exhibit A hereto (the "New Note"). The New Note will be held by the Bank and all
references in the Assignment and the Security Agreement to the "Company Note" or
the "Credit Line Note", as the case may be, will hereafter be deemed to be
references to the New Note.
(2) The term "Intellectual Property" as defined in the Security Agreement
is hereby amended to exclude therefrom, and thereby to release from the lien of
the Security Agreement thereon, any patents and other technology and
intellectual property licensed or otherwise acquired from PEC or its subsidiary,
P.E.C. Technology Corp., by the Borrower, whether now existing or hereafter
acquired, and all proceeds of the foregoing exclusions.
(3) The Assignor and the Bank agree to execute and deliver to the Borrower
any UCC financing statements that the Borrower may reasonably request to further
evidence and confirm the release of collateral from the lien of the Security
Agreement set forth in Section 2 above.
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<PAGE>
(4) The parties hereto agree that, except as set forth above, in all other
respects the Security Agreement and the Assignment remain in full force and
effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
as of the date first above written.
BORROWER: BIOTAGE, INC.
By: /s/ Robert Dishman
---------------------------
Its:
------------------
ASSIGNOR:
/s/ Sheridan G. Snyder
------------------------------
SHERIDAN G. SNYDER
BANK: CRESTAR BANK, N.A.
By: /s/ Linda W. Hitchings
---------------------------
Its: Vice President
-----------------
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<PAGE>
Exhibit 10.12
SUBLEASE
This instrument is a Sublease (the "Sublease") dated as of January __,
1999 between MITOTIX, INC., a Delaware corporation ("Sublessor"), and DYAX
CORP., a Delaware corporation ("Sublessee").
The parties to this instrument hereby agree with each other as follows:
Article I
SUMMARY OF BASIC SUBLEASE PROVISIONS
1.1 BASIC DATA
ALL CAPITALIZED TERMS USED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN
THE PRIME LEASE (hereinafter defined) UNLESS OTHERWISE DEFINED HEREIN.
Commencement Date: February 1, 1999
Sublessor: Mitotix, Inc.
Present Mailing Address of Sublessor: One Kendall Square, Building 600
Cambridge, Massachusetts 02139
Sublessee: Dyax Corp.
Present Mailing Address of Sublessee: One Kendall Square, Building 600
Cambridge, Massachusetts 02139
Permitted Uses: General office research and
development, laboratories, light
manufacturing, marketing, storage and
sale of biologically derived products
in connection with biological and
chemical research.
Premises: Approximately 7,620 rentable square
feet of space located on the second
floor of the building known as
Building 600-650-700 (the "Building")
located at One Kendall Square,
Cambridge, Massachusetts as
approximately shown on the attached
Exhibit A. The Premises demised under
this Sublease comprise a portion of
the premises leased (the "Leased
Premises") to Sublessor by Prime
Lessor (as defined below) under the
Prime Lease (as defined below).
<PAGE>
Prime Lease: That certain lease, dated as of
November 5, 1992, between the Trustees
of Old Kendall Trust (the "Initial
Prime Landlord"), as lessor, and
Sublessor, as lessee, as amended to
date.
Prime Lessor: Cambridge Athenaeum LLC, as successor
to the Initial Prime Landlord.
Base Rent (based on 7,620 rentable $304,800.00 per annum ($40.00 per
square fee) rentable square feet), payable in
monthly installments of $25,400.00
each.
Additional Rent: So that the Base Rent payable to
Sublessor hereunder shall be net to
Sublessor (except for the exclusions
described below), Sublessee shall pay
as additional rent hereunder: (a)
Sublessee's Share of all amounts in
the nature of pass throughs of
operating expenses, insurance charges
and charges for utility usage payable
by Sublessor as tenant under the Prime
Lease to the Prime Lessor in
connection with operating expenses,
insurance charges and utility charges
attributable generally to the Building
or the Leased Premises under the Prime
Lease, including the Premises,
specifically including, without
limitation, all amounts paid by
Sublessor to Prime Lessor as "Rent
Adjustments" under Sections 5.1 - 5.4
of the Prime Lease (in that regard,
Sublessor shall deliver to Sublessee a
copy of the annual statement of
operating expenses received by
Sublessor from Prime Lessor under
Section 5.3 of the Prime Lease and a
copy of the tax bills and statement of
taxes received by Sublessor from Prime
Lessor under Section 5.4 of the Prime
Lease); (b) Sublessee's Share of all
charges and costs attributable to the
Leased Premises under the Prime Lease
which are also allocable to the
Premises hereunder (including, without
limitation dumpster charges and
costs), (c) any expenses, taxes,
insurance charges, and utility charges
that are (i) incurred by Sublessor in
connection with its providing of those
utilities, maintenance and repair
services required to be provided by
Sublessor under the terms of this
Sublease and (ii) applicable
exclusively to the Premises; (d) any
additional
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<PAGE>
costs incurred by Sublessor in
connection with its provision of those
utilities, maintenance and repairs
which Sublessor is required under the
terms of this Sublease to provide to
the Premises. Such Additional Rent
shall exclude however, the following:
(a) costs attributable solely to those
portions of the Leased Premises
retained by Sublessor and not to the
Premises demised hereunder; (b) costs
payable by Sublessor as tenant under
the Prime Lease in the nature of late
penalties or interest, damages payable
on account of tenant defaults,
accelerated rents or charges except to
the extent any such costs are incurred
in connection with a default by
Sublessee under this Sublease; (c) any
costs for utilities or the like that
are separately metered to the Premises
and that Sublessee pays directly to the
utility company or service provider;
and (d) costs payable by Sublessor for
Sublessor's parking spaces in the Old
Kendall Square Garage in accordance
with Section 4(ii) of the Prime Lease.
Security Deposit: None.
Sublessee's Share: The rentable square footage of
Premises divided by the rentable
square footage of the Leased Premises,
expressed as a percentage; as of the
date of this Sublease, based upon the
Premises containing 7,620 rentable
square feet, Sublessee's Share shall
be 24.32%
Sublessee's Term or Term: Beginning on the Commencement Date and
expiring at midnight on June 30, 2000,
unless extended as provided herein.
Sublessee's Term Extension Rights: Notwithstanding any provision in this
Sublease to the contrary, Sublessee
shall have the following term
extension rights with respect to the
Term of the Sublease; Sublessee may
exercise such rights by giving
Sublessor written notice on or prior
to January 1, 2000, of Sublessee's
election of one of the following: (a)
to confirm that Sublessee intends to
vacate the Premises by June 30, 2000;
or (b) provided
3
<PAGE>
that Sublessee is not in default under
this Sublease beyond any applicable
notice, grace or cure period, to extend
the Term of the Sublease through
midnight on December 31, 2000, subject,
however to Sublessor's Recapture Rights
(as defined below), but otherwise on
all of the terms and conditions of this
Sublease.
Sublessor's Recapture Rights: If Sublessee exercises its right to
extend the Term through December 31,
2000, Sublessor may, by giving
Sublessee not less than six (6) months'
prior written notice, "recapture" the
portion of the Premises identified on
Exhibit A as the "Recapture Space".
Sublessor hereby agrees that it shall
exercise its recapture rights hereunder
if, and only if, Sublessor reasonably
and in good faith determines, at such
time as Sublessor gives Sublessee
notice of Sublessor's exercise of its
recapture rights, that Sublessor has a
need for, and intends to occupy and
use, the Recapture Space for the
conduct therein by Sublessor of its
business. Upon Sublessor's exercise of
its Recapture Rights hereunder, the
Sublease shall be deemed terminated
with respect to the Recapture Space on
the effective date specified in
Sublessor's recapture notice, and Base
Rent and other charges and Sublessee's
Share hereunder shall be equitably
adjusted to reflect the reduction of
Sublessee's usable square footage.
Broker: Fallon Hines & O'Connor, Inc. and Lynch
Murphy Walsh and Partners, Incorporated
Sublessee's Parking Rights: None.
Article II
PREMISES
2.1 SUBLEASE OF PREMISES
Subject to and provided that Prime Lessor gives Prime Lessor's written consent
to the subleasing contemplated by the Sublease, Sublessor hereby subleases to
Sublessee, and Sublessee hereby
4
<PAGE>
accepts and subleases from Sublessor, upon and subject to the terms and
provisions of the Prime Lease, as both are defined in Section 1.1. Included as
part of the Premises sublet hereunder are all of Sublessor's appurtenant rights
under the Lease to use the common areas and facilities of the building and the
Lot (as defined in the Prime Lease), subject in all events to the Prime Lessor's
rights reserved and excepted in Section 2 of the Prime Lease.
2.2 PRIME LEASE
2.2.1 Sublessor hereby represents and warrants that : (i) Sublessor
is the tenant under the Prime Lease and has the full right to enter into this
Sublease (subject, however, to Prime Lessor' s consent); (ii) the Prime Lease is
in full force and effect; (iii) Sublessor has not received from Prime Lessor any
notice of any default on the part of Sublessor as tenant under the Prime Lease
which has not been cured, nor has Sublessor given Prime Lessor notice of any
default on the part of Prime Lessor as landlord under the Prime Lease which has
not been cured; (iv) Sublessor has submitted to Sublessee a true and complete
copy of those portions of the Prime Lease that are pertinent to or affect
Sublessee's rights and obligations under the Sublease; and (v) to the best of
Sublessor's knowledge and belief, the Premises and their electrical, mechanical,
plumbing, heating, ventilating and air-conditioning systems are in working order
and repair and in a condition adequate for the conduct in the Premises of
Sublessee's business. Sublessee warrants and acknowledges that it has reviewed
the Prime Lease and is satisfied with the arrangements therein reflected.
Sublessee also warrants that it is satisfied with the present condition of the
Premises (which Sublessee takes "as is" without any representation or warranty
by Sublessor regarding the condition of the Premises [except as set forth in
clause 2.2.1(v) above] or the fitness of the Premises for any particular use and
without any obligation of any kind on Sublessor to make any repairs or
improvements thereto in connection with Sublessee's occupancy) and with
Sublessee's ability to use the Premises on the terms herein set forth.
2.2.2 The Prime Lease is by this reference incorporated into and
made a part hereof, except that
(i) all references in the Prime Lease to "Landlord", "Tenant",
"Lease" and "Premises", respectively, shall be deemed to refer to
Sublessor, Sublessee, this Sublease and the Premises subleased
hereunder, respectively, except that all references in the following
sections and/or provisions of the Prime Lease to "Landlord",
"Tenant", "Lease", and "Premises", respectively, shall be deemed to
refer to "Prime Lessor", "Sublessee", this "Sublease" and the
"Premises subleased hereunder", respectively (i.e., it is the
intention of the parties that Prime Lessor shall retain all of its
rights and obligations under such sections and/or provisions; that
Sublessor shall not be entitled to exercise any of Prime Lessor's
rights, nor shall be bound by any of Prime Lessor's obligations,
under such sections and/or provisions, and that Sublessee shall be
entitled to exercise all of Tenant's rights, and shall be bound by
all of Tenant's obligations, under such sections and/or provisions):
(a) All of Section 2, except for the first sentence, relating
to appurtenant rights and Prime Lessor's reserved rights.
5
<PAGE>
(b) Section 6 (Utilities and Other Services), except that to
the extent utilities are not separately metered for the Premises,
Sublessee shall make payments on account of utilities to Sublessor
as Additional Rent under this Sublease and not to Prime Lessor.
(c) The first grammatical paragraph of Section 9A (Insurance -
Waiver of Subrogation), except that the comprehensive general
liability insurance that Sublessee must procure thereunder shall
also name Sublessor as an additional insured and the indemnity
provided in such Section shall inure to the benefit of Sublessor.
(d) Section 10 (Maintenance of Leased Premises), except that
Sublessee shall be deemed to be obligated to maintain and operate
the Premises in the condition required thereunder not only for the
benefit of Prime Lessor, but also for the benefit of Sublessor, who
shall be entitled to enforce Sublessee's maintenance obligations and
other covenants thereunder.
(e) Section 13 (Subordination)
(f) Sections 17.1 - 17.3 (Fire, Casualty)
(g) Section 17A (Eminent Domain)
(h) Section 19 (Rules and Regulations)
(ii) the following sections and/or provisions of the Prime
Lease are expressly excluded from this Sublease (i.e., they shall be
deemed to be incorporated in this Sublease) either because they are
inapplicable or because they are superseded by specific provisions
hereof:
(a) Section 1 (Parties)
(b) The first sentence of Section 2 (Leased Premises),
relating to the description of the Premises, and the last
grammatical paragraph of Section 2, relating to parking rights in
the Kendall Square Garage.
(c) Section 3.1 (Term)
(d) Section 4 (Rent)
(e) Sections 5.1 through 5.4.4 (Rent Adjustments), except that
these provisions shall be included for the limited purpose of
determining the amount of Additional Rent payable by Sublessee on
account of Rent Adjustments payable by Sublessor under the Prime
Lease.
(f) Section 12 (Assignment - Subletting)
(g) Section 17.4 (Abatement of Rent)
6
<PAGE>
(h) Section 20 (Broker
(i) Section 22 (Notice)
(j) Section 24 (Option to Extend)
(k) Section 25 (Right of Second Opportunity)
2.2.3 This Sublease is and shall remain subject and subordinate in
all respects to the Prime Lease and to all renewals, modifications,
consolidations, replacements and extensions thereof. This Section 2.2.3 shall be
self-operative and no further instrument of subordination shall be required. In
the event of termination or cancellation of the Prime Lease for any reason
whatsoever with respect to all or any portion of the Premises, this Sublease
shall automatically terminate with respect to all or such portion of the
Premises.
2.2.4 Notwithstanding anything contained in this Sublease to the
contrary, Sublessor shall have no obligation during the term of this Sublease to
provide any services of any nature whatsoever to Sublessee or to, in or for the
benefit of the Premises or to expend any money for the preservation or repair of
the Premises, or to observe or perform any obligations of Sublessor under this
Sublease in any case where such services, expenditures or obligations are
required under the Prime Lease to be provided, performed or observed by Prime
Lessor for the benefit of Sublessor with respect to the Premises, and Sublessee
agrees to look solely and directly to Prime Lessor for the furnishing of any
such services, expenditure of any such sums, or observance or performance of any
such obligations to which, or the benefit of which, Sublessee may be entitled
under this Sublease, but nothing in the foregoing shall be deemed to exculpate
or otherwise release Sublessor from, or prevent Sublessee from looking directly
to Sublessor for, any liability arising out of Sublessor's negligence or the
failure of Sublessor to perform its express obligations hereunder; nor shall the
foregoing relieve Sublessor of its express obligations set forth in this
Sublease. Sublessor shall, however, upon the request of Sublessee from time to
time (which request may be oral), use due diligence and reasonable efforts to
cause Prime Lessor to furnish such services, expend such sums, and observe and
perform such obligations. Sublessor's only obligations under the Prime Lease
with respect to the Premises are to use the aforesaid due diligence and
reasonable efforts, make those payments of all rent and other charges due to
Prime Lessor thereunder and to make those payments due to the utility providers
for utility services (including electricity, water and sewer) which are
separately metered to the Leased Premises, which payments Sublessor hereby
agrees to make, provided, however, that Sublessee makes timely payment to
Sublessor of all rent and other charges payable under this Sublease. Sublessor
hereby agrees that, so long as Sublessee makes timely payment to Sublessor of
all rent and other charges payable by Sublessee hereunder, Sublessor shall make
timely payment of all rent and other charges due to Prime Lessor as landlord
under the Sublease. It is the intention of the parties that Sublessee comply
with all of Sublessor's obligations as tenant under the Prime Lease (not
excluded under Section 2.2.2 above) with respect to the Premises to the same
extent and with the same force and effect as if Sublessee were tenant
thereunder, and Sublessee hereby agrees to so comply with all of Sublessor's
such obligations under the Prime Lease with respect td the Premises. Sublessee
shall have no claim against Sublessor for any default by the Prime Lessor under
Prime Lease. If as a result of any default by Prime Lessor as landlord under the
Prime Lease, Sublessor as tenant under the Prime Lease is entitled to any
7
<PAGE>
offset or similar rights against Prime Lessor, Sublessee shall be entitled to a
fair and equitable share of such offset or similar rights. So long as Sublessee
is not in default under this Sublease beyond any applicable notice, grace or
cure period, Sublessee shall have the right, subject to the prior written
consent of Sublessor, which consent shall not be unreasonably withheld and shall
be given or withheld by Sublessor five (5) business days after receipt of the
request therefor, to maintain, in the name of Sublessor but at Sublessee's sole
cost and expense, an action or actions to compel Prime Lessor to discharge the
responsibilities of Prime Lessor under the Prime Lease. Sublessor shall not
unreasonably withhold its consent to the bringing of any such action or actions
by Sublessee, provided, in each instance, that Sublessee shall not sue if
Sublessor has itself commenced an action or actions for the same purpose; and
provided, further, that Sublessor may withhold its consent if, in Sublessor's
judgment, such action would result in an increase in rent, additional rent, or
any other sums whatsoever payable by Sublessor to Prime Lessor under the Prime
Lease. In any event, Sublessee agrees to indemnify Sublessor and hold Sublessor
harmless from and against all loss, cost, damage, expense, or liability
(including, without limitation, attorney's fees and disbursements) which
Sublessor may incur by reason of any action brought by Sublessee against Prime
Lessor. No default by Prime Lessor under the Prime Lease shall excuse Sublessee
from the performance of any of its obligations to be performed under this
Sublease or to any reduction in or abatement of any of the rent provided for in
this Sublease, unless and only to the extent that Sublessor shall be excused
from the performance of a corresponding obligation as the "tenant" under the
Prime Lease.
2.2.5 Sublessee shall neither do, nor permit to do nor permit to be
done, anything that would increase Sublessor's obligations to the Prime Lessor
under the Prime Lease (unless Sublessee shall indemnify Sublessor from such
increased obligation) or that would cause the Prime Lease to be terminated or
forfeited. Sublessor shall not amend or modify (nor agree to amend or modify)
the Prime Lease in any way that would increase Sublessee's obligations or
diminish Sublessee's rights under this Lease, nor shall Sublessor do, nor permit
to do or be done, anything that would cause the Prime Lease to be cancelled,
terminated or forfeited.
2.2.6 Sublessor shall promptly give Sublessee a copy of any notice
of default, termination or otherwise affecting the existence or validity of the
Sublease or relating to any casualty or taking, given by Sublessor or Prime
Lessor to the other.
Article III
TERM OF SUBLEASE
3.1 TERM
The Sublease Term of this Sublease shall be for the period specified in
Section 1.1 as the Sublease Term, unless earlier terminated as provided herein.
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Article IV
CONDITION OF PREMISES
4.1 CONDITION OF PREMISES
Sublessee acknowledges that it has accepted the Premises "as is", in the
order and condition as the Premises are in on the date hereof, and agrees that
Sublessor is under no Obligation to perform any work upon or alteration to the
Premises for Sublessee's use and occupancy.
4.2 FIXTURES AND EQUIPMENT
Sublessee shall be entitled to use all built-in fixtures and equipment
physically located in the Premises as of the Commencement Date. Such fixtures
and equipment shall include four fume hoods, one glass washer and two
autoclaves; Sublessor represents and warrants that, to its best knowledge and
belief, all such fixtures and equipment are in good working order and repair
(except for one autoclave that is not in good working order, as previously
disclosed to Sublessee). Sublessee shall, at its expense, maintain and repair
such fixtures and equipment in good order, repair and condition and shall
surrender all such fixtures and equipment to Sublessor in such condition at the
end of the term.
Article V
USE
5.1 PERMITTED USE
Sublessee agrees that the Premises shall be used and occupied for the
Permitted Uses specified in Section 1.1 only. During the Sublease Term,
Sublessee shall assume and maintain exclusive control of the Premises. Sublessee
acknowledges and understands that it shall be responsible, at its expense, for
providing any janitorial, cleaning, equipment and fixture maintenance and
security services necessary for Sublessee' s use and occupancy of the Premises.
Sublessee shall have access to the Premises and the appurtenant common areas of
the Building 24 hours per day, seven days per week, subject to such "after
hours" security systems, rules and regulations as Prime Lessor may from time to
time impose.
5.2 ASSIGNMENT AND SUBLETTING
Sublessee shall not, by operation of law or otherwise, assign, mortgage,
pledge, encumber or in any manner transfer this Sublease, or any part thereof or
any interest of Sublessee hereunder, or sublet or permit the Premises or any
part thereof to be used or occupied by others, without the prior consent of both
Sublessor and Prime Lessor. Sublessor agrees that it shall not unreasonably
withhold or delay its consent to any assignment or further sublease to which
Prime Lessor may consent. Notwithstanding any such consent, Sublessee shall
remain liable to Sublessor for the payment of all rent and for the performance
of the covenants and conditions of this Sublease (which liability, following any
assignment, shall be joint and several with the assignee).
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Article VI
RENT
6.1 BASE RENT; ADDITIONAL RENT
(a) The Base Rent and Additional Rent specified in Section 1.1
hereof (collectively, the "Rent"), and any additional rent or other charges
payable pursuant to this Sublease shall be payable by Sublessee to Sublessor at
Sublessor's mailing address (or such other place as Sublessor may from time to
time designate by notice to Sublessee).
(b) Rent shall be payable, in advance, on or before the twenty-fifth
(25th) day of each and every calendar month during the term of this Sublease.
Sublessor shall promptly deliver to Sublessee (i) a copy of the year end
statement of operating expenses that Sublessor receives from Prime Lessor as
provided in Section 5.3 of the Prime Lease, and (ii) a copy of each tax bill
received by Sublessor from Prime Lessor as provided in Section 5.4.3 of the
Prime Lease. Promptly after Sublessor and Prime Lessor have made the appropriate
adjustments between themselves on account of such actual operating expenses and
real estate taxes, the amounts paid by Sublessee as Sublessee's Share of such
estimated installments shall be adjusted between Sublessor and Sublessee. The
parties obligations hereunder to make such adjustments shall survive the
expiration or termination of this Sublease.
(c) Rent for any partial month shall be paid by Sublessee to
Sublessor at such rate on a prorata basis. Other charges payable by Sublessee on
a monthly basis, as hereinafter provided, shall likewise be prorated.
All Rent and other amounts due under this Sublease shall be made without
demand, offset or deduction. Sublessee shall be entitled to a fair and equitable
share of all rent abatements set forth in the Prime Lease which Sublessor has
been granted with respect to the Premises.
6.2 LATE PAYMENTS; ADDITIONAL RENT
If any installment of Rents, additional rent or other charges is not paid
on or before the date such payment is due and payable, and if as a result
Sublessor is obligated to pay to Prime Lessor the late charge specified in
Section 1 6(A)(d) of the Prime Lease, then Sublessee shall pay to Sublessor a
late charge of five percent (5%) of the amount of such payment. In addition, if
Sublessee shall fail to make any such payment within thirty (30) days after the
due date, such payment shall bear interest at the rate per annum which is two
percent (2%) higher than the "prime rate" then being charged by The First
National Bank of Boston from the date such payment became due to the date of
payment thereof by Sublessee; provided, however, that nothing contained herein
shall be construed as permitting Sublessor to charge or receive interest in
excess of the maximum legal rate than allowed by law. Such late charge and
interest shall constitute additional rent due and payable hereunder with the
next installment of Base Rent due hereunder.
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6.3 EXCESS UTILITY COSTS
If Sublessor, in its reasonable judgment, determines that Sublessee is
using excessive quantities of HVAC, electricity or water (for purposes of this
Sublease, "excessive quantities" shall mean quantities more than 10% higher than
the quantities being consumed by Sublessor [calculated on a per square foot
basis] in those portions of the Leased Premises used by Sublessor for purposes
comparable to Sublessee's use of the Premises), then in addition to paying
Sublessee's Share of utilities, Sublessee shall also, upon receipt of a written
invoice therefor, reimburse Sublessor for the cost of any such excess.
Article VII
ALTERATIONS, FIXTURES AND EQUIPMENT
7.1 ALTERATIONS
Sublessee may not make any alterations, installations, and improvements to
the Premises without first obtaining the prior consent of both Sublessor and
Prime Lessor. Sublessor shall not be responsible for the failure or refusal of
Prime Lessor to consent to such improvements. Sublessor hereby agrees that it
shall not unreasonably withhold its consent to any alterations, additions or
improvements approved by Prime Lessor. Any such approved alterations, additions
or improvements shall be done at Sublessee's sole expense in a good and
workmanlike manner and in compliance with all applicable laws and codes and the
applicable requirements of the Prime Lease.
Article VIII
SUBLESSEE'S RISK
8.1 SUBLESSEE'S RISK
Sublessee agrees to use and occupy the Premises at Sublessee's own risk;
and to the fullest extent permitted by law, Sublessor shall have no
responsibility or liability for any loss of or damage to fixtures or other
personal property of Sublessee, or of those claiming by, through or under
Sublessee, including without limitation, any loss or damage from the breaking,
bursting, crossing, stopping or leaking of electric cables and wires, and water,
gas, sewer or steam pipes or like matters.
Article IX
SUBLESSOR'S ACCESS TO PREMISES
9.1 SUBLESSOR'S RIGHT OF ACCESS
If Sublessee fails to make any necessary repairs to the Premises within a
reasonable time after notice thereof from Sublessor, Sublessor shall have the
right to enter the Premises at all reasonable hours for the purpose of making
such repairs.
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Article X
INSURANCE
10.1 SUBLESSEE'S INSURANCE
Sublessee shall carry and maintain, throughout the term hereof, at its own
cost and expense, the insurance required under Section 9A of the Prime Lease;
such insurance shall name as additional insureds both Sublessor and Prime
Lessor.
Article XI
CASUALTY
11.1 CASUALTY AND RESTORATION; EMINENT DOMAIN
If the Premises, or any part thereof, shall be damaged or destroyed by
fire or other casualty or damage by eminent domain then Sublessee shall promptly
notify Prime Lessor and Sublessor. Under the Prime Lease the Prime Lessor is
obligated, as soon as possible thereafter, to repair or restore the Premises to
the extent and in the manner set forth in Sections 17 and 17A of the Prime
Lease, as the case may be. If Prime Lessor abates Sublessor's rent with respect
to the Premises as a result, then Rent and other charges hereunder shall be
similarly abated for so long as Sublessor is entitled to and receives an
abatement under the Prime Lease. If damage is of the type which entitles Prime
Lessor or Sublessor to terminate the Prime Lease and either such party so elects
to terminate the Prime Lease, then the Prime .Lease shall cease and come to an
end and this Sublease shall similarly terminate. In addition, if damage is of
the type which would entitle Sublessor to terminate the Prime Lease, Sublessee
shall have the right to exercise Sublessor's right of termination by giving both
Sublessor and Prime Lessor written notice of such termination within the
applicable notice period set forth in Sections 17 and 17A of the Prime Lease, as
the case may be. Sublessee acknowledges that Sublessor shall, in no event, have
any obligation whatsoever to rebuild or restore any damage to the Premises.
Article XII
MISCELLANEOUS PROVISIONS
12.1 WAIVER
Failure on the part of either party to complain of any action or
non-action on the part of the other, no matter how long the same may continue,
shall never be deemed to be a waiver by such party of any of its rights
hereunder. Further, it is agreed that no waiver of any of the provisions hereof
by either party shall be construed as a waiver of any of the other provisions
hereof and that a waiver at any time of any of the provisions hereof shall not
be construed as a waiver at any subsequent time of the same provisions. The
consent to or approval of any action by, either party requiring such consent or
approval shall not be deemed to waive or render unnecessary such consent to or
approval of any subsequent similar act by such party.
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12.2 COVENANT OF QUIET ENJOYMENT
Sublessee, subject to the terms and provisions of this Sublease, on
payment of the Rent and observing, keeping, and performing all of the terms and
provisions of this Sublease on Sublessee's part to be observed, kept, and
performed, shall lawfully, peaceably, and quietly have, hold, occupy, and enjoy
the Premises during the Sublease Term without hindrance or ejection by Sublessor
or by any person lawfully claiming under Sublessor, but subject to force
majeure; the foregoing covenant of quiet enjoyment is given in lieu of any other
covenant, whether express or implied.
12.3 INVALIDITY OF PARTICULAR PROVISIONS
If any term or provision of this Sublease, or the application thereof to
any person or circumstance, shall, to any extent, be invalid or unenforceable,
the remainder of this Sublease, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Sublease shall be valid and be enforced to the fullest extent permitted by
law.
12.4 BROKERS
Each party represents and warrants to the other that it has not directly
or indirectly dealt, with respect to the Premises and this Sublease with any
broker other than the Brokers identified in Section 1.1 (the "Brokers"). Each
party shall save harmless and indemnify the other party against any claims by
anyone with whom it has so dealt or by whom its attention was called to the
Premises, other than the Brokers, for a commission arising out of the execution
and delivery of this Sublease or out of negotiations between Sublessor and
Sublessee with respect to space in the Building. Sublessor agrees to pay the
Brokers the commission with respect to this Sublease set forth in a separate
agreement between Sublessor and the Brokers.
12.5 PROVISIONS BINDING, ETC.
Except as herein otherwise expressly provided, the terms hereof shall be
binding upon and shall inure to the benefit of the heirs, legal representatives,
successors and assigns, respectively, of Sublessor and Sublessee. Each term and
each provision of this Sublease to be performed by Sublessee shall be construed
to be both a covenant and a condition. The reference contained to the successors
and assigns of Sublessee is not intended to constitute a consent to assignment
by Sublessee, but has reference only to those instances in which Sublessor shall
have given its consent to a particular assignment if such consent is required by
the provisions of this Sublease. Each person executing this Sublease on behalf
of Sublessor warrants that Sublessor is a duly existing and valid Delaware
corporation qualified to do business in Massachusetts, that Sublessor has duly
executed and delivered this Sublease, that the execution and delivery of, and
the performance by Sublessor of its obligations under this Sublease are within
the powers of Sublessor and have been duly authorized by all requisite corporate
action, and that this Sublease is a valid and binding obligation of Sublessor in
accordance with its terms. Each of the persons executing this instrument on
behalf of the Sublessee hereby covenant and warrant that the Sublessee is a duly
existing and valid Delaware corporation qualified to do business in
Massachusetts, that Sublessee has duly executed and delivered this Sublease,
that the execution
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and delivery of, and the performance by Sublessee of its obligations under this
Sublease are within the powers of Sublessee and have been duly authorized by all
requisite corporate action, and that the Sublease is a valid and binding
obligation of Sublessee in accordance with its terms.
12.6 NO RECORDING
Sublessee agrees not to record this Sublease or any notice thereof.
12.7 NOTICES
Whenever by the terms of this Sublease notice, demand or other
communication shall or may be given, either to Sublessor or to Sublessee, the
same shall be adequately given if in writing and delivered by hand or sent by
registered or certified mail, postage prepaid:
If intended for Sublessor, addressed to it prior to the Commencement Date
at the mailing address set forth in Section 1.1, with a courtesy copy to
Sublessor's real estate attorneys Palmer & Dodge LLP, One Beacon Street,
Boston, Massachusetts 02108, Attention: Thomas G. Schnorr, Esq. (or to
such other address or addresses as may from time to time hereafter be
designated by Sublessor by like notice).
If intended for Sublessee, addressed to it the address set forth in
Section 1.1, and after the Commencement Date addressed to it at the
Premises to the attention of the Senior Vice President for Finance and
Administration and Chief Financial Officer (to such other address or
addresses as may from time to time hereafter be designated by Sublessee
by, like notice).
All such notices shall be effective upon receipt or refusal to receive.
12.8 PRIME LESSOR CONSENT
This Sublease shall not be effective until and unless Prime Lessor has
given its consent hereto; Sublessor shall be responsible for paying all costs
and expenses payable to Prime Lessor under the Prime Lease in connection with
obtaining such consent. Sublessor shall not be responsible for the failure or
refusal of Prime Lessor to consent to this Sublease.
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EXECUTED UNDER SEAL, in any number of counterpart copies, each of which
counterpart copies shall be an original for all purposes, as of the day and year
first above written.
Sublessor: MITOTIX INC.
By /s/ James Melanson
----------------------------------
Its
hereunto duly authorizes
Sublessee: DYAX CORP.
By /s/ Keith S. Ehrlich
----------------------------------
Its
hereunto duly authorizes
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Exhibit 10.13
COMMERCIAL LEASE
THIS LEASE, made the 30th day of June 1999, by and between "Landlord",
Alan G. Dillard Jr., and "Tenant", Biotage a Div. of Dyax Corp.
WITNESSETH:
Landlord does hereby let and demise unto Tenant the hereinafter described
space in the building located on 1028 River Road Charlottesville, Virginia
22902.
DESCRIPTION OF DEMISED SPACE:
Street Address: 1028 River Road, Charlottesville, VA 22902. Consisting of
8,200 square feet +/-.
TERM OF LEASE:
The term of this lease shall be from 1st day of September 1999 to the 31st
day of August 2001.
RENT AND ADDITIONAL RENT:
The basic rent for the initial term:
A. First lease year, Fifty Eight Thousand Eight Hundred 00/100
B. Second lease year, Same
The basic rent shall be payable each year in twelve equal monthly
installments, payable in advance on the first day of each calendar month.
September and October Rent due at Signing of Lease.
SECURITY DEPOSIT:
Tenant agrees upon execution of this Lease Agreement by all parties that
Tenant will remit to Landlord a sum of Four Thousand Nine Hundred Dollars as a
security deposit. In the event of default by Tenant, Landlord may apply this
deposit toward any unpaid rent or related charges due from the Tenant. No
interest will be payable on the security deposit.
IMPROVEMENT BY TENANT:
The Tenant shall have the right, from time to time, to make all such
alterations and improvements to, and decoration of, the interior of the leased
property as shall be reasonably necessary or appropriate for the conduct of
Tenant's business therein, provided that prior to the commencement of any such
alterations or improvements the Landlord shall in each case have approved them
in writing. If within thirty (30) days after such plans are submitted by the
Tenant to the Landlord for approval, Landlord shall not have given Tenant notice
of disapproval, stating the reasons for such disapproval, such plans and
specifications shall be considered approved by
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the Landlord. Any alteration, addition or improvement made by the Tenant after
such consent shall be given, and any fixtures which are installed and would
damage the building if removed, shall at the Landlord's option become the
property of the Landlord upon the expiration or sooner termination of this
Lease, provided, however, that the Landlord shall have the right to require the
Tenant to remove such fixtures, at the Tenant's expense upon expiration or
termination of this Lease, and return the property to its original condition.
PERMITTED USE:
The premises shall be occupied and used by Tenant for the following
purposes and no others unless such other uses are approved by Landlord in
writing, in advance.
a. Light Manufacturing and Storage.
Tenant agrees not to use said premises, or permit the same or any part
thereof to be used, for the purpose of storing any material or goods which might
in any way prejudice the insurance on said premises or increase the fire hazard
to a greater extent than that necessarily incident to the business for which the
premises are leased as herein before set forth.
MAINTENANCE OF PREMISES:
Tenant shall commit no act of waste and shall take good care of the
premises and the fixtures and appurtenances therein, and shall in the use and
occupancy of the premises, conform to all laws, orders and regulations of
federal, state and municipal governments having jurisdiction. Tenant shall
maintain the interior of said leased premises in good, safe and presentable
condition during the term of the Lease and will surrender the premises in as
good condition as they were at the beginning of the term, reasonable wear and
tear, excepted. All of the property of Tenant remaining on the premises at the
expiration of the Lease or any renewal thereof shall be conclusively deemed
abandoned and may be removed, disposed of or stored by the Landlord at Tenant's
expense. Tenant shall reimburse the Landlord for the cost of such removal and
disposition, including the cost of storage. Landlord shall be responsible for
maintenance and replacement of all mechanical, electrical and plumbing systems,
and for the maintenance of the exterior of the leased premises. Tenant agrees to
provide preventative maintenance for the HVAC equipment by contracting a local
HVAC service company. Landlord's air compressor will remain on site and be
available for Tenant use. All service required to maintain air compressor in
working order will be the responsibility of Tenant.
ASSIGNMENT AND SUBLETTING:
A. Tenant shall have right to sublet part of the premises with the prior
written consent of the Landlord, which consent shall not be unreasonably
withheld.
SERVICES:
The Tenant will pay the cost of utilities.
Tenant shall be responsible for arranging for and paying for janitorial
service, trash removal, and exterminating services for the leased premises.
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INSURANCE:
Landlord will provide hazard insurance covering the improvements on the
property with coverage equal to the replacement value of the improvements and
general liability covering the common areas.
The Tenant shall be responsible for obtaining, at his expense, insurance
coverage for the Tenant's personal property stored or used on the premises. No
such coverage will be provided by the Landlord. Tenant shall maintain in force
at all times, at his expense, general liability coverage insurance covering the
leased premises, with limits of at least of $500,000/$1,000,000, naming Landlord
as an additional insured under the policy.
Landlord and Tenant shall upon the other party's request, furnish
certificates of insurance to the other party for insurance required by this
paragraph.
FIRE CLAUSE:
In the event that the leased premises shall be destroyed or damaged to
such an extent by fire or other casualty, that they are rendered untenantable,
the Landlord shall have the right to render said premises tenantable by repairs
within ninety (90) days therefrom. During any period of untenantability, the
rent shall not abate. However, if upon the expiration of ninety (90) days from
the date of the incident causing the damage to the leased premises have not been
made habitable by Landlord, either party shall upon written notice to the other,
have the right to terminate this Lease as of the date of such event, and any
rent paid for periods thereafter shall be refunded to the Tenant. In the event
of loss or damage to the premises, each party shall look first to any insurance
in his favor before making any claim against the other party and to the extent
possible without additional cost, each party shall obtain for each policy of
hazard insurance, provisions permitting waiver of any claim against the other
party for loss or damage within the scope of the insurance.
RISK OF LOSS:
The risk of loss to Tenant's property used or stored upon the leased
premises shall be solely upon the Tenant except for misconduct or gross
negligence by Landlord or Landlord's agents.
SUBORDINATION:
This Lease shall be subject to and subordinate to the lien of any
mortgage, deed of trust, or other encumbrance now existing or hereinafter placed
upon the premises by the Landlord and Tenant hereby agrees to execute upon the
request of Landlord, any and all instruments necessary to effect such
subordination.
ADDITIONAL COVENANTS BY TENANT:
Tenant shall, at all times, during the term of this Lease, and any
renewals thereof, operate a business on the leased premises and shall not at any
time, display on the premises any sign announcing that the business is moving to
a new location, is going out of business, of that the
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business is being liquidated or is in bankruptcy, or any similar sign indicating
that the Tenant is ceasing to do business at the leased premises.
DEFAULT:
Tenant shall be in default of this Lease if:
A. The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant hereunder, as and when due,
where such failure shall continue for a period of fifteen (15) days
after written notice thereof by Landlord to Tenant.
B. The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed
by Tenant (other than described in Subsection A above), where such
failure shall continue for a period of thirty (30) days after
written notice thereof by Landlord to Tenant; provided, however,
that if the nature of Tenant's default is such that more than thirty
(30) days are reasonably required for its cure, then Tenant shall
not be deemed to be in default if Tenant commences such cure within
said thirty (30) day period and thereafter diligently prosecutes
such cure to completion.
In the event of Tenant's default, Landlord shall, in addition to all of
the remedies available at law, be entitled to re-enter the premises, make such
repairs and renovations as Landlord in its sole discretion, deems appropriate,
and re-lease the premises to any other party on such terms and conditions as
Landlord, in its sole discretion, deems just and appropriate. The proceeds of
such lease, after payment of Landlord's expenses of renovation, repair and
leasing of the premises, shall be applied to Tenant's account. Landlord shall be
entitled to recover the rent provided for the full lease term, offset only by
rent actually received or by the reasonable rental value of any portion of the
leased premises which are actually occupied by the Landlord for any portion of
the lease term.
The occurrence of any one or more of the following constitutes a default
by Landlord under this Lease:
A. If Landlord shall default in the payment when due of any moneys
required to be paid by Landlord under this Lease, and such default shall
continue for a period of thirty (30) days after written notice by Tenant to
Landlord to such default.
B. If Landlord shall default in the performance of any obligation of this
Lease on Landlord's part to be performed and Landlord shall fail to remedy such
default within thirty (30) days after written notice by Tenant to Landlord, or
is such default is of such a nature that it cannot be completely remedied within
said period of thirty (30) days if Landlord shall not (I) promptly upon the
giving by Tenant of such notice, advise Tenant of Landlord's intention to
institute all steps reasonably necessary to remedy such situation, and (II)
promptly institute and thereafter diligently pursue all steps reasonably
necessary to remedy the same.
If a default by Landlord occurs, Tenant shall have all rights and remedies
available at law or in equity, including the right to set off against any
amounts due from Tenant to Landlord, the amounts required to cure any default on
the part of Landlord.
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ENTRY BY LANDLORD:
Landlord may, but shall not be obligated to, enter the demised premises at
any reasonable time during normal business hours, on reasonable notice to Tenant
(except that no notice need be given in case of emergency) for the purposes of
inspection or the making of such repairs, replacements and addition as are
necessary or desirable.
CONSTRUCTIVE EVICTION:
Tenant shall not be entitled to claim a constructive eviction from the
premises unless Tenant shall have first notified Landlord in writing of the
condition or conditions giving rise thereto, and, if the complaints be
justified, unless Landlord shall have failed within a reasonable time after
receipt of notice to remedy such conditions.
LANDLORD MAY SHOW PREMISES:
Landlord may show the premises to prospective purchasers and mortgagees at
a reasonable time, and during the four months prior to expiration and upon
notice of termination of the Lease, to prospective tenants, during business
hours and upon reasonable notice to Tenant.
Landlord agrees that any sale by Landlord of the demised premises shall be
subject to the terms and provisions of this Lease, and that in the event of any
sale of the Leased Property by Landlord, the purchaser, at such sale or any
subsequent sale of the demised premises shall be deemed, without further
agreement between the parties of their successors in the interest, or between
the parties and any such purchaser, to have assumed and agreed to carry out any
and all of the covenants and obligations of the Landlord under this Lease.
QUIET POSSESSION:
Landlord covenants that if and so long as Tenant pays the rent and
additional rent and perform the covenants hereof, Tenant shall peaceably and
quietly have, hold and enjoy the premises for the term herein provided, subject
to the provisions of this Lease.
COVENANT OF LEASE:
A. Tenant shall not make, or permit to be made, disturbing noise or
interfere with any other businesses operating in the area.
ACTS OF INSOLVENCY:
In the event that the Tenant or any of its guarantors, shall file in any
court a petition of bankruptcy or insolvency or for reorganization or for a
creditors arrangement under any section or sections of the United States
Bankruptcy or any other statute or if a receiver or trustee shall be appointed
for all or a portion of the Tenant's property or if the Tenant or any of its
guarantors shall make an assignment of its asserts for the benefit of creditors,
then this Lease shall, at the discretion of the Landlord, immediately terminate
and this Lease shall not be treated as an asset to the Tenant's estate or the
Landlord may terminate the Tenant's right to occupancy of the
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premises and re-enter the premises, thereby retaining all of his rights and
remedies against the Tenant.
NOTIFICATION:
All notices are to be sent to the following:
To Landlord: Alan G. Dillard Jr.
1000 River Road
Charlottesville, VA 22901
To Tenant: Biotage
1500 Avon Street Extd.
Charlottesville, VA 22901
MODIFICATION:
This Lease may be terminated, modified, or otherwise changed only by
written agreement signed by the Tenant and the Landlord.
WITNESS the following signatures and seals:
LANDLORD: ALAN G. DILLARD, JR.
By: /s/ Alan G. Dillard, Jr.
- ------------------------------ ------------------------------
Date
TENANT: BIOTAGE A DIV. OF DYAX CORP.
By: /s/ David Patteson
- ------------------------------ ------------------------------
Date
Tenant shall have a first right of refusal to extend the lease with 90 days'
advance notice prior to the end of the term of the Lease.
Provided that Rent shall increase annually by three percent (3%) beginning upon
completion of the initial term of this Lease.
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EXHIBIT 10.14
LEASE
This Lease Agreement made this 12th day of February 1998, by and between
AStec Partnership, a Virginia general partnership, Lessor, and Dyax Corporation,
a Delaware corporation, Lessee.
W I T N E S S E T H :
That Lessor, for and in consideration of the covenants and agreements
hereinafter set forth and further consideration of the rent which Lessee agrees
to pay, hereby leases and demises unto Lessee, and Lessee hereby takes, accepts,
and rents from Lessor, the premises hereinafter set forth for the period, at the
rental, and upon the terms and conditions hereinafter set forth:
1. DEMISED PREMISES: The premises leased hereunder shall consist of the
space currently leased to Lessee for use by Biotage Incorporated in the in AStec
Center at 1500 Avon Street Extended in Albemarle County, Virginia. Said premises
are more particularly outlined in a diagram attached to this Lease as Exhibit A.
Said premises shall consist of 19,984 square feet. Said premises shall be used
by the Lessee solely as defined in the Special Permit Application and any other
related functions not in conflict with the Special Use Permit application. Any
change in the use of the facility by Lessee must be approved in writing in
advance by the Lessor; Lessor's approval shall not be unreasonably withheld.
2. TERM OF LEASE: This Lease Agreement shall be effective on this date. The
term of this Lease shall begin at 12:01 A.M. on April 15, 1998, (the
Commencement Date) and shall end on April 14, 2002.
3. RENT AND DEPOSIT: (a) The total rent due for this lease shall be
$767,842.00 based
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on a charge of $9.61 per square foot. The rent shall be payable in forty-eight
(48) consecutive monthly installments. The monthly payments shall be $15,996.71.
The first payment of $15,996.71 shall be due and payable on the Commencement
date of this Lease as defined in paragraph 2 above. Each subsequent payment
shall be due on the fifteenth day of the month. Lessor is currently holding
deposits for $25,205.28, $8,597.34 and $7,564.77 from previous leases which
shall be continued for this Lease. All amounts held by Lessor on deposit shall
be refunded after the termination of this lease provided that the Lessee
fulfills all of the covenants and requirements of the Lease. If Lessee fails to
fulfill any covenants or requirements of this Lease, or damages the premises in
any fashion (excluding normal wear and tear), the damage caused by Lessee shall
be deducted from this deposit. If the damages exceed the amount of the deposit,
Lessor retains the right to avail itself of any other legal remedies to recover
its damages. The deposit shall be refunded within thirty (30) days of
termination of the Lease. The Lessor shall hold the deposit in trust in a
separate federally insured interest bearing account over which the Lessor alone
shall have the power of withdrawal and will not commingle the deposit with any
funds or other property of the Lessor. So long as the Lessee is not in default
under the Lease, the Lessor agrees to pay the Lessee on a quarterly basis all
interest earned on the deposit.
4. CORPORATE GUARANTEES: In order to induce the Lessor to accept this Lease
without any individual guarantees, the Lessee agrees to provide the Lessor with
quarterly financial statements.
5. RENEWAL AND OPTION TO LEASE NEW SPACE: (a) Lessee shall, provided it is
not in default of any terms and conditions of this Lease, have the option to
renew this lease for one additional period of one year. If Lessee decides to
exercise this option, Lessee shall provide written notice to Lessor of its
decision, which notice must be received by Lessor six months
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prior to the termination of the original Lease as set forth in paragraph 2
herein. If Lessee fails to give Lessor the notice set forth in this paragraph,
then Lessee's right to renew in the six months before expiration of the existing
lease term shall be at the exclusive option of the Lessor only. Thereafter,
there shall be no automatic renewal or renewal by operation of law on this
Lease.
(b) Renewal shall be for one twelve month period under the same terms
and conditions contained in this Lease except that during the renewal lease
period Lessee shall pay to the Lessor a base annual rent of $191,960.50 plus any
additional amount as determined in accordance with the provisions of
subparagraph (c), payable in advance in monthly installments on the fifth day of
each month.
(c) As used herein:
(i) "Index" shall mean the national "Consumer Price Index for Urban
Wage Earners and Clerical Workers (CPI-W) (1982-84 = 100)" specified for "All
Items" and issued by the Bureau of Labor Statistics of the United States
Department of Labor. In the event the Index shall hereafter be converted to a
different reference base or otherwise revised, the determination of the
Percentage Increase (defined below) shall be made with the use of such
conversion factor, formula or table for converting the Index as may be published
by the Bureau of Labor Statistics or, if such Bureau shall not publish the same,
then with use of such conversion factor, formula or table as may be published by
Prentice-Hall, Inc. or, failing such publication, by any other nationally
recognized publisher of similar statistical information. In the event the Index
shall cease to be published, then, for the purposes of this Lease, there shall
be substituted for the Index such other statistics on the cost of living
computed and published by a federal governmental agency or by a nationally
recognized publisher of similar statistical information.
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(ii) "Base Index" shall mean the Index in effect on the Commencement
Date.
(iii) "Current Index" shall mean the Index in effect for the first
month of the lease year for which the adjustment in rent is calculated.
(iv) "Percentage Increase" shall mean the percentage equal to the
fraction, the numerator of which shall be the Current Index less the Base Index,
and the denominator which shall be the Base Index.
If the Current Index shall exceed the Base Index, then the annual rent
payable for the ensuing lease year shall be increased be an amount equal to the
"Percentage Increase" multiplied by $191,960.50. As soon a practicable after the
end of the fourth lease year during the term of this Lease, Lessor shall send
Lessee an index comparative statement setting forth the Current Index, the Base
Index, the Percentage Increase, and the increase in the annual rent. On the
fifth day of the calendar month ("Current Month") following the month in which
the index comparative statement was sent, Lessee shall pay to Lessor (i) a sum
equal to 1/12th of such increase in the base annual rent multiplied by the
number of calendar months of the new lease year elapsed, and (ii) thereafter,
commencing with the Current Month, and continuing monthly thereafter, the
monthly installments shall be increased by an amount equal to 1/12th of such
increase. In no event shall the rent charged be less than $191,960.50 per year.
(d) The parties acknowledge that the Lessee may in the future have the
need for additional space in excess of the current demised premises as described
in Paragraph 1. The parties further acknowledge that the Lessor currently owns
additional rental properties and/or may obtain in the future other
commercial/industrial rental properties.
(e) Accordingly, provided the Lessee is not in default of any terms
and conditions of this Lease, the Lessee shall have an option to lease from the
Lessor different space of not less than 25,000 square feet (hereinafter "New
Space"). In the event of the actual relocation of the
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Lessee from the current demised premises to the New Space, this Lease shall then
terminate upon commencement of any new lease.
(f) In order to exercise this option, the Lessee shall provide the
Lessor with written notice at any time during the four (4) year lease term
described in Paragraph 2. The parties acknowledge that the said New Space will
be available within one (1) year from the date of the lease for the new space.
Accordingly in the event the written notice is received during the last lease
year of the original lease term, this lease shall continue beyond the initial
four year term until the New Space is occupied by the Lessee. The terms and
conditions of any such additional lease period shall be the same as the terms
and conditions of this lease.
(g) Upon receipt of the written notice, the parties agree to commence
negotiations regarding the New Space. Such negotiations shall include but not be
limited to the design, layout, buildout, lease terms, rental amounts and other
appropriate issues. The Lessor and the Lessee agree to undertake all reasonable
efforts and to use due diligence in order to reach a successful completion to
the negotiations. If an agreement is not reached within six (6) months of
negotiations both parties agree to accept an MAI appraisal of an appropriate
lease rate for the complete package at the then current rates.
(h) Should additional space become available in AStec Center I or II
during the term of this Lease the Lessee shall have a first right of refusal for
such space provided the Lessee is not in default of any terms and conditions of
this Lease. The Lessor shall provide written notice of the space availability
and the Lessee shall have 30 days from the date of said notice to exercise this
option by entering into a new lease for such additional space.
6. LATE FEE: In the event that the Lessor does not receive from Lessee any
installment of rent within ten (10) days of the date for which such installment
is due, a late fee of five percent (5.00%) of the monthly rent installment shall
be due as additional rent.
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7. COST OF ENFORCEMENT OF THE LEASE: The defaulting party hereby agrees to
pay all costs, expenses, fees and charges incurred by the non defaulting party
in enforcing, by legal action or otherwise, any provisions, covenants and
conditions of this Lease including reasonable attorney's fees, Lessee hereby
waives the benefit of any Homestead or similar exemption laws with respect to
the obligations of this Lease.
8. REPAIRS AND MAINTENANCE: Lessee shall at its sole expense keep the
interior of the premises in as good order and repair as it is at the
commencement of this Lease Agreement, reasonable wear and tear excepted. A
walk-through of the current Biotage space was made by representatives of Lessee
and Lessor at the commencement of the first Lease and a checklist was prepared
which stated the condition of all leased property. This checklist was signed by
both representatives at the time of the walk-through. Repairs noted as required
to be made were completed by Lessor. A walk-through of the new Biotage space
will be made by representatives of Lessee and Lessor at the commencement of this
Lease and a checklist prepared which states the condition of all leased
property. This checklist will be signed by both representatives at the time of
the walk-through. Repairs noted as required to be made will completed by Lessor.
A walk-through shall be made no later than thirty (30) days prior to expiration
of this Lease and any repairs noted as required shall be completed by Lessee,
said repairs to be completed to the reasonable satisfaction of the Lessor. If
Lessee fails to complete any such repairs by the date of the termination of the
Lease the cost of performing such repairs shall be deducted from Lessee's
deposit. Lessee's deposit shall be released upon completion of any such repairs
in accordance with the terms of paragraph 3, above. Lessee agrees to replace or
repair all broken or damaged glass, locks, plaster and flooring at the sole
expense of Lessee and such replacement or repair shall be to the satisfaction of
Lessor. Lessee agrees to use water closets and other plumbing fixtures only for
the purpose for which they were installed and not to place sweepings,
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rubbish, rags, chemicals, or other items in such fixtures. Lessee agrees not to
install on the property any heating unit or antenna of any kind without the
consent of the Lessor. Lessee agrees to keep all doors and windows closed during
rain or snow, not to keep any explosive or flammable chemicals in unprotected
areas on the property, and not to affix or suspend any signs, advertisements or
notices upon or from any part of the property without the written consent of the
Lessor. Lessor will provide a directory sign at the entrance to the parking area
identifying the Lessee's business. Lessee further agrees not to place an iron
safe or other heavy articles (defined as being greater than 125 lbs. per square
foot) on the property without the written consent of the Lessor and agrees to
indemnify the Lessor for all damages resulting from the placement or moving of
any such article. Lessee agrees not to use any harsh or abrasive compounds or
solvents on any tile floors and to use only waxes of a water emulsion type.
Notwithstanding any of the above, the Lessee shall not be responsible for any
repairs resulting from the negligence or willful acts of the Lessor or its
agent. Lessor agrees to maintain and keep in good repair the heating systems,
ventilation systems, air conditioning system, plumbing, sprinkler, electrical
(not including lamp and other light fixture replacement), the roof, the exterior
of the building, the grounds, and the parking areas except for any improvements
made by the Lessee which maintenance shall be the responsibility of the Lessee.
Said maintenance and repair shall be performed at Lessor's own expense, except
for (a) any damage exceeding reasonable wear and tear caused by the Lessee, and
(b) any damage which in the reasonable judgement of the Lessor is due to abuse
or improper use of the systems, etc., by Lessee, both of which kinds of damages
shall be paid for by Lessee. Lessor shall, at its sole expense, have the
sprinkler system tested annually as required for Lessor's insurance policy.
Lessor shall not be liable to Lessee, its employees, agents or invitees for any
damage or injury to persons or property or for any loss or interruption of
business sustained by Lessee resulting from any
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occurrence or condition in or upon the leased Premises, or the land, sidewalks
and parking places adjacent thereto, unless said injury, damage, loss or
interruption was caused by the negligence or willful misconduct of Lessor, its
agents or employees.
9. UTILITIES: Lessor agrees to furnish and pay for the water and sewerage
utilities supplied to the leased premises. Lessee agrees to pay all charges for
gas, electricity, telephone, and other utilities or services (except garbage or
standard office type waste disposal and pick-up which shall be the
responsibility of the Lessor), janitorial and cleaning services, etc. used,
rendered or supplied upon or in connection with the premises. Lessee shall
notify the Lessor before signing the lease of any demand or need for water or
sewer other than for toilet, lab or reasonable cleaning of facilities (excluding
any process water usage). Lessor reserves the right to set a meter for any
additional uses and bill Lessee for the costs in excess of these normal usages.
Lessor shall provide snow removal within 24 hours of the cessation of snow fall
except when this occurs on Sunday. Lessor shall provide Lessee with 24 parking
spaces in the South parking lot and 13 spaces in the West parking lot.
10. ALTERATIONS: No alterations, additions, improvements, change in
mechanical, plumbing, or electrical systems or exterior decorations to the
premises shall be made by Lessee until after such change shall have been
approved in writing by the Lessor. So long as the Lessee shall not be in default
hereunder any fixtures, additions or improvements installed by Lessee during
this lease and previous leases shall, at Lessee's option, become the property of
the Lessee upon expiration of the full term of this Lease agreement provided,
however, that (i) the Lessor have the right to require Lessee to remove such
fixtures, additions or improvements and restore the leased premises to their
original condition at Lessee's cost upon the termination of this Lease agreement
or (ii) if the Lessee shall be in default hereunder, such property shall, at the
lessor's option, become the property of the Lessor.
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11. CONDEMNATION: If all or a substantial part of the premises shall be
acquired for any public use by right of eminent domain, or private purchase in
lieu of such right, by a public body vested with the right of eminent domain,
this Lease and all the rights of the Lessee under it shall immediately
terminate, and the rent shall be adjusted as of the time of acquisition Lessee
shall have no claim against Lessor for any value of the unexpired term nor shall
Lessee be entitled to any part of the condemnation award or purchase price in
lieu of such award.
12. DESTRUCTION BY CASUALTY:
(a) RESTORATION OF DAMAGED PREMISES. In the event the premises are
damaged or destroyed or rendered partially untenantable for their then use by
fire or other casualty insured by Lessor, the Lessor shall promptly repair from
funds provided by Lessee as subrogee or from insurance proceeds released by the
holder of any deed of trust lien upon the building which contain the premises
and restore the same to substantially the condition in which they were
immediately prior to the happening of such casualty. The Lessor's obligation to
repair shall not extend to any improvements or addition of the Lessee. In the
event that the premises are so damaged or destroyed by fire or other casualty
that repairs to the premises required for Lessee to resume its operations within
90 days of the date of such fire or other casualty cannot be completed, then
either Lessee or Lessor shall have the right to terminate this lease effective
as of the date of the fire or other casualty.
(b) RENT ABATEMENT. During the period from the date of such casualty
until the premises are repaired and restored, Lessee's obligation to pay any
rental due hereunder, shall abate in the proportion that the premises destroyed
or rendered untenantable bears to the total leased premises. Notwithstanding the
foregoing provisions, in the event the leased property shall be damaged by fire
or other insured casualty due to the fault or neglect of the Lessee, or the
Lessee's servants, employees, contractors, agents, visitors, or licensees, then,
without prejudice
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to any other rights and remedies of the Lessor, the damage shall be repaired by
the Lessee, but there shall be no apportionment or abatement of rent.
(c) FIRE AND OTHER CASUALTY. Except as herein expressly provided, this
Lease shall not terminate nor shall there be any abatement of rent or other
charges of items of additional rent as a result of fire or other casualty.
(d) LESSEE'S INSURANCE: Consistent with the requirements of paragraph
14, Lessee shall obtain insurance to cover any damage to the premises caused by
fire or other casualty due to the deliberate or negligent act of the Lessee or
the agents, servants, employees, visitors, or licensees of Lessee.
13. INDEMNIFICATION: Lessee shall indemnify Lessor against all liabilities,
expense (including attorney's fees) and losses incurred by the Lessor as a
result of (a) the failure of Lessee to perform any covenant required to be
performed by Lessee hereunder, (b) any accident, injury or damage which shall
happen in or about the premises or resulting from the condition, maintenance or
operation of the premises, (c) failure to comply with any requirements of any
government authority, and (d) any mechanic's lien or security agreement or other
lien filed against the premises or fixtures and equipment therein or thereon
belonging to the Lessor. Notwithstanding any of the above, the Lessee shall not
be liable to indemnify the Lessor against any of the above described liabilities
to the extent caused by any act, error or omission of Lessor, or any of Lessor's
agents, representatives, or employees.
14. INSURANCE: Within thirty (30) days of occupancy, the Lessee shall
provide Lessor with written verification from Lessee's insurance company showing
compliance with the requirement that he shall obtain insurance coverage and
shall maintain such insurance as it deems necessary to cover the value of its
property located on or about the demised premises and Lessee agrees that Lessor
shall not be responsible for any damage to the Lessee's property located on
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or about the demised premises because of fire, water, or other casualty. Lessee
shall maintain in force insurance against liability for personal injury and/or
property damage with limits of no less than $500,000/$1,000,000 per occurrence.
Lessee shall also keep in force such other insurance that may from time to time
be reasonably required by Lessor against other insurable hazards as are commonly
insured against for the type of business activity that the Lessee will conduct.
All insurance required by this paragraph and paragraph 12 shall be carried in
favor of Lessor and shall require ten (10) days notice to Lessor by registered
mail of any cancellation or change affecting any interest of Lessor. Any
increase in insurance carried by Lessor on the building, which increase is
attributable to the nature of Lessee's business or Lessee's activities on the
premises, shall be reimbursed by the Lessee to the Lessor with in (60) days of
Lessee's receiving written verification of such increase.
15. TAXES: All real property taxes on the real property shall be paid by
the Lessor. In the event Lessor shall fail to pay any such taxes as and when
due, the Lessee shall, upon ten days prior written notice, have the right to pay
such taxes and offset such payments against rental payments otherwise due
hereunder. Lessee shall be responsible for all its own personal property taxes.
16. ACCESS: Upon reasonable notice to Lessee and at reasonable times,
Lessor, and their duly designated representatives, may enter the premises in
order to inspect the same, make necessary or agreed repairs, decorations,
alterations or improvements, supply needed or agreed services, exhibit the
property to prospective or actual purchasers, mortgagees, lessees, workmen, or
contractors, and place "for rent" signs on the property. It is understood by
Lessor, however, that Lessee's operations on the property are of a highly
proprietary and confidential nature and that the utmost care must be exerted to
avoid contamination of the work area or work in progress, and unnecessary
disturbance of any kind which could be of substantial financial
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detriment to Lessee. Accordingly, Lessor agrees to accommodate to the greatest
extent possible, Lessee's requirements that the premises be entered only when an
authorized representative of Lessee is present. In the case of an emergency when
it is impracticable for Lessor to give reasonable notice to Lessee of its intent
to enter the property or if the property has been abandoned or surrendered by
Lessee, the property may be entered by Lessor without notice to Lessee.
17. ASSIGNMENT AND SUBLETTING: Lessee shall not assign this Lease Agreement
nor sublet the premises or any portion thereof, without the prior written
consent of Lessor, which consent shall not be unreasonably withheld.
18. DEFAULT OR BREACH: Each of the following events shall constitute a
default or breach of this Lease by Lessee:
A. If Lessee, or any successor or assignee of Lessee while in
possession, shall file a voluntary petition in bankruptcy or insolvency or for
reorganization under any bankruptcy act, or shall voluntarily take advantage of
any such act by answer or otherwise, or shall make an assignment for the benefit
of creditors.
B. If involuntary proceedings under any bankruptcy law or insolvency
act shall be instituted against Lessee, or if a receiver or trustee shall be
appointed of all or substantially all of the property of Lessee, and such
proceedings shall not be dismissed or the receivership vacated within thirty
(30) days after the institution or appointment.
C. If five (5) days shall have elapsed after the Lessor has given the
Lessee written notice that the Lessee has failed to pay any rent or additional
rent when due under this Lease.
D. If Lessee fails to perform or comply with any of the conditions of
this Lease and if the nonperformance shall continue for a period of ten (10)
days after written notice thereof
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by Lessor to Lessee or if the performance cannot be reasonably completed within
the ten (10) day period, Lessee shall not in good faith have commenced
performance within the ten (10) day period and shall not diligently proceed to
completion of performance.
E. If Lessee shall vacate or abandon the demised premises.
F. If this Lease shall be transferred to or shall pass to or devolve
on any other person or property, except in the manner herein permitted.
19. EFFECT OF DEFAULT: In the event of any default by the Lessee hereunder,
as set forth in paragraph 18, the rights of Lessor shall be as follows:
A. Lessor shall have the right to cancel and terminate this Lease, as
well as all of the right, title, and interest of Lessee hereunder, by giving to
Lessee not less than ten (10) days notice of the cancellation and termination.
On expiration of the time fixed in the notice, this Lease and the right, title,
and interest of Lessee hereunder, shall terminate in the same manner and with
the same force and effect, except as to Lessee's liability, as if the date fixed
in the notice of cancellation and termination were the end of the term herein
originally determined.
B. Lessor may elect, but shall not be obligated, to make any payment
required of Lessee herein or comply with any agreement, term, or condition
required hereby to be performed by Lessee, and Lessor shall have the right to
enter the demised premises for the purpose of correcting or remedying any such
default and to remain until the default has been corrected or remedied, but any
expenditure for the correction by Lessor shall not be deemed to waive or release
the default of Lessee or the right of Lessor to take any action as may be
otherwise permissible hereunder in the case of any default.
C. Lessor may re-enter the premises immediately and remove the
property and personnel of Lessee, and store the property in a public warehouse
at the cost of and for the
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account of Lessee.
20. SUBORDINATION: This Lease and all rights of Lessee hereunder shall be
subject and subordinate to the lien of any and all deeds of trust that may now
or hereafter affect the demised premises, or any part thereof, and to any and
all renewals, modifications or extensions of any such deed of trust. Lessee
shall on demand execute, acknowledge, and deliver to Lessor without expense to
Lessor, any and all instruments that may be necessary or proper to subordinate
this lease and all rights therein to the lien of any such deeds of trust and
each renewal, modification, or extension. If Lessee shall fail at any time to
execute, acknowledge, or deliver any such subordination instrument, Lessor in
addition to any other remedies available in any consequence thereof, may
execute, acknowledge, and deliver the same as Lessee's attorney-in-fact and in
Lessee's name. Lessee hereby irrevocably makes, constitutes, and appoints
Lessors, their successors and assigns, its attorney-in-fact for that purpose.
The Lessor, however, shall exercise its best efforts to arrange with the holder
of any such underlying deed of trust for an agreement that if, by dispossess,
foreclosure, or otherwise such holder, or any successor in interest, shall come
into possession of the premises, or shall become owner of the premises, or take
over the rights of the Lessor in the premises, it will not disturb the
possession, use, or enjoyment of the leased property by the Lessee, its
successors or assigns, nor disaffirm this lease or the Lessee's rights or estate
hereunder, so long as all of the obligations of the Lessee are fully performed
in accordance with the terms of this Lease. In the event of a voluntary sale,
transfer, or other disposition of the lease premises by the Lessor, the Lessor
agrees to require the purchaser or transferee of the leased premises to agree to
and be bound by the terms and provisions here of.
21. NOTICE: All notices to be given with respect to this Lease shall be in
writing. Each notice shall be sent by registered or certified mail, postage
prepaid and return receipt requested, to the party to be notified at the address
set forth herein or at such other address as
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either party may from time to time designate in writing. Every notice shall be
deemed to have been given at the time it shall be deposited in the United States
mails in the manner prescribed herein. Nothing contained herein shall be
construed to preclude personal service of a summons or other legal process. All
notices to the Lessor shall be mailed to it at 1500 Avon Street,
Charlottesville, VA 22902. All notices to the Lessee shall be mailed to it at
1500 Avon Street, Charlottesville, VA 22902, and shall be deemed to have been
sent to Lessee's proper address unless written change of address has been
received by Lessor prior to that date.
22. SURRENDER OF POSSESSION: Lessee shall, on the last day of the term, or
on earlier termination and forfeiture of the Lease, peaceably and quietly
surrender and deliver the demised premises to Lessor free of all subtenancies,
including all buildings, additions, and improvements constructed or placed
thereon by Lessee, except moveable trade fixtures (including fume hoods and
walk-in cooler), all in good condition and repair. Any trade fixtures or
personal property not used in connection with the operation of the demised
premises and belonging to Lessee, if not removed at the termination or default,
and if Lessor shall so select, shall be deemed abandoned and become the property
of Lessor without any payment or offset therefor. Lessor may remove such
fixtures or property from the demised premises and store them at the risk and
expense of Lessee if Lessor so elect. Lessee shall repair and restore all damage
to the demised premises caused by the removal of equipment, trade fixtures. and
personal property. The Lessee, at the direction of the Lessor, pursuant to
Paragraph 10, shall remove any fixtures, additions or improvements and restore
the leased premises to its original condition, ordinary wear and tear excepted.
If Lessee shall remain in possession after termination of this lease, Lessee
shall be a tenant at sufferance, at one and one half (1-1/2) times the rent
being charged as of the last day before said termination, in which event lessee
shall become a tenant at will on a month to month basis.
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23. REMEDIES:
A. In the event of a breach or threatened breach by either party of
any of the terms or conditions hereof, the party aggrieved shall have the right
of injunction to restrain the other party and the right to invoke any remedy
allowed by law or in equity, as if the specific remedies of indemnity or
reimbursement were not provided herein.
B. The rights and remedies given to the Lessor and Lessee in this
Lease are distinct, separate, and cumulative, and no one of them, whether or not
exercised by either of them, shall be deemed to be in exclusion of any of the
other herein, by law, or by equity provided.
C. No receipt for money by Lessor from Lessee after default or
cancellation of this Lease in any lawful manner shall (1) reinstate, continue,
or extend the term or affect any notice given to Lessee, (2) operate as a waiver
of the right of Lessor to enforce the payment then due or falling due, or (3)
operate as a waiver of the right of Lessors to recover possession of the demised
premises by proper suit, action, proceeding or other remedy. After (1) service
of notice of termination and forfeiture as herein provided and the expiration of
the time specified therein, (2) the commencement of any suit, action,
proceeding, or other remedy, or (3) final order or judgement for possession of
the demised premises Lessor may demand, receive, and collect any monies due,
without in any manner affecting such notice, order, or judgement. Any and all
such monies so collected shall be deemed to be payment on account if the
liability of Lessee hereunder.
24. TOTAL AGREEMENT: APPLICABLE TO SUCCESSORS: This Lease contains the
entire agreement between the parties and cannot be changed or terminated except
by a written instrument subsequently executed by the parties hereto. This Lease
and the terms and conditions hereof apply to and are binding on the heirs, legal
representatives, successors, and assigns of
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both parties and shall replace and supersede any prior agreements between Lessor
and Lessee.
25. APPLICABLE LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of Virginia.
26. SURVIVAL OF AGREEMENT: If a court of competent jurisdiction shall, at
any time, hold that a portion of this agreement is invalid, the remainder shall
not be affected thereby and shall continue in full force and effect.
27. WAIVER: No waiver of any breach of default under this agreement shall
be deemed to be a waiver of any subsequent breach or default of the same or a
similar nature.
28. QUIET ENJOYMENT: As long as Lessee is not in default hereunder, Lessee
shall have quiet enjoyment of the leased Premises.
29. DEFAULT BY LESSOR: If the Lessor is in default of any of its
obligations or duties provided for in this Lease, and said default is not cured
within thirty (30) days after written notice of the grounds of default are
delivered to the Lessor, the Lessee may at its option terminate the Lease, or
cure the breach itself and hold the Lessor liable for any reasonable expenses,
losses or liabilities incurred by the Lessee.
30. INITIAL IMPROVEMENTS: Not applicable.
31. ENVIRONMENTAL MATTERS:
(a) "Hazardous Substances" shall mean (i) any "hazardous substance" as
defined in ss.101 (14) of the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. ss.9601 (14); (ii) any petroleum and petroleum
products, methane natural gas or synthetic gas; (iii) asbestos or any material
containing asbestos; and (iv) any substance, waste or other material considered
hazardous, dangerous or toxic under federal, state or local laws or regulations,
whether now in force or as amended or enacted in the future.
(b) "Release" shall mean any intentional or unintentional release,
spilling,
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leaking, pumping, emitting, emptying, discharging, escaping, leaching, dumping
or disposing.
(c) To the best of Lessor's knowledge after due inquiry and
investigation, Lessor warrants and represents that (i) any use, storage,
treatment, or transportation of Hazardous Substances that has occurred in or on
the property prior to the date hereof has been in compliance with all applicable
federal, state, and local laws, regulations, and ordinances, and (ii) no Release
of Hazardous Substances has occurred in, on, or under the property, and that the
property is free of Hazardous Substances as of the date hereof.
(d) Lessor agrees to indemnify and hold harmless the Lessee from any
and all claims, damages, fines, judgments, penalties, costs, liabilities, or
losses (including, without limitation, reasonable fees and expenses of attorneys
and environmental experts) arising during or after the term of this Lease from
or in connection with the presence or suspected presence of Hazardous Substances
in or on the property unless the Hazardous Substances are present solely as a
result of negligence, willful misconduct, or other acts of Lessee, Lessee's
agents, employees, contractors, or invitees. Without limitation of the foregoing
this indemnification shall include any and all costs incurred due to any
investigation of the site or any cleanup, removal, or restoration mandated by a
federal, state, or local agency or political subdivision, unless the Hazardous
Substances are present solely as a result of negligence, willful misconduct, or
other acts of Lessee, Lessee's agents, employees, contractors, or invitees. This
indemnification shall specifically include any and all costs due the Hazardous
Substances that flow, diffuse, migrate, or percolate into, onto, or under the
property after the term of this Lease commences.
(e) Prior to the Commencement Date, Lessor shall furnish to the
Lessee, without expense to Lessee, an environmental report of the condition of
the Property in form and substance reasonably satisfactory to the Lessee.
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(f) Lessee shall not use or permit any Hazardous Substance other than
those resulting from, and transported from the property and disposed off the
property in the operation of the property in the ordinary course of business and
in compliance with all applicable laws (collectively, "Permitted Substances") to
be used, stored, generated, or disposed of on or in the property by Lessee,
Lessee's agents, employees, contractors, or invitees without first obtaining
Lessor's written consent. If Hazardous Substances (other than Permitted
Substances) are used, stored, generated, or disposed of on or in the property
except as permitted above, and the property becomes contaminated, Lessee shall
indemnify and hold harmless the Lessor from any and all claims, damages, fines,
judgments, penalties, costs, liabilities, or losses (including without
limitation, reasonable fees and expenses of attorneys and environmental experts)
arising during or after the term of this Lease and arising as a result of that
contamination by Lessee, unless such contamination is a result of the
negligence, willful misconduct, or other acts of Lessor or other tenants of the
property or their agents, employees, contractors, or invitees. This
indemnification includes, without limitation, any and all costs incurred because
of any investigation of the site or any cleanup, removal, or restoration
mandated by a federal, state, or local agency or political subdivision. Without
limitation of the foregoing, if Lessee causes or permits the presence of any
Hazardous Substance on the property land that results in contamination, Lessee
shall promptly, at its sole expense, take any and all necessary actions to
return the property to the condition existing prior to the presence of any such
Hazardous Substance on the property. Lessee shall first obtain Lessor's approval
for any such remedial action.
(g) Each party shall give prompt written notice to the other of any
legal proceedings or any other communications of any nature whatsoever to or
from any party (including any governmental authority) relating to Hazardous
Substances on the property. Each
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party agrees at the other party's request to consult with the other party
concerning any matter coming within the scope of this Section 31.
(h) The representations, warranties, agreements and indemnification
contained in this Section 31 shall survive the termination of the Lease.
(i) Upon the termination of this Lease, Lessee shall furnish to the
Lessor, at the Lessee's expense, an environmental site assessment report of a
recognized environmental expert similar to the one provided to the Lessee at the
beginning of the term of this Lease relating to the environmental condition of
the property.
32. AUTHORITY: The Lessee warrants that he/she has appropriate corporate
authority to enter into this Lease. The General Partner executing this Lease on
behalf of Lessor represents and warrants that he has full power and authority to
do so.
WITNESS the following signatures and seals on this 12th day of February
1998.
AStec Partnership Dyax Corporation
By: /s/ Floyd M. Atrip By: /s/ Henry E. Blair
------------------ ------------------
Floyd M. Atrip Henry E. Blair
General Partner CEO
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EXHIBIT 10.15
LEASE
This Lease Agreement made this eleventh day of February 1997, by and
between AStec Partnership, a Virginia general partnership, Lessor, and Biotage,
Incorporated, a Delaware corporation, Lessee.
W I T N E S S E T H :
That Lessor, for and in consideration of the covenants and agreements
hereinafter set forth and further consideration of the rent which Lessee agrees
to pay, hereby leases and demises unto Lessee, and Lessee hereby takes, accepts
and rents from Lessor. the premises hereinafter set forth for the period, at the
rental, and upon the terms and conditions hereinafter set forth:
1. DEMISED PREMISES: The premises leased hereunder shall consist
of the space currently leased to Lessee in the in AStec Center at 1500 Avon
Street Extended in Albemarle County, Virginia. Said premises are more
particularly outlined in a diagram attached to this Lease as Exhibit A. Said
premises shall consist of 15,759 square feet. Said premises shall be used by the
Lessee solely as defined in the Special Permit Application and any other related
functions not in conflict with the Special Use Permit application. Any change in
the use of the facility by Lessee must be approved in writing in advance by the
Lessor; Lessor's approval shall not be unreasonably withheld.
2. TERM OF LEASE: This Lease Agreement shall be effective on this
date. The term of this Lease shall begin at 12:01 A.M. on June 5. 1997. (the
Commencement Date) and shall end on June 4,
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1999.
3. RENT AND DEPOSIT: (a) The total rent due for this lease shall
be $299,421.00 based on a charge of $9.50 per square foot. The rent shall be
payable in twenty-four (24) consecutive monthly installments. The monthly
payments shall be $12,465.88. The first payment of $12,475.88 shall be due and
payable on the Commencement date of this Lease as defined in paragraph 2 above.
Each subsequent payment shall be due on the fifth day of the month. Lessor is
currently holding deposits for $25,205.28, $8,597.34 and $7,564.77 from previous
leases which shall be continued for this Lease. All amounts held by Lessor on
deposit shall be refunded after the termination of this lease provided that the
Lessee fulfills all of the covenants and requirements of the Lease. If Lessee
fails to fulfill any covenants or requirements of this Lease, or damages the
premises in any fashion (excluding normal wear and tear), the damage caused by
Lessee shall be deducted from this deposit. If the damages exceed the amount of
the deposit, Lessor retains the right to avail itself of any other legal
remedies to recover its damages. The deposit shall be refunded within thirty
(30) days of termination of the Lease. The Lessor shall hold the deposit in
trust in a separate federally insured interest bearing account over which the
Lessor alone shall have the power of withdrawal and will not commingle the
deposit with any funds or other property of the Lessor. So long as the Lessee is
not in default under the Lease, the Lessor agrees to pay the Lessee on a
quarterly basis all interest earned on the deposit.
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4. CORPORATE GUARANTEES: In order to induce the Lessor to accept
this Lease without any individual guarantees, the Lessee agrees to provide the
Lessor with quarterly financial statements.
5. RENEWAL: (a) Lessee shall, provided it is not in default of
any terms and conditions of this Lease, have the option to renew this lease for
one additional period of one year. If Lessee decides to exercise this option,
Lessee shall provide written notice to Lessor of its decision, which notice must
be received by Lessor six months prior to the termination of the original Lease
as set forth in paragraph 2 herein. If Lessee fails to give Lessor the notice
set forth in this paragraph, then Lessee's right to renew in the six months
before expiration of the existing lease term shall be at the exclusive option of
the Lessor only. Thereafter, there shall be no automatic renewal or renewal by
operation of law on this Lease.
(b) Renewal shall be for one twelve month period under
the same terms and conditions contained in this Lease except that during the
renewal lease period Lessee shall pay to the Lessor a base annual rent of
$149,710.50 plus any additional amount as determined in accordance with the
provisions of subparagraph (c), payable in advance in monthly installments on
the fifth day of each month.
(c) As used herein:
(i) "Index" shall mean the national consumer Price
Index for Urban Wage Earners and Clerical Workers (CPI-W) (1982-84 = 100)"
specified for "All Items" and issued by the Bureau of Labor
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Statistics of the United States Department of Labor. In the event the Index
shall hereafter be converted to a different reference base or otherwise revised,
the determination of the Percentage Increase (defined below) shall be made with
the use of such conversion factor, formula or table for converting the Index as
may be published by the Bureau of Labor Statistics or, if such Bureau shall not
publish the same, then with use of such conversion factor, formula or table as
may be published by Prentice-Hall, Inc. or, failing such publication, by any
other nationally recognized publisher of similar statistical information. In the
event the Index shall cease to be published, then, for the purposes of this
Lease, there shall be substituted for the Index such other statistics on the
cost of living computed and published by a federal governmental agency or by a
nationally recognized publisher of similar statistical information.
(ii) "Base Index" shall mean the Index in effect on
the Commencement Date.
(iii) "Current Index" shall mean the Index in effect
for the first month of the lease year for which the adjustment in rent is
calculated.
(iv) "Percentage Increase" shall mean the percentage
equal to the fraction, the numerator of which shall be the Current Index less
the Base Index, and the denominator which shall be the Base Index.
If the Current Index shall exceed the Base Index, then the annual rent
payable for the ensuing lease year shall be increased
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be an amount equal to the "Percentage Increase" multiplied by $149,710.50. As
soon a practicable after the end of the second lease year during the term of
this Lease, Lessor shall send Lessee an index comparative statement setting
forth the Current Index, the Base Index, the Percentage Increase, and the
increase in the annual rent. On the fifth day of the calendar month ("Current
Month") following the month in which the index comparative statement was sent,
Lessee shall pay to Lessor (i) a sum equal to 1/12th of such increase in the
base annual rent multiplied by the number of calendar months of the new lease
year elapsed, and (ii) thereafter. commencing with the Current Month, and
continuing monthly thereafter, the monthly installments shall be increased by an
amount equal to 1/12th of such increase. In no event shall the rent charged be
greater than $158,693.13 per year.
6. LATE FEE: In the event that the Lessor does not receive from
Lessee any installment of rent within ten (10) days of the; date for which such
installment is due, a late fee of five percents (5.00%) off the monthly rent
installment shall be due as additional rent.
7. COST OF ENFORCEMENT OF THE LEASE: The defaulting party hereby
agrees to pay all costs, expenses, fees and charges incurred by the non
defaulting party in enforcing, by legal action or otherwise, any provisions,
covenants and conditions of this Lease including reasonable attorney's fees,
Lessee hereby waives the benefit of any Homestead or similar exemption laws with
respect to the obligations of this Lease.
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8. REPAIRS AND MAINTENANCE: Lessee shall at its sole expense keep
the interior of the premises in as good order and repair as it is at the
commencement of this Lease Agreement, reasonable wear and tear excepted. A
walk-through of the current Biotage space was made by representatives of Lessee
and Lessor at the commencement of the first Lease and a checklist was prepared
which stated the condition of all leased property. This checklist was signed by
both representatives at the time of the walk-through. Repairs noted as required
to be made were completed by Lessor. A walk-through shall be made no later than
thirty (30) days prior to expiration of this Lease and any repairs noted as
required shall be completed by Lessee, said repairs to be completed to the
reasonable satisfaction of the Lessor. If Lessee fails to complete any such
repairs by the date of the termination of the Lease the cost of performing such
repairs shall be deducted from Lessee's deposit. Lessee's deposit shall be
released upon completion of any such repairs in accordance with the terms of
paragraph 3, above.
Lessee agrees to replace or repair all broken or damaged glass, locks,
plaster and flooring at the sole expense of Lessee and such replacement or
repair shall be to the satisfaction of Lessor. Lessee agrees to use water
closets and other plumbing fixtures only for the purpose for which they were
installed and not to place sweepings, rubbish, rags, chemicals, or other items
in such fixtures. Lessee agrees not to install on the property any heating unit
or antenna of any kind without the consent of the Lessor. Lessee agrees to keep
all doors and windows closed during
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rain or snow, not to keep any explosive or flammable chemicals in unprotected
areas on the property, and not to affix or suspend any signs, advertisements or
notices upon or from any part of the property without the written consent of the
Lessor. Lessor will provide a directory sign at the entrance to the parking area
identifying the Lessee's business. Lessee further agrees not to place an iron
safe or other heavy articles (defined as being greater than 125 lbs. per square
foot) on the property without the written consent of the Lessor and agrees to
indemnify the Lessor for all damages resulting from the placement or moving of
any such article. Lessee agrees not to use any harsh or abrasive compounds or
solvents on any tile floors and to use only waxes of a water emulsion type.
Notwithstanding any of the above, the Lessee shall not be responsible for any
repairs resulting from the negligence or willful acts of the Lessor or its
agent.
Lessor agrees to maintain and keep in good repair the heating systems,
ventilation systems, air conditioning system, plumbing, sprinklers, electrical
(not including lamp and other light fixture replacement), the roof, the exterior
of the building, the grounds, and the parking areas except for any improvements
made by the Lessee which maintenance shall be the responsibility of the Lessee.
Said maintenance and repair shall be performed at Lessors own expense, except
for (a) any damage exceeding reasonable wear and tear caused by the Lessee, and
(b) any damage which in the reasonable judgement of the Lessor is due to abuse
or improper use of the systems, etc., by Lessee, both of which kinds of damages
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shall be paid for by Lessee. Lessor shall, at its sole expense, have the
sprinkler system tested annually as required for Lessor's insurance policy.
Lessor shall not be liable to Lessee, its employees, agents or invitees
for any damage or injury to persons or property or for any loss or interruption
of business sustained by Lessee resulting from any occurrence or condition in or
upon the leased Premises, or the land, sidewalks and parking places adjacent
thereto, unless said injury, damage, loss or interruption was caused by the
negligence or willful misconduct or Lessor, its agents or employees.
9. UTILITIES: Lessor agrees to furnish and pay for the water and
sewerage utilities supplied to the leased premises. Lessee agrees to pay all
charges for gas, electricity, telephone, and other utilities or services (except
garbage or standard office type waste disposal and pick-up which shall be the
responsibility of the Lessor), janitorial and cleaning services, etc. used,
rendered or supplied upon or in connection with the premises. Lessee shall
notify the Lessor before signing the lease of any demand or need for water or
sewer other than for toilet, lab or reasonable cleaning of facilities (excluding
any process water usage). Lessor reserves the right to set a meter for any
additional uses and bill Lessee for the costs in excess of these normal usages.
Lessor shall provide snow removal within 24 hours of the cessation of snow fall
except when this occurs on Sunday. Lessor shall provide Lessee with 24 parking
spaces in the South parking lot.
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10. ALTERATIONS: No alterations, additions, improvements, change
in mechanical, plumbing, or electrical systems or exterior decorations to the
premises shall be made by Lessee until after such change shall have been
approved in writing by the Lessor. So long as the Lessee shall not be in default
hereunder any fixtures, additions or improvements installed during this lease
and previous leases shall, at Lessee's option, become the property of the Lessee
upon expiration of the full term of this Lease agreement provided, however, that
(i) the Lessor have the right to require Lessee to remove such fixtures,
additions or improvements and restore the leased premises to their original
condition at Lessee's cost upon the termination of this Lease agreement or (ii)
if the Lessee shall be in default hereunder, such property shall, at the
lessor's option, become the property of the Lessor.
11. CONDEMNATION: If all or a substantial part of the premises
shall be acquired for any public use by right of eminent domain, or private
purchase in lieu of such right, by a public body vested with the right of
eminent domain, this Lease and all the rights of the Lessee under it shall
immediately terminate, and the rent shall be adjusted as of the time of
acquisition Lessee shall have no claim against Lessor for any value of the
unexpired term nor shall Lessee be entitled to any part of the condemnation
award or purchase price in lieu of such award.
12. DESTRUCTION BY CASUALTY:
(a) RESTORATION OF DAMAGED PREMISES. In the event the
premises are damaged or destroyed or rendered partially
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untenantable for their then use by fire or other casualty insured by Lessor, the
Lessor shall promptly repair from funds provided by Lessee as subrogee or from
insurance proceeds released by the holder of any deed of trust lien upon the
building which contain the premises and restore the same to substantially the
condition in which they were immediately prior to the happening of such
casualty. The Lessor's obligation to repair shall not extend to any improvements
or addition of the Lessee. In the event that the premises are so damaged or
destroyed by fire or other casualty that repairs to the premises required for
Lessee to resume its operations within 90 days of the date of such fire or other
casualty cannot be completed, then either Lessee or Lessor shall have the right
to terminate this lease effective as of the date of the fire or other casualty.
(b) RENT ABATEMENT. During the period from the date of such
casualty until the premises are repaired and restored, Lessee's obligation to
pay any rental due hereunder, shall abate in the proportion that the premises
destroyed or rendered untenantable bears to the total leased premises.
Notwithstanding the foregoing provisions, in the event the leased property shall
be damaged by fire or other insured casualty due to the fault or neglect of the
Lessee, or the Lessee's servants, employees, contractors, agents, visitors, or
licensees, then, without prejudice to any other rights and remedies of the
Lessor, the damage shall be repaired by the Lessee, but there shall be no
apportionment or abatement of rent.
(c) FIRE AND OTHER CASUALTY. Except as herein expressly
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provided, this Lease shall not terminate nor shall there be any abatement of
rent or other charges of items of additional rent as a result of fire or other
casualty.
(d) LESSEE'S INSURANCE: Consistent with the requirements of
paragraph 14, Lessee shall obtain insurance to cover any damage to the premises
caused by fire or other casualty due to the deliberate or negligent act of the
Lessee or the agents, servants, employees, visitors, or licensees of Lessee.
13. INDEMNIFICATION: Lessee shall indemnify Lessor against all
liabilities, expense (including attorney's fees) and losses incurred by the
Lessor as a result of (a) the failure of Lessee to perform any covenant required
to be performed by Lessee hereunder, (b) any accident, injury or damage which
shall happen in or about the premises or resulting from the condition,
maintenance or operation of the premises, (c) failure to comply with any
requirements of any government authority, and (d) any mechanic's lien or
security agreement or other lien filed against the premises or fixtures and
equipment therein or thereon belonging to the Lessor. Notwithstanding any of the
above, the Lessee shall not be liable to indemnify the Lessor from any accidents
which are caused by the negligence or willful acts of the Lessor or its agents.
14. INSURANCE: Within thirty (30) days of occupancy, the Lessee
shall provide Lessor with written verification from Lessee's insurance company
showing compliance with the requirement that he shall obtain insurance coverage
and shall maintain such insurance as it deems necessary to cover the value of
its property located on
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or about the demised premises and Lessee agrees that Lessor shall not be
responsible for any damage to the Lessee's property located on or about the
demised premises because of fire, water, or other casualty. Lessee shall
maintain in force insurance against liability for personal injury and/or
property damage with limits of no less than $500,000/$1,000,000 per occurrence.
Lessee shall also keep in force such other insurance that may from time to time
be reasonably required by Lessor against other insurable hazards as are commonly
insured against for the type of business activity that the Lessee will conduct.
All insurance required by this paragraph and paragraph 12 shall be carried in
favor of Lessor and shall require ten (10) days notice to Lessor by registered
mail of any cancellation or change affecting any interest of Lessor.
Any increase in insurance carried by Lessor on the building, which
increase is attributable to the nature of Lessee's business or Lessee's
activities on the premises, shall be reimbursed by the Lessee to the Lessor with
in (60) days of Lessee's receiving written verification of such increase.
15. TAXES: All real property taxes on the real property shall be
paid by the Lessor. In the event Lessor shall fail to pay any such taxes as and
when due, the Lessee shall, upon ten days prior written notice, have the right
to pay such taxes and offset such payments against rental payments otherwise due
hereunder. Lessee shall be responsible for all its own personal property taxes.
16. ACCESS: Upon reasonable notice to Lessee and at
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reasonable times, Lessor, and their duly designated representatives, may enter
the premises in order to inspect the same make necessary or agreed repairs,
decorations, alterations or improvements, supply needed or agreed services,
exhibit the property to prospective or actual purchasers, mortgagees, lessees,
workmen, or contractors, and place "for rent" signs on the property. It is
understood by Lessor, however, that Lessee's operations on the property are of a
highly proprietary and confidential nature and that the utmost care must be
exerted to avoid contamination of the work area or work in progress, and
unnecessary disturbance of any kind which could be of substantial financial
detriment to Lessee. Accordingly, Lessor agrees to accommodate to the greatest
extent possible, Lessee's requirements that the premises be entered only when an
authorized representative of Lessee is present. In the case of an emergency when
it is impracticable for Lessor to give reasonable notice to Lessee of its intent
to enter the property or if the property has been abandoned or surrendered by
Lessee, the property may be entered by Lessor without notice to Lessee.
17. ASSIGNMENT AND SUBLETTING: Lessee shall not assign this Lease
Agreement nor sublet the premises or any portion thereof, without the prior
written consent of Lessor, which consent shall not be unreasonably withheld.
18. DEFAULT OR BREACH: Each of the following events shall
constitute a default or breach of this Lease by Lessee:
A. If Lessee, or any successor or assignee of Lessee
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while in possession, shall file a voluntary petition in bankruptcy or insolvency
or for reorganization under any bankruptcy act, or shall voluntarily take
advantage of any such act by answer or otherwise, or shall make an assignment
for the benefit of creditors.
B. If involuntary proceedings under any bankruptcy law
or insolvency act shall be instituted against Lessee, or if a receiver or
trustee shall be appointed of all or substantially all of the property of
Lessee, and such proceedings shall not be dismissed or the receivership vacated
within thirty (30) days after the institution or appointment.
C. If five (5) days shall have elapsed after the Lessor
has given the Lessee written notice that the Lessee has failed to pay any rent
or additional rent when due under this Lease.
D. If Lessee fails to perform or comply with any of the
conditions of this Lease and if the nonperformance shall continue for a period
of ten (10) days after written notice thereof by Lessor to Lessee or if the
performance cannot be reasonably completed within the ten (10) day period,
Lessee shall not in good faith have commenced performance within the ten (10)
day period and shall not diligently proceed to completion of performance.
E. If Lessee shall vacate or abandon the demised
premises.
F. If this Lease shall be transferred to or shall pass
to or devolve on any other person or property, except in the manner herein
permitted.
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19. EFFECT OF DEFAULT: In the event of any default by the Lessee
hereunder, as set forth in paragraph 18, the rights of Lessor shall be as
follows:
A. Lessor shall have the right to cancel and terminate
this Lease, as well as all of the right, title, and interest of Lessee
hereunder, by giving to Lessee not less than ten (10) days notice of the
cancellation and termination. On expiration of the time fixed in the notice,
this Lease and the right, title, and interest of Lessee hereunder, shall
terminate in the same manner and with the same force and effect, except as to
Lessee's liability, as if the date fixed in the notice of cancellation and
termination were the end of the term herein originally determined.
B. Lessor may elect, but shall not be obligated, to make
any payment required of Lessee herein or comply with any agreement, term, or
condition required hereby to be performed by Lessee, and Lessor shall have the
right to enter the demised premises for the purpose of correcting or remedying
any such default and to remain until the default has been corrected or remedied,
but any expenditure for the correction by Lessor shall not be deemed to waive or
release the default of Lessee or the right of Lessor to take any action as may
be otherwise permissible hereunder in the case of any default.
C. Lessor may re-enter the premises immediately and
remove the property and personnel of Lessee, and store the property in a public
warehouse at the cost of and for the account of Lessee.
20. SUBORDINATION: This Lease and all rights of Lessee
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hereunder shall be subject and subordinate to the lien of any and all deeds of
trust that may now or hereafter affect the demised premises, or any part
thereof, and to any and all renewals, modifications or extensions of any such
deed of trust. Lessee shall on demand execute, acknowledge, and deliver to
Lessor without expense to Lessor, any and all instruments that may be necessary
or proper to subordinate this lease and all rights therein to the lien of any
such deeds of trust and each renewal, modification, or extension. If Lessee
shall fail at any time to execute, acknowledge, or deliver any such
subordination instrument, Lessor in addition to any other remedies available in
any consequence thereof, may execute, acknowledge, and deliver the same as
Lessee's attorney-in-fact and in Lessee's name. Lessee hereby irrevocably makes,
constitutes, and appoints Lessors, their successors and assigns, its
attorney-in-fact for that purpose.
The Lessor, however, shall exercise its best efforts to arrange with
the holder of any such underlying deed of trust for an agreement that if, by
dispossess, foreclosure, or otherwise such holder, or any successor in interest,
shall come into possession of the premises, or shall become owner of the
premises, or take over the rights of the Lessor in the premises, it will not
disturb the possession, use, or enjoyment of the leased property by the Lessee,
its successors or assigns, nor disaffirm this lease or the Lessee's rights or
estate hereunder, so long as all of the obligations of the Lessee are fully
performed in accordance with the terms of this Lease.
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21. NOTICE: All notices to be given with respect to this Lease
shall be in writing. Each notice shall be sent by registered or certified mail,
postage prepaid and return receipt requested, to the party to be notified at the
address set forth herein or at such other address as either party may from time
to time designate in writing.
Every notice shall be deemed to have been given at the time it shall be
deposited in the United States mails in the manner prescribed herein. Nothing
contained herein shall be construed to preclude personal service of a summons or
other legal process.
All notices to the Lessor shall be mailed to it at 1500 Avon Street,
Charlottesville, VA 22902. All notices to the Lessee shall be mailed to it at
1500 Avon Street, Charlottesville, VA 22902, and shall be deemed to have been
sent to Lessee's proper address unless written change of address has been
received by Lessor prior to that date.
22. SURRENDER OF POSSESSION: Lessee shall, on the last day of the
term, or on earlier termination and forfeiture of the Lease, peaceably and
quietly surrender and deliver the demised premises to Lessor free of all
subtenancies, including all buildings, additions, and improvements constructed
or placed thereon by Lessee, except moveable trade fixtures (including fume
hoods and walk-in cooler), all in good condition and repair. Any trade fixtures
or personal property not used in connection with the operation of the demised
premises and belonging to Lessee, if not removed at the termination or default,
and if Lessor shall so
17
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select, shall be deemed abandoned and become the property of Lessor without any
payment or offset therefor. Lessor may remove such fixtures or property from the
demised premises and store them at the risk and expense of Lessee if Lessor so
elect. Lessee shall repair and restore all damage to the demised premises caused
by the removal of equipment, trade fixtures, and personal property. The Lessee,
at the direction of the Lessor, pursuant to Paragraph 10, shall remove any
fixtures, additions or improvements and restore the leased premises to its
original condition, ordinary wear and tear excepted. If Lessee shall remain in
possession after termination of this lease, Lessee shall be a tenant at
sufferance, at one and one half (1-1/2) times the rent being charged as of the
last day before said termination, in which event lessee shall become a tenant at
will on a month to month basis.
23. REMEDIES: A. In the event of a breach or threatened breach by
either party of any of the terms or conditions hereof, the party aggrieved shall
have the right of injunction to restrain the other party and the right to invoke
any remedy allowed by law or in equity, as if the specific remedies of indemnity
or reimbursement were not provided herein.
B. The rights and remedies given to the Lessor and
Lessee in this Lease are distinct, separate, and cumulative, and no one of them,
whether or not exercised by either of them, shall be deemed to be in exclusion
of any of the other herein, by law, or by equity provided.
C. No receipt for money by Lessor from Lessee after
18
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default or cancellation of this Lease in any lawful manner shall (1) reinstate,
continue, or extend the term or affect any notice given to Lessee, (2) operate
as a waiver of the right of Lessor to enforce the payment then due or falling
due, or (3) operate as a waiver of the right of Lessors to recover possession of
the demised premises by proper suit, action, proceeding or other remedy. After
(1) service of notice of termination and forfeiture as herein provided and the
expiration of the time specified therein, (2) the commencement of any suit,
action, proceeding, or other remedy, or (3) final order or judgement for
possession of the demised premises, Lessor may demand, receive, and collect any
monies due, without in any manner affecting such notice, order, or judgement.
Any and all such monies so collected shall be deemed to be payment on account if
the liability of Lessee hereunder.
24. TOTAL AGREEMENT: APPLICABLE TO SUCCESSORS: This Lease contains
the entire agreement between the parties and cannot be changed or terminated
except by a written instrument subsequently executed by the parties hereto. This
Lease and the terms and conditions hereof apply to and are binding on the heirs,
legal representatives, successors, and assigns of both parties and shall replace
and supersede any prior agreements between Lessor and Lessee.
25. APPLICABLE LAW: This Agreement shall be governed by and
construed in accordance with the laws of the State of Virginia.
26. SURVIVAL OF AGREEMENT: If a court of competent jurisdiction
shall, at any time, hold that a portion of this
19
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agreement is invalid, the remainder shall not be affected thereby and shall
continue in full force and effect.
27. WAIVER: No waiver of any breach of default under this
agreement shall be deemed to be a waiver of any subsequent breach or default of
the same or a similar nature.
28. QUIET ENJOYMENT: As long as Lessee is not in default
hereunder, Lessee shall have quiet enjoyment of the leased Premises.
29. DEFAULT BY LESSOR: If the Lessor is in default of any of its
obligations or duties provided for in this Lease, and said default is not cured
within thirty (30) days after written notice of the grounds of default are
delivered to the Lessor, the Lessee may at its option terminate the Lease, or
cure the breach itself and hold the Lessor liable for any reasonable expenses,
losses or liabilities incurred by the Lessee.
30. INITIAL IMPROVEMENTS: Not applicable.
31. ENVIRONMENTAL MATTERS:
(a) "Hazardous Substances" shall mean (i) any "hazardous
substance" as defined in ss.101 (14) of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. ss.9601 (14);(ii) any
petroleum and petroleum products, methane, natural gas or synthetic gas; (iii)
asbestos or any material containing asbestos; and (iv) any substance, waste or
other material considered hazardous, dangerous or toxic under federal, state or
local laws or regulations, whether now in force or as amended or enacted in the
future.
20
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(b) "Release" shall mean any intentional or unintentional
release, spilling, leaking, pumping, emitting, emptying, discharging, escaping,
leaching, dumping or disposing.
(c) To the best of Lessor's knowledge after due inquiry
and investigation, Lessor warrants and represents that (i) any use, storage,
treatment, or transportation of Hazardous Substances that has occurred in or on
the property prior to the date hereof has been in compliance with all applicable
federal, state, and local laws, regulations, and ordinances, and (ii) no Release
of Hazardous Substances has occurred in, on, or under the property, and that the
property is free of Hazardous Substances as of the date hereof.
(d) Lessor agrees to indemnify and hold harmless the
Lessee from any and all claims, damages, fines, judgments, penalties, costs,
liabilities, or losses (including, without limitation, reasonable fees and
expenses of attorneys and environmental experts) arising during or after the
term of this Lease from or in connection with the presence or suspected presence
of Hazardous Substances in or on the property unless the Hazardous Substances
are present solely as a result of negligence, willful misconduct, or other acts
of Lessee, Lessee's agents, employees, contractors, or invitees. Without
limitation of the foregoing this indemnification shall include any and all costs
incurred due to any investigation of the site or any cleanup, removal, or
restoration mandated by a federal, state, or local agency or political
subdivision, unless the Hazardous Substances are present solely as a result of
negligence, willful misconduct, or other acts of
21
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Lessee, Lessee's agents,employees, contractors, or invitees. This
indemnification shall specifically include any and all costs due the Hazardous
Substances that flow, diffuse, migrate, or percolate into, onto, or under the
property after the term of this Lease commences.
(e) Prior to the Commencement Date, Lessor shall furnish
to the Lessee, without expense to Lessee, an environmental report of the
condition of the Property in form and substance reasonably satisfactory to the
Lessee.
(f) Lessee shall not use or permit any Hazardous
Substance other than those resulting from, and transported from the property and
disposed off the property in the operation of the property in the ordinary
course of business and in compliance with all applicable laws (collectively,
"Permitted Substances") to be used, stored, generated, or disposed of on or in
the property by Lessee, Lessee's agents, employees, contractors, or invitees
without first obtaining Lessor's written consent, If Hazardous Substances (other
than Permitted Substances) are used, stored, generated, or disposed of on or in
the property except as permitted above, and the property becomes contaminated,
Lessee shall indemnify and hold harmless the Lessor from any and all claims,
damages, fines, judgments, penalties, costs, liabilities, or losses (including
without limitation, reasonable fees and expenses of attorneys and environmental
experts) arising during or after the term of this Lease and arising as a result
of that contamination by Lessee, unless such contamination is a result of the
negligence,
22
<PAGE>
willful misconduct, or other acts of Lessor or other tenants of the property or
their agents, employees, contractors, or invitees. This indemnification
includes, without limitation, any and all costs incurred because of any
investigation of the site or any cleanup, removal, or restoration mandated by a
federal, state, or local agency or political subdivision. Without limitation of
the foregoing, if Lessee causes or permits the presence of any Hazardous
Substance on the property land that results in contamination, Lessee shall
promptly, at its sole expense, take any and all necessary actions to return the
property to the condition existing prior to the presence of any such Hazardous
Substance on the property. Lessee shall first obtain Lessor's approval for any
such remedial action.
(g) Each party shall give prompt written notice to the
other of any legal proceedings or any other communications of any nature
whatsoever to or from any party (including any governmental authority) relating
to Hazardous Substances on the property. Each party agrees at the other party's
request to consult with the other party concerning any matter coming within the
scope of this Section 31.
(h) The representations, warranties, agreements and
indemnification contained in this Section 31 shall survive the termination of
the Lease.
(i) Upon the termination of this Lease, Lessee shall
furnish to the Lessor, at the Lessee's expense, an environmental site assessment
report of a recognized environmental expert similar
23
<PAGE>
to the one provided to the Lessee at the beginning of the term of this Lease
relating to the environmental condition of the property.
32. AUTHORITY: The Lessee warrants that he/she has appropriate
corporate authority to enter into this Lease. The General Partner executing this
Lease on behalf of Lessor represents and warrants that he has full power and
authority to do so.
WITNESS the following signatures and seals on this 11th day of January,
1998.
Astec Partnership Biotage Incorporated
By: /s/ Floyd M. Artrip By: /s/ C. Hess
--------------------------------- -------------------------------
Floyd M. Artrip Sr. V.P. Operations
General Partner Biotage Division of Dyax
24
<PAGE>
EXHIBIT 10.16
SUBLEASE
This instrument dated as of September 21, 1996, is a Sublease between
GENZYME CORPORATION, a Massachusetts corporation ("Sublessor"), and DYAX CORP.,
a Delaware corporation ("Sublessee").
The parties to this instrument hereby agree with each other as follows:
ARTICLE I
SUMMARY OF BASIC SUBLEASE PROVISIONS
------------------------------------
1.1 BASIC DATA
ALL CAPITALIZED TERMS USED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN
THE PRIME LEASE (hereinafter defined) UNLESS OTHERWISE DEFINED HEREIN.
Commencement Date: September 21, 1996.
Sublessor: Genzyme Corporation
Present Mailing Address
of Sublessor: One Kendall Square, Building 1400
Cambridge, Massachusetts 02139
Sublessee: Dyax Corp.
Present Mailing Address
of the Sublessee: One Kendall Square, Building 600
Cambridge, Massachusetts 02139
Permitted Uses: Offices, research, development, laboratories,
manufacturing, storage, marketing and sales of
biologically derived products in connection with
biological and chemical research.
Premises: 16,183 rentable square feet of office and laboratory
space located on the fifth floor of the building
known as Building 600, One Kendall Square,
Cambridge, Massachusetts (the "Building"), as
approximately shown on the sketch attached hereto
as Exhibit A. The Premises demised under this
Sublease comprise a portion of the Leased Premises
<PAGE>
(as defined in the Prime Lease) leased to Sublessor
by Prime Lessor under the Prime Lease (as defined
below).
Prime Lease: That certain lease, dated as of December 20, 1988,
between the Trustees of Old Kendall Realty Trust,
as lessor (the "Prime Lessor"), and Sublessor, as
lessee as most recently amended by a Third
Amendment dated March 8, 1996; a copy of the
pertinent provisions of the Prime Lease is attached
hereto as Exhibit B.
Rent: $614,954 per annum ($38 per sq. ft.)/$51,246.16
per month [BUT SEE Section 6.1(e) below for
Sublessee's rights for a limited "rent free" period
for the "Expansion Space" portion of the Premises].
Sublease Term or Term: Beginning on the Commencement Date and expiring
on September 30, 1998.
ARTICLE II
PREMISES
--------
2.1 SUBLEASE OF PREMISES
Sublessor hereby leases to Sublessee, and Sublessee hereby accepts and
leases from Sublessor, upon and subject to the terms and provisions of the Prime
Lease, all of Sublessor's right, title and interest in and to the Premises for
the Sublease Term. As appurtenant to the Premises, Sublessee shall be entitled
to the appurtenant rights set forth in clauses (a) and (b) of Section 2 of the
Prime Lease, subject in all events to the Prime Lessor's rights reserved and
excepted in such clauses.
2.2 PRIME LEASE
2.2.1 Sublessor hereby represents and warrants that: (i) Sublessor is lessee
under the Prime Lease and has the full right to enter into this Sublease; (ii)
the Prime Lease is in full force and effect and that Sublessor has submitted to
Sublessee a true and complete copy of those portions of the Prime Lease that are
pertinent to Sublessee's rights and obligations under this Sublease; (iii)
Sublessor has not received any notice of default thereunder from Prime Lessor,
nor is Sublessor aware of any default thereunder by Sublessor or Prime Lessor or
of any event or condition which, but for the passage of time or the giving of
notice or both, would constitute a default thereunder by Sublessor or Prime
Lessor; and (iv) to Sublessor's knowledge and belief, the Premises and their
electrical, mechanical, plumbing, heating, ventilating, and air conditioning
systems and all fixtures and equipment built into the Premises are in good
working order and repair. Sublessee warrants and acknowledges that it has
reviewed the Prime Lease and is satisfied with the arrangements therein
reflected. Sublessee also warrants and acknowledges that it is satisfied with
the present condition of the Premises (which Sublessee
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<PAGE>
takes "as is" without any representation or warranty by Sublessor regarding the
condition of the Premises [except as set forth in Section 2.2.1 (iv) above] or
the fitness of the Premises for any particular use, and without obligation of
any kind on Sublessor to make any repairs or improvements thereto), and with
Sublessee's ability to use the Premises on the terms herein set forth.
2.2.2 The Prime Lease is by this reference incorporated into and made a part
hereof, except that:
(i) all references in the Prime Lease to "Lessor", "Lessee", "Lease"
and "Leased Premises", respectively, shall be deemed to refer to Sublessor,
Sublessee, this Sublease and the Premises subleased hereunder,
respectively; except that all references in the following sections and/or
provisions of the Prime Lease to "Lessor", "Lessee", "Lease", and "Leased
Premises", respectively, shall be deemed to refer to "Prime Lessor",
"Sublessee", this "Sublease" and the "Premises subleased hereunder",
respectively [i.e., it is the intention of the parties that Prime Lessor
shall retain all of its rights and obligations under such sections and/or
provisions; that Sublessor shall not be entitled to exercise any of Prime
Lessor's rights, nor shall be bound by any of Prime Lessor's obligations,
under such sections and/or provisions; and that Sublessee shall be entitled
to exercise all of Tenant's rights, and shall be bound by all of Tenant's
obligations, under such sections and/or provisions]:
(a) All of Section 2 except for the first sentence (relating to
appurtenant rights and Prime Lessor's reserved rights)
(b) Section 6 (Utilities and Other Services)
(c) The second and the second from the last sentence of Section 10
(relating to Lessor's obligations to maintain HVAC systems, the
Building and its structural and mechanical systems); EXCEPT THAT
Sublessee shall have no obligation to make any payments to Lessor
for maintenance of the HVAC System
(d) Section 13 (Subordination)
(e) Section 19 (Rules and Regulations)
(ii) the following sections and/or provisions of the Prime Lease are
expressly EXCLUDED from this Sublease (i.e., they shall NOT be deemed to be
incorporated in this Sublease) either because they are inapplicable or
because they are superseded by specific provisions hereof:
(a) The first sentence of Section 2 (Leased Premises) (relating to
the description of the Leased Premises)
(b) Section 2A (Parking)
(c) Section 3.1 (Term)
(d) Section 3.2 (Condition of the Premises)
(e) Section 3.2.1 (Lessee's Improvement Work)
(f) Section 3A (Construction of Bridge Between Buildings 700 and
1400)
(g) Section 4 (Rent)
(h) Section 4A (Rent Commencement)
(i) Section 5 through 5.4.5 (Rent Adjustments)
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<PAGE>
(j) The first six lines of Section 9A, beginning with "LESSOR agrees
to keep the Building..." and ending with "boilers and other
machinery and equipment, and"
(k) Section 10, except to the extent included in Section 2.2.2(i)
above
(l) Section 12 (Assignment-Subletting)
(m) Sections 17 through 17A (Fire, Casualty and Eminent Domain)
(n) Section 20 (Broker)
(o) Section 22 (Notice)
(p) Section 24 (Expansion Rights)
(q) Section 25 (Option to Extend)
2.2.3 This Sublease is and shall remain subject and subordinate in all respects
to the Prime Lease and to all renewals, modifications, consolidations,
replacements and extensions thereof. In the event of termination or cancellation
of the Prime Lease for any reason whatsoever with respect to all or any portion
of the Premises, this Sublease shall automatically terminate with respect to all
or such portion of the Premises.
2.2.4 Notwithstanding anything contained in this Sublease to the contrary,
Sublessor shall have no obligation during the term of this Sublease to provide
any services of any nature whatsoever to Sublessee or to, in or for the benefit
of the Premises or to expend any money for the preservation or repair of the
Premises, or to observe or perform any obligations of Sublessor under this
Sublease in any case where such services, expenditures or obligations are
required under the Prime Lease to be provided, performed or observed by Prime
Lessor for the benefit of Sublessor with respect to the Premises, and Sublessee
agrees to look solely and directly to Prime Lessor for the furnishing of any
such services, expenditure of any such sums, or observance or performance of any
such obligations to which, or the benefit of which, Sublessee may be entitled
under this Sublease. Sublessor shall, however, upon the request of Sublessee
from time to time (which may be oral), notify Prime Lessor of any default by
Prime Lessor under the Prime Lease with respect to the Premises and to use
reasonable efforts to cause Prime Lessor to provide such services, expenditures
or obligations. For purposes of this Sublease and during the term of this
Sublease, Sublessor's only obligations as lessee under the Prime Lease with
respect to the Premises shall be to make those payments of rent due to Prime
Lessor thereunder, and to make those payments due to the utility providers for
utility services (including HVAC, electricity, water and sewer) which are
separately metered and furnished to the Leased Premises, which payments
Sublessor hereby agrees to make in timely fashion, and to use reasonable efforts
to cause Prime Lessor to provide the aforesaid services, expenditures and
obligations. It is the intention of the parties that Sublessee comply with, and
Sublessee agrees to comply with, all of the Sublessor's obligations as lessee
under the Prime Lease (not excluded under Section 2.2.2 above and except for
Sublessor's obligations to pay rent and utility charges to Prime Lessor and
others) with respect to the Premises to the same extent and with the same force
and effect as if Sublessee were lessee thereunder and Sublessee hereby agrees to
so comply with all of Sublessor's such obligations under the Prime Lease with
respect to the Premises. Sublessee shall have no claim against Sublessor for any
default by the Prime Lessor under Prime Lease; if, however, Sublessor is
entitled to a rent abatement equitably allocable to the Premises as a result of
any default by Prime Lessor, Sublessee shall be entitled to receive its fair and
equitable share of such abatement. If Prime Lessor shall default under any of
its obligations under the Prime Lease with respect to the Premises, Sublessee
shall have the right, at Sublessee's expense, but in the name of Sublessor, to
make demand or prosecute any appropriate action or proceeding against Prime
Lessor for the enforcement of the obligations of Prime Lessor
- 4 -
<PAGE>
with respect to the Premises. Sublessor agrees that it will cooperate with
Sublessee in such actions and proceedings and will sign such demand, pleadings
and/or other papers as may be required or appropriate, to enable the Sublessee
to proceed in Sublessor's name to enforce the obligations of Prime Lessor; but
Sublessee will pay all costs and expenses in the prosecution of any action or
any proceeding so taken by Sublessee and agrees to defend and indemnify
Sublessor against all costs and liability arising therefrom.
2.2.5 Sublessee shall neither do, nor permit to do nor permit to be done,
anything that would increase Sublessor's obligations to Prime Lessor under the
Prime Lease (unless Sublessee shall indemnify Sublessor from such increased
obligation) or that would cause the Prime Lease to be terminated or forfeited.
Sublessor hereby agrees that it shall not amend or modify the Prime Lease in any
manner that affects the Premises subleased hereunder without Sublessee's prior
consent, which consent shall not be unreasonably withheld.
2.2.6 Sublessor shall promptly give Sublessee a copy of any notice of default,
termination or otherwise affecting the existence or validity of the Sublease or
relating to any casualty or taking, given by Sublessor or Prime Lessor to the
other.
2.2.7 Sublessor and Sublessee hereby acknowledge that portions of the Premises
have direct access to portions of the Leased Premises located in Buildings 650
and 700 by means of existing interior corridors and doors. In recognition of
Sublessor's reasonable business safety, security and confidentiality needs,
Sublessee agrees that, except for its limited restroom/lavatory access rights
described in Section 2.3 below, Sublessee shall have no right whatsoever to
enter or have access to or otherwise use any space in Buildings 650 and 700.
2.3 SUBLESSEE'S RIGHTS RE BUILDING 700 LAVATORY USE
Sublessor and Sublessee hereby acknowledge that, based upon Sublessee's
anticipated use of the Premises, the number of restroom/lavatory facilities
located in the Premises may be inadequate to meet Sublessee's expected need for
restroom/lavatory facilities. Accordingly to enable Sublessee to avoid the cost
of installing in the Premises the additional restroom/lavatory facilities that
might otherwise be required as a practical matter for Sublessee's expected need,
Sublessor hereby grants to Sublessee, subject to the conditions described below,
the right (the "Bldg 700 Lavatory Rights"), in common with Sublessor, to have
access through the fifth floor of Buildings 650 and 700 for the limited purpose
of traveling to and from, and use of, the restroom/lavatory facilities located
on the fifth floor of Building 700 and labeled "Fifth Floor Lavatories" on the
Attached Exhibit A; Sublessor also hereby grants to Sublessee the right to have
access through the fifth floor of Buildings 650 and 700 for the additional
limited purposes of having access to emergency exits during emergency
situations. Sublessee's Bldg 700 Lavatory Rights shall be in all events subject
to the following conditions:
(a) The Bldg 700 Lavatory Rights may only be exercised during regular
business hours; as of the date of this Sublease, regular business hours are 8AM
to 6PM Mondays through Fridays, and 8AM to 1PM on Saturdays, but excluding
holidays. Neither Sublessee nor any Permitted User (as defined below) nor any
other person claiming by, through or under Sublessee shall have any right
whatsoever to exercise the Bldg 700 Lavatory Rights at any time outside regular
business hours.
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<PAGE>
(b) The Bldg 700 Lavatory Rights may only be exercised by (x) "Authorized
Personnel" (as defined below) and (y) visitors, customers, contractors and other
invitees of Sublessee who are accompanied by Authorized Personnel (Authorized
Personnel and such other persons are referred to herein collectively as
"Permitted Users").
(c) In exercising the Bldg 700 Lavatory Rights, Permitted Users shall be
authorized to enter and exit Building 700 only through the one door labelled
"Access Door" on the attached Exhibit A, and once inside Building 700, Permitted
Users shall be authorized to travel between the Access Door and the Fifth Floor
Lavatories only through the portions of the corridor labelled "Access Corridor"
on Exhibit A. Neither Sublessee nor any Permitted User nor any person claiming
by, through or under Sublessee shall have any right whatsoever to enter or
travel through any portion of Buildings 650 and 700 other than the Access Door,
the Access Corridor and the Fifth Floor Lavatories.
(d) For purposes of this Sublease, "Authorized Personnel" shall mean those
individual directors, officers and employees of Sublessee who have (x) received
written instructions approved by Sublessor that describe the times when, and the
terms and conditions under which, the Bldg 700 Lavatory Rights may be exercised;
(y) signed and delivered to Sublessor's Director of Security (or his designee) a
confidentiality agreement in form and substance satisfactory to Sublessor; and
(z) received from Sublessor's Director of Security (or his designee) a security
card which shall enable such person to have access through the Security Doors.
If Sublessee, any Permitted User or any other person claiming by, through
or under Sublessee shall fail to observe and/or perform any of the terms,
provisions, conditions, restrictions, or agreements set forth in this Section
2.3 (including without limitation any failure to observe and/or perform any of
the terms, provisions, conditions, restrictions or agreements contained in the
confidentiality agreement described above), and such failure continues for five
(5) days after Sublessee's written notice of such failure from Sublessor, then
Sublessor shall have the right at any time thereafter to terminate and revoke
the Building 700 Lavatory Rights. In such case, the Sublessee shall, at its sole
expense, be solely responsible for undertaking whatever steps are necessary to
provide within the Premises the minimum number of restroom/lavatories required
for Sublessee's needs in the Premises.
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<PAGE>
ARTICLE III
TERM OF SUBLEASE
----------------
3.1 TERM
The Sublease Term of this Sublease shall be for the period specified in
Section 1.1 as the Sublease Term, unless earlier terminated or extended as
provided below.
ARTICLE IV
CONDITION OF PREMISES
---------------------
4.1 CONDITION OF PREMISES
(a) Sublessee agrees to accept the Premises "as is", generally in the same
order and condition as the Premises are in as of the date hereof, and agrees
that Sublessor is under no obligation to perform any work upon or alteration to
the Premises for Sublessee's use and occupancy, other than to deliver the
Premises to Sublessee on the Commencement Date.
(b) Sublessor will permit Sublessee and its agents to enter the Premises
prior to the Commencement Date in order to perform through Sublessee's own
contractors (to be first approved by Sublessor) any work necessary to prepare
the Premises for Sublessee's occupancy; all such work shall be performed
substantially in accordance with plans approved by Sublessor and Prime Lessor.
The foregoing license to enter prior to the Commencement Date is conditioned
upon Sublessee's workmen and mechanics working in harmony and not interfering
with the labor employed by Sublessor, Sublessor's mechanics or contractors or by
Prime Lessor or any other tenant or their contractors. If at any time such entry
shall cause disharmony or interference, this license may be immediately
withdrawn by Sublessor.
Worker's compensation and public liability and property damage insurance,
all in amounts and with companies and on forms satisfactory to Sublessor, shall
be provided and at all times maintained by Sublessee or Sublessee's contractors
engaged in the performance of any work and, before proceeding with any work,
certificates of such insurance shall be furnished to Sublessor.
Any such entry shall be deemed to be under all of the terms, covenants,
provisions and conditions of the Sublease except the covenant to pay Rent.
4.2 FIXTURES AND EQUIPMENT
Sublessee shall be entitled to use all built-in fixtures and equipment,
including fume hoods physically located in the Premises as of the Commencement
Date. Sublessee shall, at its expense, maintain and repair such fixtures and
equipment in good order, repair and condition and shall surrender all such
fixtures and equipment to Sublessor in such condition at the end of the term,
reasonable wear and tear and damage by fire or other casualty excepted.
ARTICLE V
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<PAGE>
USE, ASSIGNMENT AND SUBLETTING
------------------------------
5.1 PERMITTED USE; ACCESS
Sublessee agrees that the Premises shall be used and occupied for the
Permitted Uses only. During the Sublease Term, Sublessee shall assume and
maintain exclusive control of the Premises. Sublessee acknowledges and
understands that it shall be responsible, at its expense, for providing any
janitorial, cleaning, equipment and fixture maintenance and security services
necessary for Sublessee's use and occupancy of the Premises. Sublessee shall
have access to the Premises and the appurtenant common areas of the Building 24
hours per day, seven days per week, subject to such "after hours" security
systems, rules and regulations as Prime Lessor may from time to time impose.
5.2 ASSIGNMENT AND SUBLETTING
Sublessee shall not, without the prior written consent of both Sublessor
(which consent shall not be unreasonably withheld or delayed) and Prime Lessor
by operation of law or otherwise, assign, mortgage, pledge, encumber or in any
manner transfer this Sublease, or any part thereof or any interest of Sublessee
hereunder or sublet or permit the Premises or any part thereof to be used or
occupied by others. Notwithstanding any such consent, Sublessee shall remain
liable to Sublessor for the payment of all rent and for the performance of the
covenants and conditions of this Sublease (which liability, following any
assignment, shall be joint and several with the assignee).
ARTICLE VI
RENT AND UTILITIES
------------------
6.1 RENT
(a) The Rent (specified in Section 1.1 hereof) and any additional rent or
other charges payable pursuant to this Lease shall be payable by Sublessee to
Sublessor by mailing such rent payment to Genzyme Corporation, P.O. Box 3486,
Boston, Massachusetts 02241-3486 (or such other place as Sublessor may from time
to time designate by notice to Sublessee).
(b) Rent shall be payable in advance on the first (1st) day of each and
every calendar month during the term of this Sublease.
(c) Rent for any partial month shall be paid by Sublessee to Sublessor at
such rate on a prorata basis. Other charges payable by Sublessee on a monthly
basis, as hereinafter provided, shall likewise be prorated.
(d) All Rent and other amounts due under this Sublease shall be made
without demand, offset or deduction. Sublessee shall be entitled to a fair and
equitable share of all abatements of rent and rent adjustments set forth in the
Prime Lease which Sublessor has been granted with respect to the Premises.
(e) Sublessee represents and Sublessor acknowledges that, as of the
Commencement Date and for the period of approximately six months thereafter,
Sublessee expects to use the
- 8 -
<PAGE>
approximately 2,638 rentable square foot portion of the Premises identified on
Exhibit A as the "Expansion Space" for only limited purposes. Accordingly,
Sublessor hereby agrees that Sublessee shall have no obligation to pay any rent
with respect to the Expansion Space until May 1, 1997. From and after May 1,
1997, however, full rent shall be due and payable with respect to the Expansion
Space. Sublessor shall provide Sublessee with such "free rent" for the Expansion
Space by applying to Sublessee's rental account for each month that Sublessee
qualifies for free rent, a credit in the amount of $8,353.67.
(f) It is the intention of the parties that Rent payable by Sublessee under
this Sublease shall be a "gross rent" that includes amounts on account of base
rent, utilities, operating expenses and real estate taxes payable by Sublessee
to Sublessor; i.e.; except under the limited circumstances set forth in Section
6.3 below and except for Sublessee's obligations under Section 9.3 to pay for
parking spaces, Sublessee shall have no obligation to make any payments to
Sublessor other than the Rent specified in Section 1.1.
6.2 LATE PAYMENTS; ADDITIONAL RENT
If any installment of Rent, additional rent or other charges is not paid
within five (5) business days of the date such payment is due and payable, then
Sublessee shall pay to Sublessor a late charge of five percent (5%) of the
amount of such payment. In addition, if Sublessee shall fail to make any such
payment within thirty (30) days after the due date, such payment shall bear
interest at the rate per annum which is two percent (2%) higher than the "prime
rate" then being charged by The First National Bank of Boston from the date such
payment became due to the date of payment thereof by Sublessee; provided,
however, that nothing contained herein shall be construed as permitting
Sublessor to charge or receive interest in excess of the maximum legal rate then
allowed by law. Such late charge and interest shall constitute additional rent
due and payable hereunder with the next installment of Base Rent due hereunder.
6.3 EXCESS UTILITY COSTS
If Sublessor, in its reasonable judgment, determines that Sublessee is
using excessive quantities of HVAC, electricity or water (for purposes of this
Sublease, "excessive quantities" shall mean quantities more than 10% higher than
the quantities being consumed by Sublessor [calculated on a per square foot
basis] in portion of the Leased Premises used by Sublessor for purposes
comparable to Sublessee's use of the Premises), Sublessee shall, upon receipt of
a written invoice therefor, reimburse Sublessor for the cost of any such excess.
- 9 -
<PAGE>
ARTICLE VII
CASUALTY
--------
7.1 CASUALTY AND RESTORATION
If the Premises, or any part thereof, shall be damaged or destroyed by fire
or other casualty then Sublessee shall promptly notify Prime Lessor and
Sublessor. Under the Prime Lease the Prime Lessor is obligated, as soon as
possible thereafter, to repair or restore the Premises to the extent and in the
manner set forth in Section 17 of the Prime Lease. If damage is of the type
which entitles Prime Lessor or Sublessor to terminate the Prime Lease and either
such party so elects to terminate the Prime Lease, then the Prime Lease shall
cease and come to an end and this Sublease shall similarly terminate. In
addition, if damage is of the type which would entitle Sublessor to terminate
the Prime Lease, Sublessee shall have the right to terminate this Sublease by
giving both Sublessor and the Prime Lessor written notice of such termination
within the applicable notice period set forth in Section 17 of the Prime Lease.
Sublessee acknowledges that Sublessor shall, in no event, have any obligation
whatsoever to rebuild or restore any damage to the Premises.
If during the Sublease Term the Building shall be partially or
substantially damaged by fire or casualty and if such partial or substantial
damage shall materially interfere with the Sublessee's use of the Premises as
contemplated by this Sublease, a just amount of the rent and other charges
payable by the Sublessee hereunder shall be equitably abated or adjusted for the
period in which, by reason of such damage, there is such interference with the
use of the Premises, but only to the extent that Sublessor is also entitled to
an abatement under the Prime Lease on account of such fire or casualty that is
equitably allocable to the Premises subleased hereunder.
ARTICLE VIII
EMINENT DOMAIN
--------------
8.1 EMINENT DOMAIN
Should the Building or any part thereof be taken by eminent domain and such
taking (or damage caused by such taking) is of the type which entitles Prime
Lessor or Sublessor to terminate the Prime Lease and either such party elects to
terminate the Prime Lease, then, and in that event, the Prime Lease shall cease
and come to an end and this Sublease shall cease and come to an end, and the
Rent shall be apportioned as of the date of the termination notice.
If any such taking renders the remaining portion of the Premises unsuitable
for the purposes of Sublessee (in Sublessee's reasonable judgment), then
Sublessee shall have the right to terminate this Sublease by written notice to
Sublessor which shall be within sixty (60) days of the public recording of such
taking. In the event of termination by Sublessee as set forth above, the Rent
shall be apportioned as of the date of such termination notice. In addition, if
any taking is of the type which would entitle Sublessor to terminate the Prime
Lease, Sublessee shall have the right to terminate this Sublease by giving both
Sublessor and the Prime Lessor written notice of such termination within the
applicable notice period set forth in Section 17A of the Prime Lease.
- 10 -
<PAGE>
In the event of a taking described in Section 17A of the Prime Lease, the
rent and other charges payable hereunder, or a fair and just proportion thereof
according to the nature and extent of the loss of use, shall be suspended or
abated, but only to the extent that Sublessor is also entitled to an abatement
or suspension under the Prime Lease on account of such taking that is equitably
allocable to the Premises subleased hereunder.
Sublessor reserves, and Sublessee grants to Sublessor all rights which the
Sublessee may have for damages or injury to the Premises for any taking by
eminent domain, except for damage to the Sublessee's fixtures, personal property
or equipment, if any, the Sublessee's right to relocation expenses, if any, and
the Sublessee's right for business interruption, if any.
ARTICLE IX
MISCELLANEOUS PROVISIONS
------------------------
9.1 NO BROKERAGE
The parties represent that they have dealt with no real estate broker or
agent in connection with this Sublease other than Robert Richards of Fallon
Hines & O'Connor, and in the event of any brokerage claims against Sublessor
from any broker other than Fallon, Hines & O'Connor, predicated upon prior
dealings with Sublessee, Sublessee hereby agrees to defend, indemnify and hold
harmless Sublessor from and against any such claim.
9.2 NOTICES
Whenever by the terms of this Sublease notice, demand or other
communication shall or may be given, either to Sublessor or to Sublessee, the
same shall be adequately given if in writing and delivered by hand or sent by
registered or certified mail, postage prepaid:
If intended for Sublessor, addressed to it at the mailing address set forth
on the first page of this Lease, with a copy to Sublessor's attorneys,
Palmer & Dodge LLP, One Beacon Street, Boston, Massachusetts 02108,
Attention: Maureen P. Manning, Esquire and Thomas G. Schnorr, Esquire (or
to such other address or addresses as may from time to time hereafter be
designated by Sublessor by like notice).
If intended for Sublessee, addressed to it at the Premises to the attention
of the Director of Finance (or to such other address or addresses as may
from time to time hereafter be designated by Sublessee by like notice).
All such notices shall be effective upon receipt or refusal to receive.
- 11 -
<PAGE>
9.3 PARKING
Under the terms of the March 8, 1996, Third Amendment to the Prime Lease,
Sublessor is entitled, as a right appurtenant to the Leased Premises, to use a
certain number of parking spaces in the One Kendall Square Parking Garage upon
payment of the then current monthly parking fee determined in accordance with
the last paragraph of Section 4 of the Prime Lease. Sublessor shall make
available to Sublessee during the term of this Sublease, at Sublessee's expense,
the right to use up to 16 of such parking spaces in such garage.
9.4 PRIME LESSOR CONSENT
This Sublease shall not be effective until and unless Prime Lessor has
given its consent hereto. Sublessor shall not be responsible for the failure of
Prime Lessor to consent to this Sublease.
EXECUTED UNDER SEAL.
Sublessor: GENZYME CORPORATION
By /S/ EVAN M. LEBSON
--------------------------------
Its Vice President and Treasurer
hereunto duly authorized
Sublessee: DYAX CORP.
By /S/ HENRY E. BLAIR
---------------------------------
Its Chairman
hereunto duly authorized
- 12 -
<PAGE>
[GENZYME LETTERHEAD]
January 23, 1998
Dyax Corp.
One Kendall Square, Bldg. 600
Cambridge, MA 02139
Attention: Director of Finance
Re: Sublease dated as of September 21, 1996, between Genzyme
Corporation, as Sublessor, and Dyax Corp., as Sublessee, with
respect to premises consisted of approximately 16,183 square
feet located on the Fifth Floor of Building 600 at One Kendall
Square, Cambridge, Massachusetts
Gentlemen:
The purpose of this letter is to confirm the agreement that we reached on
December 31, 1997 to extend the term of the captioned Sublease as of December
31, 1997 as follows:
1. The expiration date of the Sublease is hereby extended from September
30, 1998, through and including December 31, 1999 (such extension
period is referred to as the "Extended Term").
2. Sublessee has no rights or options to extend the term of the Sublease
beyond such expiration date.
3. Except as amended hereby, the Sublease remains unchanged and in full
force and effect.
Please acknowledge your agreement to the foregoing by having the two
enclosed copies of this letter signed by an authorized officer of Dyax Corp.
Once this letter is so
[This space intentionally left blank.]
<PAGE>
Dyax Corporation
January 23, 1998
Page 2
signed and returned to me and approved by Prime Lessor, this letter shall
constitute an amendment to the Sublease.
Very truly yours,
GENZYME CORPORATION
By: /s/ Peter Wirth
--------------------------
Peter Wirth
Executive Vice President
Chief Legal Officer
Enclosures (2)
cc: Thomas G. Schnorr, Esquire
Accepted and Agreed to this 23rd day of January, 1998:
DYAX CORP.
By: /s/ Henry E. Blair
--------------------------------
Its President
Hereunto duly authorized
The undersigned, as successor to the Trustees of Old Kendall Realty Trust as
Prime Lessor, hereby consents to the foregoing:
OLD KENDALL PROPERTY LLC
By: /s/ Allan R. Jones, President, Managing Member
--------------------
Dated: January 26, 1998
<PAGE>
Exhibit 10.17
SECOND AMENDMENT TO SUBLEASE
This Second Amendment to Sublease (the "Second Amendment") is entered into
as of March 21, 2000 by and between Genzyme Corporation, a Massachusetts
corporation (the "Sublessor") and Dyax Corp., a Delaware corporation (the
"Sublessee"). The effective date of this Second Amendment is January 1, 2000.
Capitalized terms used herein and not otherwise defined shall have the meaning
given to them in the Sublease (as defined below).
WHEREAS, a Sublessor and Sublessee entered into a Sublease dated September
21, 1996 (the "Sublease") with respect to premises consisted of approximately
16,183 square feet located in the Fifth Floor of Building 600 at One Kendall
Square, Cambridge, Massachusetts;
WHEREAS, Sublessor and Sublessee amended the Sublease pursuant to a Letter
Agreement dated as of January 23, 1998 with an effective date of December 31,
1997; and
WHEREAS, Sublessor and Sublessee wish to further amend certain provisions
of the Sublease, as amended.
NOW THEREFORE, in consideration for the foregoing premises and the
following covenants and promises, the parties agree and acknowledge as follows:
1. The expiration date of the Sublease is hereby extended from December
31, 1999, through and including June 30, 2001 (such extension period is referred
to as the "Extended Term").
2. Sublessee shall have the option to extend the Extended Term for six (6)
additional one month periods commencing on July 1, 2001 (each such additional
one month period is referred to as an "Option Term"). Not less than ten (10)
days prior to the expiration of the Extended Term or any Option Term, Sublessee
shall provide Sublessor with written notice of its intention to either (i)
terminate the Sublease at the end of the Extended Term or the Option Term, or
(ii) continue the Sublease for the next Option Term. In no event shall Sublessee
have the right to extend the Term of the Sublease beyond December 31, 2001.
3. The Rent payable by the Sublessee to Sublessor for the Premises shall
be $647,320 per annum ($40.00 per square foot or $53,943.33 per month).
4. Except as specifically amended hereby, the Sublease remains unchanged
and in full force and effect.
5. This Second Amendment shall not be effective until and unless Prime
Lessor has given its consent hereto. Sublessor shall not be responsible for the
failure of Prime Lessor to consent to this Second Amendment.
<PAGE>
IN WITNESS WHEREOF, this Second Amendment has been executed as of the date
first set forth above.
Sublessor:
GENZYME CORPORATION
By: /s/ Frank Ollington
-------------------------------
Name:
Title:
Subtenant:
DYAX CORP.
By: /s/ Henry E. Blair
------------------------------
Name:
Title:
2
<PAGE>
DATED 8TH APRIL 1991 EXHIBIT 10.18
BRIDGE GATE REAL ESTATES LIMITED
- AND -
BIOTAGE UK LIMITED
- AND -
HARTFORD COURT MANAGEMENT LIMITED
----------------------------------------
Counterpart
L E A S E
- OF -
Unit 15 Hartford Court,
Foxholes Business Park
John Tate Road, Hertfordshire
----------------------------------------
Ref: MPFOX15.LSE
<PAGE>
"the Ancillary Area" means that part of the Estate and adjacent
to the Demised Premises shown cross hatched
green on the Plan
"the Roadways" means all that piece or parcel of land
forming part of the Estate and hatched brown
on the Plan
"the Landscaped Areas" means all those pieces or parcels of land
forming part of the Estate and hatched green
on the Plan
"the Pathways" means all that piece or parcel of land
forming part of the Estate and coloured
yellow on the Plan
"the Parking Spaces" means all those pieces or parcels of land
forming part of the Estate set aside for the
purposes of parking vehicles on the Estate
"the Forecourt" means the area of land forming part of the
estate shown coloured blue on the Plan (and
Forecourts shall mean all such similar areas
from time to time located adjacent to other
buildings on the Estate)
"this Lease" means this Lease and includes any Schedule
hereto any license granted pursuant to and
any deed of variation of the provisions
hereof and any deed or instrument made
supplemental hereto
"Quarter Days" means the 25th March, 24th June, 29th
September and 25th December in each year
(and the term Quarter Day shall be construed
accordingly)
"Term" means the term hereby granted and shall
include where appropriate any extension
thereof whether by agreement of the Landlord
and Tenant or by or pursuant to any statute
for the time being in force
"Termination of the Term" means the determination of the Term whether
by effluxion of time re-entry notice under
the provisions hereof surrender by operation
of law or otherwise or by any other means or
cause whatsoever
"the First Reserved Rent" shall mean the rent first herein reserved
and shall include any increase therein
during the Term pursuant to the provisions
of the Fifth Schedule to this Lease
"Permitted Part" shall mean the whole of any floor of the
Demised Premises
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<PAGE>
"Party Structures" means unless the context otherwise requires
the walls, columns and other structural
items dividing the Demised Premises from any
adjoining building on the Estate not let to
the Tenant excluding the internal
plasterwork or other surfaces and coverings
of the said pillars, walls and structural
items which shall be within the Demised
Premises
"Common Parts" means the parts of the Estate which have not
been and are not intended to be transferred
or demised by the Landlord and shall include
without prejudice to the generality of the
foregoing the Roadways, the Pathways, the
Parking Spaces, the Forecourts and the
Landscaped Areas
"the Insured Risks" means the risks from time to time and at the
relevant time intended to be covered by the
policy or policies of insurance effected by
the Landlord pursuant to the covenant on the
Landlord's part in that respect herein
contained against loss or damage by fire
storm tempest flood lightning, explosion,
aircraft articles dropped therefrom, riot or
civil commotion, malicious damage impact,
earthquake, landslip, subsidence bursting
and overflowing of water tanks, apparatus or
pipes and such other risks as the Landlord
shall reasonably consider it necessary to
insure against together also with property
owners and third party liability plant and
machinery cover (including the cost of
shoring demolition site clearance and
consultant's fees) and in respect of the
employment of people on the Estate and loss
of the rent and the Service Charge payable
hereunder from time to time for such period
(being not less than three years) as is
reasonably required by the Landlord from
time to time having regard to the likely
period required for reinstatement in the
event of partial and total destruction and
in an amount which would take into account
the Landlords reasonable estimate of
potential increases of rent in accordance
with the rent review provisions herein
contained
"Prescribed Rate" means four per centum (4%) per annum above
Barclays Bank Plc Base Rate (or such other
rate or rates which may replace the same and
by reference to which all or a majority of
English clearing banks determine their own
rates of interest) in force at the date of
the commencement of the period in respect of
which any payment of interest accrues due
under this Lease
- 3 -
<PAGE>
"Service Expenditure" shall mean the total cost to the Landlord or
the Service Company (as appropriate) of
providing the Services calculated and
payable in accordance with the provisions of
the Seventh Schedule of this Lease
"the Service Charge" shall bear the meaning ascribed to it
respectively by and shall be construed in
accordance with the Seventh Schedule to this
Lease
"the Services" the services to be carried out by the
Landlord or the Service Company as listed in
sub-paragraphs (a) - (f) inclusive of
paragraph 2 of the Fourth Schedule hereto
"Relevant Area" in relation to any part of the Estate means
the total area of the building erected on
that part in square feet (rounded up to the
nearest one hundred square foot) measured in
accordance with the Code of Measuring
Practice adopted or approved by the Royal
Institution of Chartered Surveyor's at the
material time or times
"Financial Year" means in relation to Service Expenditure the
period from the first day of January in each
year to the thirty-first day of December in
the same year or such other annual period as
the Landlord may in its discretion from time
to time determine as being that for which
the accounts of the Landlord shall be made
up
"Relevant Financial Year" in relation to the determination of the
Service Expenditure means the Financial Year
for which the amount of the Service
Expenditure is being determined
"Accountant" means an accountant appointed by the
Landlord who shall be a member of a body of
accountants established in the United
Kingdom and for the time being recognized by
the Secretary of State for the purpose of
the Companies Act 1985
"Certificate" means a written statement of the Service
Expenditure and the Service Charge certified
by the Accountant
"the Planning Acts" shall mean the Town and Country Planning
Acts 1962 to 1990 and the Town and Country
Amenities Act 1974
"Service Media" ventilators, sewers, drains, pipes, wires,
cables, gutters, conduits and other
conducting media in on or over the Estate or
some part thereof
- 4 -
<PAGE>
(2) (i) words importing the masculine gender only shall include the
feminine gender and vice versa;
(ii) words importing the singular number shall include the plural
number and vice versa and where there are two or more persons
included in the expression "the Tenant" covenants contained in
this Lease which are expressed to be made by the Tenant shall
be deemed to be made by such persons jointly and severally;
(iii) words importing persons shall include firms, companies and
corporations and vice versa;
(iv) any reference to an Act of Parliament shall include any
modification, extension or re-enactment thereof for the time
being in force and shall include all instruments, orders,
plans, regulations, permissions and directions for the time
being made issued or given thereunder or deriving validity
therefrom
(v) the Clause headings herein and the Schedule headings are for
reference only and shall not be deemed to form part of this
Lease nor shall they affect the construction thereof
(vi) any certificate to be given by the Landlord's Accountants
under the provisions of this Lease shall in respect of matters
of fact (unless otherwise specified in any particular Clause)
and save in the case of manifest error be final and binding on
the parties hereto
(vii) any covenant by the Tenant not to do or omit to be done an act
or thing shall be construed as if it were a covenant not to do
or permit or suffer such act or thing.
1. THE Landlord HEREBY DEMISES unto the Tenant ALL THAT the Demised Premises
TOGETHER with the rights specified in Part II of the First Schedule hereto
EXCEPT AND RESERVING unto the Landlord (and any person authorized or approved by
the Landlord) the interests, rights and easements more particularly specified in
Part III of the First Schedule hereto TO HOLD the Demised Premises unto the
Tenant for a term of 25 years from the 8th day of April One thousand nine
hundred and ninety one Together with the benefit of the rights (so far as the
Landlord is able to grant same) contained in the First Schedule of a transfer of
the Estate dated 24th March 1988 made between Foxholes Business Limited (1) S.T.
Martin (London) Limited (2) Tarmac Properties Limited (3) and Bride Hall
Developments Limited (4) and Subject to all rights, easements, quasi-easements
and privileges belonging to or enjoyed by any adjoining or neighboring property
YIELDING AND PAYING THEREFOR unto the Landlord during the said term FIRST the
yearly rent of FIFTY SIX THOUSAND TWO HUNDRED AND FIFTY TWO POUNDS
((pound)56,252,00) (or such increased rent as may hereafter become payable under
the provisions for rent revision hereinafter contained in the Fifth Schedule
hereto) by equal quarterly payments in advance (by bankers order if so required
by the Landlord) on the Quarter Days in every year
- 5 -
<PAGE>
and in each case without any deduction of which the first payment shall be made
on the date hereof in respect of the period from the day of One thousand
nine hundred and ninety to the day of One thousand nine hundred and ninety
AND SECONDLY by way of additional rent.
(1) on written demand by the Landlord a yearly sum equal to the due and proper
proportion attributable to the Demised Premises (as certified by the
Landlord) of the expenditure by the Landlord in effecting insurance in
respect of the Insured Risks
(2) the amount or amounts payable by the Tenant from time to time under this
Lease in respect of the Service Charge (calculated in accordance with the
Seventh Schedule to this Lease) such additional rent to be payable at the
times and in the manner specified in the Seventh Schedule and
(3) where services are provided by the Landlord to the Tenant on the request
of the Tenant in addition to or substitution for the Services on written
demand the whole of the cost to the Landlord as certified by the Landlord
acting reasonably of providing such service
2. THE Tenant HEREBY COVENANTS with the Landlord and as a separate covenant with
the Service Company in manner set out in the Second Schedule and paragraph 1 of
the Seventh Schedule hereto.
3. THE Landlord HEREBY COVENANTS with the Tenant in manner set out in the Third
Schedule hereto.
4. THE Service Company HEREBY COVENANTS with the Tenant and as a separate
covenant with the Landlord in manner set out in the Fourth Schedule hereto.
5. IT IS HEREBY AGREED AND DECLARED that the First Reserved Rent shall be
reviewed and (if appropriate) increased at the times and in manner set out in
the Fifth Schedule hereto.
6. PROVIDED ALWAYS AND AS HEREBY EXPRESSLY AGREED AND DECLARED in manner set
out in the Sixth Schedule hereto.
IN WITNESS whereof, the Landlord and Tenant and the Service Company have
executed this Lease as a Deed and have caused their respective common seals to
be hereunto affixed to day and year first above written.
THE FIRST SCHEDULE hereinbefore referred to
PART I
Description of the Demised Premises
ALL THOSE land and premises comprising Unit 15 and forming part of the Estate
such land and premises being more particularly delineated on the Plan and
thereon edged red
- 6 -
<PAGE>
PART II
Rights granted pursuant to Clause 2 of this Lease
with and for the benefit of the Demised Premises
The following rights in common with the Landlord and all others now or hereafter
entitled to the like rights:
(1) A right of way with or without vehicles in common with the Landlord and
all other persons who have or may hereafter be granted a like right at all
times and for all purposes connected with the Demised Premises (but not
for any other purpose) over and along the Roadways and the exclusive right
to use the Forecourt for such purposes.
(2) The right (so far as the same are not mains facilities in the ownership of
the appropriate statutory undertakers) in common with the Landlord and all
other persons who may have or may hereafter be granted a like right to the
free and uninterrupted passage and running of air water soil gas
electricity and telephone signals or impulses through the Service Media
serving or capable of serving or being enjoyed by the Demised Premises and
the right to enter upon the Estate for the purposes of making connections
with the said Service Media and inspecting maintaining or repairing and
renewing the Service Media and the said connections thereto causing as
little damage as possible and making good all damage thereby occasioned to
the reasonable satisfaction of the surveyor for the time being of the
Landlord or (if required) to the satisfaction of the relevant Highway
Authority.
(3) A right-of-way on foot only in case of fire or other emergency over the
Pathways shown hatched blue on the Plan and an exclusive right of way on
foot only other the Pathways shown hatched brown on the Plan
(4) The exclusive right to use the Parking Spaces shown coloured orange on the
Plan and to erect discreet notices in the name of the tenant thereon
PROVIDED however that the Landlord shall be entitled to vary the location
of the said spaces for the purposes of good estate management PROVIDED
FURTHER that the Tenant is always to have an entitlement to not less than
sixteen Parking Spaces at all times and that such spaces shall in any
event be located on the Estate.
(5) The right to erect a sign on the Landlord's Estate Signboard at the
entrance to the Estate in accordance with the provisions of paragraph (13)
of the Second Schedule hereto
(6) The right with servants workmen and others at all reasonable times or at
any time in case of emergency to enter and remain upon the Estate and any
buildings erected thereon or any part thereof for the purpose of repairing
maintaining inspecting renewing or rebuilding the Demised Premises or any
Party Structures making good all damage thereby effected as soon as
reasonably practicable.
- 7 -
<PAGE>
(7) The right of support and shelter from any adjoining buildings or other
structures on the Estate.
(8) The exclusive right to enter and remain upon the Ancillary Area together
with servants employees licensees and invitees of the Tenant on foot only
for recreational and leisure purposes ancillary to the use of the Demised
Premises.
(9) The right at any time during the term to erect a brick built building or
other similar structure upon the Ancillary Area for storage use in
connection with the business of the tenant PROVIDED THAT:
(a) Prior to exercising such right the Tenant shall obtain all necessary
consents and approvals from any local statutory or other authorities
(b) Prior to exercising such right the Tenant shall supply a
specification and drawings of the said structure such specifications
and drawings to be to the reasonable satisfaction of the Landlord.
(c) On the Termination of the Term the Tenant shall remove the said
structure and shall reinstate the Ancillary Area in all respects to
its former condition.
PART III
Rights excepted and reserved pursuant to
Clause 2 of this Lease
There are excepted and reserved out of this Lease to the Landlord and its
successors in title and to the Service Company or to other Tenants to the
remaining parts of the Estate (save as hereinafter provided) for the benefit of
the Estate
(1) The right to erect or to consent to any person erecting any new building
on the Estate and the right to alter or to consent to any person altering
any buildings which may now or may hereafter be built on the Estate
notwithstanding that such erection or alteration may diminish the access
of light or air enjoyed by the Demised Premises with liberty to deal with
any land adjoining opposite or near to the Demised Premises or the Estate
as may be thought fit but without prejudice to the easements granted to
the Tenant by this Lease or the Landlord's covenants set out in the Third
Schedule hereto.
(2) The right with servants workmen and others at all reasonable times in
the day time on reasonable notice (or at any time and without notice in
case of emergency) to enter and remain upon the Demised Premises
together with all necessary tools appliances and materials for the
purpose of inspecting maintaining repairing altering or rebuilding
any adjoining or contiguous premises or any drain or other service
connected thereto causing as little damage as possible and making good
all damage thereby occasioned PROVIDED THAT any persons exercising
such right shall cause as little interference with the trade business
or activities being carried on by the Tenant at the Demised Premises as
shall be reasonably practicable.
(3) The right to the passage and running of air water soil gas electricity
and telephone signals or impulses through the Service Media which now are
or may at any time hereafter be situate in any part of the Demised
Premises and serving or capable of serving or being enjoyed by any other
part of the Estate with liberty to alter amend add to and make connections
with the Service Media or any of them for the purposes of exercising such
right together with the right at reasonable times on reasonable notice (or
at any time and without notice in the case of emergency) to enter upon the
Demised Premises for the purpose of repairing renewing altering amending
adding to and connection up the same but so that all such work as
aforesaid shall be carried out in such manner as to cause as little
inconvenience as possible to the owner or occupier of the Demised Premises
and the trade business or activities carried out thereat and any damage
occasioned thereby shall be made good as soon as reasonably practicable.
THE SECOND SCHEDULE ABOVE REFERRED TO
(1) To pay the First Reserved Rent and any revised and additional rents
hereby reserved at the times and in manner aforesaid without any
deduction and also to pay interest on the same in the circumstances
hereinafter provided in Paragraph 6 of the Sixth Schedule hereto
(2) (a) To pay and discharge all existing and future rates taxes duties
charges assessments impositions and outgoings whatsoever (whether
parliamentary parochial local or of any other description and
whether or not of a capital or revenue or non-recurring nature
and even though of a wholly novel character) which are now or may
at any time hereafter be assessed charged levied or imposed upon
or payable in respect of occupation of (and not ownership of) the
Demised Premises or on or by any estate owner landlord tenant or
occupier in respect thereof PROVIDED ALWAYS that nothing in this
lease shall impose any liability on the Tenant to pay
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contribute or defray (or otherwise howsoever) any such sums relating
to the income or chargeable gains of any third party or the Landlord
in relation to the Demised Premises or any other premises or
otherwise howsoever or any disposition or dealing with the same.
(b) To repay to the Landlord in the absence of direct assessment on the
Tenant the proportion properly attributable to the Demised Premises
of such of the aforesaid rates taxes duties charges assessments
impositions and outgoings as may be payable in respect of occupation
of any property of which the Demised Premises form a part insofar as
the same is not included in the calculation of the Service Charge
(such proportion to be determined by the Landlord's Surveyor acting
reasonably).
(c) To pay the cost of any connection charges in respect of the supply
of gas water and electricity and for the supply of any meters.
(3) To keep in good and substantial repair and condition the Demised Premises
damage (over and above any excess on such policy from time to time) caused
by any of the Insured Risks excepted unless any policy of insurance has
been vitiated or payment of any of the policy monies withheld or refused
due to any act neglect or default of the Tenant or any sub-tenant or their
respective servants agents lessees or invitees) and keep clean the Demised
Premises and appurtenances thereof including but without prejudice to the
generality of the foregoing the doors windows Party Structures and walls
of the Demised Premises and all glass fixtures fittings fastenings wires
gutters sewers drains and other pipes sanitary and water heating and
electrical apparatus and all heating equipment and apparatus (if any)
therein and exclusively serving the Demised Premises and the painting
papering and decoration thereof and the Landlord's fixtures and fittings
therein with all necessary reparations and cleansing works and amendments
whatsoever including save as hereinafter provided the making good of all
defects howsoever and wherever arising in or on or under the Demised
Premises (PROVIDED ALWAYS THAT the making good of all defects directly or
indirectly attributable to the defective or faulty design or construction
of the Demised Premises or the use of inadequate defective or faulty
materials or building practices in connection therewith howsoever and
whenever arising in on or under the Demised Premises shall not fall within
this or any other covenant on the part of the Tenant herein contained) and
to replace from time to time all Landlord's fixtures fittings and
appurtenances in the Demised Premises which may be or become beyond repair
at any time during or at the Termination of the term and without prejudice
to the generality of the foregoing covenants to clean all windows (both
inside and outside) including the frames thereof as often as reasonably
necessary.
(4) Without prejudice to the generality of the foregoing covenant:
(a) as and whenever necessary and in any event in every fifth year of
the term and also in the twelve months prior to the Termination of
the Term to have prepared and painted or otherwise decorated or
treated (as the case may be) all surfaces and other portions of the
fabric and finishes inside the Demised
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Premises usually painted or decorated with two coats at least of
good quality paint or good quality polish or other suitable material
of good quality in a proper and workmanlike manner and so often as
may be necessary to have professionally treated in accordance with
an approved manner (for preserving and protecting the same) all
other parts of the interior of the Demised Premises requiring such
treatment for preservation and protection All such painting
decoration or other treatments to be carried out by the Tenant to
the reasonable satisfaction of the Landlord and in the twelve months
prior to the Termination of the Term in materials of a type standard
and quality approved by the Landlord such approval not to be
unreasonably withheld or delayed.
(b) as and whenever necessary and in any event in every fifth year of
the Term and also in the twelve months prior to the Termination of
the term to have prepared and painted or otherwise decorated or
treated (as the case may be) all surfaces and other portions of the
fabric and finishes of the exterior of the Demised Premises usually
painted or decorated with two coats at least of good quality paint
or good quality polisher other suitable material of good quality in
a good and workmanlike manner and so often as may be necessary to
have professionally treated in accordance with the approved manner
(for preserving and protecting the same) the exterior of the Demised
Premises requiring such treatment for preservation and protection
all such painting and decoration or other treatments to be carried
out by the Tenant to the reasonable satisfaction of the Landlord
(and in the twelve months prior to the Termination Date in materials
of a type standard and quality approved by the Landlord) such
approval not to be unreasonably withheld or delayed.
(c) to carry out all such painting decoration or the treatment as
aforesaid during the twelve months prior to the Termination of the
Term in colors and tints as the Landlord may reasonably require
(d) to replace all glass in the Demised Premises (including roof lights
(if any) as and when the same is broken or damaged with glass of the
same color tint and specification and in conformity to the glass
fitted in the remainder of the Demised Premises.
(5) At the Termination of the Term to yield up to the Landlord the Demised
Premises decorated repaired cleaned and kept in accordance with the
Tenant's covenants in this Lease contained together with all additions and
improvements thereto and all fixtures (other than tenant's or trade
fixtures) in or upon the Demised Premises or which during the said Term
may be fitted or fastened to or upon the Demised Premises and in
accordance also with the covenants and conditions contained or imposed in
or by virtue of any license granted by the Landlord hereunder and prior to
the Termination of the Term:
(a) in case any of the Landlord's fixtures and fittings shall be missing
broken damaged or destroyed without delay to replace them with
others of a similar character
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(b) in the event of any alterations having been made to the Demised
Premises by the Tenant during the Term to reinstate the Demised
Premises (if the Landlord shall so require but not otherwise) to the
condition in which the same were prior to the making of such
alterations and in any event to remove any molding, sign writing, or
painting of the name or business of the Tenant and other persons
from the Demised Premises and
(c) make good any damage caused to the Demised Premises by such removal
or the removal of the Tenant's fixtures fittings furniture and
effects PROVIDED THAT in this paragraph damage (over and above any
excess on such policy from time to time) by any of the Insured Risks
is excepted unless any policy of insurance has been vitiated or
payment of any of the policy monies withheld or refused due to any
act neglect or default of the Tenant or any sub-tenant or their
respective servants agents licensees or invitees.
(6) To permit the Landlord or its agents at any reasonable time in the day
time and by prior appointment (except in case of emergency) to enter into
and upon the Demised Premises
(a) to examine the same to ensure that nothing has been done therein or
omitted which constitutes or may in the opinion of the Landlord tend
to constitute a breach or non-performance of any of the covenants
contained in this Lease
(b) to take schedules or inventories of the fixtures and things to be
yielded up at the Termination of the Term
(c) to exercise any rights excepted and reserved to the Landlord by this
Lease.
(7) As soon as reasonably practicable (and in the case of emergency without
delay) to remedy repair and make good all breaches and defects of which
notice shall e given by the Landlord to the Tenant and which the Tenant
shall be liable to remedy repair or make good under the covenants
contained in these Presents.
PROVIDED that if the Tenant fails to remedy repair and make good all breaches
and defects within three months of the notice by the Landlord or such other time
as may be reasonable the Landlord may (but shall not be obliged to) enter the
Demised Premises and at the expense of the Tenant fulfill the Tenant's
obligations under sub-paragraphs (3) (4) and (5) of this Second Schedule and the
Tenant will pay the reasonable costs and expenses properly incurred by the
Landlord to the Landlord on demand
(8) (a) Not to do or bring in or upon the Demised Premises anything which
may throw on the Demised Premises any weight or strain in excess of
that which such premises are calculated to bear with due margin for
safety and in particular nor to overload the floors nor suspend any
excessive weight from the ceilings or walls stanchions or the
structure of the Demised Premises
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<PAGE>
(b) Not to overload the electrical installation or any other service in
or to the Demised Premises
(9) (a) At all times during the Term to comply with all requirements and
recommendations from time to time of the appropriate authority in
relation to fire precautions affecting the Demised Premises
(b) If reasonably required by the Landlord for the purposes of safety or
to comply with the requirements of the insurers of the Estate to pay
to the Landlord within 14 days of written demand the cost of
providing and installing such fire escape prevention and
extinguishment equipment and devices for use in the Demised Premises
or at the Landlord's option to install the same at the Landlord's
direction and at the Tenant's expense.
(c) Not to bring into the Demised Premises or to any part of the Estate
any article or substance nor to carry on or suffer upon the Demised
Premises any activity in any manner nor to do or omit any act matter
or thing whatsoever the carrying on bringing doing or omission of
any of which would make void or voidable any policy of insurance
issued subject to usual conditions in respect of the Demised
Premises or in respect of the Landlord's fixtures and fittings
therein or in respect of any other part of the Estate or any
adjoining or contiguous property belonging to the Landlord or would
cause the premiums payable in respect of any insurance effected in
relation to the Demised Premises or the Estate or any part thereof
or any adjoining or contiguous premises to be increased beyond the
then existing rate.
(d) Without prejudice to the rights of the Landlord in respect of any
breach of the foregoing sub-clause the Tenant shall reimburse the
Landlord for any increased premium or premiums payable by the
Landlord in respect of the Demised Premises the Estate or any part
thereof or any adjoining or contiguous premises as a result of a
breach of the covenant contained in the foregoing sub-clause.
(e) In the event of the Demised Premises or any part thereof being
damaged or destroyed by any of the Insured Risks to give immediate
notice to the Landlord as soon as the same shall come to the
attention of the Tenant stating (if possible) whether and to what
extent such destruction or damage was brought about directly or
indirectly by any of the Insured Risks.
(f) In the event of the Demised Premises or any part thereof or any
other part of the Estate being damaged or destroyed by any of the
Insured Risks and the insurance money under any insurance against
the same effected thereon by the Landlord being wholly or partly
irrecoverable by reason solely or in part or any act or default of
the Tenant or the Tenant's servants agents or licensees then and in
every such case the Tenant will forthwith pay to the Landlord the
whole or (as the case may require) a fair proportion of the amount
irrecoverable.
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<PAGE>
(10) (a) Not to use or permit the use of the hand and washing up basins
lavatories water closets and incinerators included in the Demised
Premises for any purpose which may cause a stoppage in the waste
water pipes soil pipes incinerators and incinerator flues
(b) Not to allow to pass into the sewers drains or watercourses serving
the Demised Premises any noxious or deleterious effluent or other
substance whatsoever which may injure the said sewers drains or
watercourse and in the event of any such obstruction or injury
forthwith upon become aware of the same to notify the Landlord
thereof.
(c) Not to allow to accumulate any trade empties or any rubbish upon
external parts of the Demised Premises and not to hand or expose or
allow to be hung or exposed from the windows of the Demised Premises
any thing for any purpose.
(11) (a) Not at any time during the Term without the prior written consent of
the Landlord such consent not to be unreasonably withheld or delayed
to instal or make any alteration or addition to the Service Media
(whether demised or otherwise) or any Landlord's fixtures and
fittings (including the heating and sprinkler systems) (if any) or
interfere with the same.
(b) Not to erect any television or radio aerials satellite dishes or
other transmitting or receiving equipment on the exterior of any
part of the Demised Premises or on any part of the Estate without
the prior written consent of the Landlord such consent not to be
unreasonably withheld or delayed.
(c) Not to do or permit or suffer to be done on the Demised Premises any
waste spoil of destruction.
(d) Not to make or permit any alteration or additions whatsoever in the
Demised Premises or any part thereof either internally or externally
PROVIDED THAT non structural alterations or additions to the
internal layout or design of the Demised Premises may be carried out
without the Landlord's consent.
(12) (a) Not to use the demised Premises otherwise than for a trade or
business falling within Class B1 of the Town and Country Planning
(Use Classes) Order 1987 PROVIDED ALWAYS that up to fifty per cent
of the Relevant Area of the Demised Premises may be used for
purposes falling within Class B8 of the Town and Country Planning
(Use Classes) Order 1987.
(b) Not to use the demised Premises for any purpose connected with the
breakage or repair of motor vehicles.
(c) Not to erect or set up in or upon any part of the Demised Premises
any engine or machinery which involves undue noise or vibration
emanating from the Demised Premises without the previous consent of
the Landlord such consent
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<PAGE>
not to be unreasonably withheld or delayed provided that consent may
be reasonably withheld in the interest of good estate management.
(d) Not at any time to use the Demised Premises or any part thereof for
any public meeting entertainment exhibition or show or spectacle of
any kind or for any dangerous noisy noxious or offensive trade
business manufacture or occupation whatsoever or for residential
purposes or for any illegal or immoral act or purpose or as a club
nor to play or use thereon any musical instrument gramophone
wireless loud speaker or similar apparatus so as to be audible
outside the Demised Premises nor to hold any auction on the demised
Premises nor to use the Demised Premises as a sleeping place for any
person and not to keep any animal of any kind therein and not to use
the Demised Premises or any part thereof for the purpose of any
betting transactions within the meaning of the Betting Gaming and
Lotteries Act 1963 or for gaming within the meaning of the Gaming
Act 1968 and not to make any application for a Betting Office
License or a License or Registration under the Gaming Act 1968 in
respect of the Demised Premises or any part thereof and not to use
the Demised Premises for any purpose involving the sale manufacture
repair cleaning or processing of any car or other motor vehicle.
(13) That no figure letter pole flag signboard advertisement inscription bill
placard or sign whatsoever shall be attached to or exhibited on the
Demised Premises or the windows thereof so as to be seen from the exterior
without the previous consent in writing of the Landlord which shall not be
unreasonably withheld or delayed in respect of a sign on the door and
frontage of the Demised Premises and on the Landlord's Estate signboard
stating the name of the Tenant and its business or profession (such sign
to be removed and any damage caused thereby to be made good by the Tenant
at the Termination of the Term).
(14) (a) Not to assign sublet or part with or share the possession or
occupation of the whole or any part of the Demised Premises nor
permit any of the foregoing PROVIDED HOWEVER that with the prior
written consent of the Landlord such consent not to be unreasonably
withheld or delayed the Tenant may assign or sublet the whole or the
Demised Premises or underlet a Permitted Part subject to the Tenant
obtaining if the Landlord shall so reasonably require an acceptable
guarantor for any company other than a public company quoted on a
recognized stock exchange in the United Kingdom (or any other
assignee if the Landlord shall in such case so reasonably require)
and a direct covenant by an assignee with the Landlord to observe
and perform the covenants and conditions of this Lease.
(b) (i) Not to underlet the whole of the Demised Premises at a
fine or a premium nor at a rent less than the open market rack
rent of the Demised Premises at the time of such underlease
(or the due proportion thereof in the case of an underletting
of a Permitted Part)
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(ii) Upon the Landlord consenting to an underletting of the whole
or a Permitted Part of the Demised Premises to procure that
the underlease shall contain:
(A) an unqualified covenant on the part of the underlessee
with the Landlord that the underlessee will not assign
or charge any part or parts of the Demised Premises or
the Permitted Part as the case may be (as distinct from
the whole) and will not underlet or (save by way of an
assignment of the whole) part with or share possession
of or permit any person or company to occupy the whole
or any part of the premises thereby demised
(B) a covenant on the part of the underlessee with the
Landlord that the underlessee will not assign the whole
of the Demised Premises or the Permitted Part as the
case may be without the previous consent in writing of
the Landlord such consent not to be unreasonably
withheld or delayed
(C) provision for review of the rent reserved by the
underlease corresponding as to terms with the provisions
set out and at intervals no less frequent than those
provided for in the Fifth Schedule hereto
(D) a condition for a re-entry on breach of any covenant on
the part of the underlessee
(E) in the case of an underletting of a Permitted Part only
an agreement between the Tenant and the Undertenant
excluding in the provisions of S.24-28 inclusive of the
Landlord and Tenant Act 1954 duly authorized by an
appropriate order of the Court
(F) a covenant on the part of the underlessee to observe and
perform the covenants on the part of the Tenant
contained in this Lease other than as to the payment of
rent (to the extent that the same may be appropriate in
the case of an underletting of a Permitted Part)
(iii) To procure in any underletting of the Demised Premises
that the rent under such underletting is reviewed in
accordance with the terms of such review
(c) Upon every application for consent required by this sub-clause to
disclose to the Landlord such information as to the terms of the
proposed assignment or sub-letting as the Landlord shall reasonably
require
(d) Notwithstanding anything in this sub-paragraph (14) contained the
Tenant (if a limited liability company incorporated under the
Companies Acts for the time
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<PAGE>
being in force) shall be entitled to share possession or occupation
of the Demised Premises or any part thereof with any other member or
members of the group (as defined in Section 42 of the Landlord and
Tenant Act 1954) of companies of which the Tenant is itself a member
Provided That a relationship of Landlord and Tenant is not created
between the Tenant and any such member
(e) Within one months after the execution of any assignment (or any
charge or underlease or the assignment of an underlease or the grant
of any sub-underlease out of an underlease notwithstanding the
foregoing prohibition) or any transmission by reason of a death or
otherwise affecting the Demised Premises to product to and leave
with the Solicitors for the time being of the Landlord a certified
copy of the deed instrument or other document evidencing or
affecting such transmission and on each occasion to pay to the
Landlord's Solicitors' reasonable registration fee plus Value Added
Tax thereon.
(15) In relation to the Planning Acts
(a) At all times during the said term to comply in all respects with the
provisions and requirements of the Planning Acts and all licenses
consents permissions and conditions (if any) granted or to be
granted or imposed thereunder or under any enactment repealed
thereby so far as the same respectively relate to or affect the
Demised Premises or any part thereof or any operations works acts or
things already or hereafter to be carried out executed done or
omitted thereon or the use thereof for any purpose
(b) So often as occasion shall require at the expense in all respects of
the Tenant to obtain all such licenses consents and permissions as
may be required for the carrying out by the Tenant or any operations
on the Demised Premises or the institution or continuance by the
Tenant therein of any use thereof which may constitute development
within the meaning of the Planning Acts
(c) To pay and satisfy any charge that may hereafter be imposed under
the Planning Acts in respect of the carrying out or maintenance by
the Tenant of any such operations or the institution or continuance
by the Tenant or any such use as aforesaid
(d) Not to make any planning application to the Local Planning Authority
in respect of the Demised Premises or any part thereof without the
prior written consent of the Landlord such consent not to be
unreasonably withheld or delayed
(e) Notwithstanding any consent which may be granted by the Landlord
under this Lease not to carry out or make any alteration or addition
to the Demised Premises or any change of use thereof (being an
alteration or addition or change of use which is prohibited by or
for which the consent of the Landlord is required to be obtained
under this Lease and for which a planning
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permission needs to be obtained) before all necessary planning
permissions therefor have been produced to the Landlord and
acknowledged by it in writing as satisfactory (such acknowledgment
not to be unreasonably withheld or delayed) to it but so that the
Landlord may refuse so to express its satisfaction with any such
planning permission on the ground that the period thereof or
anything contained therein or omitted therefrom in the reasonable
opinion of the Landlord or its Surveyor would be or be likely to be
prejudicial to its interest in the Demised Premises or the Estate
whether during the Term or following the Termination of the Term
(f) Unless the Landlord shall otherwise direct to carry out before the
Termination of the Term any works stipulated to be carried out to
the Demised Premises by a date subsequent to the Termination of the
Term as a condition of any planning permission which may have been
granted to and implemented by the Tenant during the Term
(g) If and when called upon so to do to produce to the Landlord or the
Landlord's Surveyor all such plans documents and other evidence as
the Landlord may reasonably require in order to satisfy itself that
the provisions of this covenant have been complied within all
material respects
(h) Nothing herein shall render the Landlord or Tenant liable in respect
of any of the covenants conditions and provisions contained in the
preceding sub-paragraphs of this paragraph if and so far only as
the performance or observance of such covenants conditions and
provisions or any one or more of them shall hereafter become a
contravention of or otherwise impossible or illegal under or by
virtue of the Planning Acts but subject as aforesaid the Term and
the rents payable to the Landlord in respect thereof shall not
determine by reason only of any changes modifications or
restrictions of user of the Demised Premises or obligations or
requirements (if any) hereafter to be made or imposed under or by
virtue of the Planning Acts
(16) To the satisfaction of the Landlord and within the time limited by law or
by any notice requiring the same to be done or if there is no such time
limit within a reasonable time to do and execute all such works and comply
with all such requirements as under or by virtue of any Act of Parliament
already or hereafter to be passed and ever order regulation and by-law
made under or in pursuance thereof or by any local or other authority have
been or shall be directed to be done, executed or complied with in respect
of the Demised Premises or the user thereof or the person or persons or
any fixture machinery plant or chattel for the time being therein whether
by the owner or occupier thereof and to indemnify the Landlord at all
times against all costs charges and expenses of or incidental to the
execution of any works or the provisions and maintenance of any
arrangements so directed or required as aforesaid and not at any time
during the Term to do or omit in or about the Demised Premises any act or
thing by reason of which the Landlord may under any enactment incur or
have imposed upon it or become liable to pay any damages compensation
costs charges or expenses
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(17) Within seven days of the receipt of notice of the same to give full
particulars to the Landlord of any permission notice order or proposal for
a notice or order relevant to the use or condition of or otherwise
concerning the Demised Premises made given or issued to the Tenant by any
Government Department Local or Public Authority under or by virtue of any
statutory powers and if so reasonably required by the Landlord to produce
such permission notice order or proposal for a notice or order to the
Landlord AND ALSO as soon as reasonably practicable to take all reasonable
or necessary steps to comply with any such notice or order AND ALSO at the
request of the Landlord to make or join with the Landlord in making such
objections or representations against or in respect of any such notice
order or proposal as aforesaid as the Landlord shall deem expedient
(18) Not to stop up or obstruct any windows or light belonging to the Demised
Premises nor permit any new window light opening doorway path drain or
encroachment or easement to be made into, against or upon the Demised
Premises and to give immediate notice to the Landlord of any such window,
light, opening, doorway, path, drain or encroachment or easement which
shall be made or attempted and shall come to the notice of the Tenant and
at the request and cost of the Landlord adopt such means as may be
reasonably required for preventing any such encroachment of the
acquisition of any such easement
(19) To pay or procure the payment to the Landlord of the due and proper
portion (if any) of any compensation paid to the Tenant or payable
consequent upon any notice served on or application refused by any
governmental or local authority in respect of the Demised Premises or the
user thereof
(20) Without prejudice to the Tenant's liability hereunder to notify the
Landlord forthwith upon becoming aware of any defect in the repair or
condition of the Demised Premise (whether or not the liability of the
Tenant hereunder) or in the Estate of which the Tenant is aware and which
is or may affect the repair and condition of the Demised Premises
(21) To pay and make good to the Landlord all damages, demands, losses, costs,
claims and expenses (including professional fees properly incurred by the
Landlord) in connection with all and every loss and damage whatsoever
incurred or sustained by the Landlord as a consequence of every breach,
non-performance or non-observance of the covenants by the Tenant herein
contained or implied and the conditions herein contained and on the part
of the Tenant to be complied with and to indemnify the Landlord from and
against all actions, claims, liabilities, costs and expenses thereby
arising PROVIDED that such indemnity shall be deemed (a) to extend to and
cover all reasonable costs and expenses properly incurred by the Landlord
in connection with any steps which the Landlord may take to remedy any
breach of covenant by the Tenant herein contained or failure of the Tenant
to observe and perform any covenant, condition or obligation on the part
of the Tenant herein contained or implied and (b) to be without prejudice
to any rights or remedies of the landlord hereunder in respect of any and
every such breach, non-performance or non-observance
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<PAGE>
(22) To permit the Landlord if he so desires to affix and retain without
interference upon any suitable parts of the Demised Premises in a
conspicuous place (but not so as to interfere materially with the access
of light and air to the Demised Premises) during the last six months of
the Term notices for reletting the same and during such period to permit
all persons with written authority from the Landlord or the Landlord's
agents at reasonable times of the day on prior appointment to view the
Demised Premises
(23) To pay on demand:-
(a) All reasonable legal costs and surveyors' fees properly incurred by
the Landlord attendant upon or incidental to every application made
by the Tenant for a consent or license herein required or made
necessary whether the same be granted or refused on reasonable
grounds or proffered subject to any lawful qualification or
condition or whether the application be withdrawn
(b) All reasonable expenses including solicitors' costs and surveyors'
fees properly incurred by the Landlord incidental to the preparation
and service of a notice under Section 146 of the Law of Property Act
1925 or incurred in or in contemplation of proceedings under Section
146 and 147 of that Act or incurred in consequence of any breach of
the Tenants obligations hereunder notwithstanding that in any such
case forfeiture is avoided otherwise than by relief granted by the
Court
(c) All reasonable expenses including solicitors' costs and surveyors'
fees properly incurred by the Landlord of and incidental to the
service of all notices and Scheduled relating to wants of repair to
the Demised Premises and whether served during or after the
Termination of the Term (but relating in all cases to such wants of
repair that accrued not later than the Termination of the Term)
(d) To the Landlord or (as the case may be) to its Solicitors Surveyors
or other agents or other persons to whom any payment is due under
the covenants, agreements and provisions herein contained or implied
which is a payment whereon Valued Added Tax is chargeable the amount
of Value Added Tax in respect of the payment at the rate applicable
to that payment but only on an indemnity basis and to the extent
that the Landlord or its agent is unable to deduct or recover the
same in its Value Added Tax accounting
(24) To observe and perform the covenants and stipulations referred to in the
Property and charges Registers of the Landlord's title at the date of this
Lease save those entries relating to moneys lent (if and so far as the
same are subsisting and capable of being enforced and relate to the
Demised Premises) and to indemnify the Landlord against all actions
proceedings, costs, claims and demands in respect thereof
(25) To observe and keep the Regulations set out in the Eighth Schedule hereto
with such reasonable alterations and additions thereto as may from time to
time be made by the
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Landlord for the purposes of good estate management and for the mutual
benefit of the tenants and occupiers of the Estate
(26) Upon any lawful assignment of this Lease to transfer all shares held by
the Tenant in the Service Company to the assignee
THE THIRD SCHEDULE above referred to
Covenants by the Landlord given pursuant
to and incorporated in this Lease
by Clause 4 of this Lease
(1) Upon the completion of the sale or the grant of a Lease as the case may be
of the last of the Units comprised within the Estate to transfer to the
Service Company, the Common Parts unencumbered in consideration of One
Pound ((pound)1) and to retain ownership of the Common Parts until such
Transfer
(2) So long as the Landlord has not transferred the Common Parts to the
Service Company to keep the same in good repair and condition and to
maintain the Service Media other than that which is publicly maintained or
demised to any tenant or occupier on the Estate and to keep in good repair
and neat and tidy condition the Landscaped Areas and to carry out the
Services PROVIDED ALWAYS THAT the liability of the Landlord under the
covenant contained in this Sub-clause shall altogether cease after the
Common Parts have been transferred to the Service Company without
prejudice to any claim on the part of the Tenant arising from any
antecedent breach by the Landlord of its obligations under this sub-clause
(3) The Tenant paying rents and performing and observing the several covenants
and stipulations on the part of the Tenant herein contained shall and may
peaceably and quietly hold and enjoy the Demised Premises during the Term
without any lawful interruption or disturbance from or by the Landlord or
any person lawfully or equitably claiming under or in trust for him or by
title paramount
(4) In the case of damage or destruction of the Demised Premises or any part
thereof by the occurrence of any of the Insured Risks then unless such
insurance has been vitiated or made void or voidable or forfeited by
reason of any act, default or omission of the Tenant or its servants,
agents, licensees or invitees the Landlord shall subject to the
requirements of all competent authorities completely rebuild or reinstate
the same as soon as reasonably practical Provided that the Landlord shall
be excused from rebuilding or reinstating the Demised Premises if the
competent authorities decline to give or grant the necessary permission or
permit or authority therefor (PROVIDED ALWAYS that the Landlord shall use
its best endeavors to expeditiously obtain all necessary permissions,
permits and authorities) within two years of the date of the damage or
destruction and Provided Further that if at the expiration of such period
of two years such permission, permit or authority has not been given as
aforesaid the Landlord or the Tenant may at any time thereafter and before
such permission permit or authority is given by notice in writing to the
other forthwith determine this Lease which shall thereupon cease and
determine but without
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<PAGE>
prejudice to any right or remedy of the Landlord or the Tenant against the
other in respect of any antecedent breach and all insurance monies shall
belong to and be paid to the Landlord absolutely
(5) To insure in the name of the Landlord the Demised Premises in a sum equal
to the full replacement cost thereof against the occurrence of any of the
Insured Risks to the extent that such cover is for the time being
available for buildings of the type of the Demised Premises and to pay and
discharge all premiums due and payable thereon and in the event of damage
or destruction to the Demised Premises or any part thereof due to the
Insured Risks (or any of them) to make up any shortfall in the insurance
monies received as may be necessary to comply with its obligations in
paragraph 4 above from its own resources
(6) To procure that all other Leases of Units on the Estate are in
substantially the same form as this lease and to enforce and procure the
remedying of any breaches of covenant thereof at the request of the Tenant
at the sole cost and expense of the Tenant
(7) To pay and make good to the Tenant all damages, demands, losses, costs,
claims and expenses (including professional fees properly incurred by the
Tenant) in connection with all and every loss and damage whatsoever
incurred or sustained by the Tenant as a consequence of every breach,
non-performance or non-observance of the covenants by the Landlord herein
contained or implied and the conditions herein contained and on the part
of the Landlord to be complied with and to indemnify the Tenant from and
against all actions, claims, liabilities, costs and expenses thereby
arising PROVIDED that such indemnity shall be deemed (a) to extend to and
cover all reasonable costs and expenses properly incurred by the Tenant in
connection with any steps which the Tenant may take to remedy any breach
of covenant by the Landlord herein contained or failure of the Landlord to
observe and perform any covenant condition or obligation on the part of
the Landlord herein contained or implied and (b) to be without prejudice
to any rights or remedies of the Tenant hereunder in respect of any and
every such breach, non-performance or non-observance
(8) To remedy or procure the remedying of all defects, directly or indirectly,
attributable to the defective or faulty design or construction of the
Demised Premises or the use of inadequate, defective or faulty materials
or building practices in connection therewith howsoever and whensoever
arising in, on or under the Demised Premises and to indemnify the Tenant
against all damages, costs, expenses and fees incurred as a result of any
such defects
(9) To procure that the owner, tenant or occupier of any building adjoining
the Demised Premises contributes a due and fair proportion of the costs of
repairing, maintaining, renewing and rebuilding the Party Structures and
to make such contribution in the event that any such adjoining building is
in the ownership of the Landlord
(10) To enforce or procure the enforcement of the covenant set out in clause 3
(and the Fourth Schedule) of a transfer of the Estate dated 24th March
1988 made between
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Foxholes Business Park Limited (1) S.T. Martin (London) Limited (2) Tarmac
Properties Limited (3) and Bride Hall Developments Limited (4) at the
request and for the benefit of the Tenant and to indemnify the Tenant in
respect of all losses, damages, claims, proceedings, expenses and costs
arising out of any breach or non-performance by the Landlord at any time
of the covenants set out at clauses 4(f)(i) and (iii) of the said Transfer
THE FOURTH SCHEDULE hereinbefore referred to
Covenants by the Service Company
(1) To take a transfer of the Common Parts in consideration of the payment by
the Service Company of One Pound ((pound)1)
(2) From and after the transfer to the Service Company of the Common Parts
(but subject to the payment by the Tenant of the Service Charge)
(a) to pay all rates, taxes, charges, duties, burdens, assessments,
dues, outgoings and impositions whatsoever which shall be charged,
rated, assessed or imposed upon or in respect of the Common Parts
(b) so long as the Roadways are not maintainable at public expense to
effect and maintain such insurance policy or policies as may be
necessary to provide for cover against loss or damage to the
Roadways or any part or parts thereof by any perils normally covered
to the full cost of replacement plus adequate sums for professional
fees and against third party and public liability
(c) to effect and maintain such insurance policy or policies as may be
necessary to provide for cover against loss or damage to the
Pathways, the Parking Spaces and the Landscaped Areas or any part or
parts thereof by any perils normally covered to the full cost of
replacement plus adequate sums for professional fees and against
third party and public liability
(d) to keep the Roadways, the Pathways and the Parking Spaces in good
repair and condition so long as they shall not be maintainable at
public expense
(e) to keep in good repair and condition the Service Media which is not
publicly maintained or demised to any tenant or occupier on the
Estate
(f) to keep in good repair and neat and tidy condition the Landscaped
Areas
(3) Upon any lawful assignment of this Lease to enter into a deed of covenant
with the assignee in the form of Clause 5 (and this Fourth Schedule) at
the cost and expense of the Tenant
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<PAGE>
THE FIFTH SCHEDULE above referred to
Provisions as to Review of Rent
(1) In this Schedule, the following expressions shall have the meanings
attributed to them as follows:-
"Review Date" means the 8th day of April, 1996, 2001, 2006 and 2011 but shall
also be construed subject to the provisions of Paragraph 5 of this Schedule and
the expression "Relevant Review Date" shall be construed accordingly
"Open Market Rent" means the yearly rent at which the Demised Premises might be
expected to be let as a whole at the Relevant Review Date
(a) for a term equal to the residue of the Term unexpired on the
Relevant Review Date or fifteen years whichever shall be the longer
as between a willing lessor and a willing lessee with vacant
possession without payment of any fine or premium and having regard
to the same terms provisions and conditions including the provisions
for the review of rent set out in this Fifth Schedule but excluding
the amount of rent payable as at the Relevant Review Date
(b) upon the suppositions (if not facts):-
(i) that all parts of the Demised Premises are then ready fit and
available for immediate use and occupation and could be
immediately occupied whether by any willing lessee or
underlessee and that the Tenant has complied with all its
obligations imposed by these presents (but without prejudice
to any rights or remedies of either party in regard thereto);
and
(ii) that if the Demised Premises or any part thereof or the means
of access thereto or any Services Media enjoyed therewith
shall have been destroyed or damaged or fallen into disrepair
or restricted the same had before the Relevant Review Date
been fully repaired and reinstated and are fully available to
the Tenant; and
(iii) that no works have been carried out to the Demised Premises by
or on behalf of the Tenant or any undertenant or permitted
occupier or their respective predecessors in title at any time
which have diminished the rental value of the Demised Premises
including without prejudice to the foregoing any diminution in
floor area arising out of any underletting or permitted
occupation
(iv) all part of the Demised Premises comply with all relevant
statutes and the user permitted by this Lease is lawful
(c) but disregarding and taking no account of any effect on rent of:-
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<PAGE>
(i) any goodwill attributable to the Demised Premises by reason of
any trade or business carried on therein by the Tenant or any
permitted undertenant or other lawful occupier; and
(ii) any effect on rent of the fact that the Tenant or any
permitted undertenant or other lawful occupier may have been
in occupation of the Demised Premises; and
(iii) any effect on rent of the fact that the Tenant or any
permitted undertenant or other lawful occupier has carried out
any works to the Demised Premises (to which the Landlord shall
have given written consent if such consent is required
pursuant to the terms hereunder) excluding all work carried
out pursuant to an obligation to the Landlord or under
statute; and
(iv) any Statutory Rent Restrictions (as hereinafter defined)
(d) Provided always that the Open Market Rent shall be ascertained
without making any discount reduction or allowance to reflect (or
compensate the Tenant for the absence of) any rent free period or
concessionary rent free period or contribution to fitting out works
or other inducement which it might then be the practice in open
market lettings for the Landlord to make so that such Open Market
Rent shall be that which would be payable after the expiry of and
without regard to any such rent free or concessionary rent period
and after and without regard to the receipt of any such contribution
or other inducement
"Surveyor" means an independent Chartered Surveyor (being conversant and
experienced in the valuation and letting of premises within the area) appointed
from time to time to determine the Open Market Rent pursuant to the provisions
of this Schedule
"Statutory Rent Restrictions" means the restrictions imposed by any statute for
the control of rent in force on a Review Date or on the date on which any
increased rent is ascertained in accordance with this Schedule and any
regulations or orders made thereunder which operate to impose any limitation
whether in time or amount on the collection of an increase in the First Reserve
Rent or any part thereof
(2) From and after each Review Date, the First Reserved Rent shall be
whichever is the higher of:-
(i) the First Reserved Rent which was operative immediately before the
Relevant Review Date or
(ii) the First Reserved Rent which but for the Statutory Rent Restrictions
would have been operative immediately before the Relevant Review Date or
(iii) the Open Market Rent
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<PAGE>
(3) Surveyor's decision
(a) The Surveyor shall be agreed upon by the parties hereto or in the
event of failure so to agree to be nominated by the President (or if
he is unable to act the Vice-President) for the time being of The
Royal Institution of Chartered Surveyors and who shall act and be
deemed to act as an expert or as an arbitrator as the Landlord shall
reasonably decide and who shall be required to agree to:-
(i) afford the Landlord and the Tenant an opportunity to make
written representations to him;
(ii) afford the Landlord and the Tenant an opportunity to comment
on any written representations received by him;
(b) If the Landlord and the Tenant shall not have agreed on the amount
of the Open Market Rent as aforesaid by the Relevant Review Date
then at the election of either party made at any time thereafter the
amount aforesaid shall be determined by the Surveyor and the
determination of the Surveyor shall be binding on both the Landlord
and the Tenant Provided always that if the Surveyor dies or is for
any other reason unable to act before he shall give his
determination the amount aforesaid shall be determined by another
Surveyor ("the further Surveyor") and the provisions of this
sub-clause (3) shall continue to apply mutatis mutandis to the
further Surveyor until the amount aforesaid is determined;
(c) The fees payable to the President or the Vice-President of The Royal
Institution of Chartered Surveyors and to the Surveyor shall be
borne and paid by the Landlord and the Tenant in such shares and in
such manner as the Surveyor shall decided and failing such decision
and subject thereto in equal shares;
(4) If the Open Market Rent has not been ascertained (by agreement or
determination) by any Relevant Review Date in accordance with the
provisions hereof the Tenant shall pay to the Landlord
(a) for any interval between such Relevant Review Date and the Quarter
Day immediately following the date when the Open Market Rent has
been ascertained as aforesaid rent at the yearly rate payable for
the period immediately preceding such Relevant Review Date and
(b) upon the amount of the First Reserved Rent actually payable from
such Relevant Review Date (having been ascertained in accordance
with this Fifth Schedule) the difference (if any) between the First
Reserved Rent payable immediately before the Relevant Review Date
and the new First Reserved Rent as determined in accordance with
this Lease for the period commencing on the Relevant Review Date and
ending on the Quarter Day immediately following
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<PAGE>
such ascertainment shall be paid by the Tenant to the Landlord
together with interest thereon at four per cent below the Prescribed
Rate from the Relevant Review Date to the date of payment
(5) Statutory restrictions
If at any Relevant Review Date the Landlord shall be obliged legally or
otherwise to comply with any Act of Parliament dealing with the control of
rent and which shall restrict or modify the Landlord's right to revise the
First Reserved Rent in accordance with the terms of these presents or
which shall restrict the right of the Landlord to demand or accept payment
of the full amount of the First Reserved Rent for the time being payable
under these presents then the Landlord shall on each occasion that any
such enactment is removed relaxed or modified be entitled on giving not
less than three months' notice in writing to the Tenant expiring after the
date of each such removal, relaxation or modification to introduce an
intermediate review date (hereinafter called "the Intermediate Review
Date") which shall be the date of expiration of such notice and the rent
payable hereunder from an Intermediate Review Date (whichever shall first
occur) shall be determined in like manner as the rent payable from each
Relevant Date of Review as hereinbefore provided.
(6) Memorandum
As soon as the amount of First Reserved Rent payable after a Relevant
Review Date has been agreed or determined in accordance with the terms
hereof (and if required by the Landlord so to do) the parties hereto
(including any guarantor) will at their own expense forthwith sign a
memorandum thereof endorsed on the Lease and the Counterpart thereof
specifying the yearly amount of the said reviewed rent and all stamp
duties (if any) payable in respect thereof shall be borne and paid by the
Tenant
THE SIXTH SCHEDULE above referred to
Provisos Agreements and Declarations given pursuant
to and incorporated in this Lease by Clause 6
of this Lease
(1) This Lease is made on the express condition that if and whenever the rents
hereby reserved or made payable or any part thereof shall be in arrear and
unpaid for twenty-one days next after the same shall become due (whether
legally demanded or not) or if and whenever there shall be a breach or
non-performance or non-observance of any of the covenants or agreements on
the part of the Tenant or conditions herein contained or if the Tenant
being a company shall go into liquidation (other than a voluntary
liquidation for the purpose or amalgamation or reconstruction) or have a
winding-up order made against it or shall enter into a composition with
its creditors or have a receiving order made against it or being an
individual be adjudicated as bankrupt or if the Tenant shall suffer any
distress or execution to be levied on the Demised Premises or the contents
thereof or shall take the benefit of any Act for the relief of debtors
then and in any such case the Landlord or its agents may forthwith (or at
any time thereafter) notwithstanding the waiver or implied waiver of any
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<PAGE>
previous right of re-entry arising under this Lease at the expiry of 7
days' notice of the alleged default re-enter upon the Demised Premises or
any part thereof in the name of the whole whereupon the Term shall
absolutely determine but without prejudice to any rights or remedies which
may have then accrued to the Landlord In respect of arrears of rent or
other subsisting breach or any condition or covenant or agreement on the
part of the Tenant herein contained
(2) If the Tenant shall become subject to the Bankruptcy Laws or (in the case
of a company) a meeting to pass a resolution to go into liquidation
(otherwise than merely for the purpose of amalgamation or reconstruction)
shall be convened or if any process or execution shall be issued against
the Tenant any outstanding rent shall be immediately paid and the Landlord
may distrain for the same and no effects of the Tenant shall thereafter be
removed from the Demised Premises (save in the course of lawful execution)
but the Landlord may detain such effects to enable him to distrain the
same
(3) All notices to be given hereunder shall be in writing and the provisions
as to service of notices contained in Section 196 of the Law of Property
Act 1925 as amended by the Recorded Delivery Service Act 1962 shall be
deemed to be incorporated herein and apply to the service of all notices
hereby or by statute authorized to be served
(4) In the event of the Demised Premises or the Estate or any part thereof at
any time during the Term being damaged or destroyed by any of the Insured
Risks so as to render the Demised Premises or any part thereof unfit for
occupation and use then (save to the extent that the policy or policies of
insurance for the time being in force shall have been vitiated or the
payment of the policy monies withheld or refused due to any act negligent
or default of the Tenant or the servants, agents, licensees or invitees of
the Tenant) the First Reserved Rent and the sums payable under paragraph 1
of the Seventh Schedule hereto or a fair proportion thereof according to
the nature and extent of the damage sustained shall be suspended until the
earlier of (i) the expiration of three years from the occurrence of such
damage or (ii) the date when the Demised Premises shall again be rendered
fit for use and occupation and any dispute as to the proportion or period
of such suspension shall be referred to a single arbitrator to be agreed
by the parties or failing agreement nominated by the President (or Chief
Officer or Acting Chief Officer) for the time being of the Royal
Institution of Chartered Surveyors in accordance with the Arbitration Acts
1950 and 1979 or any statutory modification or re-enactment thereof for
the time being in force
(5) To the extent permitted by statute the Landlord shall not be responsible
to the Tenant or his servants or visitors (a) for any injury death damage
destruction or financial or consequential loss whether to person, property
or gods due directly or indirectly to the act or default of any other
permitted occupier for the time being of the Estate or (b) arising by
reason of the defective working accidental stoppage leakage or breakage of
any pipes, appliances, apparatus, machinery in or connected with or used
for the purpose of the Estate or any part thereof
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<PAGE>
(6) If any rents or other sums payable by the Tenant to the Landlord under
this Lease shall not be paid to the Landlord within fourteen days of the
same being due and having been demanded the Tenant shall pay to the
Landlord with any such sums (but without prejudice to all or any rights or
remedies of the Landlord hereunder) interest thereon at the Prescribed
Rate calculated on a day-to-day basis from the date the same became due
and payable down to the date of payment or reimbursement by the Tenant and
the aggregate amount for the time being so payable shall at the option of
the Landlord be recoverable by action as rent in arrear
(7) That no demand for or acceptance or receipt of any part of the First
Reserved Rent or any payment on account thereof or of any other rents
shall operate as a waiver by the Landlord of any right which the Landlord
may have to forfeit this Lease by reason of any breach of covenant by the
Tenant notwithstanding that the Landlord may know or be deemed to know of
such demand acceptance or receipt and the Tenant shall not in any
proceedings for forfeiture be entitled to rely on any such demand receipt
or acceptance as aforesaid as a defense
(8) Without prejudice to and so that the Landlord shall not derogate from or
restrict in any way the effect of its covenant given in paragraph 6 of the
Third Schedule each of the Tenant's covenants herein contained shall
remain in full force both at law and in equity notwithstanding that the
Landlord shall have waived or released temporarily or permanently
revocably or irrevocably or otherwise howsoever a similar covenant or
similar covenants affecting other premises adjoining or near the Demised
Premises for the time being belonging to the Landlord
(9) Any dispute arising between the Tenant and tenants or occupiers of
adjoining or neighboring property belonging to the Landlord about any
easement right or privilege in favor of or affecting the Demised Premises
or the premises adjoining or near the Demised Premises shall be decided by
an independent Chartered Surveyor appointed by the Landlord (whose
decision shall in the absence of manifest error be binding upon the Tenant
who shall submit to and abide by such decision)
(10) (a) The Tenant may determine this Lease on the expiry of the fifth year
of the Term ("the Determination Date") by giving to the Landlord not
more than eighteen calendar months nor less than twelve calendar
months (time to be of the essence) prior written notice of such
desire whereupon if the Tenant shall have paid all rent up to the
Determination Date (and complied with the requirement to pay the
Determination Sum in accordance with sub- paragraph (c) below) this
Lease shall cease and be void on such date but without prejudice to
the rights and remedies of the Landlord or the Tenant in respect of
any antecedent claim or breach of covenant and without prejudice to
sub-paragraphs (c) and (d) below
(b) In this Clause 10 "the Determination Sum" shall mean the amount
equal to the First Reserved Rent payable during the twelve month
period immediately prior to the Determination Date
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<PAGE>
(c) In the event that the Tenant shall serve on the Landlord a notice to
determine the Lease pursuant to sub-paragraph (a) above the Tenant
shall pay to the Landlord the Determination Sum as calculated by the
Landlord on the Determination Date
(d) Should this Lease be determined in accordance with this Clause 10
and the Landlord shall relet the Demised Premises within the period
of twelve months from the Determination Date ("Determination
Period") the Landlord shall return to the Tenant a proportion of the
Determination Sum calculated on the following basis:-
Amount returned = Determination Sum x B
---------------------
365
Where B is the number of days from the date upon which the demised
premises shall be relet (meaning any lease license or other
arrangement permitting occupation or use of the Demised Premises or
any part thereof whether income producing or not) until the
expiration of the Determination Period
(11) Except where any statutory provision prohibits the Tenant's right to
compensation being reduced or excluded by agreement the Tenant shall not
be entitled to claim from the Landlord on quitting the Demised Premises or
any part thereof any compensation of any kind under the Landlord and
Tenant Act 1954
THE SEVENTH SCHEDULE above referred to
Covenants by the Tenant given pursuant
to and incorporated in this Lease by
Clause 3 of this Lease
(1) To pay to the Landlord or to the Service Company as the case may be
annually and proportionately for any less period than a year a Service
Charge (hereinafter called "the Service Charge") being such proportion of
the Service Expenditure as bears to the whole thereof the same proportion
as the Relevant Area of the Demised Premises bears to the total Relevant
Area of the Estate Subject to the terms and provisions set out in this
Schedule
(2) The amount of the Service Expenditure shall be ascertained and certified
by the Accountant annually and so soon after the end of the Financial Year
as may be practicable and shall relate to such year
(3) A copy of the Certificate for the Relevant Financial Year shall be
supplied by the Landlord or the Service Company to the Tenant without
charge
(4) The Certificate shall contain a fair summary of the Service Expenditure
and shall specify a sum as the amount of the Service Charge (due credit
being given for any interim payments made by the Tenant) AND the
Certificate shall be conclusive and
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<PAGE>
binding on the Landlord the Service Company and the Tenant as regards all
matters of fact contained specified or certified therein save in the case
of manifest error
(5) The expression "Service Expenditure" shall be deemed to include not only
Service Expenditure actually disbursed incurred or made by the Landlord
and the Service Company during the Relevant Financial Year but also such
sum or sums on account of any other items of Service Expenditure whether
of a unique or of a periodically recurring nature and whether recurring by
regular or irregular periods and whenever disbursed incurred or made and
whether before or after the Relevant Financial Year as the Accountant may
in his or her absolute discretion (which discretion shall not be exercised
capriciously) consider it reasonable to include (whether by way of
amortization of costs expenses and outgoings already incurred or by way of
provision for anticipated future costs expenses and outgoings or
otherwise) in the amount of the Service Expenditure for the Relevant
Financial Year
(6) The Tenant shall on each of the Quarter Days falling within each Financial
Year pay to the Landlord or the Service Company payable for such Financial
Year in respect of the Demised Premises such sum (if any) as the Landlord
or the Service Company or its agents shall from time to time specify in
its or their discretion to be a fair and reasonable interim payment the
first such payment being a due proportion of such interim payment in
respect of the period from the date hereof to the Quarter Day next
following to be made within fourteen days of such date
(7) As soon as practicable after the signature of the Certificate the Landlord
or the Service Company shall furnish the same to the Tenant and upon the
furnishing of such Certificate there shall be paid by the Tenant to the
Landlord or the Service Company the Service Charge payable as aforesaid or
any balance thereof shown to be payable or credit shall be given by the
Landlord or the Service Company to the Tenant for any amount which may
have been overpaid by the Tenant by way of interim payment as the case may
require
(8) Provided Always and notwithstanding anything herein contained:
(a) if and insofar as any monies received by the Landlord or the Service
Company during any Financial Year by way of Service Charge are not
actually expended by the Landlord or the Service Company during that
Financial Year on Service Expenditure the Landlord or the Service
Company shall hold those moneys on trust to expend them in
subsequent Financial Years on Service Expenditure and subject
thereto on trust for the Tenants absolutely
(b) during such times as the said costs expenses and outgoings shall
have been incurred in respect of any part only of the Estate or for
part only of a Financial Year then the Service Expenditure shall be
calculated by reference to such notional expenditure for the whole
of the Estate for the whole of the Financial Year as shall be
certified by the Accountant to be fair and proper having regard to
the actual costs expenses and outgoings incurred in providing
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all or any of the services herein described to a part only of the
Estate or for part only of a Financial Year as the case may be
THE EIGHTH SCHEDULE above referred to:
Regulations to be observed by the Tenant
(1) Not to park vehicles on or otherwise obstruct the Roadways or the Landscaped
Areas of the Estate nor to use the same in such a manner as will cause
inconvenience to the owners or occupiers for the time being of the Estate
(2) Not to use or permit to be used any part of the Demised Premises for the
parking of motor vehicles other than the part of the Demised Premises designated
for such purpose on the plan and on the Parking Spaces and not to permit to be
loaded or unloaded any vehicles except within the boundaries of the Demised
Premises and the Forecourt
(EXECUTED as a Deed by affixing
(THE COMMON SEAL of BIOTAGE
(UK LIMITED in the presence
(of:-
(Director /s/ C.H. Donovan
(Secretary
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<PAGE>
EXHIBIT 10.19
From the Office of
THE ATHENAEUM GROUP
215 FIRST STREET
CAMBRIDGE, MA 02142
STANDARD FORM COMMERCIAL LEASE
1. PARTIES OLD KENDALL PROPERTY LLC
LESSOR, which expression shall include its heirs, successors,
and assigns where the context so admits, does hereby lease to
DYAX CORPORATION
LESSEE, which expression shall include its successors,
executors, administrators, and assigns where the context so
admits, and the LESSEE hereby leases the following described
premises:
2. PREMISES
APPROXIMATELY SIX THOUSAND THREE HUNDRED THIRTY-TWO (6,332
RSF) RENTABLE SQUARE FEET MORE OR LESS LOCATED AT SUITE 106,
BUILDING 600 AT ONE KENDALL SQUARE, CAMBRIDGE, MA AS SHOWN ON
THE ATTACHED EXHIBIT A ("LEASED PREMISES")
together with the right to use in common with others entitled
thereto, the hallways, stairways, and elevators, necessary for
access to said leased premises, and lavatories nearest
thereto.
3. TERM The term of this lease shall commence commencing on February
10, 1998 and end on December 31, 1999
4. RENT The LESSEE shall pay to the LESSOR rent at the rate of
$120,308.00 dollars per year, payable in advance in monthly
installments of $10,025.67, subject to proration in case of
any partial calendar month. All rent shall be payable without
offset or deduction.
5. SECURITY [Intentionally omitted]
DEPOSIT
6. RENT [Intentionally omitted]
ADJUSTMENT
A. TAX [Intentionally omitted]
ESCALATION
B. OPERATING [Intentionally omitted]
COST
ESCALATION
C. CONSUMER [Intentionally omitted]
PRICE
ESCALATION
<PAGE>
7. UTILITIES The LESSEE shall pay, as they become due, all bills for
electricity and other utilities (whether they are used for
furnishing heat or other purposes) that are furnished to the
leased premises and presently separately metered, and all
bills for fuel furnished to a separate tank servicing the
leased premises exclusively. The LESSOR agrees to provide all
other utility service and to furnish reasonably hot and cold
water and reasonable heat and air conditioning* (except to the
extent that the same are furnished through separately metered
utilities or separate fuel tanks as set forth above) to the
leased premises, the hallways, stairways, elevators, and
lavatories during normal business hours on regular business
days of the heating and air conditioning* seasons of each
year, to furnish elevator service and to light passageways and
stairways during business hours, and to furnish such cleaning
service as is customary in similar buildings in said city or
town, all subject to interruption due to any accident, to the
making of repairs, alterations, or improvements, to labor
difficulties, to trouble in obtaining fuel, electricity,
service, or supplies from the sources from which they are
usually obtained for said building, or to any cause beyond the
LESSOR's control.
LESSOR shall have no obligation to provide utilities or
equipment other than the utilities and equipment within the
premises as of the commencement date of this lease. In the
event LESSEE requires additional utilities or equipment, the
installation and maintenance thereof shall be the LESSEE's
sole obligation, provided that such installation shall be
subject to the written consent of the LESSOR.
8. USE OF The LESSEE shall use the leased premises only for the purposes
LEASED of general office.
PREMISES
9. COMPLIANCE The LESSEE acknowledges that no trade or occupation shall be
WITH LAWS conducted in the leased premises or use made thereof which
will be unlawful, improper, noisy or offensive, or contrary to
any law or any municipal by-law or ordinance in force in the
city or town in which the premises are situated. Without
limiting the generality of the foregoing (a) the LESSEE shall
not bring or permit to be brought or kept in or on the leased
premises or elsewhere on the LESSOR's property any hazardous,
toxic inflammable, combustible or explosive fluid, material,
chemical or substance, including without limitation any item
defined as hazardous pursuant to chapter 21E of the
Massachusetts General Laws; and (b) the LESSEE shall be
responsible for compliance with requirements imposed by the
Americans with Disabilities Act relative to the layout of the
leased premises and any work performed by LESSEE therein.
10. FIRE The LESSEE shall not permit any use of the leased premises
INSURANCE which will make voidable any insurance on the property of
which the leased premises are apart, or on the contents of
said property or which shall be contrary to any law or
regulation from time to time established by the New England
Fire Insurance Rating Association, or any similar body
succeeding to its powers. The LESSEE shall on demand reimburse
the LESSOR, and all other tenants, all extra insurance
premiums caused by the LESSEE's use of the premises.
11. MAINTENANCE
A. LESSEE'S OBLIGATIONS. The LESSEE agrees to maintain the leased
premises in good condition, damage by fire and other casualty only
excepted, and whenever necessary, to replace plate glass and other
glass therein, acknowledging that the leased premises are now in
good order and the glass whole. The LESSEE shall not permit the
leased premises to be overloaded, damaged, stripped, or defaced, nor
suffer any waste. LESSEE shall obtain written consent of LESSOR
before erecting any sign on the premises.
<PAGE>
B. LESSOR'S OBLIGATIONS. The LESSOR agrees to maintain the structure of
the building of which the leased premises are a part in the same
condition as it is at the commencement of the term or as it may be
put in during the term of this lease, reasonable wear and tear,
damage by fire and other casualty only excepted, unless such
maintenance is required because of the LESSEE or those for whose
conduct the LESSEE is legally responsible.
12. ALTERATIONS- THE LESSEE shall not make structural alterations or
ADDITIONS additions to the leased premises, but may make
non-structural alterations provided the LESSOR consents
thereto in writing, which consent shall not be
unreasonably withheld or delayed. All such allowed
alterations shall be at LESSEE'S expense and shall be in
quality at least equal to the present construction.
LESSEE shall not permit any mechanics' liens, or similar
liens, to remain upon the leased premises for labor and
material furnished to LESSEE or claimed to have been
furnished to LESSEE in connection with work of any
character performed or claimed to have been performed at
the direction of LESSEE and shall cause any such lien to
be released of record forthwith without cost to LESSOR.
Any alterations or improvements made by the LESSEE shall
become the property of the LESSOR at the terminator of
occupancy as provided herein.
13. ASSIGNMENT The LESSEE shall not assign or sublet the whole or any
SUBLEASING part of the leased premises without LESSOR'S prior
written consent. Notwithstanding such consent, LESSEE
shall remain liable to LESSOR for the payment of all
rent and for the full performance of the covenants and
conditions of this lease.
14. SUBORDIN- This lease shall be subject and subordinate to any and
ATION all mortgages, deeds of trust and other instruments in
the nature of a mortgage, now or at any time hereafter,
a lien or liens on the property of which the leased
premises are a part and the LESSEE shall, when
requested, promptly execute and deliver such written
instruments as shall be necessary to show the
subordination of this lease to said mortgages, deeds of
trust or other such instruments in the nature of a
mortgage.
15. LESSOR'S The LESSOR or agents of the LESSOR may, at reasonable
ACCESS times, enter to view the leased premises and may remove
placards and signs not approved and affixed as herein
provided, and make repairs and alterations as LESSOR
should elect to do and may show the leased premises to
others, and at any time within three (3) months before
the expiration of the term, may affix to any suitable
part of the leased premises a notice for letting or
selling the leased premises or property of which the
leased premises are a part and keep the same so affixed
without hindrance or molestation.
16. INDEMNIFI- The LESSEE shall save the LESSOR harmless from all loss
CATION AND and damage occasioned by anything occurring on the leased
LIABILITY premises unless caused by the negligence or misconduct
of the LESSOR, and from all loss and damage wherever
occurring occasioned by any omission, fault, neglect or
other misconduct of the LESSEE. The removal of snow and
ice from the sidewalks bordering upon the leased
premises shall be the LESSOR'S responsibility.
17. LESSEE'S The LESSEE shall maintain with respect to the leased
LIABILITY premises and the property of which the leased premises
INSURANCE are a part comprehensive public liability insurance in
the amount of $1,000,000. with property damage insurance
in limits of $1,000,000. in responsible companies
qualified to do business in Massachusetts and in good
standing therein insuring the LESSOR as well as LESSEE
against injury to persons or damage to property as
provided. The LESSEE shall deposit with the LESSOR
certificates for such insurance at or prior to the
commencement of the term, and thereafter within thirty
(30) days prior to the expiration of any such policies.
All such insurance
<PAGE>
certificates shall provide that such policies shall not
be cancelled without at least ten (10) days prior
written notice to each assured named therein.
18. FIRE, Should a substantial portion of the leased premises, or of
CASUALTY- the property of which they are part, be substantially
EMINENT damaged by the fire or other casualty, or be taken by
DOMAIN eminent domain, the LESSOR may elect to terminate this
lease. When such fire, casualty, or taking renders the
leased premises substantially unsuitable for their
intended use, a just and proportionate abatement of rent
shall be made, and the LESSEE may elect to terminate this
lease if:
(a) The LESSOR fails to give written notice within thirty
(30) days of intention to restore leased premises, or
(b) The LESSOR fails to restore the leased premises to a
condition substantially suitable for their intended
use within ninety (90) days of said fire, casualty or
taking.
The LESSOR reserves, and the LESSEE grants to the LESSOR,
all rights which the LESSEE may have for damages or injury
to the leased premises for any taking by eminent domain,
except for damage to the LESSEE's fixtures, property, or
equipment.
19. DEFAULT In the event that:
AND BANK-
RUPTCY
(a) The LESSEE shall default in the payment of any
installment of rent or other sum herein specified and
such default shall continue for ten (10) days after
written notice thereof; or
(b) The LESSEE shall default in the observance or
performance of any other of the LESSEE's covenants,
agreements, or obligations hereunder and such default
shall not be corrected within thirty (30) days after
written notice thereof; or
(c) The LESSEE shall be declared bankrupt or insolvent
according to law, or, if any assignment shall be made
of LESSEE's property for the benefit of creditors,
then the LESSOR shall have the right thereafter, while
such default continues, to re-enter and take complete
possession of the leased premises, to declare the term of
this lease ended, and remove the LESSEE's effects, without
prejudice to any remedies which might be otherwise used
for arrears of rent or other default. The LESSEE shall
indemnify the LESSOR against all loss of rent and other
payments which the LESSOR may incur by reason of such
termination during the residue of the term. If the LESSEE
shall default, after reasonable notice thereof, in the
observance or performance of any conditions or covenants
on LESSEE's part to be observed or performed under or by
virtue of any of the provisions in any article of this
lease, the LESSOR, without being under any obligations to
do so and without thereby waiving such default, may remedy
such default for the account and at the expense of the
LESSEE. If the LESSOR makes any expenditures or incurs any
obligations for the payment of money in connection
therewith, including but not limited to, reasonable
attorney's fees in instituting, prosecuting or defending
any action or proceeding, such sums paid or obligations
insured, with interest at the rate of 12% per cent per
annum and costs, shall be paid to the LESSOR by the LESSEE
as additional rent.
<PAGE>
20. NOTICE Any notice from the LESSOR to the LESSEE relating to the
leased premises or to the occupancy thereof, shall be
deemed duly served, if left at the leased premises
addressed to the LESSEE, or if mailed to the leased
premises, registered or certified mail, return receipt
requested, postage prepaid, addressed to the LESSEE. Any
notice from the LESSEE to the LESSOR relating to the
leased premises or to the occupancy thereof, shall be
deemed duly service, if mailed to the LESSOR by registered
or certified mail, return receipt requested, postage
prepaid, addressed to the LESSOR at such address as the
LESSOR may from time to time advise in writing. All rent
notices shall be paid and sent to the LESSOR at OLD
KENDALL PROPERTY LLC, P.O. BOX 414086, BOSTON, MA
02241-4086
21. SURRENDER The LESSEE shall at the expiration or other termination of
this lease remove all LESSEE's goods and effects from the
leased premises, (including, without hereby limiting the
generality of the foregoing, all signs and lettering
affixed or painted by the LESSEE, either inside or outside
the leased premises). LESSEE shall deliver to the LESSOR
the leased premises and all keys, locks thereto, and other
fixtures connected therewith and all alterations and
additions made to or upon the leased premises, in good
condition, damage by fire or other casualty only excepted.
In the event of the LESSEE's failure to remove any of
LESSEE's property from the premises, LESSOR is hereby
authorized, without liability to LESSEE for loss or damage
thereto, and at the sole risk of LESSEE, to remove and
store any of the property at LESSEE's expense, or to
retain same under LESSOR's control or to sell at public or
private sale, without notice any or all of the property
not so removed and to apply the net proceeds of such sale
to the payment of any sum due hereunder, or to destroy
such property.
22. BROKERAGE [Intentionally omitted]
23. CONDITION Except as may be otherwise expressly set forth herein, the
OF PREMISES LESSEE shall accept the leased premises "as is" in their
condition as of the commencement of the term of this
lease, and the LESSOR shall be obligated to perform no
work whatsoever in order to prepare the leased premises
for occupancy by the LESSEE.
24. FORCE In the event that the LESSOR is prevented or delayed from
MAJEURE making any repairs or performing any other covenant
hereunder by reason of any cause reasonably beyond the
control of LESSOR, the LESSOR shall not be liable to the
LESSEE therefor nor, except as expressly otherwise
provided in case of casualty or taking, shall the LESSEE
be entitled to any abatement or reduction of rent by
reason thereof, nor shall the same give rise to a claim by
the LESSEE that such failure constitutes actual or
constructive eviction from the leased premises or any part
thereof.
25. LATE If rent or any other sum payable hereunder remains
CHARGE outstanding for a period of ten (10) days, the LESSEE
shall pay to the LESSOR a late charge equal to five
percent (5%) of the amount due for each month or portion
thereof during which the arrearage continues.
26. LIABILITY No owner of the property of which the leased premises are
OF OWNER a part shall be liable hereunder except for breaches of
the LESSOR's obligations occurring during the period of
such ownership. The obligations of the LESSOR shall be
binding upon the LESSOR'S interest in said property, but
not upon other assets of the LESSOR, and no individual
partner, agent, trustee, stockholder, officer, director,
employee or beneficiary of the LESSOR shall be personally
liable for performance of the LESSOR'S obligations
hereunder.
<PAGE>
27. OTHER It is also understood and agreed that
PROVISIONS (a) Any notice to LESSOR other than a rental payment shall
be sent to Old Kendall Property LLC, c/o The Athenaeum
Group, 215 First Street, Cambridge, MA 02142.
(b) The space shall be delivered in its "as is" condition,
cleaned by LESSOR prior to delivery.
(c) LESSEE shall have the right to park ten (10) cars at
the One Kendall Square Garage at Fair Market Value, as
reasonably determined by LESSOR.
(d) Prior to Lease execution, LESSEE shall deliver current
financial statements and information to LESSOR for
LESSOR's review and reasonable approval.
(e) LESSEE shall be responsible for its pro-rata share of
real estate taxes and common area maintenance (CAM)
charges, as billed by LESSOR on a monthly basis.
IN WITNESS WHEREOF, the said parties hereunto set their hands and seals
this 20th day of February, 1998.
DYAX CORPORATION ("LESSEE") OLD KENDALL PROPERTY LLC ("LESSOR")
/s/ Henry E. Blair /s/ Allan R. Jones
- ----------------------------- ------------------------------
LESSEE LESSOR
/s/ Karen Roberts /s/ Rosalie M. Famolau
- ----------------------------- ------------------------------
WITNESS WITNESS
<PAGE>
Exhibit 10.20
Building No. 600, One Kendall Square
Cambridge, Massachusetts 02142
("the Building")
FIRST AMENDMENT
February 26, 1999
LESSOR: Cambridge Athenaeum LLC, a Delaware limited
liability company, successor-in-interest to
Old Kendall Property LLC
LESSEE: Dyax Corporation
PREMISES: An area on the first (1) floor of the
Building, containing 6,332 rentable square
feet, more or less, known as Suite 106, as
shown on Exhibit A attached to the Lease
ORIGINAL
LEASE LEASE
DATA EXECUTION: February 20, 1998
DATE:
TERMINATION
DATE: December 31, 1999
PREVIOUS
LEASE
AMENDMENTS: None
EXTENDED
TERMINATION
DATE: June 30, 2002
WHEREAS, Lessee desires to extend the term of the lease for an additional
period;
WHEREAS, Lessor agrees to extend the term of the lease for an additional
period on the terms and conditions hereinafter set forth;
NOW THEREFORE, the parties hereby agree that the above-referenced lease
(the "Lease") is hereby amended as follows:
<PAGE>
1. EXTENSION OF TERM OF LEASE
The term of the Lease is hereby extended for an additional period
commencing as of January 1, 2000 and terminating as of June 30, 2002. Said
additional term shall be upon all of the same terms and conditions of the Lease
in effect immediately preceding the commencement of such additional term
(including, without limitation, Lessee's obligation to pay Lessee's pro-rata
share of real estate taxes and common area maintenance (CAM) charges, pursuant
to Section 27(e) of the Lease), except as follows:
A. The fixed rent during the additional term shall be the sum of: (i) One
Hundred Fifty-Eight Thousand Three Hundred and 04/100 ($158,300.04) Dollars per
year (i.e., a monthly payment of $13,191.67), plus (ii) the annual fair market
rental value of Lessee's parking spaces in the OKS Garage, all to be reasonably
determined by Lessor and as the same may be adjusted from time to time.
B. In the event that any of the provisions of the Lease are inconsistent
with this Amendment or the state of facts contemplated hereby, the provisions of
this Amendment shall control.
2. PARKING
The parties hereby acknowledge that Lessee currently has the right to park
ten (10) passenger motor vehicles ("Parking Spaces") in the OKS Garage at the
then current rental value, from time to time, pursuant to Section 27(c) of the
Lease. The parties hereby further acknowledge that Lessee shall continue to have
the right said Parking Spaces during the additional term of the Lease, in
accordance with the terms and conditions of said Section 27(c) of the Lease.
3. BROKER
The Lessor and Lessee each represent and warrant to the other that each
has had no dealings with any broker concerning this First Amendment, except
Fallon Hines & O'Connor, a Trammell Crow Company and each party agrees to
indemnify and hold the other harmless for any damages occasioned to the other by
reason of a breach of this representation and warranty.
4. NOTICES
For all purposes of the Lease, the notice address for Lessor is as
follows:
Beacon Capital Partners, Inc.
One Federal Street
Boston, Massachusetts 02110
Attention: Treasurer
5. LIMITATION OF LESSOR'S LIABILITY
Lessee shall neither assert nor seek to enforce any claim against Lessor,
or Lessor's agents or employees, or the assets of Lessor or of Lessor's agents
or employees, for breach of
2
<PAGE>
this Lease or otherwise, other than against Lessor's interest in the Building of
which the premises are a part and in the uncollected rents, issues and profits
thereof, and Lessee agrees to look solely to such interest for the satisfaction
of any liability of Lessor under this Lease, it being specifically agreed that
in no event shall Lessor or Lessor's agents or employees (or any of the
officers, trustees, directors, partners, beneficiaries, joint venturers,
members, stockholders or other principals or representatives, and the like,
disclosed or undisclosed, thereof) ever be personally liable for any such
liability. This paragraph shall not limit any right that Lessee might otherwise
have to obtain injunctive relief against Lessor or to take any other action
which shall not involve the personal liability of Lessor to respond in monetary
damages from Lessor's assets other than the Lessor's interest in said real
estate, as aforesaid. In no event shall Lessor or Lessor's agents or employees
(or any of the officers, trustees, directors, partners, beneficiaries, joint
venturers, members, stockholders or other principals or representatives and the
like, disclosed or undisclosed, thereof) ever be liable for consequential or
incidental damages. Without limiting the foregoing, in no event shall Lessor or
Lessor's agents or employees (or any of the officers, trustees, directors,
partners, beneficiaries, joint venturers, members, stockholders or other
principals or representatives and the like, disclosed or undisclosed, thereof)
ever be liable for lost profits of Lessee.
6. WAIVER OF SUBROGATION
In any case in which Lessee shall be obligated to pay to Lessor any loss,
cost, damage, liability, or expense suffered or incurred by Lessor, Lessor shall
allow to Lessee as an offset against the amount thereof (i) the net proceeds of
any insurance collected by Lessor for or on account of such loss, cost, damage,
liability or expense, provided that the allowance of such offset does not
invalidate or prejudice the policy or policies under which such proceeds were
payable, and (ii) if such loss, cost, damage, liability or expense shall have
been caused by a peril against which Lessor has agreed to procure insurance
coverage under the terms of this Lease, the amount of such insurance coverage,
whether or not actually procured by Lessor.
In any case in which Lessor or Lessor's managing agent shall be obligated
to pay to Lessee any loss, cost, damage, liability or expense suffered or
incurred by Lessee, Lessee shall allow to Lessor or Lessor's managing agent, as
the case may be, as an offset against the amount thereof (i) the net proceeds of
any insurance collected by Lessee for or on account of such loss, cost, damage,
liability, or expense, provided that the allowance of such offset does not
invalidate the policy or policies under which such proceeds were payable and
(ii) the amount of any loss, cost, damage, liability or expense caused by a
peril covered by fire insurance with the broadest form of property insurance
generally available on property in buildings of the type of the Building,
whether or not actually procured by Lessee.
The parties hereto shall each procure an appropriate clause in, or
endorsement on, any property insurance policy covering the premises and the
Building and personal property, fixtures and equipment located thereon and
therein, pursuant to which the insurance companies waive subrogation or consent
to a waiver of right of recovery in favor of either party, its respective agents
or employees. Having obtained such clauses and/or endorsements, each party
hereby agrees that it will not make any claim against or seek to recover from
the other or its agents or employees for any loss or damage to its property or
the property of others resulting from fire or other perils covered by such
property insurance.
3
<PAGE>
7. As herein amended, the Lease is ratified, approved and confirmed in all
respects.
EXECUTED under seal as of the date first above written.
LESSOR: LESSEE:
CAMBRIDGE ATHENAEUM LLC, DYAX CORPORATION
a Delaware limited liability company
By: Kendall Athenaeum LLC,
a Delaware limited liability company,
its manager
By: Beacon/PW Kendall LLC, a
Delaware limited liability company,
its manager
By: Beacon Capital Partners, L.P.,
a Delaware limited partnership
d/b/a Beacon Capital Partners
Limited Partnership, its manager
By: Beacon Capital Partners, Inc.,
a Maryland corporation, its
general partner
By: /s/ Thomas Ragno By: /s/ Keith S. Ehrlich
--------------------- ----------------------
Name: (Name) (Title)
------------------- ------------------------
Title: Hereunto duly Authorized
------------------
Date Signed: Date Signed:
------------ ------------
4
<PAGE>
EXHIBIT 10.21
CUSTOMER NO. 1101
MASTER LEASE AGREEMENT
Lessor: TRANSAMERICA BUSINESS CREDIT CORPORATION
RIVERWAY II
WEST OFFICE TOWER
WEST HIGGINS
ROSEMONT, ILLINOIS 60018
Lessee: DYAX CORP.
ONE KENDALL SQUARE
BUILDING 600, 5TH FLOOR
CAMBRIDGE, MASSACHUSETTS 02139
The lessor pursuant to this Master Lease Agreement ("Agreement") dated as of
December 30, 1997, is Transamerica Business Credit Corporation ("Lessor"). All
equipment, together with all present and future additions, parts, accessories,
attachments, substitutions, repairs, improvements, and replacements thereof or
thereto, which are the subject of a Lease (as defined in the next sentence)
shall be referred to as "Equipment." Simultaneous with the execution and
delivery of this Agreement, the parties are entering into one or more Lease
Schedules (each, a "Schedule") which refer to and incorporate by reference this
Agreement, each of which constitutes a lease (each, a "Lease") for the Equipment
specified therein. Additional details pertaining to each Lease are specified in
the applicable Schedule. Each Schedule that the parties hereafter enter into
shall constitute a Lease. Lessor has no obligation to enter into any additional
leases with, or extend any future financing to, Lessee.
1. LEASE. Subject to and upon all of the terms and conditions of this
Agreement and each Schedule, Lessor hereby agrees to lease to Lessee and Lessee
hereby agrees to lease from Lessor the Equipment for the Term (as defined in
Paragraph 2 below) thereof. The timing and financial scope of Lessor's
obligation to enter into Leases hereunder are limited as set forth in the
Commitment Letter executed by Lessor and Lessee, dated as of December 17, 1997
and attached hereto as Exhibit A (the "Commitment Letter").
2. TERM. Each Lease shall be effective and the term of each Lease
("Term") shall commence on the commencement date specified in the applicable
Schedule and, unless sooner terminated (as hereinafter provided), shall expire
at the end of the term specified in such Schedule; PROVIDED, HOWEVER, that
obligations due to be performed by Lessee during the Term shall continue until
they have been performed in full. Schedules will only be executed after the
delivery of the Equipment to the Lessee or upon completion of deliveries of
items of such Equipment with aggregate cost of not less than $50,000.
3. RENT. Lessee shall pay as rent to Lessor, for use of the Equipment
during the Term or Renewal Term (as defined in Paragraph 8), rental payments
equal to the sum of all rental payments including, without limitation, security
deposits, advance rents, and interim rents payable in the amounts and on the
dates specified in the applicable Schedule ("Rent"). If any Rent or other amount
payable by Lessee is not paid within five days after the day on which it becomes
payable, Lessee will pay on demand, as a late charge, an amount equal to 5% of
such unpaid Rent or other amount but only to
<PAGE>
the extent permitted by applicable law. All payments provided for herein shall
be payable to Lessor at its address specified above, or at any other place
designated by Lessor.
4. LEASE NOT CANCELABLE; LESSEE'S OBLIGATIONS ABSOLUTE. No Lease may
be canceled or terminated except as expressly provided herein. Lessee's
obligation to pay all Rent due or to become due hereunder shall be absolute and
unconditional and shall not be subject to any delay, reduction, set-off,
defense, counterclaim, or recoupment for any reason whatsoever, including any
failure of the Equipment or any representations by the manufacturer or the
vendor thereof. If the Equipment is unsatisfactory for any reason, Lessee shall
make any claim solely against the manufacturer or the vendor thereof and shall,
nevertheless, pay Lessor all Rent payable hereunder.
5. SELECTION AND USE OF EQUIPMENT. Lessee agrees that it shall be
responsible for the selection and use of, and results obtained from, the
Equipment and any other associated equipment or services.
6. WARRANTIES. LESSOR MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN
OR CONDITION OF THE EQUIPMENT OR ITS MERCHANTABILITY, SUITABILITY, QUALITY, OR
FITNESS FOR A PARTICULAR PURPOSE, AND HEREBY DISCLAIMS ANY SUCH WARRANTY. LESSEE
SPECIFICALLY WAIVES ALL RIGHTS TO MAKE A CLAIM AGAINST LESSOR FOR BREACH OF ANY
WARRANTY WHATSOEVER. LESSEE LEASES THE EQUIPMENT"AS IS." IN NO EVENT SHALL
LESSOR HAVE ANY LIABILITY, NOR SHALL LESSEE HAVE ANY REMEDY AGAINST LESSOR, FOR
ANY LIABILITY, CLAIM, LOSS, DAMAGE, OR EXPENSE CAUSED DIRECTLY OR INDIRECTLY BY
THE EQUIPMENT OR ANY DEFICIENCY OR DEFECT THEREOF OR THE OPERATION, MAINTENANCE,
OR REPAIR THEREOF OR ANY CONSEQUENTIAL DAMAGES AS THAT TERM IS USED IN SECTION
2-719(3) OF THE MODEL UNIFORM COMMERCIAL CODE, AS AMENDED FROM TIME TO TIME
("UCC"). Lessor grants to Lessee, for the sole purpose of prosecuting a claim,
the benefits of any and all warranties made available by the manufacturer or the
vendor of the Equipment to the extent assignable.
7. DELIVERY. Lessor hereby appoints Lessee as Lessor's agent for the
sole and limited purpose of accepting delivery of the Equipment from each vendor
thereof. Lessee shall pay any and all delivery and installation charges. Lessor
shall not be liable to Lessee for any delay in, or failure of, delivery of the
Equipment.
8. RENEWAL. So long as no Event of Default or event which, with the
giving of notice, the passage of time, or both, would constitute an Event of
Default, shall have occurred and be continuing, or the Lessee shall not have
exercised its purchase option under Paragraph 9 hereof, each Lease will
automatically renew for a term specified in the applicable Schedule (the
"Renewal Term") on the terms and conditions of this Agreement or as set forth in
such Schedule; PROVIDED, HOWEVER, that Obligations due to be performed by the
Lessee during the Renewal Term shall continue until they have been performed in
full.
9. PURCHASE OPTION. So long as no Event of Default or event which,
with the giving of notice, the passage of time, or both, would constitute an
Event of Default, shall have occurred and be continuing, Lessee may, upon
written notice to Lessor received at least one hundred eighty days before the
expiration of a Term, purchase all, but not less than all, the Equipment covered
by the applicable Lease on the date specified therefor in the applicable
Schedule ("Purchase Date"). The purchase price for such Equipment shall be its
fair market value as set forth in the applicable Schedule
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determined on an "In-place, In-use" basis, as mutually agreed by Lessor and
Lessee, or, if they cannot agree, as determined by an independent appraiser
selected by Lessor and approved by Lessee, which approval will not be
unreasonably delayed or withheld. Lessee shall pay the cost of any such
appraisal. So long as no Event of Default or event which, with the giving of
notice, the passage of time, or both, would constitute an Event of Default shall
have occurred and be continuing, Lessee may, upon written notice to Lessor
received at least one hundred eighty days prior to the expiration of the Renewal
Term, purchase all, but not less than all, the Equipment covered by the
applicable Schedule by the last date of the Renewal Term (the "Alternative
Purchase Date") at a purchase price equal to its then fair market value on an
"In-place, In-use" basis. On the Purchase Date or the Alternative Purchase Date,
as the case may be, for any Equipment, Lessee shall pay to Lessor the purchase
price, together with all sales and other taxes applicable to the transfer of the
Equipment and any other amount payable and arising hereunder, in immediately
available funds, whereupon Lessor shall transfer to Lessee, without recourse or
warranty of any kind, express or implied, all of Lessor's right, title, and
interest in and to such Equipment on an "As Is, Where Is" basis.
10. OWNERSHIP; INSPECTION; MARKING; FINANCING STATEMENTS. Lessee shall
affix to the Equipment any labels supplied by Lessor indicating ownership of
such Equipment. The Equipment is and shall be the sole property of Lessor.
Lessee shall have no right, title, or interest therein, except as lessee under a
Lease. The Equipment is and shall at all times be and remain personal property
and shall not become a fixture. Lessee shall obtain and record such instruments
and take such steps as may be necessary to prevent any person from acquiring any
rights in the Equipment by reason of the Equipment being claimed or deemed to be
real property. Upon request by Lessor, Lessee shall obtain and deliver to Lessor
valid and effective waivers, in recordable form, by the owners, landlords, and
mortgagees of the real property upon which the Equipment is located or
certificates of Lessee that it is the owner of such real property or that such
real property is neither leased nor mortgaged. Lessee shall make the Equipment
and its maintenance records available for inspection by Lessor at reasonable
times and upon reasonable notice. Lessee shall execute and deliver to Lessor for
filing any UCC financing statements or similar documents Lessor may reasonably
request.
11. EQUIPMENT USE. Lessee agrees that the Equipment will be operated
by competent, qualified personnel in connection with Lessee's business for the
purpose for which the Equipment was designed and in accordance with applicable
operating instructions, laws, and government regulations, and that Lessee shall
use all reasonable precautions to prevent loss or damage to the Equipment from
fire and other hazards. Lessee shall procure and maintain in effect all orders,
licenses, certificates, permits, approvals, and consents required by federal,
state, or local laws or by any governmental body, agency, or authority in
connection with the delivery, installation, use, and operation of the Equipment.
12. MAINTENANCE. Lessee, at its sole cost and expense, shall keep the
Equipment in a suitable environment as specified by the manufacturer's
guidelines or the equivalent, shall meet all recertification requirements, and
shall maintain the Equipment in its original condition and working order,
ordinary wear and tear excepted. At the reasonable request of Lessor, Lessee
shall furnish all proof of maintenance.
13. ALTERATION; MODIFICATIONS; PARTS. Lessee may alter or modify the
Equipment only with the prior written consent of Lessor. Any alteration shall be
removed and the Equipment restored to its normal, unaltered condition at
Lessee's expense (without damaging the Equipment's originally intended function
or its value) prior to its return to Lessor. Any part installed in connection
with warranty or maintenance service or which cannot be removed in accordance
with the preceding sentence shall be the property of Lessor.
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14. RETURN OF EQUIPMENT. Except for Equipment that has suffered a
Casualty Loss (as defined in Paragraph 15 below) and is not required to be
repaired pursuant to Paragraph 15 below or Equipment purchased by Lessee
pursuant to Paragraph 9 above, upon the expiration of the Renewal Term of a
Lease, or upon demand by Lessor pursuant to Paragraph 22 below, Lessee shall
contact Lessor for shipping instructions and, at Lessee's own risk, immediately
return the Equipment, freight prepaid, to a location in the continental United
States specified by Lessor. At the time of such return to Lessor, the Equipment
shall (i) be in the operating order, repair, and condition as required by or
specified in the original specifications and warranties of each manufacturer and
vendor thereof, ordinary wear and tear excepted, (ii) meet all recertification
requirements, and (iii) be capable of being promptly assembled and operated by a
third party purchaser or third party lessee without further repair, replacement,
alterations, or improvements, and in accordance and compliance with any and all
statutes, laws, ordinances, rules, and regulations of any governmental authority
or any political subdivision thereof applicable to the use and operation of the
Equipment. Except as otherwise provided under Paragraph 9 hereof, at least one
hundred eighty days before the expiration of the Renewal Term, Lessee shall give
Lessor notice of its intent to return the Equipment at the end of such Renewal
Term. During the one hundred eighty-day period prior to the end of a Term or the
Renewal Term, Lessor and its prospective purchasers or lessees shall have, upon
not less than two business days' prior notice to Lessee and during normal
business hours, or at any time and without prior notice upon the occurrence and
continuance of an Event of Default, the right of access to the premises on which
the Equipment is located to inspect the Equipment, and Lessee shall cooperate in
all other respects with Lessor's remarketing of the Equipment. The provisions of
this Paragraph 14 are of the essence of the Lease, and upon application to any
court of equity having jurisdiction in the premises, Lessor shall be entitled to
a decree against Lessee requiring specific performance of the covenants of
Lessee set forth in this Paragraph 14. If Lessee fails to return the Equipment
when required, the terms and conditions of the Lease shall continue to be
applicable and Lessee shall continue to pay Rent until the Equipment is received
by Lessor.
15. CASUALTY INSURANCE; LOSS OR DAMAGE. Lessee will maintain, at its
own expense, liability and property damage insurance relating to the Equipment,
insuring against such risks as are customarily insured against on the type of
equipment leased hereunder by businesses in which Lessee is engaged in such
amounts, in such form, and with insurers satisfactory to Lessor; PROVIDED,
HOWEVER, that the amount of insurance against damage or loss shall not be less
than the greater of (a) the replacement value of the Equipment and (b) the
stipulated loss value of the Equipment specified in the applicable Schedule
("Stipulated Loss Value"). Each liability insurance policy shall provide
coverage (including, without limitation, personal injury coverage) of not less
than $1,000,000 for each occurrence, and shall name Lessor as an additional
insured; and each property damage policy shall name Lessor as sole loss payee
and all policies shall contain a clause requiring the insurer to give Lessor at
least thirty days' prior written notice of any alteration in the terms or
cancellation of the policy. Lessee shall furnish to Lessor a copy of each
insurance policy (with endorsements) or other evidence satisfactory to Lessor
that the required insurance coverage is in effect; PROVIDED, HOWEVER, Lessor
shall have no duty to ascertain the existence of or to examine the insurance
policies to advise Lessee if the insurance coverage does not comply with the
requirements of this Paragraph. If Lessee fails to insure the Equipment as
required, Lessor shall have the right but not the obligation to obtain such
insurance, and the cost of the insurance shall be for the account of Lessee due
as part of the next due Rent. Lessee consents to Lessor's release, upon its
failure to obtain appropriate insurance coverage, of any and all information
necessary to obtain insurance with respect to the Equipment or Lessor's interest
therein.
Until the Equipment is returned to and received by Lessor as provided
in Paragraph 14 above, Lessee shall bear the entire risk of the theft or
destruction of, or damage to, the Equipment including, without limitation, any
condemnation, seizure, or requisition of title or use ("Casualty Loss"). No
Casualty Loss shall relieve Lessee from its obligations to pay Rent except as
provided in clause (b)
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below. When any Casualty Loss occurs, Lessee shall immediately notify Lessor
and, at the option of Lessor, shall promptly (a) place such Equipment in good
repair and working order; or (b) pay Lessor an amount equal to the Stipulated
Loss Value of such Equipment and all other amounts (excluding Rent) payable by
Lessee hereunder, together with a late charge on such amounts at a rate per
annum equal to the rate imputed in the Rent payments hereunder (as reasonably
determined by Lessor) from the date of the Casualty Loss through the date of
payment of such amounts, whereupon Lessor shall transfer to Lessee, without
recourse or warranty (express or implied), all of Lessor's interest, if any, in
and to such Equipment on an "AS IS, WHERE IS" basis. The proceeds of any
insurance payable with respect to the Equipment shall be applied, at the option
of Lessor, either towards (i) repair of the Equipment or (ii) payment of any of
Lessee's obligations hereunder. Lessee hereby appoints Lessor as Lessee's
attorney-in-fact to make claim for, receive payment of, and execute and endorse
all documents, checks or drafts issued with respect to any Casualty Loss under
any insurance policy relating to the Equipment.
16. TAXES. Lessee shall pay when due, and indemnify and hold Lessor
harmless from, all sales, use, excise, and other taxes, charges, and fees
(including, without limitation, income, franchise, business and occupation,
gross receipts, licensing, registration, titling, personal property, stamp and
interest equalization taxes, levies, imposts, duties, charges, or withholdings
of any nature),and any fines, penalties, or interest thereon, imposed or levied
by any governmental body, agency, or tax authority upon or in connection with
the Equipment, its purchase, ownership, delivery, leasing, possession, use, or
relocation of the Equipment or otherwise in connection with the transactions
contemplated by each Lease or the Rent thereunder, excluding taxes on or
measured by the net income of Lessor. Upon request, Lessee will provide proof of
payment. Unless Lessor elects otherwise, Lessee will pay all property taxes on
the Equipment. Lessee shall timely prepare and file all reports and returns
which are required to be made with respect to any obligation of Lessee under
this Paragraph 16. Lessee shall, to the extent permitted by law, cause all
billings of such fees, taxes, levies, imposts, duties, withholdings, and
governmental charges to be made to Lessor in care of Lessee. Upon request,
Lessee will provide Lessor with copies of all such billings.
17. LESSOR'S PAYMENT. If Lessee fails to perform its obligations under
Paragraphs 15 or 16 above, or Paragraph 23 below, Lessor shall have the right to
substitute performance, in which case Lessee shall immediately reimburse Lessor
therefor.
18. GENERAL INDEMNITY. Each Lease is a net lease. Therefore, Lessee
shall indemnify Lessor and its successors and assigns against, and hold Lessor
and its successors and assigns harmless from, any and all claims, actions,
damages, obligations, liabilities, and all costs and expenses, including,
without limitation, legal fees incurred by Lessor or its successors and assigns
arising out of each Lease including, without limitation, the purchase,
ownership, delivery, lease, possession, maintenance, condition, use, or return
of the Equipment, or arising by operation of law, except that Lessee shall not
be liable for any claims, actions, damages, obligations, and costs and expenses
determined by a non-appealable, final order of a court of competent jurisdiction
to have occurred as a result of the gross negligence or willful misconduct of
Lessor or its successors and assigns. Lessee agrees that upon written notice by
Lessor of the assertion of any claim, action, damage, obligation, liability, or
lien, Lessee shall assume full responsibility for the defense thereof, provided
that Lessor's failure to give such notice shall not limit or otherwise affect
its rights hereunder. Any payment pursuant to this Paragraph (except for any
payment of Rent) shall be of such amount as shall be necessary so that, after
payment of any taxes required to be paid thereon by Lessor, including taxes on
or measured by the net income of Lessor, the balance will equal the amount due
hereunder. The provisions of this Paragraph with regard to matters arising
during a Lease shall survive the expiration or termination of such Lease.
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19. ASSIGNMENT BY LESSEE. Lessee shall not, without the prior written
consent of Lessor, (a) assign, transfer, pledge, or otherwise dispose of any
Lease or Equipment, or any interest therein; (b) sublease or lend any Equipment
or permit it to be used by anyone other than Lessee and its employees; or (c)
move any Equipment from the location specified for it in the applicable
Schedule, except that Lessee may move Equipment to another location within the
United States provided that Lessee has delivered to Lessor (A) prior written
notice thereof and (B) duly executed financing statements and other agreements
and instruments (all in form and substance satisfactory to Lessor) necessary or,
in the opinion of the Lessor, desirable to protect Lessor's interest in such
Equipment. Notwithstanding anything to the contrary in the immediately preceding
sentence, Lessee may keep any Equipment consisting of motor vehicles or rolling
stock at any location in the United States.
20. ASSIGNMENT BY LESSOR. Lessor may assign its interest or grant a
security interest in any Lease and the Equipment individually or together, in
whole or in part. If Lessee is given written notice of any such assignment, it
shall immediately make all payments of Rent and other amounts hereunder directly
to such assignee. Each such assignee shall have all of the rights of Lessor
under each Lease assigned to it. Lessee shall not assert against any such
assignee any set-off, defense, or counterclaim that Lessee may have against
Lessor or any other person.
21. DEFAULT; NO WAIVER. Lessee or any guarantor of any or all of the
obligations of Lessee hereunder (together with Lessee, the "Lease Parties")
shall be in default under each Lease upon the occurrence of any of the following
events (each, an "Event of Default"): (a) Lessee fails to pay within two days
after notice of when due any amount required to be paid by Lessee under or in
connection with any Lease; (b) any of the Lease Parties fails to perform any
other provision under or in connection with a Lease or violates any of the
covenants or agreements of such Lease Party under or in connection with a Lease;
(c) any representation made or financial information delivered or furnished by
any of the Lease Parties under or in connection with a Lease shall prove to have
been inaccurate in any material respect when made; (d) any of the Lease Parties
makes an assignment for the benefit of creditors, whether voluntary or
involuntary, or consents to the appointment of a trustee or receiver, or if
either shall be appointed for any of the Lease Parties or for a substantial part
of its property without its consent and, in the case of any such involuntary
proceeding, such proceeding remains undismissed or unstayed for forty-five days
following the commencement thereof; (e) any petition or proceeding is filed by
or against any of the Lease Parties under any Federal or State bankruptcy or
insolvency code or similar law and, in the case of any such involuntary petition
or proceeding, such petition or proceeding remains undismissed or unstayed for
forty-five days following the filing or commencement thereof, or any of the
Lease Parties takes any action authorizing any such petition or proceeding; (f)
any of the Lease Parties fails to pay when due any indebtedness for borrowed
money or under conditional sales or installment sales contracts or similar
agreements, leases, or obligations evidenced by bonds, debentures, notes, or
other similar agreements or instruments to any creditor (including Lessor under
any other agreement) after any and all applicable cure periods therefor shall
have elapsed; (g) any judgment shall be rendered against any of the Lease
Parties which shall remain unpaid or unstayed for a period of sixty days; (h)
any of the Lease Parties shall dissolve, liquidate, wind up or cease its
business, sell or otherwise dispose of all or substantially all of its assets,
or make any material change in its lines of business; (i) any of the Lease
Parties shall amend or modify its name, unless such Lease Party delivers to
Lessor, thirty days prior to any such proposed amendment or modification,
written notice of such amendment or modification and within ten days before such
amendment or modification delivers executed financing statements (in form and
substance satisfactory to the Lessor); (j) any of the Lease Parties shall merge
or consolidate with any other entity or make any material change in its capital
structure, in each case without Lessor's prior written consent, which shall not
be unreasonably withheld; (k) any of the Lease Parties shall suffer any loss or
suspension of any material license, permit, or other right or asset necessary to
the profitable conduct of its business, fail generally to pay its debts as they
mature, or call a meeting for
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purposes of compromising its debts; (l) any of the Lease Parties shall deny or
disaffirm its obligations hereunder or under any of the documents delivered in
connection herewith; (m) there is a change in more than 35% of the ownership of
any equity interests of any of the Lease Parties on the date hereof or more than
35% of such interests become subject to any contractual, judicial or statutory
lien, charge, security interest or encumbrance; or (n) any of the Lease Parties
suffers a material adverse change in the business, prospects, operations,
results of operations, assets, liabilities, or condition (financial or
otherwise).
22. REMEDIES. Upon the occurrence and continuation of an Event of
Default, Lessor shall have the right, in its sole discretion, to exercise any
one or more of the following remedies: (a) terminate each Lease; (b) declare any
and all Rent and other amounts then due and any and all Rent and other amounts
to become due under each Lease (collectively, the "Lease Obligations")
immediately due and payable; (c) take possession of any or all items of
Equipment, wherever located, without demand, notice, court order, or other
process of law, and without liability for entry to Lessee's premises, for damage
to Lessee's property, or otherwise; (d) demand that Lessee immediately return
any or all Equipment to Lessor in accordance with Paragraph 14 above, and, for
each day that Lessee shall fail to return any item of Equipment, Lessor may
demand an amount equal to the Rent payable for such Equipment in accordance with
Paragraph 14 above; (e) leases, sell, or otherwise dispose of the Equipment in a
commercially reasonable manner, with or without notice and on public or private
bid; (f) recover the following amounts from the Lessee (as damages, including
reimbursement of costs and expenses, liquidated for all purposes and not as a
penalty): (i) all costs and expenses of Lessor reimbursable to it hereunder,
including, without limitation, expenses of disposition of the Equipment, legal
fees, and all other amounts specified in Paragraph 23 below; (ii) an amount
equal to the sum of (A) any accrued and unpaid Rent through the later of (1) the
date of the applicable default, (2) the date that Lessor has obtained possession
of the Equipment, or (3) such other date as Lessee has made an effective tender
of possession of the Equipment to Lessor (the "Default Date") and (B) if Lessor
resells or re-lets the Equipment, Rent at the periodic rate provided for in each
Lease for the additional period that it takes Lessor to resell or re-let all of
the Equipment; (iii) the present value of all future Rent reserved in the Leases
and contracted to be paid over the unexpired Term of the Leases discounted at
five percent compound interest; (iv) the reversionary value of the Equipment as
of the expiration of the Term of the applicable Lease as set forth on the
applicable Schedule; and (v) any indebtedness for Lessee's indemnity under
Paragraph 18 above, plus a late charge at the rate specified in Paragraph 3
above, less the amount received by Lessor, if any, upon sale or re-let of the
Equipment; and (g) exercise any other right or remedy to recover damages or
enforce the terms of the Leases. Upon the occurrence and continuance of an Event
of Default or an event which with the giving of notice or the passage of time,
or both, would result in an Event of Default, Lessor shall have the right,
whether or not Lessor has made any demand or the obligations of Lessee hereunder
have matured, to appropriate and apply to the payment of the obligations of
Lessee hereunder all security deposits and other deposits (general or special,
time or demand, provisional or final) now or hereafter held by and other
indebtedness or property now or hereafter owing by Lessor to Lessee. Lessor may
pursue any other rights or remedies available at law or in equity, including,
without limitation, rights or remedies seeking damages, specific performance,
and injunctive relief. Any failure of Lessor to require strict performance by
Lessee, or any waiver by Lessor of any provision hereunder or under any
Schedule, shall not be construed as a consent or waiver of any other breach of
the same or of any other provision. Any amendment or waiver of any provision
hereof or under any Schedule or consent to any departure by Lessee herefrom or
therefrom shall be in writing and signed by Lessor.
No right or remedy is exclusive of any other provided herein or
permitted by law or equity. All such rights and remedies shall be cumulative and
may be enforced concurrently or individually from time to time.
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23. LESSOR'S EXPENSE. Lessee shall pay Lessor on demand all costs and
expenses (including legal fees and expenses) incurred in connection with the
preparation, execution and delivery of this Agreement and any other agreements
and transactions contemplated hereby, which expenses shall not exceed $2,500
without the written consent of Lessee and all costs and expenses in protecting
and enforcing Lessor's rights and interests in each Lease and the equipment,
including, without limitation, legal, collection, and remarketing fees and
expenses incurred by Lessor in enforcing the terms, conditions, or provisions of
each Lease or upon the occurrence and continuation of an Event of Default.
24. LESSEE'S WAIVERS. To the extent permitted by applicable law,Lessee
hereby waives any and all rights and remedies conferred upon a lessee by
Sections 2A-508 through 2A-522 of the UCC. To the extent permitted by applicable
law, Lessee also hereby waives any rights now or hereafter conferred by statute
or otherwise which may require Lessor to sell, lease, or otherwise use any
Equipment in mitigation of Lessor's damages as set forth in Paragraph 22 above
or which may otherwise limit or modify any of Lessor's rights or remedies under
Paragraph 22. Any action by Lessee against Lessor for any default by Lessor
under any Lease shall be commenced within one year after any such cause of
action accrues.
25. NOTICES; ADMINISTRATION. Except as otherwise provided herein, all
notices, approvals, consents, correspondence, or other communications required
or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery, or certified or registered mail,
postage prepaid, if to Lessor, then to Transamerica Technology Finance Division,
76 Batterson Park Road, Farmington, Connecticut 06032, Attention: Assistant Vice
President, Lease Administration, with a copy to Lessor at Riverway II, West
Office Tower, 9399 West Higgins Road, Rosemont, Illinois 60018, Attention: Legal
Department, if to Lessee, then to Dyax Corp., One Kendall Square, Building 600,
5th Floor, Cambridge, Massachusetts 02319, Attention: Director of Finance, or
such other address as shall be designated by Lessee or Lessor to the other
party. All such notices and correspondence shall be effective when received.
26. REPRESENTATIONS. Lessee represents and warrants to Lessor that (a)
Lessee is duly organized, validly existing, and in good standing under the laws
of the State of its incorporation; (b) the execution, delivery, and performance
by Lessee of this Agreement are within Lessee's powers, have been duly
authorized by all necessary action, and do not and will not contravene (i)
Lessee's organizational documents or (ii) any law, regulation, rule, or
contractual restriction binding on or affecting Lessee; (c) no authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery, and
performance by Lessee of this Agreement; (d) each Lease constitutes the legal,
valid, and binding obligations of Lessee enforceable against Lessee in
accordance with its terms; (e) the cost of each item of Equipment does not
exceed the fair and usual price for such type of equipment purchased in like
quantity and reflects all discounts, rebates, and allowances for the Equipment
(including, without limitation, discounts for advertising, prompt payment,
testing, or other services) given to the Lessee by the manufacturer, supplier,
or any other person; and (f) all information supplied by Lessee to Lessor in
connection herewith is correct and does not omit any material statement
necessary to insure that the information supplied is not misleading.
27. FURTHER ASSURANCES. Lessee, upon the request of Lessor, will
execute, acknowledge, record, or file, as the case may be, such further
documents and do such further acts as may be reasonably necessary, desirable, or
proper to carry out more effectively the purposes of this Agreement. Lessee
hereby appoints Lessor as its attorney-in-fact to execute on behalf of Lessee
and authorizes Lessor to file without Lessee's signature any UCC financing
statements and amendments Lessor deems advisable.
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28. FINANCIAL STATEMENTS. Lessee shall deliver to Lessor: (a) as soon
as available, but not later than 120 days after the end of each fiscal year of
Lessee and its consolidated subsidiaries, the consolidated balance sheet, income
statement, and statements of cash flows and shareholders equity for Lessee and
its consolidated subsidiaries (the "Financial Statements") for such year,
reported on by independent certified public accountants without an adverse
qualification; and (b) as soon as available, but not later than 60 days after
the end of each of the first three fiscal quarters in any fiscal year of Lessee
and its consolidated subsidiaries, the Financial Statements for such fiscal
quarter, together with a certification duly executed by a responsible officer of
Lessee that such Financial Statements have been prepared in accordance with
generally accepted accounting principles and are fairly stated in all material
respects (subject to normal year-end audit adjustments). Lessee shall also
deliver to Lessor as soon as available copies of all press releases and other
similar communications issued by Lessee.
29. CONSENT TO JURISDICTION. Lessee irrevocably submits to the
jurisdiction of any Illinois state or federal court sitting in Illinois for any
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, and Lessee irrevocably agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
Illinois state or federal court.
30. WAIVER OF JURY TRIAL. LESSEE AND LESSOR IRREVOCABLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
31. FINANCE LEASE. Lessee and Lessor agree that each Lease is a
"Finance Lease" as defined by Section 2A-103(g) of the UCC. Lessee acknowledges
that Lessee has reviewed and approved each written Supply Contract (as defined
by UCC 2A-103(y)) covering Equipment purchased from each "Supplier" (as defined
by UCC 2A-103(x)) thereof.
32. NO AGENCY. Lessee acknowledges and agrees that neither the
manufacturer or supplier, nor any salesman, representative, or other agent of
the manufacturer or supplier, is an agent of Lessor. No salesman,
representative, or agent of the manufacturer or supplier is authorized to waive
or alter any term or condition of this Agreement or any Schedule, and no
representation as to the Equipment or any other matter by the manufacturer or
supplier shall in any way affect Lessee's duty to pay Rent and perform its other
obligations as set forth in this Agreement or any Schedule.
33. SPECIAL TAX INDEMNIFICATION. Lessee acknowledges that Lessor, in
determining the Rent due hereunder, has assumed that certain tax benefits as are
provided to an owner of property under the Internal Revenue Code of 1986, as
amended (the "Code"), and under applicable state tax law, including, without
limitation, depreciation deductions under Section 168(b) of the Code, and
deductions under Section 163 of the Code in an amount at least equal to the
amount of interest paid or accrued by Lessor with respect to any indebtedness
incurred by Lessor in financing its purchase of the Equipment, are available to
Lessor as a result of the lease of the Equipment. In the event Lessor is unable
to obtain such tax benefits as a result of an act or omission of Lessee, is
required to include in income any amount other than the Rent, or is required to
recognize income in respect of the Rent earlier than anticipated pursuant to
this Agreement, Lessee shall pay Lessor additional rent ("Additional Rent") in a
lump sum in an amount needed to provide Lessor with the same after-tax yield and
after-tax cash flow as would have been realized by Lessor had Lessor (i) been
able to obtain such tax benefits, (ii) not been required to include any amount
in income other than the Rent, and (iii) not been required to recognize income
in respect of the Rent earlier than anticipated pursuant to this Agreement. The
Additional Rent shall be computed by Lessor, which computation shall be binding
on Lessee. The
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Additional Rent shall be due immediately upon written notice by Lessor to Lessee
of Lessor's inability to obtain tax benefits, the inclusion of any amount in
income other than the Rent or the recognition of income in respect of the Rent
earlier than anticipated pursuant to this Agreement. The provision of this
Paragraph 33 shall survive the termination of this Agreement.
34. GOVERNING LAW; SEVERABILITY. EACH LEASE SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. IF ANY PROVISION SHALL BE HELD TO BE INVALID OR
UNENFORCEABLE, THE VALIDITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS SHALL
NOT IN ANY WAY BE AFFECTED OR IMPAIRED.
LESSEE ACKNOWLEDGES THAT LESSEE HAS READ THIS AGREEMENT AND THE SCHEDULE HERETO,
UNDERSTANDS THEM, AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS. FURTHER,
LESSEE AND LESSOR AGREE THAT THIS AGREEMENT, THE SCHEDULES DELIVERED IN
CONNECTION HEREWITH FROM TIME TO TIME, AND THE COMMITMENT LETTER ARE THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES,
SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER
COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF. SHOULD
THERE EXIST ANY INCONSISTENCY BETWEEN THE TERMS OF THE COMMITMENT LETTER AND
THIS AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL PREVAIL.
- 10 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed by their duly authorized officers as of the date
first written above.
DYAX CORP.
By: /s/ L. Edward Cannon
-------------------------------------
Name: L. Edward Cannon
Title: Executive Vice President
Federal Tax ID: 04-3053198
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: Gary P. Moro
-------------------------------------
Name: Gary P. Moro
Title: Vice President
- 11 -
<PAGE>
[Transamerica Business Credit letterhead]
EXHIBIT A
December 17, 1997
Ms. Karen Roberts
Director of Finance
Dyax Corp.
One Kendall Square
Building 600, 5th Floor
Cambridge, MA 02139
Dear Karen:
Transamerica Business Credit Corporation - Technology Finance Division
("Lessor") is pleased to offer this commitment (this "Commitment") to lease the
equipment described below to Dyax Corp. ("Lessee"). This Commitment supersedes
all prior correspondence, commitments, and oral or other communications relating
to leasing arrangements between Lessor and Lessee.
The outline of this offer is as follows:
LESSOR: Transamerica Business Credit Corporation - Technology
Finance Division
LESSEE: Dyax Corp.
EQUIPMENT: Laboratory, production and office equipment (all equipment
subject to Lessor's approval prior to funding), including
without limitation, all additions, improvements,
replacements, repairs, appurtenances, substitutions, and
attachments thereto and all proceeds thereof ("Equipment"),
including equipment acquired during 1997.
EQUIPMENT COST: Not to exceed $3,000,000.
EQUIPMENT LOCATION: Cambridge, Massachusetts and Charlottesville, Virginia
LEASE TERM
COMMENCEMENT: Upon delivery of the Equipment or upon each completion of
deliveries of items of Equipment with aggregate cost of not
less than $50,000, but no later than December 31, 1998.
TERM: From each Lease Term Commencement until 60 months from the
first day of the month next following or coincident with
that Lease Term Commencement.
MONTHLY RENT: Monthly Rent equal to 2.09409% of Equipment Cost will be
payable monthly in advance. The first month's rent will be
due and payable in advance on or before each Lease Term
Commencement.
ADJUSTMENTS TO
<PAGE>
RENTAL PAYMENTS: The Lessor reserves the right to adjust the Monthly Rent
Payments as of the date of each Lease Term Commencement
proportionally to the change in the weekly average of the
interest rates of like-term U.S. Treasury Securities tracked
from September 15, 1997 (U.S. Five Year Treasury rate 6.22)
to the week preceding the date of each Lease Term
Commencement, as published in the Wall Street Journal. As of
the date of each Lease Term Commencement, the Monthly Rent
Payments will be fixed for the term. A schedule of the
actual Monthly Rent Payments will be provided by the Lessor
following each Lease Term Commencement.
INTERIM RENT: Interim Rent will accrue from each Lease Term Commencement
until the next following first day of a month (unless the
Lease Term Commencement is on the first day of a month).
Interim Rent will be at the daily equivalent of the
currently adjusted Monthly Rent Payment.
NET LEASE: The lease will be a net lease under which the Lessee will be
responsible for maintenance, insurance, taxes, and all other
costs and expenses.
TAXES: Sales or use taxes will be added to the Equipment Cost or
collected on the gross rentals, as appropriate.
INSURANCE: Prior to any delivery of Equipment, the Lessee will furnish
confirmation of insurance acceptable to the Lessor covering
the Equipment, including primary, all risk, physical damage,
property damage and bodily injury with appropriate loss
payee endorsement in favor of the Lessor.
CONDITIONS PRECEDENT
TO EACH LEASE TERM
COMMENCEMENT: 1. No material adverse change in the financial condition,
operation or prospects of the Lessee prior to funding.
The Lessor reserves the right to rescind any unused
portion of its commitment in the event of a material
adverse change in the financial condition, operation or
prospects of the Lessee.
2. Completion of the documentation and final terms of the
proposed financing satisfactory to Lessor and Lessor's
counsel.
3. Results of all due diligence, including lien, judgment
and tax searches, and other matters Lessor may
reasonably request shall be satisfactory to Lessor and
Lessor's counsel.
4. Receipt by Lessor of duly executed Lease documentation
in form and substance satisfactory to Lessor and its
counsel.
5. Lessor shall receive title and a valid and perfected
first priority lien and security interest in all
Equipment acquired through the use of this Commitment
and Lessor shall have received satisfactory evidence
that there are no liens on any Equipment except as
expressly permitted herein.
PURCHASE OPTION: The Lessee will have the option to purchase all (but not
less than all) the Equipment at the expiration of the term
of the lease for the then current Fair Market Value of the
Equipment, plus applicable sales and other taxes. It will be
agreed that Fair Market Value will be ten percent (10%) of
original Equipment Cost.
- 2 -
<PAGE>
AUTOMATIC RENEWAL: In the event the Lessee does not exercise the Purchase
Option described above, the lease will automatically renew
for a term of one year with Monthly Rentals equal to 1.0% of
Equipment Cost payable monthly in advance. At the expiration
of the renewal period, the Lessee will have the option to
purchase all (but not less than all) the Equipment for its
then current Fair Market Value, plus applicable sales and
other taxes. It will be agreed that the Fair Market Value
will not exceed five percent (5%).
ADDITIONAL
COVENANTS: There will be no actual or threatened conflict with, or
violation of, any regulatory statute, standard or rule
relating to the Lessee, its present or future operations, or
the Equipment.
Lessee will be required to provide quarterly financial
information. All information supplied by the Lessee will be
correct and will not omit any statement necessary to make
the information supplied not be misleading. There will be no
material breach of the representations and warranties of the
Lessee in the lease. The representations will include that
the Equipment Cost of each item of the Equipment does not
exceed the fair and usual price for like quantity purchased
of such item and reflects all discounts, rebates and
allowances for the Equipment given to Lessee or any
affiliate of Lessee by the manufacturer, supplier or anyone
else including, without limitation, discounts for
advertising, prompt payment, testing or other services.
There will be no financial ratio covenants.
FEES AND EXPENSES: The Lessee will be responsible for the Lessor's reasonable
expenses in connection with the transaction. Said fees and
expenses will not exceed $2,500 without consent of Lessee.
LAW: This letter and the proposed Lease are intended to be
governed by and construed in accordance with Illinois law
without regard to its conflict of law provisions.
INDEMNITY: Lessee agrees to indemnify and to hold harmless Lessor, and
its officers, directors and employees against all claims,
damages, liabilities and expenses which may be incurred by
or asserted against any such person in connection with or
arising out of this letter and the transactions contemplated
hereby, other than claims, damages, liability, and expense
resulting from such person's gross negligence or willful
misconduct.
CONFIDENTIALITY: This letter is delivered to you with the understanding that
neither it nor its substance shall be disclosed publicly or
privately to any third person except those who are in a
confidential relationship to you (such as your legal counsel
and accountants), or where the same is required by law and
then only on the basis that it not be further disclosed,
which conditions Lessee and its agents agree to be bound by
upon acceptance of this letter.
Without limiting the generality of the foregoing, none of
such persons shall use or refer to Lessor or to any
affiliate name in any disclosures made in connection with
any of the transactions without Lessor's prior written
consent.
- 3 -
<PAGE>
Upon completion of the initial takedown by Lessor and
Lessee, the Lessee will no longer be required to obtain
Lessor's prior written consent to disclose the transaction
contemplated hereby. In addition, the Lessee agrees to
provide camera ready artwork of typestyles and logos of the
Lessee for use in promotional material by the Lessor.
CONDITIONS OF
ACCEPTANCE: This Commitment Letter is intended to be a summary of the
most important elements of the agreement to enter into a
leasing transaction with Lessee, and it is subject to all
requirements and conditions contained in Lease documentation
proposed by Lessor or its counsel in the course of closing
the Lease described herein. Not every provision that imposes
duties, obligations, burdens, or limitations on Lessee is
contained herein, but shall be contained in the final Lease
documentation satisfactory to Lessor and its counsel.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATED TO THIS
LETTER OR THE TRANSACTION DESCRIBED IN THIS LETTER.
APPLICATION FEE: The $20,000 Application Fee previously paid by Lessee shall
be first applied to the costs and expenses of the Lessor in
connection with the transaction (not to exceed $2,500
without the consent of the Lessee), and any remainder shall
be applied pro rata to the second month's rent due under
each Lease Schedule.
COMMITMENT
EXPIRATION: This commitment shall expire on December 23, 1997 unless
prior thereto either extended in writing by the Lessor or
accepted as provided below by the Lessee.
- 4 -
<PAGE>
Should you have any questions, please call me. If you wish to accept this
Commitment, please so indicate by signing and returning the enclosed duplicate
copy of this letter to me by December 23, 1997.
Yours truly,
TRANSAMERICA BUSINESS CREDIT CORP.
TECHNOLOGY FINANCE DIVISION
By: /s/ Gerald A. Michaud
-------------------------------------
Gerald A. Michaud
Senior Vice President - Marketing
Accepted this 19th day of December, 1997
DYAX CORPORATION
By: /s/ Karen Roberts
- ------------------------------------
- 5 -
<PAGE>
SCHEDULE A
Equipment Locations:
1500 Avon Street Ext.
Charlottesville, Virginia 22902
One Kendall Square
Building 600, 5th Floor
Cambridge, Massachusetts 02139
<PAGE>
SCHEDULE TO MASTER LEASE AGREEMENT
Dated as of December 30, 1997
Schedule No. 1
LESSOR NAME & MAILING ADDRESS LESSEE NAME & MAILING ADDRESS
Transmerica Business Credit Corporation Dyax Corp.
Riverway II One Kendall Square
West Office Tower Building 600, 5th Floor
9399 West Higgins Road Cambridge, Massachusetts 02139
Rosemont, Illinois 60018
Equipment Location (if different from above):
This Schedule covers the following described equipment ("Equipment"):
See Exhibit II attached hereto and made a part hereof.
The Equipment is hereby leased pursuant to the provisions of the Master Lease
Agreement between the undersigned Lessee and Lessor dated December 30, 1997 (the
"Master Lease"), the terms of which are incorporated herein by reference
thereto, plus the following additional terms, provisions, and modifications. The
Lessor reserves the right to adjust the monthly payments in accordance with the
Commitment Letter dated December 17, 1997, if the Lessor has not received this
Schedule and an Acceptance and Delivery Certificate executed by the Lessee
within five business days from the date first set forth above.
<TABLE>
<S> <C> <C>
1. Term (Number of Months) 60 months
2. Equipment Cost $ 325,518.51
3. Commencement Date December 30, 1997
4. Rate Factor 2.09409% of Equipment Cost
5. Total Rents $408,999.03
Total sales/use tax $ 20,449.95 $ 429,448.98
6. Advance Rents (first) $ 6,816.65
Sales/use tax for advance rent $ 340.83 $ 7,157.48
7. Monthly rental payments $ 6,816.65
Monthly sales/use tax $ 340.83 $ 7,157.48
and the second such rental payment
will be due on and subsequent rental February 1, 1998
payments will be due on the same day
of each month thereafter
8. Security Deposit NONE
</TABLE>
<PAGE>
<TABLE>
<S> <C>
9. In addition to the monthly rental
payments provided for herein, Lessee
shall pay to Lessor, as interim rent,
payable on the commencement date
specified above, an amount equal to
1/30th of the monthly rental payment
(including monthly sales/use tax)
multiplied by the number of days from
and including the commencement date
through the end of the same calendar
month. $ 477.17
</TABLE>
Renewal terms:
In the event the Lease does not exercise the Purchase Option described below,
the Lease shall automatically renew for a term of 12 months with Monthly Rental
equal to 1% of the original Equipment Cost payable in monthly in advance. At the
expiration of the renewal period, the Lessee shall have the option to purchase
all (but not less than all) the Equipment for its then current Fair Market
Value, plus applicable and other taxes. It is agreed that the Fair Market Value
at the end of the renewal period shall not exceed 5% of Equipment Cost.
Lessee hereby irrevocably authorizes Lessor to insert in this Schedule the
Commencement Date and the due date of the first rental payment.
Except as expressly provided or modified hereby, all the terms and provisions of
the Master Lease Agreement shall remain in full force and effect.
The Lessee shall have the option to purchase all (but not less than all) the
Equipment at the expiration of the term of the lease for the then Fair Market
Value of the Equipment, plus applicable sales and other taxes. It is agreed that
the Fair Market Value will be 10% of the Equipment Cost. The Purchase Date shall
be December 31, 2002.
The Stipulated Loss Value of any items of Equipment shall be an amount equal to
the present value of all future Rent discounted at a rate of 5% per annum plus
the Reversionary Value.
The Reversionary Value of any item of Equipment shall be 10% of Equipment Cost.
TRANSAMERICA BUSINESS CREDIT DYAX CORP.
CORPORATION (Lessee)
(Lessor)
By: /s/ Gary P. Moro By: /s/ L. E. Cannon
-------------------------------- --------------------------------
Title: Vice President Title: Executive Vice President
----------------------------- -----------------------------
<PAGE>
EXHIBIT II
To
Schedule No. 1
To:
X Schedule to Master Lease Agreement X Sale and Leaseback Agreement
X UCC X Bill of Sale
__ Collateral Access Agreement __
Dated as of December 30, 1997,
Between
TRANSAMERICA BUSINESS CREDIT CORPORATION
And DYAX CORPORATION
Equipment Locations: One Kendall Square
Cambridge, MA
<TABLE>
====================================================================================================================================
<CAPTION>
QTY EQUIPMENT INVOICE SERIAL SUPPLIER/ PURCH. DATE EQUIPMENT
DESCRIPTION NO. NO. VENDOR COST
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
5 Micron Millenia 1368162 Micron 5/2/97
LXA Desktop Electronics
Computers and
accessories
- ------------------------------------------------------------------------------------------------------------------------------------
1 17" Monitor 1368162 Micron 5/2/97
Electronics
- ------------------------------------------------------------------------------------------------------------------------------------
Total Invoice $ 9,299.50
- ------------------------------------------------------------------------------------------------------------------------------------
2 Micron 1422676 Micron 5/2/97 $ 8,954.70
Transport Electronics
Notebook
Computers
- ------------------------------------------------------------------------------------------------------------------------------------
1 Geneamp PCR 852335 N19460 Perkin Elmer 2/17/97 $ 10,110.01
System 9600
- ------------------------------------------------------------------------------------------------------------------------------------
1 PE Applied 839951 PE Applied 5/27/97 $ 55,378.00
Biosystems Biosystems
Model 310
Genetic Analyser
- ------------------------------------------------------------------------------------------------------------------------------------
1 Micron Millenia 1712483 Micron 8/29/97 $ 2,793.35
MME 200 Electronics
Desktop
Computer
- ------------------------------------------------------------------------------------------------------------------------------------
2 Bio-Tek 183711 90577 Bio-Tek 7/16/97 $ 3,020.47
Instruments Instruments,
EL403B Robotic Inc.
System
- ------------------------------------------------------------------------------------------------------------------------------------
1 Bio-Tek 183706 128827 Bio-Tek 7/16/97 $ 1,950.00
Instruments Instruments,
Combo Pressure Inc.
Vacuum system
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 DSA Firewall-2 1 Decision- 4/1/97 $ 7,182.00
VPN 2.1 Science
Applications,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
4 Impact-2 8 67335 00713571, Matrix 11/10/97 $ 4,701.72
Challen 1250ul 00713577, Technologies
Pipe 00713575, Corp
00713578
- ------------------------------------------------------------------------------------------------------------------------------------
1 Beckman TL-45 305062CL01 940-801 Beckman 1/27/97 $ 2,786.93
Rotor Assy. Instruments
2 Tubes
- ------------------------------------------------------------------------------------------------------------------------------------
1 Sorvall RC-5C 0220217182 9700232 Sorvall, Inc. 2/27/97
Plus Centrifuge
- ------------------------------------------------------------------------------------------------------------------------------------
2 Rotor, SLA 0220217182 9750858, Sorvall, Inc. 2/27/97
1500 9750874
- ------------------------------------------------------------------------------------------------------------------------------------
2 SS34 Superspeed 0220217182 9700222, Sorvall, Inc. 2/27/97
Rotor 9613255
- ------------------------------------------------------------------------------------------------------------------------------------
Total Invoice $ 27,723.50
- ------------------------------------------------------------------------------------------------------------------------------------
Various Office furniture 725594, OfficeEnviron- Various $ 46,929.55
728809, ments of New
740565, England
733679,
739494,
730207
- ------------------------------------------------------------------------------------------------------------------------------------
1 Buchi RE 111 6299 American 10/20/97 $ 1,688.78
w/bath std. gl Instrument
EVAP Exchange
- ------------------------------------------------------------------------------------------------------------------------------------
1 Heat stir plate, American 10/03/97 $ 3,010.00
(2) watson Instrument
marlow pumps, Exchange
(2) Millipore
Chart recorders,
K&Z Chart
recorder
- ------------------------------------------------------------------------------------------------------------------------------------
1 JEOL JNM- 92259, JEOL USA, 9/09/97, $139,990.00
LA300 300 Mhz 56804 Inc. 10/23/97
NMR system
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total $325,518.51
====================================================================================================================================
</TABLE>
Transamerica Business Credit Dyax Corporation
Corporation (Lessee)
(Lessor)
By: Gary P. Moro By: /s/ L. E. Cannon
-------------------------------- -----------------------------
Title: Vice President Title: Executive Vice President
----------------------------- ---------------------------
<PAGE>
SCHEDULE TO MASTER LEASE AGREEMENT
Dated as of December 30, 1997
Schedule No. 2
LESSOR NAME & MAILING ADDRESS LESSEE NAME & MAILING ADDRESS
Transamerica Business Credit Corporation Dyax Corp.
Riverway II One Kendall Square
West Office Tower Building 600, 5th Floor
9399 West Higgins Road Cambridge, Massachusetts 02139
Rosemont, Illinois 60018
Equipment Location (if different than Lessee's address above):
1500 Avon Street Ext.
Charlottesville, VA 22902
This Schedule covers the following described equipment ("Equipment"):
See Exhibit II attached hereto and made a part hereof.
The Equipment is hereby leased pursuant to the provisions of the Master Lease
Agreement between the undersigned Lessee and Lessor dated December 30, 1997 (the
"Master Lease"), the terms of which are incorporated herein by reference
thereto, plus the following additional terms, provisions, and modifications. The
Lessor reserves the right to adjust the monthly payments in accordance with the
Commitment Letter dated December 17, 1997, if the Lessor has not received this
Schedule and an Acceptance and Delivery Certificate executed by the Lessee
within five business days from the date first set forth above.
<TABLE>
<S> <C> <C>
1. Term (Number of Months) 60 months
2. Equipment Cost $120,135.84
3. Commencement Date December 30, 1997
4. Rate Factor 2.09409% of Equipment Cost
5. Total Rents $151,073.32
Total sales/use tax $ 6,798.30 $157,871.62
6. Advance Rents (first) $ 2,515.75
Sales/use tax for advance rent $ 113.21 $ 2,628.96
7. Monthly rental payments $ 2,515.75
Monthly sales/use tax $ 113.21 $ 2,628.96
and the second such rental payment
will be due on and subsequent rental February 1, 1998
payments will be due on the same day
of each month thereafter
</TABLE>
<PAGE>
<TABLE>
<S> <C>
8. Security Deposit N/A
9. In addition to the monthly rental
payments provided for herein, Lessee
shall pay to Lessor, as interim rent,
payable on the commencement date
specified above, an amount equal to
1/30th of the monthly rental payment
(including monthly sales/use tax)
multiplied by the number of days from
and including the commencement date
through the end of the same calendar
month. $ 175.26
</TABLE>
Renewal terms:
In the event the Lease does not exercise the Purchase Option described below,
the Lease shall automatically renew for a term of 12 months with Monthly Rental
equal to 1% of the original Equipment Cost payable in monthly in advance. At the
expiration of the renewal period, the Lessee shall have the option to purchase
all (but not less than all) the Equipment for its then current Fair Market
Value, plus applicable and other taxes. It is agreed that the Fair Market Value
at the end of the renewal period shall not exceed 5% of Equipment Cost.
Lessee hereby irrevocably authorizes Lessor to insert in this Schedule the
Commencement Date and the due date of the first rental payment.
Except as expressly provided or modified hereby, all the terms and provisions of
the Master Lease Agreement shall remain in full force and effect.
The Lessee shall have the option to purchase all (but not less than all) the
Equipment at the expiration of the term of the lease for the then Fair Market
Value of the Equipment, plus applicable sales and other taxes. It is agreed that
the Fair Market Value will be 10% of the Equipment Cost. The Purchase Date shall
be December 31, 2002.
The Stipulated Loss Value of any items of Equipment shall be an amount equal to
the present value of all future Rent discounted at a rate of 5% per annum plus
the Reversionary Value.
The Reversionary Value of any item of Equipment shall be 10% of Equipment Cost.
TRANSAMERICA BUSINESS CREDIT DYAX CORP.
CORPORATION (Lessee)
(Lessor)
By: /s/ Gary P. Moro By: /s/ L. E. Cannon
---------------------------------- ----------------------------------
Title: Vice President Title: Executive Vice President
------------------------------- -------------------------------
<PAGE>
EXHIBIT II
To
Schedule No. 2
To:
X Schedule to Master Lease Agreement X Sale and Leaseback Agreement
X UCC X Bill of Sale
__ Collateral Access Agreement __ Option of Counsel
Dated as of December 30, 1997
Between
TRANSAMERICA BUSINESS CREDIT CORPORATION
And DYAX CORPORATION
Equipment Locations: 1500 Avon Street Ext.
Charlottesville, VA 22902
<TABLE>
====================================================================================================================================
<CAPTION>
QTY EQUIPMENT INVOICE SERIAL NO. SUPPLIER/ PURCH. EQUIPMENT
DESCRIPTION NO. VENDOR DATE COST
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2 8101 analog Ath Inc. 7/4/97 $ 204.00
telephones
- ------------------------------------------------------------------------------------------------------------------------------------
1 Coulter 100Q 190795 UU AA16275 Coulter 10/29/97 $ 35,054.53
Optical Bench Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
1 DEH1963 Super A2063386 Data Comm 5/06/97 $ 1,010.45
stack II 24 Port hub Warehouse
with coax module
- ------------------------------------------------------------------------------------------------------------------------------------
2 Dell Dimension XPS 120817408 B1WLQ Dell Direct 8/14/97 $ 4,524.00
233 Mhz pentium B1WLY Sales L.P.
processor and
accessories
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Dimension 111519021 95KCY Dell Direct 5/13/97 $ 2,978.00
Pentium Pro200n Sales L.P.
Minitower and
accessories
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Latitude 128020062 BCG87 Dell Direct 10/20/97 $ 3,007.00
Notebook computer Sales L.P.
with accessories
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Dimension 200v 103950887 8GM9R Dell Direct 2/25/97 $ 3,320.80
Mini Tower and Sales L.P.
accessories
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Latitude Xpi 101855039 82MY4 Dell Direct 2/26/97 $ 5,233.00
CD laptop computer Sales L.P.
and acc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
====================================================================================================================================
<CAPTION>
QTY EQUIPMENT INVOICE SERIAL NO. SUPPLIER/ PURCH. EQUIPMENT
DESCRIPTION NO. VENDOR DATE COST
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2 Dell Dimension 133v 102390739 8BTDX, Dell Direct 2/10/97 $ 4,014.00
minitowers and 8BTFI Sales L.P.
accessories
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Latitude Xpi 101939221 7Y8HO Dell Direct 2/07/97 $ 3,904.00
133 Mhz laptop Sales L.P.
computer with
accessories
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Dimension XPS 120816830 B4X84 Dell Direct 8/18/97 $ 2,545.00
M233 Mhz Pentium Sales L.P.
processor minitower
and acc.
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Dimension XPS 119069029 9VT7B Dell Direct 7/28/97 $ 3,237.00
H233 Mhz minitower Sales L.P.
and acc
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell P133/GsM and 106274459 8MDP8 Dell Direct 3/31/97 $ 1,751.00
accessories Sales L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Dimension 113561153 9B01F Dell Direct 6/03/97 $ 3,172.00
Pentium Pro200n Sales L.P.
minitower and acc.
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Latitude LM 112641261 8WGKC Dell Direct 6/10/97 $ 4,836.00
M166MMX Sales L.P.
notebook computer
and acc.
- ------------------------------------------------------------------------------------------------------------------------------------
3 Dell Dimension 108903634 90DXL, Dell Direct 4/23/97 $ 9,135.00
Pentium Pro2000n 90DXQ, Sales L.P.
minitowers and 90DXX
accessories
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Latitude LM 107809568 84MCV Dell Direct 4/01/97 $ 4,291.29
P133 Mhz notebook Sales L.P.
and acc. including 108353020
MS office pro
bookshelf
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dell Latitude P133 62XNK Patrick 5/27/97 $ 4,302.00
Mhz laptop and Coffey
accessories
- ------------------------------------------------------------------------------------------------------------------------------------
1 Office printer Edward 3/5/97 $ 610.74
Stefanczyk
- ------------------------------------------------------------------------------------------------------------------------------------
1 Dielectric tester 153797 E.I.L. 6/23/97 $ 2,604.00
system with Instruments
calibration and Transcat
ground leakage tester
- ------------------------------------------------------------------------------------------------------------------------------------
1 Wire cabling Ath, Inc. 7/4/97 $ 348.77
- ------------------------------------------------------------------------------------------------------------------------------------
1 STA 120A6 supplies 2120150-01 Industrial 3/06/97 $ 243.40
Supply Co.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
====================================================================================================================================
<CAPTION>
QTY EQUIPMENT INVOICE SERIAL NO. SUPPLIER/ PURCH. EQUIPMENT
DESCRIPTION NO. VENDOR DATE COST
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 STA 36x48 surplate 2120150-02 Industrial 3/14/97 $ 1,900.60
and statstand Supply Co.
- ------------------------------------------------------------------------------------------------------------------------------------
1 Digimatic Height 3022923-01 James 3/21/97 $ 3,991.88
gage with Touch McGraw, Inc.
Probe
- ------------------------------------------------------------------------------------------------------------------------------------
1 6' Compact tabletop A 59970 Photoworks 3/18/97 $ 1,677.50
system of Virginia,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
1 each Used desk, used 21738 S&W Office 4/18/97 $ 467.11
utility table, used Products, Inc.
steno chair
- ------------------------------------------------------------------------------------------------------------------------------------
1 each Used desk, used 22001 S&W Office 6/22/97 $ 363.66
chair Products, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
1 3Com etherlink III A3316726 inmac 6/9/97 $ 559.24
and 2 etherlink Enet
PCMCIA cards with
cable
- ------------------------------------------------------------------------------------------------------------------------------------
2 etherlink III B A3579570 inmac 6/16/97 $ 979.90
combo ISA card
- ------------------------------------------------------------------------------------------------------------------------------------
1 Chromatogram 9790915-04 960729-12- Scientific 9/15/97 $ 2,638.48
system validation 412 Software, Inc.
package
- ------------------------------------------------------------------------------------------------------------------------------------
1 AMS A-100 Auger 100658-1 AMS Filling 10/01/97 $ 5,260.00
filler Systems, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
1 2MB module for -87803 Entre 10/14/97 $ 648.00
laser jet printer and Computer
print server Center
- ------------------------------------------------------------------------------------------------------------------------------------
1 Laserjet 6PXT -87643 USCD012958 Entre 10/06/97 $ 769.00
printer Computer
Center
- ------------------------------------------------------------------------------------------------------------------------------------
1 Workbench with 4374613 McCaster- 3/04/97 $ 554.49
flared leg and fixed Carr Supply
height Co.
- ------------------------------------------------------------------------------------------------------------------------------------
Total $120,135.84
Invoices
====================================================================================================================================
</TABLE>
Transamerica Business Credit Dyax Corporation
Corporation (Lessee)
(Lessor)
By: /s/ Gary P. Moro By: /s/ L. E. Cannon
---------------------------------- ---------------------------------
Title: Vice President Title: Executive Vice President
------------------------------- ------------------------------
<PAGE>
Exhibit 10.22
SALE AND LEASEBACK AGREEMENT
THIS SALE AND LEASEBACK AGREEMENT (this "Agreement") is made as of December
30, 1997, among Dyax Corp., a Delaware corporation ("Seller"), and Transamerica
Business Credit Corporation, a Delaware Corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is the owner of the equipment more particularly described
on Exhibit II hereto (the "Equipment");
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase from
Seller the Equipment; and
WHEREAS, Buyer, as a condition to such purchase, wishes to lease to Seller
and Seller wishes to lease from Buyer the Equipment under the terms and
conditions of the Master Lease Agreement dated as of December 30, 1997 and
Schedule No. 1 thereto (collectively, as amended, supplemented or otherwise
modified from time to time, the "Lease") between Buyer, as lessor, and Seller,
as lessee.
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. AMOUNT AND TERMS OF PURCHASE.
(a) Subject to the terms and conditions of this Agreement, and in
reliance upon the representations and warranties of the Seller herein set forth,
the Buyer agrees to purchase all of the Sellers' right, title and interest in
and to all of the Equipment such that the Buyer will become the owner of all
such Equipment for all purposes whatsoever. The Seller hereby agrees that the
Buyer is under no obligation to purchase any other equipment now or in the
future and shall not assert a claim that the Buyer may have any such obligation.
(b) The price to be paid by the Buyer with respect to the purchase of
the Equipment (the "Purchase Price") is $_______. The Purchase Price shall be
payable to the Seller on the Lease Commencement Date (as defined in the Lease).
(c) The Seller shall pay any and all applicable federal, state, county
or local taxes and any and all present or future taxes or other governmental
charges arising in connection with the sale of the Equipment hereunder,
including sales, use or occupation taxes due upon the purchase by the Buyer.
(d) The purchase of the Equipment shall be evidenced by a bill of
sale, substantially in the form attached hereto as Exhibit A (the "Bill of
Sale"), duly executed by the Seller.
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2. CONDITIONS TO PURCHASE. The obligation of the Buyer to purchase the
Equipment is subject to the following conditions:
(a) The Buyer shall have received this Agreement, duly executed by the
Seller.
(b) The Buyer shall have received the Bill of Sale, duly executed by
the Seller.
(c) The Buyer shall have received the Lease, duly executed by the
Seller.
(d) The Buyer shall have received resolutions of the Board of
Directors of the Seller approving and authorizing the execution, delivery and
performance by the Seller of this Agreement, the Lease and the notices and other
documents to be delivered by the Seller hereunder and thereunder (collectively,
the "Sale and Leaseback Documents").
(e) The Buyer shall have received the certificate of title or similar
evidence of ownership with respect to each item of Equipment and Uniform
Commercial Code financing statements covering the Equipment in form and
substance satisfactory to the Buyer, duly executed by the Seller.
(f) No material adverse change has occurred with respect to the
business, prospects, properties, results of operations, assets, liabilities or
condition (financial or otherwise) of the Seller and its affiliates, taken as a
whole, since December 31, 1996.
(g) The Buyer shall have received all warranties and other
documentation received or executed by Seller in connection with the original
acquisition of the Equipment by the Seller (and by its execution hereof, the
Seller hereby assigns to the Buyer all such warranties and other Documentation).
(h) The Buyer shall have received an opinion of Seller's counsel,
substantially in the form attached hereto as Exhibit B.
(i) The Buyer shall have received such other approvals, opinions or
documents as the Buyer may reasonably request.
3. REPRESENTATIONS AND WARRANTIES. To induce the Buyer to enter into this
Agreement, the Seller represents and warrants to the Buyer that:
(a) The Seller is duly authorized to execute, deliver and perform its
obligations under each of the Sale and Leaseback Documents and all corporate
action required on its part for the due execution, delivery and performance of
the transactions contemplated herein and therein has been duly and effectively
taken.
(b) The execution, delivery and performance by the Seller of each of
the Sale and Leaseback Documents and the consummation of the transactions
contemplated herein and therein does not and will not violate any provision of,
or result in a default under, the Seller's Articles or Certificates of
Incorporation or By-laws or any indenture or agreement to which the Seller is a
party or to which its assets are bound or any order, permit, law, statute, code,
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ordinance, rule, regulation, certificate or any other requirement of any
governmental authority or regulatory body to which the Seller is subject, or
result in the creation or imposition of any mortgage, deed of trust, pledge,
security interest, lien or encumbrance of any kind upon or with respect to the
Equipment or any proceeds thereof, other than those in favor of the Buyer as
contemplated by the Sale and Leaseback Documents.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Seller of any of the Sale and
Leaseback Documents to which it is a party.
(d) Each Sale and Leaseback Document to which the Seller is a party
constitutes or will constitute, when delivered hereunder, the legal, valid and
binding obligation of the Seller enforceable against the Seller in accordance
with its respective terms, except as such enforceability may be (i) limited by
the effect of applicable bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally or (ii) subject to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding at equity or at law).
(e) There are no actions, suits or proceedings pending, threatened
against or affecting the Seller which seek to enjoin, prohibit or restrain the
consummation of any of the transactions contemplated hereby or by the other Sale
and Leaseback Documents.
(f) Each item of Equipment is owned by the Seller free and clear of
any liens and encumbrances of any kind or description. Upon purchase of the
Equipment hereunder, the Buyer will acquire good and marketable title in and to
the Equipment.
All representations and warranties herein shall survive the execution of this
Agreement and the purchase of the Equipment.
4. INDEMNITIES. The Seller agrees to indemnify, defend and save harmless
the Buyer and its officers, directors, employees, agents and attorneys, and each
of them (the "Indemnified Parties"), from and against all claims, actions, suits
and other legal proceedings, damages, costs, interest, charges, counsel fees and
other expenses and penalties (collectively, the "Indemnified Amounts") which any
of the Indemnified Parties may sustain or incur by reason of or arising out of
(i) the Seller's ownership of any Equipment prior to the date on which such
Equipment is sold to the Buyer, or the Seller's acts or omissions prior to such
date under, in connection with or relating to such Equipment or any of the Sale
and Leaseback Documents, (ii) the operation, maintenance or use of such
Equipment prior to such date, (iii) the accuracy of any of the Seller's
representations or warranties contained in any of the Sale and Leaseback
documents, (iv) the breach of any of the Seller's covenants contained in any of
the Sale and Leaseback Documents, (v) any loss or damage to any Equipment in
excess of the deductible which is not paid by insurance or (vi) any sales, use,
excise and other taxes, charges and fees (including, without limitation, income,
franchise, business and occupation, gross receipts, sales, use, licensing,
registration, titling, personal property, stamp and interest equalization taxes,
levies, imposts, duties, charges or withholdings of any nature), and any fines,
penalties or interest thereon, imposed or levied by any governmental body,
agency or tax authority upon or
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in connection with the Equipment, its acquisition, ownership, delivery, leasing,
possession, use or relocation or otherwise in connection with the transactions
contemplated by each Sale and Leaseback Document.
5. REMEDIES. Upon the Sellers' violation of or default under any
provision of this Agreement, the Buyer may (subject to the provisions of the
other Sale and Leaseback Documents) proceed to protect and enforce its rights
either by suit in equity or by action at law or both, whether for the specific
performance of any covenant or agreement contained herein or in aid of the
exercise of any power granted in any Sale and Leaseback Document; it being
intended that the remedies contained in any Sale and Leaseback Document shall be
cumulative and shall be in addition to every other remedy given under such Sale
and Leaseback Document or now or hereafter existing at law or in equity or by
statute or otherwise.
6. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement, nor consent to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Buyer, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
7. NOTICES, ETC. All notices and other communications provided for
hereunder shall be in writing and sent:
if to the Seller, at its address at:
Dyax Corp.
One Kendall Square
Building 600, 5th Floor
Cambridge, Massachusetts 02139
Attention: Director of Finance
Telephone No.: 617-225-2500
Telecopy No.: 617-225-2501
if to the Buyer, at its address at:
Transamerica Business Credit Corporation
Technology Finance Division
76 Batterson Park Road
Farmington, Connecticut 06032-2571
Attention: Assistant Vice President, Lease Administration
Telephone No.: 860-677-6466
Telecopy No.: 860-677-6766
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with a copy to:
Transamerica Business Credit Corporation
9399 West Higgins Road
Rosemont, Illinois 60018
Attention: Legal Department
Telephone No.: 847-685-1106
Telecopy No.: 847-685-1143
or to such other address as shall be designated by such party in a written
notice to the other party. All such notices shall be deemed given (i) if sent by
certified or registered mail, three days after being postmarked, (ii) if sent by
overnight delivery service, when received at the above stated addresses or when
delivery is refused and (iii) if sent by facsimile transmission, when receipt of
such transmission is acknowledged.
8. NO WAIVER; REMEDIES. No failure on the part of the Buyer to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
9. BENEFIT. Without the prior written consent of the Buyer, the Seller
may not transfer, assign or delegate any of its rights, duties or obligations
hereunder.
10. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the Seller and the Buyer and their respective successors and assigns.
11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
12. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall constitute an original and all of
which taken together shall constitute one and the same agreement.
13. SEVERABILITY. If one or more of the provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein, and any other application thereof, shall not in any way be affected or
impaired thereby.
14. SUBMISSION TO JURISDICTION. ALL DISPUTES ARISING UNDER OR IN
CONNECTION WITH THIS AGREEMENT BETWEEN THE PARTIES HERETO, WHETHER SOUNDING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE AND FEDERAL
COURTS LOCATED IN ILLINOIS, AND THE COURTS TO WHICH AN APPEAL THEREFROM MAY BE
TAKEN; PROVIDED, HOWEVER, THAT THE BUYER SHALL HAVE THE RIGHT, TO THE EXTENT
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PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE SELLER OR ITS PROPERTY IN
ANY LOCATION REASONABLY SELECTED BY THE BUYER IN GOOD FAITH TO ENABLE THE BUYER
TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF THE BUYER. EACH PARTY AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS, SETOFFS OR CROSS-CLAIMS IN ANY PROCEEDING BROUGHT BY THE BUYER;
IT BEING UNDERSTOOD THAT THIS SENTENCE DOES NOT PRECLUDE THE SELLER FROM
ASSERTING COMPULSORY COUNTERCLAIMS. THE SELLER WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH THE BUYER HAS COMMENCED A PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
FORUM NON CONVENIENS.
15. JURY TRIAL. THE PARTIES HERETO EACH HEREBY WAIVE TO THE FULLEST EXTENT
PERMITTED BY LAW ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.
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<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
EXHIBIT 10.23
LICENSE AGREEMENT
(Therapeutic Field)
THIS LICENSE AGREEMENT (this "Agreement"), effective as of ____ __,
2000 the "Effective Date"), is between DYAX CORP., a Delaware corporation,
having a principal place of business at One Kendall Square, Bldg. 600, Suite
623, Cambridge, Massachusetts 02139 USA ("Licensor"); and ____________________
("Licensee"), a corporation having its principal place of business at
_____________________________.
R E C I T A L S
A. Licensor has the right to grant licenses to and under certain
technology described and claimed in U.S. Patent No. 5,223,409 entitled "Directed
Evolution of Novel Binding Proteins", U.S. Patent No. 5,403,484 entitled
"Viruses Expressing Chimeric Binding Proteins", U.S. Patent No. 5,571,698
entitled "Directed Evolution of Novel Binding Proteins", U.S. Patent No.
5,837,500 entitled "Directed Evolution of Novel Binding Proteins", and
associated patent rights.
B. Licensee desires to obtain a license from Licensor to practice the
inventions described in the patents referenced above and Licensor is willing to
grant such a license on the terms and subject to the conditions provided herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below:
1.1."AFFILIATE" shall mean a corporation or other legal entity that
controls, is controlled by, or is under common control with such party. For
purposes of this definition, "control" means the ownership, directly or
indirectly, of more than fifty percent (50%) of the outstanding equity
securities of a corporation which are entitled to vote in the election of
directors or a more than fifty percent (50%) interest in the net assets or
profits of an entity which is not a corporation.
1.2. "BULK PRODUCTS" shall mean Licensed Products other than Finished
Products.
1.3. "END USER" shall mean a person or entity whose use of a product
results in its destruction, loss of activity, and/or loss of value.
1.4. "FINISHED PRODUCTS" shall mean Licensed Products which are in a
form ready for use by an End User without further formulation, processing or
chemical transformation.
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<PAGE>
1.5. "FIELD OF USE" shall mean human therapeutics only and not any IN
VITRO or IN VIVO diagnostics, purification or separations, agricultural,
industrial enzymes, or other purposes.
1.6. "FIRST COMMERCIAL SALE" shall mean the initial transfer by
Licensee or its Affiliate (or a Third Party Transferee of any of the foregoing)
of a Licensed Product for value and not for demonstration, testing or
promotional purposes.
1.7. "LICENSED INTERMEDIATE" shall mean any fusion protein (including
without limitation any chimeric binding protein), genetic package (including
without limitation any virus, spore or cell) or other intermediate compound, or
any compound or sequence derived from any of the foregoing, that is (i)
discovered, made or developed by Licensee or its Affiliates using a method by
Patent Rights or (ii) is otherwise covered by Patent Rights.
1.8."LICENSED PRODUCT" shall mean any product intended for sale to an
End User as a human therapeutic that is directly discovered, made or developed,
whether by Licensee, its Affiliates or any Third Party Transferee, using a
Licensed Intermediate or a method covered by Patent Rights.
1.9. "NET SALES" shall mean the amounts received on sales of Licensed
Products in the Field of Use by Licensee, its Affiliates and any Third Party
Transferee, less five percent (5%) as credit for normal and customary deduction
such as trade discounts, rebates, or commissions actually allowed and taken,
credits or allowances given for rejections or returns, taxes levied, and
shipping costs charged to a customer, without any further reduction. In any
transfers of Licensed Products between Licensee and one of its Affiliates or
between any of the foregoing and a Third Party Transferee and its Affiliates,
the Net Sales shall be calculated based on the final sale of the Licensed
Product to parties which are not Affiliates of Licensee or of such Third Party
Transferee. In the event that non-monetary consideration is received for any
Licensed Products, Net Sales with respect to such Licensed Products shall be
calculated based on the fair market value of such consideration.
1.10. "PATENT RIGHTS" shall mean any and all Valid Claims (defined
below) of United States Patent Nos. 5,223,409, 5,403,484, 5,571,698, and
5,837,500 (collectively, the "U.S. Patents"), reissues, reexaminations, renewals
and extensions thereof, and all continuations, continuations-in-part and
divisionals of the applications for such U.S. patents and all counterparts
thereto in countries outside the United States, all of which patents and patent
applications as of the Effective Date are listed in ATTACHMENT B. Patent Rights
shall exclude (i) Claim 66 in U.S. Patent No. 5,223,409 to the extent that it
covers single chain antibodies, or (ii) any claim to specific protein or peptide
sequences, or nucleic acids thereof, that bind to a specific biological or
molecular target.
1.11. "ROYALTY PERIOD" shall mean the calendar quarter, or partial
calendar quarter, commencing with the First Commercial Sale of any Licensed
Product in each country, and each calendar quarter thereafter.
1.12. "THIRD PARTY TRANSFEREE" shall mean any party, other than an
Affiliate of Licensee, who is authorized by Licensee to make, have made, use,
sell or have sold Licensed Products or to otherwise commercialize products in
the Field of Use and (i) to which Licensee (or any of its Affiliates), sells,
transfers, or otherwise makes available any Licensed Intermediate or (ii) for
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<PAGE>
which Licensee (or any of its Affiliates) performs services or provides
proprietary information, with respect to any Licensed Intermediate.
1.13."VALID CLAIM" shall mean either (a) a claim of an issued patent
that has not been held unenforceable or invalid by an agency or a court of
competent jurisdiction in any unappealable or unappealed decision or (b) a claim
of a pending patent application that has not been abandoned or finally rejected
without the possibility of appeal or refiling.
The above definitions are intended to encompass the defined terms in
both the singular and plural forms.
ARTICLE 2. GRANT OF RIGHTS
2.1. LICENSE GRANT. Subject to the terms and conditions set forth
herein, Licensor hereby grants Licensee and its Affiliates a world-wide,
nonexclusive, royalty-bearing license (without the right to grant sublicenses)
under Patent Rights (i) to research and develop, make, have made, use, sell and
have sold Licensed Products in the Field of Use and (ii) to research and
develop, make and use Licensed Intermediates in the Field of Use for sale or
transfer to any Third Party Transferee.
2.2. LIMITATION OF RIGHTS. Licensee acknowledges that its rights under
Patent Rights are limited to those expressly granted herein and that Licensee
and its Affiliates are expressly prohibited from selling, transferring or
otherwise making available to third parties Licensed Products or Licensed
Intermediates for use outside the Field of Use.
2.3. COVENANT NOT TO SUE. In partial consideration for the grant of
rights hereunder, Licensee agrees not to enforce against Licensor or its
Affiliates any patent right owned or controlled by Licensee or its Affiliates
during the term of this Agreement that Licensor or its Affiliates may infringe
in practicing the inventions claimed in Patent Rights. Nothing in this Section
2.3 is intended to grant Licensor or its Affiliates any proprietary rights or
rights to nonsuit with respect to specific peptides or proteins or analogs
thereof. The parties agree that the covenant not to sue in this Section 2.3 is a
right that transfers with any sale or disposition by Licensee or its Affiliates
of the applicable patent right.
ARTICLE 3. THIRD PARTY AGREEMENTS
3.1. REQUIRED AGREEMENT. Licensee acknowledges that the value of Patent
Rights is measured in part by the value of products resulting from any Licensed
Intermediate. Licensee agrees, therefore, that it will not sell, transfer, or
otherwise make available a Licensed Intermediate to any Third Party Transferee
and will not provide services or proprietary information with respect to any
Licensed Intermediate to any Third Party Transferee, unless such Third Party
Transferee agrees to the provisions substantially as set forth attached in
ATTACHMENT C ("Third Party Agreement").
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ARTICLE 4. PAYMENTS, RECORDS AND REPORTS
4.1. PAYMENT OPTION SELECTION. Licensee has, upon execution of this
Agreement and as a condition hereto, irrevocably elected one and only one of the
payment options (such selected option being herein referred to as the "Payment
Schedule") as set forth in ATTACHMENT A, which election is evidenced and
confirmed by Licensee's signature thereon.
4.1.1. SIGNING FEE. Licensee agrees to pay Licensor, within
ten (10) days of the Effective Date, a non-refundable signing fee in the amount
specified in the Payment Schedule.
4.1.2. MAINTENANCE FEE. Licensee agrees to pay Licensor, on
every anniversary of the Effective Date, an annual maintenance fee for the
license granted under this Agreement in the amount specified in the Payment
Schedule.
4.1.3. TRANSFER FEE. Licensee agrees to pay Licensor the
amount specified in the Payment Schedule within thirty (30) days of the first
transfer of a Licensed Intermediate or provision of services therefore to a
Third Party Transferee for each specific biological or molecular target.
4.1.4. IND MILESTONE. Licensee agrees to pay Licensor the
amount specified therefor in the Payment Schedule within thirty (30) days of the
first application for an Investigational New Drug ("IND") in the United States
or foreign equivalent thereof for each indication for a Licensed Product. As
used herein, "indication" refers to a new and distinct primary disease (for
example cancer versus inflammation) and does not refer to the subsequent filing
of a different type of the same primary disease (for example colon versus breast
cancer).
4.1.5. NDA MILESTONE. Licensee agrees to pay Licensor the
amount specified therefor in the Payment Schedule within thirty (30) days of the
first New Drug Application ("NDA") in the United States or foreign equivalent
thereof for each indication for a Licensed Product. As used herein, "indication"
refers to a new and distinct primary disease (for example cancer versus
inflammation) and does not refer to the subsequent filing of a different type of
the same primary disease (for example colon versus breast cancer).
4.1.6. ROYALTIES. Licensee agrees to pay Licensor,
concurrently with delivery of the report set forth in Section 4.2, royalties on
aggregate Net Sales during the prior Royalty Period, as follows:
a. on Net Sales of Finished Products, at the royalty
rate specified in the Payment Schedule; and
b. on Net Sales of Bulk Products, at one hundred
thirty percent (130%) of the royalty rate specified therefor in the Payment
Schedule;
provided, however, that for any Licensed Product that is not a peptidic compound
(i.e. cannot in whole or part be genetically encoded), the royalty rate
specified in the Payment Schedule shall be reduced by fifty percent (50%). In
the event Licensee is required to pay royalties on Net Sales to any third party
as a result of any patent license required for Licensee to practice the
inventions claimed in the Patent Rights, Licensee shall be permitted to offset
such royalty payment against the royalty payments due Licensor on the same Net
Sales, provided, however, that this offset shall be applied on a pro rata basis
with any other permitted offsets, and further provided that no royalty payment
due Licensor on any Net Sales shall be reduced by more than fifty percent (50%).
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4.2. REPORTS AND PAYMENTS.
4.2.1. THIRD PARTY TRANSFEREE REPORTS. On each anniversary of
the Effective Date, and within thirty (30) days after a transfer described in
Section 4.1.3, Licensee shall deliver to Licensor a report containing the
following information with respect to each Third Party Transferee to whom
Licensee has transferred Licensed Intermediates during the period since the last
such report or, in the case of the first such period, since the Effective Date:
a. a copy of the Third Party Agreement with such
Third Party Transferee; and
b. to the extent publicly available or not subject to
confidentiality obligations, identification of the specific biological or
molecular target to which such Licensed Intermediates are to be directed.
4.2.2. COMMERCIAL REPORTS AND PAYMENTS. Prior to the First
Commercial Sale of a Licensed Product, Licensee agrees, upon request from
Licensor, to provide annual summary reports on the status of its research and
development activities covered by the license granted herein. Commencing with
the First Commercial Sale of a Licensed Product in any country, within thirty
(30) days after the conclusion of each Royalty Period, Licensee shall deliver to
Licensor a report containing the following information:
a. gross sales of Licensed Products, in each country
of sale, made by or on behalf of Licensee and its Affiliates during the
applicable Royalty Period;
b. calculation of Net Sales for the applicable
Royalty Period in each country of sale, together with the exchange rates used
for conversion; and
c. calculation of the amount payable to Licensor
for the applicable Royalty Period.
If no royalties or other payments are due to Licensor for any reporting period,
the report shall so state. Concurrent with these reports, Licensee shall remit
to Licensor any payment due for the applicable Royalty Period. The method of
payment shall be by check or wire transfer as directed from time to time by
Licensor. All amounts payable to Licensor under this Section will first be
calculated in the currency of sale and then converted into U.S. dollars in
accordance with Section 4.3, and such amounts shall be paid without deduction of
any withholding taxes, value-added taxes, or other charges applicable to such
payments. All reports provided to Licensor hereunder shall be maintained in
confidence by Licensor.
4.3. PAYMENTS IN U.S. DOLLARS. All payments due under this Agreement
shall be payable in United States dollars. Conversion of foreign currency to
U.S. dollars shall be made at the conversion rate existing in the United States
(as reported in the WALL STREET JOURNAL) on the last working day of the calendar
quarter preceding the applicable calendar quarter. Such payments shall be
without deduction of exchange, collection, or other charges.
4.4. RECORDS. Licensee and its Affiliates shall maintain, and shall
ensure that any Third Party Transferee shall maintain, complete and accurate
records of Licensed Products made, used, or sold under this Agreement and any
amounts payable to Licensor in relation to such Licensed Products, which records
shall contain sufficient information to permit Licensor to confirm the accuracy
of any reports delivered to Licensor in accordance with Section 4.2. Licensee
and its Affiliates shall retain such records relating to a given Royalty Period
for at least three (3) years after the conclusion of that Royalty Period, during
which time Licensor shall have the right, at its
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expense, to cause an independent certified public accountant to inspect such
records during normal business hours for the sole purpose of verifying any
reports and payments delivered under this Agreement. Such accountant shall not
disclose to Licensor any information other than information relating to accuracy
of reports and payments delivered under this Agreement and shall provide
Licensee with a copy of any report given to Licensor. The parties shall
reconcile any underpayment or overpayment within thirty (30) days after the
accountant delivers the results of the audit. In the event that any audit
performed under this Section reveals an underpayment in excess of five percent
(5%) in any Royalty Period, Licensee shall bear the full cost of such audit.
4.5. LATE PAYMENTS. Any payments by Licensee that are not paid on or
before the date such payments are due under this Agreement shall bear interest,
to the extent permitted by law, at two percentage points above the base prime
rate of interest most recently reported by THE WALL STREET JOURNAL, calculated
based on the number of days that payment is delinquent.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
5.1. AUTHORIZATION. Each party represents and warrants to the other
that it has the legal right and power to enter into this Agreement, to extend
the rights and licenses granted to the other in this Agreement, and to fully
perform its obligations hereunder, and that the performance of such obligations
will not conflict with its charter documents or any agreements, contracts, or
other arrangements to which it is a party.
5.2. OWNERSHIP OF PATENT RIGHTS. Licensor represents and warrants that,
as of the Effective Date, it possesses the exclusive right, title, and interest
in and to the Patent Rights and that it has the full legal right and power to
enter into the obligations and grant the rights and licenses set forth in this
Agreement.
5.3. DISCLAIMER OF WARRANTIES. Nothing in this Agreement shall be
construed as:
a. a warranty or representation by Licensor as to the
validity or scope of any patent included within the Patent Rights;
b. a warranty or representation that the exploitation
of the Patent Rights or the manufacture, use or sale of a Licensed Intermediate
or a Licensed Products is or will be free from infringement of patents of third
parties;
c. an obligation of either party to bring or
prosecute actions or suits against third parties for infringement;
d. an obligation of Licensor to maintain any patent
or to continue to prosecute any patent application included within the Patent
Rights in any country;
e. an obligation of either party to furnish any
confidential information or know-how;
f. creating any agency, partnership, joint venture or
similar relationship between Licensor and Licensee; or
g. conferring by implication, estoppel or otherwise
any license, immunity or right under any patent of Licensor other than those
specified in Patent Rights.
6
<PAGE>
ARTICLE 6. INDEMNIFICATION
6.1. INDEMNIFICATION. Licensee shall indemnify, defend, and hold
harmless Licensor and its Affiliates and their directors, officers, employees,
and agents and their respective successors, heirs and assigns (the
"Indemnities") against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses of litigation) incurred by or imposed
upon the Indemnitees or any one of them in connection with any claims, suits,
actions, demands, or judgments concerning any product, process or service that
is made, used, sold or provided pursuant to any right or license granted under
this Agreement.
ARTICLE 7. TERM AND TERMINATION
7.1. TERM. This Agreement shall commence on the Effective Date and
shall remain in effect until the expiration of the last to expire of the
applicable Patent Right, unless earlier terminated as provided in this Article.
7.2. TERMINATION BY LICENSEE. Licensee may terminate this agreement for
any reason upon six (6) months notice to Licensor.
7.3. TERMINATION BY LICENSOR. In the event that Licensee fails to make
timely payment of any amounts due to Licensor under this Agreement, including
amounts due under Article 4 hereof, Licensor may terminate this Agreement upon
thirty (30) days written notice to Licensee, unless Licensee pays all past-due
amounts prior to the expiration of such thirty (30)-day notice period.
7.4. OTHER MATERIAL BREACH. In the event that either party commits a
material breach of any of its obligations under this Agreement, other than that
stated in Section 7.3, and such party fails to remedy that breach within ninety
(90) days after receiving written notice thereof from the other party, that
other party may immediately terminate this Agreement upon written notice to the
breaching party.
7.5. EFFECT OF TERMINATION. Upon the expiration or termination of this
Agreement, Licensee's rights under the Patent Rights shall terminate
immediately. Such expiration or termination shall not affect the rights of any
Third Party Transferee if any such Third Party Transferee performs its
obligations under the Third Party Agreement. The following provisions shall
survive the expiration or termination of this Agreement: Articles 1, 3, 6 and 8
and Section 2.3; as well as Licensee's obligations to make payments and reports
pursuant to Article 4 with respect to Licensed Products developed using the
Patent Rights, or developed as a result of Licensed Intermediates, during the
term of this Agreement.
7.6. NOTICE OF TERMINATION. Licensee agrees that, in the event that
this Agreement is terminated pursuant to the terms hereof, Licensee shall so
notify each Third Party Transferee within twenty (20) days of such termination.
ARTICLE 8. MISCELLANEOUS
8.1. NOTICES. All notices, requests, demands and other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given upon the date of receipt if
delivered by hand, recognized international overnight
7
<PAGE>
courier, confirmed facsimile transmission, or registered or certified mail,
return receipt requested, postage prepaid to the following addresses or
facsimile numbers:
<TABLE>
<S> <C>
If to Licensor: If to Licensee:
Dyax Corp. To the address or facsimile
One Kendall Square, Bldg. 600, Suite 623 set forth below the signature to this Agreement
Cambridge, MA 02139 USA
Attention: Chief Executive Officer
Facsimile: (617) 225-2501
</TABLE>
Either party may change its designated address and facsimile number by notice to
the other party in the manner provided in this Section.
8.2. GOVERNING LAW & JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts.
The parties hereby irrevocably consent and submit to the exclusive jurisdiction
of any Commonwealth of Massachusetts or Federal court sitting in Boston in any
action or proceeding of any type whatsoever arising out of or relating to this
Agreement.
8.3. SPECIFIC PERFORMANCE. The parties agree that irreparable damage
will occur in the event that the provisions of Article 3 are not specifically
enforced. In the event of a breach or threatened breach of any such provisions,
Licensee agrees that Licensor shall, in addition to all other remedies, be
entitled to temporary or permanent injunction, without showing any actual damage
or that monetary damages would not provide an adequate remedy and without the
necessity of posting any bond, and/or a decree for specific performance, in
accordance with the provisions hereof.
8.4. ASSIGNMENT. This Agreement may not be assigned by either party
without the prior written consent of the other party, except that either party
may assign this Agreement to any of its Affiliates or to a successor in
connection with the merger, consolidation, or sale of all or substantially all
of its assets or that portion of its business pertaining to the subject matter
of this Agreement, with prompt written notice to the other party of any such
assignment. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective lawful successors and assigns.
8.5. COMPLIANCE WITH LAW. Nothing in this Agreement shall be construed
so as to require the commission of any act contrary to law, and wherever there
is any conflict between any provision of this Agreement and any statute, law,
ordinance or treaty, the latter shall prevail, but in such event the affected
provisions of the Agreement shall be conformed and limited only to the extent
necessary to bring it within the applicable legal requirements.
8.6. AMENDMENT AND WAIVER. This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by both
parties. Any waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an agreement to waive
any rights or fail to act in any other instance, whether or not similar.
8.7. SEVERABILITY. In the event that any provision of this Agreement
shall, for any reason, be held to be invalid or unenforceable in any respect,
such invalidity or unenforceability shall
8
<PAGE>
not affect any other provision hereof, and the parties shall negotiate in good
faith to modify the Agreement to preserve (to the extent possible) their
original intent.
8.8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements or understandings between the parties relating to the subject
matter hereof.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement as a sealed instrument effective as of the date first above
written.
LICENSOR: LICENSEE:
DYAX CORP. -------------------
By: By:
Name: Name:
Title: Title:
Address of Licensee:
Facsimile:
9
<PAGE>
ATTACHMENT A
PAYMENT SCHEDULE OPTIONS
<TABLE>
<CAPTION>
===================================================================================================================
PAYMENTS OPTION 1 OPTION 2 OPTION 3
- -------- -------- -------- --------
===================================================================================================================
<S> <C> <C> <C>
Signing Fee $ 45,000 $ 90,000 $ 180,000
- -------------------------------------------------------------------------------------------------------------------
Annual Maintenance Fee $ 35,000 $ 70,000 $ 100,000
- -------------------------------------------------------------------------------------------------------------------
First transfer of Licensed Intermediate $ 55,000 $ 55,000 $ 55,000
or provision of services therefor to a
Third Party Transfer for each specific
target
- -------------------------------------------------------------------------------------------------------------------
First application for an IND or $ 80,000 $ 160,000 $ 260,000
equivalent for each indication
- -------------------------------------------------------------------------------------------------------------------
First NDA or equivalent for each $ 175,000 $ 335,000 $ 535,000
indication
- -------------------------------------------------------------------------------------------------------------------
Royalty rate on Net Sales, subject to 2.2% 1.65% 1.1%
reduction pursuant to Section 4.1.6
===================================================================================================================
</TABLE>
The undersigned hereby irrevocably elects payment option __ {fill in 1, 2 or 3}.
-------------------------------------------------
(signature of individual signing
on behalf of Licensee}
10
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
ATTACHMENT B
PATENT RIGHTS
<TABLE>
<CAPTION>
=========================================================================================================
APPLICATION/
COUNTRY PATENT NO. FILING DATE PATENT NO. ISSUE DATE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
US 07/664,989* 3/1/91 5,223,409 6/29/93
- ---------------------------------------------------------------------------------------------------------
US 9,319 1/26/93 5,403,484 4/4/95
- ---------------------------------------------------------------------------------------------------------
US 08/057,667 6/18/93 5,571,698 11/5/96
- ---------------------------------------------------------------------------------------------------------
US div 08/415,922 4/3/95 5,837,500 11/17/98
- ---------------------------------------------------------------------------------------------------------
US div 08/993,776 12/18/97
- ---------------------------------------------------------------------------------------------------------
US div ************* 11/16/98
- ---------------------------------------------------------------------------------------------------------
US div ************* 11/16/98
- ---------------------------------------------------------------------------------------------------------
PCT US89/03731 9/1/89
W09002809 pub 3/22/90
- ---------------------------------------------------------------------------------------------------------
EPO 89/910702.3 9/1/89 436,597 4/2/97
************* 7/17/91
- ---------------------------------------------------------------------------------------------------------
EPO div 96/112867.5 8/9/96 Allowed
************* 4/16/97 pub
- ---------------------------------------------------------------------------------------------------------
Japan 89510087 9/1/89
JP4502700 (pub) 5/21/92
- ---------------------------------------------------------------------------------------------------------
Canada 610,176 9/1/89 1,340,288 12/29/98
- ---------------------------------------------------------------------------------------------------------
Ireland IR89/2834 9/4/89
- ---------------------------------------------------------------------------------------------------------
Israel 91501 9/1/89 91501 6/11/98
- ---------------------------------------------------------------------------------------------------------
Israel ************* 5/29/97
- ---------------------------------------------------------------------------------------------------------
PCT US92/01456 2/27/92
W09215677 (pub) 9/17/92
- ---------------------------------------------------------------------------------------------------------
EPO 92/908057.0 2/27/92
- ---------------------------------------------------------------------------------------------------------
Canada 2105300 2/27/92
- ---------------------------------------------------------------------------------------------------------
Japan 92507558 2/27/92
- ---------------------------------------------------------------------------------------------------------
PCT US92/01539 2/28/92
W09215679 (pub) 9/17/92
- ---------------------------------------------------------------------------------------------------------
EPO 92/908799.7 2/28/92
- ---------------------------------------------------------------------------------------------------------
Canada 2105303 2/28/92
- ---------------------------------------------------------------------------------------------------------
Japan 92508216 2/28/92
=========================================================================================================
</TABLE>
* CIP of US SN487,063 filed 3/2/90 which is a CIP of US SN240,160 filed 9/2/88
All Protein Engineering Corporation patent rights have been assigned to Dyax
Corp.
11
<PAGE>
ATTACHMENT C
THIRD PARTY AGREEMENT
1. The [Third Party Transferee] hereby acknowledges that Dyax Corp.
("Licensor"), having a principal place of business at One Kendall Square, Bldg.
600, Suite 623, Cambridge, Massachusetts 02139, has licensed certain patent
rights to and under U.S. Patent Nos. 5,223,409; 5,403,484; 5,571,698; 5,571,698;
5,837,500; and associated patent rights, to ______________ ("Licensee") under a
License Agreement (the "License") effective as of _______, and that it expects
to receive from Licensee or its Affiliates one or more Licensed Intermediates or
services or proprietary information with respect to one or more Licensed
Intermediates (collectively, the "Transferred Technology"). All terms not
otherwise defined herein shall have the same meanings set forth in the License.
2. In consideration of the value of the patent rights referenced above in
developing the Transferred Technology, the [Third Party Transferee] agrees (a)
to use the Transferred Technology solely within the Field of Use to research and
develop, make, have made, use, sell and have sold Licensed Products
(collectively, "Covered Products"); and (b) to maintain and retain complete and
accurate records of sales of Covered Products and any amounts paid or payable to
Licensee in relation to such Covered Products, all in accordance with Article 4
of the License.
3. If the [Third Part Transferee] is notified, by Licensor or Licensee or
otherwise, that the License has been terminated in accordance with its terms,
such termination shall not affect the rights of the undersigned to research and
develop, make, use and sell Covered Products; provided, however, that the [Third
Party Transferee] hereby agrees that from and after the date of such termination
the undersigned shall have the obligation (a) to pay directly to Licensor all
amounts due pursuant to the Payment Schedule elected by Licensee under Section
4.1 of the License, including royalties on Net Sales, with respect to all
Covered Products (which shall be deemed for purposes of this paragraph to be
"Licensed Products" as defined in the License), and (b) deliver directly to
Licensor all reports otherwise due to Licensee pursuant to paragraph 1 above.
All such payments and reports shall be subject to the terms and conditions
therefor set forth in the License. To the extent that the foregoing constitutes
a grant of rights under Patent Rights with respect to the Transferred
Technology, such rights shall be contingent and, in the event of a failure to
make any such payments or any other material breach by the undersigned,
terminate upon thirty (30) days notice unless the breach is cured prior to
expiration of such period.
12
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
EXHIBIT 10.24
LICENSE AGREEMENT
(Antibody Diagnostic Field)
THIS LICENSE AGREEMENT (this "Agreement"), effective as of _________ __, 2000
(the "Effective Date"), is between DYAX CORP., having a principal place of
business at One Kendall Square, Bldg. 600, Suite 623, Cambridge,
Massachusetts 02139 USA (collectively referred to herein as "Licensor"); and
_________________________("Licensee"), a __________________ corporation
having its principal place of business at
_______________________________________________________________________.
R E C I T A L S
A. Licensor has the right to grant licenses to and under certain
technology described and claimed in U.S. Patent No. 5,223,409 entitled "Directed
Evolution of Novel Binding Proteins", U.S. Patent No. 5,403,484 entitled
"Viruses Expressing Chimeric Binding Proteins", and U.S. Patent No. 5,571,698
entitled "Directed Evolution of Novel Binding Proteins", U.S. Patent No.
5,837,500 entitled "Directed Evolution of Novel Binding Proteins", and
associated patent rights.
B. Licensee desires to obtain a license from Licensor to practice the
inventions described in the patents referenced above and Licensor is willing to
grant such a license on the terms and subject to the conditions provided herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall have the
meanings specified below:
1.1 "AFFILIATE" shall mean a corporation or other legal entity that
controls, is controlled by, or is under common control with such party. For
purposes of this definition, "control" means the ownership, directly or
indirectly, of more than fifty percent (50%) of the outstanding equity
securities of a corporation which are entitled to vote in the election of
directors or a more than fifty percent (50%) interest in the net assets or
profits of an entity which is not a corporation.
1.2."END USER" shall mean a person or entity whose use of a product
results in its destruction, loss of activity, and/or loss of value.
1.3."FIELD OF USE" shall mean human IN VITRO diagnostic or research
reagent uses, and not for any therapeutic, IN VIVO diagnostic, purification or
separations, agricultural, industrial enzymes or other purposes.
1
<PAGE>
1.4."FIRST COMMERCIAL SALE" shall mean the initial transfer by Licensee
or its Affiliate (or a Third Party Transferee of any of the foregoing) of a
Licensed Product for value and not for demonstration, testing or promotional
purposes.
1.5."LICENSED INTERMEDIATE" shall mean any fusion protein (including
without limitation any chimeric binding protein), genetic package (including
without limitation any virus, spore or cell) or other intermediate compound, or
any compound derived from any of the foregoing, that is (i) discovered, made or
developed by Licensee using a method covered by Patent Rights or (ii) is
otherwise covered by Patent Rights.
1.6. "LICENSED PRODUCT" shall mean any product intended for sale to an
End User as an IN VITRO diagnostic or research reagent, and sold in the form of
an immunoassay kit or vial containing one or more antibodies as a binding moiety
that is discovered, made or developed, whether by Licensee, its Affiliates or
any Third Party Transferee, using a Licensed Intermediate or a method covered by
Patent Rights.
1.7."NET SALES" shall mean the amounts received on sales of Licensed
Products in the Field of Use by Licensee, its Affiliates and any Third Party
Transferee, less five percent (5%) for normal and customary deductions, such as
trade discounts, rebates, or commissions actually allowed and taken, credits for
rejections or returns, taxes levied, and shipping costs, without any further
reductions. In any transfers of Licensed Products between Licensee and one of
its Affiliates or between any of the foregoing and a Third Party Transferee and
its Affiliates, the Net Sales Price shall be calculated based on the final sale
of the Licensed Product to parties which are not Affiliates of Licensee or of
such Third Party Transferee. In the event that non-monetary consideration is
received for any Licensed Products, Net Sales with respect to such Licensed
Products shall be calculated based on the fair market value of such
consideration.
1.8."PATENT RIGHTS" shall mean any and all Valid Claims (defined below)
of United States Patent Nos. 5,223,409, 5,403,484, 5,571,698 and 5,837,500
(collectively, the "U.S. Patents"), reissues, reexaminations, renewals and
extensions thereof, and all continuations, continuations-in-part and divisionals
of the applications for such U.S. patents and all counterparts thereto in
countries outside the United States, all of which patents and patent
applications as of the Effective Date are listed in ATTACHMENT B. Patent Rights
shall exclude (i) Claim 66 in U.S. Patent No. 5,223,409 to the extent that it
covers single chain antibodies, or (ii) any claim to specific protein or peptide
sequences, or nucleic acids thereof, that bind to a specific biological or
molecular target.
1.9."ROYALTY PERIOD" shall mean the calendar quarter, or partial
calendar quarter, commencing with the First Commercial Sale of any Licensed
Product in each country, and each calendar quarter thereafter.
1.10."THIRD PARTY TRANSFEREE" shall mean any party, other than an
Affiliate of Licensee, which is undertaking to make, have made, use, sell or
have sold Licensed Products and (i) to which Licensee (or any of its
Affiliates), sells, transfers, or otherwise makes available any Licensed
Intermediate or (ii) for which Licensee (or any of its Affiliates) performs
services or provides proprietary information, with respect to any Licensed
Intermediate.
2
<PAGE>
1.11."VALID CLAIM" shall mean either (a) a claim of an issued patent
that has not been held unenforceable or invalid by an agency or a court of
competent jurisdiction in any unappealable or unappealed decision or (b) a claim
of a pending patent application that has not been abandoned or finally rejected
without the possibility of appeal or refiling.
The above definitions are intended to encompass the defined terms in both the
singular and plural forms.
ARTICLE 2. GRANT OF RIGHTS
2.1. LICENSE GRANT. Subject to the terms and conditions set forth
herein, Licensor hereby grants Licensee and its Affiliates a world-wide,
nonexclusive, royalty-bearing license (without the right to grant
sublicenses) under Patent Rights (i) to research and develop, make, have
made, use, sell and have sold Licensed Products in the Field of Use and (ii)
to research and develop, make and use Licensed Intermediates in the Field of
Use for sale or transfer to any Third Party Transferee.
2.2. LIMITATION OF RIGHTS. Licensee acknowledges that its rights
under Patent Rights are limited to those expressly granted herein and that
Licensee is expressly prohibited from selling, transferring or otherwise
making available to third parties Licensed Products or Licensed Intermediates
for use outside the Field of Use.
2.3. COVENANT NOT TO SUE. In partial consideration for the grant of
rights hereunder, Licensee agrees not to enforce against Licensor or its
Affiliates any patent right owned or controlled by Licensee or its Affiliates
during the term of this Agreement that Licensor or its Affiliates may
infringe in practicing the inventions claimed in Patent Rights. Nothing in
this Section 2.3 is intended to grant Licensor or its Affiliates any
proprietary rights or rights to nonsuit with respect to specific peptides or
proteins or analogs thereof. The parties agrees that the covenant not to sue
in this Section 2.3 is a right that transfers with any sale or disposition by
Licensee or its Affiliates of the applicable patent right.
ARTICLE 3. THIRD PARTY AGREEMENTS
3.1. REQUIRED AGREEMENT. Licensee acknowledges that the value of
Patent Rights is measured in part by the value of products resulting from any
Licensed Intermediate. Licensee agrees, therefore, that it will not sell,
transfer, or otherwise make available a Licensed Intermediate to any Third
Party Transferee and will not provide services or proprietary information
with respect to any Licensed Intermediate to any Third Party Transferee,
unless such Third Party Transferee agrees to the provisions substantially as
set forth attached in ATTACHMENT C ("Third Party Agreement").
ARTICLE 4. PAYMENTS, RECORDS AND REPORTS
4.1. PAYMENTS. Licensee shall make the payments in the Payment
Schedule as set forth in ATTACHMENT A.
3
<PAGE>
4.1.1. SIGNING FEE. Licensee agrees to pay Licensor, within
ten (10) days of the Effective Date, a nonrefundable signing fee in the amount
specified in the Payment Schedule.
4.1.2. MAINTENANCE FEE. Licensee agrees to pay Licensor, on
every anniversary of the Effective Date, an annual maintenance fee for the
license granted under this Agreement in the amount specified in the Payment
Schedule.
4.1.3. TRANSFER FEE. Licensee agrees to pay Licensor the
amount specified in the Payment Schedule within thirty (30) days of the transfer
of a Licensed Intermediate or provision of services therefor to a Third Party
Transferee for each specific biological or molecular target.
4.1.4.5 10(K) OR PMA MILESTONE. Licensee agrees to pay
Licensor the amount specified in the Payment Schedule within thirty (30) days of
the first 510(k) application or Pre-Market Approval application in the United
States or foreign equivalent thereof for each indication for a Licensed Product.
4.1.5. ROYALTIES. Licensee agrees to pay Licensor,
concurrently with delivery of the quarterly report set forth in Section 4.2,
royalties on aggregate Net Sales of Licensed Products during the prior Royalty
Period; provided, however that in the event Licensed Products contain one or
more active components which are not covered by the Patent Rights, the royalty
due on such Net Sales shall be calculated by dividing the Net Sales of the
combination product by the number of active components not covered by the Patent
Rights, but in no event shall the amount due Licensor be reduced by more than
75%.
4.2. REPORTS AND PAYMENTS.
4.2.1. THIRD PARTY TRANSFEREE TRANSFERS AND REPORTS. On each
anniversary of the Effective Date, and within thirty (30) days after a transfer
described in Section 4.1.3, Licensee shall deliver to Licensor a report
containing the following information with respect to each Third Party Transferee
to whom Licensee has transferred Licensed Intermediates during the period since
the last such report or, in the case of the first such period, since the
Effective Date:
a. a copy of the Third Party Agreement with such Third Party
Transferee; and
b. to the extent publicly available or not subject to
confidentiality obligations, identification of the specific biological or
molecular target to which such Licensed Intermediates are to be directed.
4.2.2. ROYALTY PAYMENTS AND REPORTS. Commencing with the First
Commercial Sale of a Licensed Product in any country, within thirty (30) days
after the conclusion of each Royalty Period, Licensee shall deliver to Licensor
a report containing the following information:
a.gross sales of Licensed Products, in each country of sale,
made by or on behalf of Licensee and its Affiliates during the applicable
Royalty Period;
b.calculation of Net Sales for the applicable Royalty Period
in each country of sale, together with the exchange rates used for conversion;
and
c.calculation of the amount payable to Licensor for the
applicable Royalty Period.
4
<PAGE>
All such reports shall be maintained in confidence by Licensor. If no royalties
or other payments are due to Licensor for any reporting period, the report shall
so state. Concurrent with these reports, Licensee shall remit to Licensor any
payment due for the applicable Royalty Period. The method of payment shall be by
check or wire transfer as directed from time to time by Licensor. All amounts
payable to Licensor under this Section will first be calculated in the currency
of sale and then converted into U.S. dollars in accordance with Section 4.3, and
such amounts shall be paid without deduction of any withholding taxes,
value-added taxes, or other charges applicable to such payments.
4.3. PAYMENTS IN U.S. DOLLARS. All payments due under this Agreement
shall be payable in United States dollars. Conversion of foreign currency to
U.S. dollars shall be made at the conversion rate existing in the United States
(as reported in the WALL STREET JOURNAL) on the last working day of the calendar
quarter preceding the applicable calendar quarter. Such payments shall be
without deduction of exchange, collection, or other charges.
4.4. RECORDS. Licensee and its Affiliates shall maintain, and shall
ensure that any Third Party Transferee shall maintain, complete and accurate
records of Licensed Products made, used, or sold under this Agreement and any
amounts payable to Licensor in relation to such Licensed Products, which records
shall contain sufficient information to permit Licensor to confirm the accuracy
of any reports delivered to Licensor in accordance with Section 4.2. Licensee
and its Affiliates shall retain such records relating to a given Royalty Period
for at least three (3) years after the conclusion of that Royalty Period, during
which time Licensor shall have the right, at its expense, to cause an
independent certified public accountant to inspect such records during normal
business hours for the sole purpose of verifying any reports and payments
delivered under this Agreement. Such accountant shall not disclose to Licensor
any information other than information relating to accuracy of reports and
payments delivered under this Agreement and shall provide Licensee with a copy
of any report given to Licensor. The parties shall reconcile any underpayment or
overpayment within thirty (30) days after the accountant delivers the results of
the audit. In the event that any audit performed under this Section reveals an
underpayment in excess of five percent (5%) in any Royalty Period, Licensee
shall bear the full cost of such audit.
4.5. LATE PAYMENTS. Any payments by Licensee that are not paid on or
before the date such payments are due under this Agreement shall bear interest,
to the extent permitted by law, at two percentage points above the base prime
rate of interest most recently reported in THE WALL STREET JOURNAL, calculated
based on the number of days that payment is delinquent.
4.6. OTHER LICENSES. In the event that Licensor enters into an
agreement with a third party (other than a not-for-profit institution) in which
Licensor grants a license solely under the Patent Rights for Licensed Products
in the Field of Use only and the amounts to be paid to Licensor are more
favorable to such third party than the amounts to be paid by Licensee under this
Agreement, then Licensor shall notify Licensee and Licensee shall have the right
to substitute such payment amounts for the payments due in this Agreement.
5
<PAGE>
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
5.1. AUTHORIZATION. Each party represents and warrants to the other
that it has the legal right and power to enter into this Agreement, to extend
the rights and licenses granted to the other in this Agreement, and to fully
perform its obligations hereunder, and that the performance of such obligations
will not conflict with its charter documents or any agreements, contracts, or
other arrangements to which it is a party.
5.2. OWNERSHIP OF PATENT RIGHTS. Licensor represents and warrants that,
as of the Effective Date, it possesses the exclusive right, title, and interest
in and to the Patent Rights and that it has the full legal right and power to
enter into the obligations and grant the rights and licenses set forth in this
Agreement.
5.3. DISCLAIMER OF WARRANTIES. Nothing in this Agreement shall be
construed as:
a.a warranty or representation by Licensor as to the validity
or scope of any patent included within the Patent Rights;
b.a warranty or representation that the exploitation of the
Patent Rights or the manufacture, use or sale of a Licensed Intermediate or a
Licensed Products is or will be free from infringement of patents of third
parties;
c.an obligation of either party to bring or prosecute actions
or suits against third parties for infringement;
d.an obligation of Licensor to maintain any patent or to
continue to prosecute any patent application included within the Patent Rights
in any country;
e.an obligation of either party to furnish any confidential
information or know-how;
f.creating any agency, partnership, joint venture or similar
relationship between Licensor and Licensee; or
g.conferring by implication, estoppel or otherwise any
license, immunity or right under any patent of Licensor other than those
specified in Patent Rights.
ARTICLE 6. INDEMNIFICATION
6.1. INDEMNIFICATION. Licensee shall indemnify, defend, and hold
harmless Licensor and its Affiliates and their directors, officers, employees,
and agents and their respective successors, heirs and assigns (the
"Indemnities") against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses of litigation) incurred by or imposed
upon the Indemnitees or any one of them in connection with any claims, suits,
actions, demands, or judgments concerning any product, process or service that
is made, used, sold or provided pursuant to any right or license granted under
this Agreement.
6
<PAGE>
ARTICLE 7. TERM AND TERMINATION
7.1.TERM. Unless sooner terminated as provided herein, this Agreement
shall commence on the Effective Date and shall remain in effect until the
expiration of the last to expire of the applicable Patent Right, unless earlier
terminated as provided in this Article.
7.2. TERMINATION BY LICENSEE. Licensee may terminate this agreement for
any reason upon six (6) months notice to Licensor.
7.3. TERMINATION BY LICENSOR. In the event that Licensee fails to make
timely payment of any amounts due to Licensor under this Agreement, including
amounts due under Article 4 hereof, Licensor may terminate this Agreement upon
thirty (30) days written notice to Licensee, unless Licensee pays all past-due
amounts prior to the expiration of such thirty (30)-day notice period.
7.4. OTHER MATERIAL BREACH. In the event that either party commits a
material breach of any of its obligations under this Agreement, other than that
stated in Section 7.3, and such party fails to remedy that breach within ninety
(90) days after receiving written notice thereof from the other party, that
other party may immediately terminate this Agreement upon written notice to the
breaching party.
7.5. EFFECT OF TERMINATION. Upon the expiration or termination of this
Agreement, Licensee's rights under the Patent Rights shall terminate
immediately. Such expiration or termination shall not affect the rights of any
Third Party Transferee if any such Third Party Transferee performs its
obligations under the Third Party Agreement. The following provisions shall
survive the expiration or termination of this Agreement: Articles 1, 3, 6 and 8
and Section 2.3; as well as Licensee's obligations to make payments and reports
pursuant to Article 4 with respect to Licensed Products developed using the
Patent Rights, or developed as a result of Licensed Intermediates, during the
term of this Agreement.
7.6. NOTICE OF TERMINATION. Licensee agrees that, in the event that
this Agreement is terminated pursuant to the terms hereof, Licensee shall so
notify each Third Party Transferee within twenty (20) days of such termination.
ARTICLE 8. MISCELLANEOUS
8.1. NOTICES. All notices, requests, demands and other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given upon the date of receipt if
delivered by hand, recognized international overnight courier, confirmed
facsimile transmission, or registered or certified mail, return receipt
requested, postage prepaid to the following addresses or facsimile numbers:
<TABLE>
<S> <C>
If to Licensor: If to Licensee:
Dyax Corp. To the address or facsimile
One Kendall Square, Bldg. 600, Suite 623 number set forth below Licensee's signature
Cambridge, MA 02139 to this Agreement
Attention: Chief Executive Officer
Facsimile: (617) 225-2501
</TABLE>
7
<PAGE>
8.2. GOVERNING LAW & JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts.
The parties hereby irrevocably consent and submit to the exclusive jurisdiction
of any Commonwealth of Massachusetts or Federal court sitting in Boston in any
action or proceeding of any type whatsoever arising out of or relating to this
Agreement.
8.3. SPECIFIC PERFORMANCE. The parties agree that irreparable damage
will occur in the event that the provisions of Article 3 are not specifically
enforced. In the event of a breach or threatened breach of any such provisions,
Licensee agrees that Licensor shall, in addition to all other remedies, be
entitled to temporary or permanent injunction, without showing any actual damage
or that monetary damages would not provide an adequate remedy and without the
necessity of posting any bond, and/or a decree for specific performance, in
accordance with the provisions hereof.
8.4. ASSIGNMENT. This Agreement may not be assigned by either party
without the prior written consent of the other party, except that either party
may assign this Agreement to any of its Affiliates or to a successor in
connection with the merger, consolidation, or sale of all or substantially all
of its assets or that portion of its business pertaining to the subject matter
of this Agreement, with prompt written notice to the other party of any such
assignment. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective lawful successors and assigns.
8.5. COMPLIANCE WITH LAW. Nothing in this Agreement shall be construed
so as to require the commission of any act contrary to law, and wherever there
is any conflict between any provision of this Agreement and any statute, law,
ordinance or treaty, the latter shall prevail, but in such event the affected
provisions of the Agreement shall be conformed and limited only to the extent
necessary to bring it within the applicable legal requirements.
8.6. AMENDMENT AND WAIVER. This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by both
parties. Any waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an agreement to waive
any rights or fail to act in any other instance, whether or not similar.
8.7. SEVERABILITY. In the event that any provision of this Agreement
shall, for any reason, be held to be invalid or unenforceable in any respect,
such invalidity or unenforceability shall not affect any other provision hereof,
and the parties shall negotiate in good faith to modify the Agreement to
preserve (to the extent possible) their original intent.
8.8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements or understandings between the parties relating to the subject
matter hereof.
8
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the date first above written.
LICENSOR: LICENSEE:
DYAX CORP.
- --------------------- ---------------------
By: By:
Name: Name:
Title: Title:
Address:
Facsimile:
9
<PAGE>
ATTACHMENT A
PAYMENT SCHEDULE
<TABLE>
<S> <C>
- -----------------------------------------------------------------
PAYMENTS
- -----------------------------------------------------------------
Signing Fee $ 52,500
- -----------------------------------------------------------------
Annual Maintenance Fee $ 27,500
- -----------------------------------------------------------------
Each transfer of one or more Licensed $ 27,500
Intermediates or provision of services
therefor for a specific target
- -----------------------------------------------------------------
First application for a 510(k), PMA or $ 102,500
equivalent for each indication
- -----------------------------------------------------------------
Royalty rate on Net Sales 2.2%
- -----------------------------------------------------------------
</TABLE>
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
ATTACHMENT B
PATENT RIGHTS
<TABLE>
<CAPTION>
=========================================================================================================
APPLICATION/
COUNTRY PATENT NO. FILING DATE PATENT NO. ISSUE DATE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
US 07/664,989* 3/1/91 5,223,409 6/29/93
- ---------------------------------------------------------------------------------------------------------
US 9,319 1/26/93 5,403,484 4/4/95
- ---------------------------------------------------------------------------------------------------------
US 08/057,667 6/18/93 5,571,698 11/5/96
- ---------------------------------------------------------------------------------------------------------
US div 08/415,922 4/3/95 5,837,500 11/17/98
- ---------------------------------------------------------------------------------------------------------
US div 08/993,776 12/18/97
- ---------------------------------------------------------------------------------------------------------
US div ************* 11/16/98
- ---------------------------------------------------------------------------------------------------------
US div ************* 11/16/98
- ---------------------------------------------------------------------------------------------------------
PCT US89/03731 9/1/89
W09002809 pub 3/22/90
- ---------------------------------------------------------------------------------------------------------
EPO 89/910702.3 9/1/89 436,597 4/2/97
EP436597 pub 7/17/91
- ---------------------------------------------------------------------------------------------------------
EPO div 96/112867.5 8/9/96 Allowed
768377 pub 4/16/97 pub
- ---------------------------------------------------------------------------------------------------------
Japan 89510087 9/1/89
JP4502700 (pub) 5/21/92
- ---------------------------------------------------------------------------------------------------------
Canada 610,176 9/1/89 1,340,288 12/29/98
- ---------------------------------------------------------------------------------------------------------
Ireland IR89/2834 9/4/89
- ---------------------------------------------------------------------------------------------------------
Israel 91501 9/1/89 91501 6/11/98
- ---------------------------------------------------------------------------------------------------------
Israel 3 divs 5/29/97
- ---------------------------------------------------------------------------------------------------------
PCT US92/01456 2/27/92
W09215677 (pub) 9/17/92
- ---------------------------------------------------------------------------------------------------------
EPO 92/908057.0 2/27/92
- ---------------------------------------------------------------------------------------------------------
Canada 2105300 2/27/92
- ---------------------------------------------------------------------------------------------------------
Japan 92507558 2/27/92
- ---------------------------------------------------------------------------------------------------------
PCT US92/01539 2/28/92
W09215679 (pub) 9/17/92
- ---------------------------------------------------------------------------------------------------------
EPO 92/908799.7 2/28/92
- ---------------------------------------------------------------------------------------------------------
Canada 2105303 2/28/92
- ---------------------------------------------------------------------------------------------------------
Japan 92508216 2/28/92
=========================================================================================================
</TABLE>
* CIP of US SN487,063 filed 3/2/90 which is a CIP of US SN240,160 filed 9/2/88
All Protein Engineering Corporation patent rights have been assigned to Dyax
Corp.
<PAGE>
ATTACHMENT C
THIRD PARTY AGREEMENT
1. The [Third Party Transferee] hereby acknowledges that Dyax Corp.
("Licensor"), having a principal place of business at One Kendall Square, Bldg.
600, Suite 623, Cambridge, Massachusetts 02139, has licensed certain patent
rights to and under U.S. Patent Nos. 5,223,409; 5,403,484; 5,571,698; 5,571,698;
5,837,500; and associated patent rights, to ______________ ("Licensee") under a
License Agreement (the "License") effective as of _______, and that it expects
to receive from Licensee or its Affiliates one or more Licensed Intermediates or
services or proprietary information with respect to one or more Licensed
Intermediates (collectively, the "Transferred Technology"). All terms not
otherwise defined herein shall have the same meanings set forth in the License.
2. In consideration of the value of the patent rights referenced above in
developing the Transferred Technology, the [Third Party Transferee] agrees (a)
to use the Transferred Technology solely within the Field of Use to research and
develop, make, have made, use, sell and have sold Licensed Products
(collectively, "Covered Products"); and (b) to maintain and retain complete and
accurate records of sales of Covered Products and any amounts paid or payable to
Licensee in relation to such Covered Products, all in accordance with Article 4
of the License.
3. If the [Third Part Transferee] is notified, by Licensor or Licensee or
otherwise, that the License has been terminated in accordance with its terms,
such termination shall not affect the rights of the undersigned to research and
develop, make, use and sell Covered Products; provided, however, that the [Third
Party Transferee] hereby agrees that from and after the date of such termination
the undersigned shall have the obligation (a) to pay directly to Licensor all
amounts due pursuant to the Payment Schedule elected by Licensee under Section
4.1 of the License, including royalties on Net Sales, with respect to all
Covered Products (which shall be deemed for purposes of this paragraph to be
"Licensed Products" as defined in the License), and (b) deliver directly to
Licensor all reports otherwise due to Licensee pursuant to paragraph 1 above.
All such payments and reports shall be subject to the terms and conditions
therefor set forth in the License. To the extent that the foregoing constitutes
a grant of rights under Patent Rights with respect to the Transferred
Technology, such rights shall be contingent and, in the event of a failure to
make any such payments or any other material breach by the undersigned,
terminate upon thirty (30) days notice unless the breach is cured prior to
expiration of such period.
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Exhibit 10.25
COLLABORATION AGREEMENT
between
GENZYME CORPORATION
and
DYAX CORP.
dated as of October 1, 1998
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
COLLABORATION AGREEMENT
THIS COLLABORATION AGREEMENT dated as of October 1, 1998 (the "Agreement")
is made between Genzyme Corporation, a Massachusetts corporation having its
principal place of business at One Kendall Square, Cambridge, Massachusetts
02139 ("Genzyme") and Dyax Corp., a Delaware corporation having its principal
place of business at One Kendall Square, Cambridge, Massachusetts 02139
("Dyax"). Genzyme and Dyax are sometimes referred to herein individually as a
"Party" and collectively as the "Parties."
R E C I T A L S
A. Dyax is developing EPI-KAL-2 ("EPI-KAL-2"), *************. Dyax is
currently developing EPI-KAL-2 for the treatment of HAE and other inflammatory
diseases.
B. Genzyme has expertise in the areas of development, manufacturing and
marketing of bio-pharmaceutical products.
C. Dyax and Genzyme desire to collaborate in developing EPI-KAL-2 for the
treatment of HAE and other inflammatory diseases.
NOW THEREFORE, in consideration of the premises and of the covenants
herein contained, the Parties mutually agree as follows:
ARTICLE 1 DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below. Certain other capitalized terms are defined
elsewhere in this Agreement.
1.1 "Affiliate" shall mean any corporation or other entity which controls,
is controlled by, or is under common control with a Party. A corporation or
other entity shall be regarded as in control of another corporation or entity if
it owns or directly or indirectly controls more than fifty percent (50%) of the
voting stock or other ownership interest of the other corporation or entity, or
if it possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the corporation or other entity or
the power to elect or appoint more than fifty percent (50%) of the members of
the governing body of the corporation or other entity.
i
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.2 "Collaboration Product" shall mean EPI-KAL-2 and ************* any
combination products, delivery systems and dosage forms related thereto,
together with any process developed for use in the Field by a Party utilizing,
based upon or arising out of the Genzyme Patent Rights, the Dyax Patent Rights,
the Joint Patent Rights, the Genzyme Technology, the Dyax Technology, the Joint
Technology or the Manufacturing Know-How owned or controlled by either Party.
*************.
1.3 "Commercialization Costs" with respect to a Collaboration Product
shall mean the variable costs and fixed costs incurred by the Parties or by
Kallikrein LLC with respect to work performed by the Parties and their
Affiliates and subcontractors in connection with the performance of the
Commercialization Plan for such Collaboration Product, including without
limitation, sales and marketing costs related to performing market research,
post-marketing studies, advertising, producing promotional literature,
sponsoring seminars and symposia, sales training meetings and seminars,
originating sales, providing reimbursement and other patient support services
and such other expenses described in Section 6.4 hereof. For purposes of this
Section 1.3, "variable costs" shall be deemed to be the cost of labor, raw
materials, supplies and other resources directly consumed in the conduct of the
Commercialization Plan and manufacture of Collaboration Product for use in
commercialization activities, as well as royalties payable to Third Parties. For
purposes of Section 1.3, "fixed costs" shall be deemed to be the cost of
facilities, utilities, insurance, equipment depreciation and other fixed costs
directly related to the conduct of the Commercialization Plan and the
manufacture of Collaboration Product for use in commercialization activities,
allocated based upon the proportion of such costs directly attributable to the
support or performance of the Commercialization Plan and the manufacture of
Collaboration Product for use in commercialization activities or by such other
method of cost allocation as may be approved by the Steering Committee.
Commercialization Costs shall exclude all costs otherwise reimbursed pursuant to
this Agreement. All cost determinations made hereunder shall be made in
accordance with GAAP.
1.4 "Commercialization Plan" shall mean, with respect to a particular
Collaboration Product, the comprehensive plan for the commercialization of such
Collaboration Product, as more specifically described in Section 6.1 hereof.
1.5 "Commercially reasonable and diligent efforts" shall have the meaning
ascribed to it in Section 5.1.1.
1.6 "Development Costs" with respect to a Collaboration Product shall mean
the variable costs and fixed costs incurred by the Parties or by Kallikrein LLC
with respect to work performed by the Parties and their Affiliates and
subcontractors in connection with the conduct of the Development Plan for such
Collaboration Product, including without limitation (a) direct, out-of-pocket
external costs, including clinical grants, clinical laboratory fees, positive
controls and the cost of studies conducted and services provided by contract
research organizations and individuals, consultants, toxicology contractors, and
manufacturers necessary or useful for the purpose of obtaining Regulatory
Approvals for such Collaboration Product, (b) amounts paid to Genzyme by Dyax
prior to satisfaction by Dyax of the Initial Funding Commitment (as defined
herein), or to Genzyme and Dyax by Kallikrein LLC after satisfaction by Dyax of
the Initial Funding Commitment, with respect to research and development and
pre-commercialization sales and marketing efforts as set forth in the
Development Plan for such Collaboration Product, including without limitation
the efforts of the Parties to develop and document process methods
2
<PAGE>
and procedures for the manufacture, characterization and release of such
Collaboration Product and the Fully Absorbed Cost of Goods for batches of such
Collaboration Product manufactured and supplied for use in preclinical and
clinical trials and pre-commercialization activities, including quality control
and quality assurance, (c) costs related to data management, statistical designs
and studies, document preparation and other expenses associated with the
clinical testing program for such Collaboration Product, (d) costs for
preparing, submitting, reviewing or developing data or information for the
purpose of submission of applications to obtain Regulatory Approvals for such
Collaboration Product and (e) the pro rata share of license fees and other
amounts payable to Third Party licensors and costs relating to the prosecution
and maintenance of Patent Rights, allocated based on the proportion of such
costs directly attributable to such Collaboration Product. For purposes of this
Section 1.6, "variable costs" shall be deemed to be the cost of labor, raw
materials, supplies and other resources directly consumed in the conduct of the
Development Program and the manufacture of the Collaboration Product for use in
preclinical and clinical trials and pre-commercialization activities. For
purposes of this Section 1.6, "fixed costs" shall be deemed to be the cost of
facilities, utilities, insurance, facility and equipment depreciation and other
fixed costs directly related to the conduct of the Development Program and the
manufacture of the Collaboration Product for use in preclinical and clinical
trials and pre-commercialization activities, allocated based upon the proportion
of such costs directly attributable to support of the Development Program and
the manufacture of the Collaboration Product for use in preclinical and clinical
trials and pre-commercialization activities or by such other method of cost
allocation as may be approved by the Steering Committee. Development Costs shall
exclude all costs otherwise reimbursed pursuant to this Agreement. All cost
determinations made hereunder shall be made in accordance with GAAP.
1.7 "Development Plan" shall mean, with respect to a particular
Collaboration Product, the comprehensive plan and budget for the development of
such Collaboration Product under the Development Program, as more specifically
described in Section 5.1 hereof.
1.8 "Development Program" shall mean, with respect to a particular
Collaboration Product, the preclinical and clinical development of such
Collaboration Product including the preparation and filing of all applications
for Regulatory Approvals for such Collaboration Product.
1.9 "Dyax Companies" shall mean Dyax and a wholly-owned subsidiary of Dyax
("Subsidiary") to be formed prior to the LLC Formation Date for the purpose of
holding a one percent (1%) interest in Kallikrein LLC.
1.10 "Dyax Patent Rights" shall mean all Patent Rights owned or controlled
by, or licensed (to the extent licensed and if there is the right to sublicense)
to, Dyax, to the extent that such Patent Rights claim Collaboration Products or
are necessary for the research, development, manufacture or commercialization of
Collaboration Products in the Field. The Dyax Patent Rights in existence on the
Effective Date are set forth on Schedule 1.10. This schedule will be updated by
Dyax on the LLC Formation Date to include all Dyax Patent Rights owned or
controlled by Dyax as of such date.
1.11 "Dyax Technology" shall mean all Technology owned or controlled by,
or licensed (to the extent licensed and if there is the right to sublicense) to,
Dyax that is necessary
3
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
for, or specifically relates or is specifically useful to, the research,
development, manufacture or commercialization of Collaboration Products for use
in the Field.
1.12 "Effective Date" shall mean the date first above written.
1.13 "FDA" shall mean the United States Food and Drug Administration, any
successor agency, or the regulatory authority of any country other than the
United States with responsibilities comparable to those of the United States
Food and Drug Administration.
1.14 "Field" shall mean ************* uses of a Collaboration Product.
1.15 "Fully Absorbed Cost of Goods" with respect to a Collaboration
Product shall mean (a) the variable costs and fixed costs incurred by a Party
associated with the manufacture (inclusive of finishing processes) of batches of
such Collaboration Product or (b) if such Collaboration Product is not
manufactured by the Parties, the transfer price for batches of such
Collaboration Product purchased from Third Party manufacturers. For purposes of
this Section 1.15, "variable costs" shall be deemed to be the cost of labor, raw
materials, supplies and other resources directly consumed in the manufacture of
batches of such Collaboration Product, including quality control and quality
assurance. For purposes of this Section 1.15, "fixed costs" shall be deemed to
be the cost of facilities, utilities, insurance, facility and equipment
depreciation and other fixed costs directly related to the manufacture of
batches of such Collaboration Product, as well as royalties payable to Third
Parties in connection with the manufacture, use or sale of a Collaboration
Product. Fixed costs shall be allocated to such Collaboration Product based upon
the proportion of such costs directly attributable to support of the
manufacturing process for such Collaboration Product. If a facility is used to
manufacture Collaboration Products and products for other programs of either
Genzyme or Dyax, fixed costs shall be allocated in proportion to the use of such
facility for the manufacture of Collaboration Products and products for such
other programs. Fully Absorbed Cost of Goods shall exclude all costs otherwise
reimbursed pursuant to this Agreement. In the event that either Dyax or Genzyme
subcontracts with the other Party to perform any work on its behalf in
connection with the manufacturing responsibilities assigned to Dyax or Genzyme,
respectively, pursuant to Section 7.2.1 hereof, Dyax and Genzyme (i) shall each
directly charge Kallikrein LLC their respective Fully Absorbed Cost of Goods and
(ii) shall not include any part of the other Party's Fully Absorbed Cost of
Goods in the amount so charged to Kallikrein LLC. Except as otherwise provided
in this Agreement, all cost determinations made hereunder shall be made in
accordance with GAAP.
1.16 "GAAP" shall mean United States generally accepted accounting
principles, consistently applied, except when different accounting principles
are required under the terms of the Operating Agreement, in which case the
accounting principles mandated under the Operating Agreement shall control.
1.17 "Genzyme Patent Rights" shall mean all Patent Rights owned or
controlled by, or licensed (to the extent licensed and if there is the right to
sublicense) to, Genzyme, to the extent that such Patent Rights claim
Collaboration Products or are necessary for the research, development,
manufacture or commercialization of Collaboration Products in the Field. The
Genzyme Patent Rights in existence on the Effective Date are set forth on
Schedule 1.17. This
4
<PAGE>
schedule will be updated by Genzyme on the LLC Formation Date to include all
Genzyme Patent Rights owned or controlled by Genzyme as of such date.
1.18 "Genzyme Technology" shall mean all Technology owned or controlled
by, or licensed (to the extent licensed and if there is the right to sublicense)
to, Genzyme that is necessary for or specifically relates or is specifically
useful to, the research, development, manufacture or commercialization of
Collaboration Products for use in the Field.
1.19 "Joint Patent Rights" shall mean the Patent Rights that claim Joint
Inventions (as such term is defined in Section 9.1.1 hereof) that are jointly
discovered, made or conceived during and in connection with the Program to the
extent that such Patent Rights relate to or are useful for the research,
development, manufacture or commercialization of Collaboration Products for use
in the Field.
1.20 "Joint Technology" shall mean all Technology discovered, made or
conceived during and in connection with the Program, and future Technology owned
or controlled by, or licensed (with the right to sublicense where possible) to,
either Genzyme or Dyax relating to or useful for the research, development,
manufacture or commercialization of Collaboration Products for use in the Field.
1.21 "Kallikrein LLC" shall mean the Delaware limited liability company to
be organized by Dyax in accordance with Section 2.1 hereof for the purpose of
developing and commercializing Collaboration Products in the Territory and in
the Field.
1.22 "LLC Formation Date" shall mean the date the Certificate of Formation
of Kallikrein LLC is filed with the Secretary of State of Delaware.
1.23 "Manufacturing Know-How" shall mean all information, techniques,
inventions, discoveries, improvements, practices, methods, knowledge, skill,
experience and other technology, whether or not patentable or copyrightable, and
any copyrights based thereon, relating to or necessary or useful for the
production, purification, packaging, storage and transportation of Collaboration
Products, including without limitation specifications, acceptance criteria,
manufacturing batch records, standard operating procedures, engineering plans,
installation, operation and process qualification protocols for equipment,
validation records, master files submitted to the FDA, process validation
reports, environmental monitoring processes, test data including
pharmacological, toxicological and clinical test data, cost data and employee
training materials.
1.24 "Manufacturing Party" shall have the meaning set forth in Section
7.3.
1.25 "Member" shall have the meaning set forth in the Operating Agreement.
1.26 "NDA" shall mean a New Drug Application, Biologics License
Application, or similar application filed with the FDA after completion of human
clinical trials to obtain marketing approval for a Collaboration Product.
1.27 "Net Profit" of Kallikrein LLC for any period shall be equal to (a)
the sum during such period of all revenues recognized and recorded by Kallikrein
LLC during such period, including without limitation (i) revenues from sales of
all Collaboration Products sold by
5
<PAGE>
Kallikrein LLC and (ii) all revenues received by Kallikrein LLC from Third
Parties as consideration for sublicensing the manufacture, use, distribution or
sale of Collaboration Products, less (b) all expenses incurred by Kallikrein LLC
during such period, including without limitation expenses incurred in respect of
Development Costs and Commercialization Costs and facility and equipment
depreciation costs not otherwise accounted for. All determinations made
hereunder shall be made in accordance with GAAP.
1.28 "Operating Agreement" shall mean the Operating Agreement of
Kallikrein LLC in substantially the form attached hereto as Schedule 1.28 to be
entered into by Dyax, Subsidiary and Genzyme on the LLC Formation Date.
1.29 "Patent Rights" shall mean any patents, patent applications,
certificates of invention, or applications for certificates of invention,
together with any extensions, registrations, confirmations, reissues, divisions,
continuations or continuations-in-part, re-examinations or renewals thereof,
that may be sought throughout the world.
1.30 "Percentage Interest" shall have the meaning set forth in the
Operating Agreement; provided, however, prior to the execution of the Operating
Agreement, the Percentage Interest of both Genzyme and Dyax shall be fifty
percent (50%).
1.31 "Program" shall mean the collaboration described in this Agreement.
1.32 "Program Costs" shall mean all Program-related costs, including
without limitation Development Costs and Commercialization Costs, in each case
as such costs are incurred or accrued by the Parties or by Kallikrein LLC on or
after the Effective Date.
1.33 "Program Management Team" shall mean the joint team composed of
representatives of Genzyme and Dyax described in Section 8.1.1 hereof.
1.34 "Purchase Agreement" shall mean the Purchase Agreement in
substantially the form attached hereto as Schedule 1.34 to be entered into by
Dyax and Genzyme on the LLC Formation Date.
1.35 "Regulatory Approvals" shall mean all approvals from regulatory
authorities in any country required lawfully to manufacture and market
Collaboration Products in any such country, including without limitation any
NDA, any establishment license application filed with the FDA to obtain approval
of the facilities and equipment to be used to manufacture a Collaboration
Product, and any product pricing approvals where applicable. Regulatory
Approvals shall also include "orphan drug" designations granted by the FDA for a
Collaboration Product.
1.36 "Regulatory Scheme" shall mean the United States Public Health
Service Act, the United States Food, Drug and Cosmetics Act, and the
regulations, interpretations and guidelines promulgated thereunder by the FDA or
the regulatory scheme applicable to the Collaboration Products in any country
other than the United States, as such statutes, regulations, interpretations and
guidelines or regulatory schemes may be amended from time to time.
1.37 "Specifications" with respect to a Collaboration Product shall mean
the written specifications for such Collaboration Product determined by the
Program Management Team and
6
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
approved by the Steering Committee; provided that such specifications shall at
all times comply with the relevant Regulatory Scheme in the country of sale and
in the country of use. The Specifications may be amended from time to time by
the Program Management Team provided that such amendments are approved by the
Steering Committee or the written agreement of the Parties, as the case may be.
Copies of such Specifications shall be maintained by both Dyax and Genzyme and
shall become a part of this Agreement as if incorporated herein.
1.38 "Steering Committee" shall mean the joint team composed of
representatives of Dyax and Genzyme appointed as described in Section 8.2.1
hereof. The Steering Committee shall also be the governing body of Kallikrein
LLC following the LLC Formation Date.
1.39 "Technology" shall mean inventions, trade secrets, copyrights,
know-how, data and other intellectual property of any kind (including without
limitation any proprietary biological or other materials, compounds or reagents,
but not including Patent Rights).
1.40 "Territory" shall mean all of the countries in the world.
1.41 "Third Party" shall mean any entity other than Kallikrein LLC, Dyax
or Genzyme and their respective Affiliates.
ARTICLE 2 SCOPE AND STRUCTURE OF THE COLLABORATION
2.1 General. Genzyme and Dyax desire to collaborate in developing
Collaboration Products in the Field and in the Territory, with the initial focus
of the Program to be on the development of a Collaboration Product for the
treatment of HAE. Dyax shall initially be responsible for undertaking the
Development Program as described in the Development Plan. ************* at a
time to be mutually agreed upon by the Parties, but in no event later than the
satisfaction by Dyax of the Initial Funding Commitment (as defined in Section
4.1), Dyax will form Kallikrein LLC as the vehicle for a joint venture between
Dyax and Genzyme to further develop and commercialize Collaboration Products in
the Field and in the Territory. Dyax will be the sole initial member of
Kallikrein LLC. Immediately following the formation of Kallikrein LLC,
Kallikrein LLC will execute and become a Party to this Agreement. Immediately
following the execution and delivery of this Agreement by Kallikrein LLC, Dyax
will transfer and assign one percent (1%) of its interest to Subsidiary, and
Subsidiary will be admitted as a member of Kallikrein LLC. Immediately
thereafter, Dyax will sell and assign to Genzyme a fifty percent (50%) interest
in Kallikrein LLC (subject to adjustment pursuant to Section 4.2.1 hereof and
pursuant to the Operating Agreement) pursuant to the Purchase Agreement and
Article 4 hereof and, upon execution and delivery of the Operating Agreement,
Genzyme will be admitted as a member of Kallikrein LLC. Kallikrein LLC will then
undertake the Development Program for each Collaboration Product, with each of
the Parties assuming responsibility for those portions of the Development
Program allocated to it under this Agreement. Upon completion of the Development
Program, the Manufacturing Party or Parties will manufacture the Collaboration
Products on behalf of Kallikrein LLC and Genzyme will market and sell the
Collaboration Products in the Field and in the Territory as exclusive agent for
Kallikrein LLC all on the terms and conditions set forth in this Agreement or
such other terms and conditions as the Parties may agree upon.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
2.2 Exclusive Relationship. Subject to Section 3.2, neither Kallikrein
LLC, Genzyme, Dyax nor any of their respective Affiliates shall independently,
or with a Third Party, conduct research or development activities regarding, or
engage in the manufacture, marketing, sale or distribution of, EPI-KAL-2
************* during the term of this Agreement other than as part of the
Program. *************; provided, however, that in the event that this Agreement
is terminated pursuant to Section 13.2.2 hereof and the non-terminating Party
does not exercise its option under Section 13.3.2(a) hereof, then the
restrictions set forth in this sentence shall not apply. *************.
ARTICLE 3 GRANTS AND RESERVATIONS OF RIGHTS
3.1 Licenses of Rights to Kallikrein LLC.
3.1.1 Grants from Dyax. Except as otherwise expressly provided
herein, Dyax will grant to Kallikrein LLC on the LLC Formation Date a worldwide,
exclusive, royalty-free right and sublicense during the term of this Agreement,
************* under Dyax Patent Rights, Dyax Technology, the Joint Patent Rights
and the Joint Technology and any Manufacturing Know-How owned or held by Dyax to
develop, make, have made, use, offer for sale, sell, have sold, import and
export Collaboration Products in the Field.
3.1.2 Grants from Genzyme. Except as otherwise expressly provided
herein, Genzyme will grant to Kallikrein LLC on the LLC Formation Date a
worldwide, exclusive, royalty-free right and sublicense during the term of this
Agreement, ************* under the Genzyme Patent Rights, Genzyme Technology,
Joint Patent Rights and the Joint Technology and any Manufacturing Know-How
owned or held by Genzyme to develop, make, have made, use, offer for sale, sell,
have sold, import and export Collaboration Products in the Field.
3.1.3 Kallikrein LLC Undertakings; Sublicenses. In consideration of
the licenses to be granted under this Section 3.1, Kallikrein LLC will undertake
to pay all royalties, sublicense fees and other costs or expenses payable to
Third Parties associated with the acquisition or use of such licenses by
Kallikrein LLC for use in connection with the Program. Except as provided in
Section 3.2 below, all sublicenses granted by Kallikrein LLC shall be subject to
prior approval by the Steering Committee.
3.1.4 Rights of Kallikrein LLC to Patent Rights or Technology
Developed Outside the Program. *************.
3.2 Proposals For Additional Indications. Genzyme and Dyax acknowledge and
agree that the initial focus of the Program shall be the use of a Collaboration
Product for the treatment of HAE. At any time during the term of this Agreement,
either Genzyme or Dyax (the "Proposing Party") may make a proposal to the
Steering Committee to develop a Collaboration Product for an additional disease
indication. *************.
3.3 Sublicenses of Rights from Kallikrein LLC to Dyax and Genzyme.
Kallikrein LLC will grant to each of Dyax and Genzyme a worldwide,
non-exclusive, royalty-free right and sublicense during the term of this
Agreement under the Patent Rights, Technology and Manufacturing Know-How
licenses granted to it pursuant to Section 3.1 solely to the extent required to
permit such Party to perform its duties under this Agreement. *************.
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Kallikrein LLC will further grant to Genzyme a worldwide, non-exclusive,
royalty-free right and license during the term of this Agreement to use any and
all trademarks owned or licensed (with the right to sublicense) by Kallikrein
LLC in connection with the commercialization of Collaboration Products in the
Field and in the Territory to the extent required to permit Genzyme to perform
its duties under this Agreement.
3.4 Reservation of Rights.
3.4.1 Reservation by Dyax. Notwithstanding the license grants set
forth in Section 3.1, Dyax will at all times reserve the rights under the Dyax
Patent Rights, the Dyax Technology, the Joint Patent Rights, the Joint
Technology and the Manufacturing Know-How owned or controlled by Dyax (a) to
make, have made and use Collaboration Products for research and development
purposes only, (b) to develop, make, have made, use, offer for sale, sell, have
sold, import and export products outside the Field and (c) to grant licenses to
Third Parties for the foregoing purposes.
3.4.2 Reservation by Genzyme. Notwithstanding the license grants set
forth in Section 3.1, Genzyme will at all times reserve the rights under the
Genzyme Patent Rights, the Genzyme Technology, the Joint Patent Rights, the
Joint Technology and Manufacturing Know-How owned or controlled by Genzyme (a)
to make, have made and use Collaboration Products for research and development
purposes only, (b) to develop, make, have made, use, offer for sale, sell, have
sold, import and export products outside the Field and (c) to grant licenses to
Third Parties for the foregoing purposes.
3.5 Assignment of Orphan Drug Designation. Except to the extent prohibited
by the Regulatory Scheme, the Parties agree to assign to Kallikrein LLC on the
LLC Formation Date any "Orphan Drug" designations for any Collaboration Product
which Dyax or Genzyme may receive during the term of this Agreement.
ARTICLE 4 PROGRAM FUNDING; LLC INTEREST
4.1 Initial Funding Commitment. Dyax hereby undertakes to fund the first
six million dollars ($6,000,000) in Program Costs (the "Initial Funding
Commitment"). At a time mutually agreed upon by the Parties, but in no event
later than the satisfaction by Dyax of the Initial Funding Commitment, Dyax will
form Kallikrein LLC in accordance with the provisions of Section 2.1.
4.2 Program Funding Capital Contributions.
4.2.1 General. Following satisfaction of the Initial Funding
Commitment, Genzyme and Dyax each undertakes to make capital contributions to
Kallikrein LLC in an amount equal to fifty percent (50%) of all Program Costs.
In the event that either Dyax, on behalf of the Dyax Companies, or Genzyme fails
to make a capital contribution to Kallikrein LLC as required by this Section
4.2.1, and the other Party does not elect to terminate this Agreement pursuant
to Section 13.2.1 hereof, then the Percentage Interests in Kallikrein LLC and
the future funding responsibility of the Members shall be adjusted as provided
in Section 4.1(b) of the Operating Agreement.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
4.2.2 Initial Capital Contributions. Within five (5) working days
after the LLC Formation Date, Dyax and Genzyme shall each make a capital
contribution to Kallikrein LLC in an amount equal to one-half of the Program
Costs budgeted to be incurred by Kallikrein LLC from the LLC Formation Date
through and including the end of the next calendar month after the LLC Formation
Date, less any amounts required to be funded solely by Dyax pursuant to the
Initial Funding Commitment.
4.2.3 Monthly Capital Contributions. With respect to each calendar
month thereafter, Genzyme and Dyax, on behalf of the Dyax Companies, shall each
make capital contributions to Kallikrein LLC, monthly in advance, not later than
the fifteenth (15th) day of the prior calendar month, in an aggregate amount
equal to one-third of the Program Costs budgeted to be incurred by Kallikrein
LLC in any then-current Development Plan or Commercialization Plan for the
calendar quarter in which such calendar month occurs, allocated between such
Parties in accordance with the funding responsibility assumed by Genzyme and
Dyax, on behalf of the Dyax Companies, pursuant to Sections 4.1 and 4.2.1 above.
Upon receipt of each such capital contribution from Genzyme or Dyax, as the case
may be, Kallikrein LLC shall promptly pay each of the Parties an amount equal to
that portion of the budgeted Program Costs to which they are respectively
entitled.
4.2.4 Quarterly Statements; Quarterly Reconciliation. Within thirty
(30) days after the end of each of the first three (3) calendar quarters of each
year and within sixty (60) days after the end of each calendar year, each of
Dyax and Genzyme shall provide Kallikrein LLC with a detailed itemization of its
Program Costs actually incurred during the previous quarter. Each of Dyax and
Genzyme shall provide the other Party with estimates of such costs upon the
reasonable request of the other Party prior to the dates such statements are
due. Within thirty (30) days following receipt of the quarterly statement of
actual Program Costs provided by each of Dyax and Genzyme, Dyax, on behalf of
the Dyax Companies, and Genzyme shall each make an additional capital
contribution to Kallikrein LLC in the amount of any actual Program Costs shown
thereon and not yet paid for which such Party has assumed funding responsibility
pursuant to Section 4.2 above but only to the extent that such amount, together
with all prior capital contributions to date during such year, does not exceed
************* of the total Program Costs budgeted year-to-date through the end
of the quarter to which such statement relates (except to the extent such excess
is approved by the Steering Committee pursuant to Section 5.1.3 hereof). If the
aggregate amount stated to be due from Kallikrein LLC in such quarterly
statements for actual Program Costs is less than the amount already contributed
by the Parties to the capital of Kallikrein LLC with respect to budgeted Program
Costs for such calendar quarter, such excess shall be credited pro rata against
the next successive monthly capital contribution due from Genzyme or Dyax
hereunder.
4.3 Distributions. Distributions shall be made quarterly to each Member in
amounts determined in accordance with the Operating Agreement. Amounts available
for distribution shall be calculated for each calendar quarter after the date of
the first sale of a Collaboration Product following Regulatory Approval of such
Collaboration Product and shall be reported to each of Dyax and Genzyme within
ninety (90) days following the end of each such quarter. All distributions to
the Parties will be accompanied by a report setting forth the basis for such
distribution. Such reports shall be subject to audit rights as set forth in
Section 4.5 below, mutatis mutandis.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
4.4 Sale and Purchase of LLC Interest. Immediately after the assignment by
Dyax of one percent (1%) of its interest in Kallikrein LLC to Subsidiary, in
accordance with the terms and conditions of the Purchase Agreement, Dyax shall
sell, assign and transfer to Genzyme, and Genzyme shall purchase from Dyax, a
fifty percent (50%) interest in Kallikrein LLC (subject to adjustment pursuant
to Section 4.2.1 hereof and pursuant to the Operating Agreement) for an
aggregate amount of *************:
(a) *************;
(b) *************;
(c) *************.
************* payments shall be made in United States dollars by certified or
bank check or by wire transfer *************.
4.5 Books of Account; Audit. Genzyme shall keep and maintain proper and
complete books of account, and shall maintain a bank account, on behalf of
Kallikrein LLC. Dyax shall have reasonable access to such books of account and
bank records upon reasonable prior notice to Genzyme. In the event that either
Dyax or Genzyme reasonably deems the Program to be material to Dyax or Genzyme,
as the case may be, for financial accounting purposes, then, upon such Party's
request, audited financial statements of Kallikrein LLC shall be prepared by an
independent accounting firm to be selected by the Steering Committee. Each of
Dyax and Genzyme shall keep and maintain proper and complete records and books
of account documenting all Program Costs incurred by it. Each of Kallikrein LLC,
Dyax and Genzyme shall permit independent accountants retained by the other
Parties to have access to its records and books for the sole purpose of
determining the appropriateness of Program Costs charged by the non-auditing
Party hereunder. Such examination shall be conducted during regular business
hours and upon reasonable notice, at the auditing Party's own expense and no
more than once in each calendar year during the term of this Agreement and once
during the three (3) calendar years following the termination hereof. If such
examination reveals that such Program Costs have been misstated, any adjustment
shall be promptly refunded or paid, as appropriate. The auditing Party shall pay
the fees and expenses of the accountant engaged to perform the audit, unless
such audit reveals an overcharge of ************* or more for the period
examined, in which case the Party who received such overpayment shall pay all
reasonable costs and expenses incurred by the auditing Party in the course of
making such determination, including the fees and expenses of the accountant.
4.6 Enforceability of Sections 4.1 and 4.2. The agreements regarding
funding commitments and capital contributions set forth in Sections 4.1 and 4.2
hereof are by and between, and for the benefit of, Genzyme and Dyax only, and
are not enforceable by Kallikrein LLC or any Third Party.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
ARTICLE 5 THE DEVELOPMENT PROGRAM
5.1 Conduct of the Development Program.
5.1.1 General. The Parties each agree to collaborate diligently in
the development of Collaboration Products in the Field and to use commercially
reasonable and diligent efforts to develop, obtain Regulatory Approvals for and
bring to market Collaboration Products in the Field and in the Territory as soon
as practicable, all in accordance with the Development Plan and the
Commercialization Plan for such Collaboration Products. The Parties agree to
execute and substantially perform and to cooperate with each other in carrying
out the Development Plan and the Commercialization Plan for each Collaboration
Product. Neither Dyax nor Genzyme shall be required to undertake activities in
furtherance of the Development Plan or Commercialization Plan in the absence of
funding pursuant to the provisions of this Agreement. As used in this Agreement,
the term "commercially reasonable and diligent efforts" will mean that level of
effort which, consistent with the exercise of prudent scientific and business
judgment, is applied by the Party in question to its other therapeutic products
at a similar stage of development and with similar commercial potential.
5.1.2 Development Plan. Prior to the LLC Formation Date, the
Development Program shall be conducted by Dyax under a Development Plan which
shall describe the proposed overall program of development for each
Collaboration Product, including preclinical studies, toxicology, formulation,
clinical trials and regulatory plans and other key elements necessary to obtain
Regulatory Approvals for such Collaboration Product. Following the LLC Formation
Date, the Development Program shall be conducted by Genzyme and Dyax on behalf
of Kallikrein LLC under the Development Plan in effect as of such date. Pursuant
to the applicable Development Plan, development work may be subcontracted by
Dyax to Genzyme, or by Kallikrein LLC to Genzyme and Dyax, as applicable, at
fully absorbed costs determined by GAAP. The respective charges to Dyax or
Kallikrein LLC, as the case may be, shall be invoiced following completion of
the work, and shall be payable by Dyax or Kallikrein LLC, as applicable, within
a commercially reasonable time thereafter *************. The Development Plan
shall include a summary of estimated Development Costs expected during the
development process through obtaining such Regulatory Approvals and a detailed
description of and budget for all development activities proposed for each
calendar year for each Collaboration Product.
5.1.3 Initial and Updated Development Plan. The Parties have agreed
to a preliminary Development Plan and initial budget for the Program for the
period beginning on the Effective Date and ending on December 31, 1998. The
Program Management Team shall submit an updated Development Plan and budget for
the period beginning on the Effective Date and ending on December 31, 1999 to
the Steering Committee for approval no later than December 1, 1998. The
Development Plan shall be updated annually by the Program Management Team and
submitted to the Steering Committee for review and approval not later than sixty
(60) days prior to January 1 of each year during the Development Program. Each
such updated Development Plan shall include (a) an overall development plan for
each Collaboration Product which sets forth all major development tasks
remaining to be accomplished prior to submission of filings for Regulatory
Approvals and (b) a detailed description and budget for the development and
pre-commercialization activities proposed for the forthcoming calendar year. The
Project Management Team shall be primarily responsible for preparing the annual
updates to the Development Plan and, in connection with the preparation of such
updates, shall consult with
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Genzyme and Dyax regarding the identification, timing and execution of and
budget for the major tasks and detailed activities required to perform the
updated Development Plan. Each such updated Development Plan approved by the
Steering Committee shall be signed by an authorized representative of each of
Dyax and Genzyme. The members of the Program Management Team shall actively
consult with one another throughout the term of the Development Plan so as to
adjust the specific work performed under the Development Plan to conform to
evolving developments in technology and the results of the development work
performed. While minor adjustments to the Development Plan may be made from time
to time upon approval of the Program Management Team, significant changes in the
scope or direction of the work and any changes in funding exceeding
************* of the total amount budgeted in any calendar year for the
Development Program must be approved by the Steering Committee, in the absence
of which approval the most recently approved Development Plan shall remain in
effect.
5.1.4 Execution and Performance. The Development Program shall
allocate among the Parties responsibility for each of the activities described
therein. The Parties shall use commercially reasonable and diligent efforts to
conduct the activities described in the Development Plan. The Development Plan
shall be supervised by the Program Management Team. The Program Management Team
will coordinate preclinical and clinical testing of the Collaboration Products
and work with designated individuals at Dyax and Genzyme in the preparation of
Regulatory Approval filings for the Collaboration Products.
5.1.5 Attendance at Regulatory Meetings. Each Party shall provide
the others with prior notice of all meetings and teleconferences between
representatives of the notifying Party and regulatory authorities regarding any
Collaboration Product. Except as otherwise provided herein, the Party receiving
such notice shall have the right to have representatives participate in all such
meetings and teleconferences. Each Party shall keep a reasonably detailed record
of each contact between such Party and all regulatory authorities regarding any
Collaboration Product and deliver a copy of such record to the other Party
within three (3) business days of such contact.
5.2 Development Information.
5.2.1 Ownership of Pre-Clinical and Clinical Data. The Parties shall
jointly own all pre-clinical and clinical trial data generated as part of the
Program or otherwise funded or partially funded by the Parties. Upon the
formation of Kallikrein LLC, the Parties shall assign their respective interests
in such data to Kallikrein LLC and Kallikrein LLC shall thereafter own such
data.
5.2.2 Reports and Information Exchange. Each of Dyax and Genzyme
shall use commercially reasonable and diligent efforts to disclose to the other
Party and, if applicable, Kallikrein LLC, all material information relating to
any Collaboration Product promptly after it is learned or its materiality is
appreciated. The Party performing or supervising clinical trials of
Collaboration Products in accordance with the Development Plan shall, on behalf
and in the name of the owner of the clinical trial data accumulated from all
clinical trials of Collaboration Products, maintain the database of such data
and of adverse reaction information for all such Collaboration Products. Each
Party shall also keep the Program Management Team informed as to its progress in
the Development Plan. Within sixty (60) days following the end of each calendar
quarter during the Development Program, each of Dyax and Genzyme shall provide
the
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other Parties with a reasonably detailed written report describing the progress
to date of all activities for which such Party was allocated responsibility
during such quarter under the Development Plan.
5.2.3 Adverse Reaction Reporting. Each of Dyax and Genzyme shall
notify the other Parties of any adverse reaction information relating to any
Collaboration Product within twenty-four (24) hours of the receipt of such
information and as necessary for compliance with regulatory requirements.
"Adverse reaction information" includes without limitation information relating
to any experience that (a) suggests a significant hazard, contraindication, side
effect or precaution, (b) is fatal or life threatening, (c) is permanently
disabling, (d) requires or prolongs inpatient hospitalization, (e) involves a
congenital anomaly, cancer or overdose or (f) is one not identified in nature,
specificity, severity or frequency in the current investigator brochure or the
United States labeling for the Collaboration Product.
5.2.4 Clinical and Regulatory Audits. Each of Dyax and Genzyme shall
permit Kallikrein LLC and the other Party, or the representatives of Kallikrein
LLC or the other Party, to have access during regular business hours and upon
reasonable advance notice, at the auditing Party's own expense and no more than
once in each calendar year during the term of this Agreement, to the
non-auditing Party's records and facilities relating to the Development Program
for the purpose of monitoring compliance with Good Clinical Practice and other
applicable requirements of the Regulatory Scheme.
5.3 Regulatory Approval Filings. Regulatory Approval filings in the
Territory for the Collaboration Products and for the facilities used to
manufacture such Collaboration Products shall be filed in the name of an entity
determined by the Steering Committee. The entity in whose name such Regulatory
Approval filings are filed shall give each of the Parties a right of reference
in such filings if such right is not prohibited under the applicable Regulatory
Scheme. Prior to submission to the FDA, the Parties, through the Program
Management Team, shall consult, cooperate in preparing and mutually agree on the
content and scope of the Regulatory Approval filings. In the event that
Regulatory Approvals are required to be filed in the name of an entity other
than Dyax, Genzyme or Kallikrein LLC, the Steering Committee shall ensure that a
duly authorized officer of such entity agrees in writing that (a) such entity
shall hold the licenses issued in respect of such Regulatory Approval filings,
maintain control over the manufacturing facilities, equipment and personnel, and
engage in pharmacovigilence to the extent required by the Regulatory Scheme, (b)
such entity shall maintain compliance with applicable Regulatory Schemes, (c)
such entity shall provide manufacturing and supply services at the Fully
Absorbed Cost of Goods of Collaboration Products so manufactured and supplied,
(d) the Parties shall have an irrevocable right of access and reference to such
Regulatory Approval filings, licenses and facilities and (e) such entity agrees
to comply with the provisions of Article 13 hereof with respect to the ownership
and/or disposition of such Regulatory Approvals in the event this Agreement is
terminated and to provide the level of cooperation described in Section 14.1
hereof in connection therewith.
5.4 Facilities Visits. Representatives of Dyax and Genzyme may visit all
manufacturing sites and the sites of any clinical trials or other experiments
being conducted by the other Party, Kallikrein LLC or a Third Party in
connection with the Development Program. If requested by the other Party, Dyax
and Genzyme shall cause appropriate individuals working on the Development
Program to be available for meetings at the location of the facilities where
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
such individuals are employed at times reasonably convenient to the Party
responding to such request.
ARTICLE 6 SALES, MARKETING AND ADMINISTRATIVE SERVICES
6.1 Commercialization Plans.
6.1.1 General. The commercialization of each Collaboration Product
shall be governed by a Commercialization Plan which shall describe the overall
plan for commercializing such Collaboration Product, including without
limitation (a) a comprehensive marketing, sales, pricing, manufacturing,
distribution and licensing strategy for such Collaboration Product in all
applicable countries, including the identification of any Third Parties engaged
or to be engaged in connection with such activities and the arrangements with
them that have been or are proposed to be agreed upon (including policies and
procedures for adjustments, rebates, bundling and the like), (b) estimated
launch date, market and sales forecasts, in numbers of patients and local
currency, and competitive analysis for such Collaboration Product, (c) a
detailed budget for the Commercialization Costs to be incurred in connection
with performing such Commercialization Plan, (d) reasonable due diligence
obligations to be met by Genzyme with respect to commercialization objectives to
be achieved during the calendar year to which the Commercialization Plan relates
(such as minimum annual sales objectives) and (e) a detailed manufacturing plan.
6.1.2 Initial and Updated Commercialization Plans. No later than
immediately prior to the completion of the submission of all Regulatory Approval
filings for a Collaboration Product in any given country, Genzyme shall develop
and submit to the Steering Committee for review and approval an initial
Commercialization Plan in accordance with its customary standard for a product
of comparable market potential, taking into consideration factors such as market
conditions, regulatory factors, competition and the costs and profits of such
Collaboration Product. Genzyme shall be primarily responsible for developing
each Commercialization Plan and, in connection therewith, shall consult with
Dyax regarding the identification, timing and execution of and budget for the
major commercialization tasks required to perform the Commercialization Plan.
Each Commercialization Plan shall be updated annually by Genzyme, in
consultation with Dyax below as herein provided, and shall be submitted to the
Steering Committee for approval not later than sixty (60) days prior to January
1 of each year. Each Commercialization Plan approved by the Steering Committee
shall be signed by an authorized representative of each of Dyax and Genzyme.
While minor adjustments to the Commercialization Plan may be made from time to
time without Steering Committee approval, significant changes in the scope or
direction of the work and any changes in funding exceeding ************* of the
total amount budgeted in any calendar year for the Commercialization Plan must
be approved by the Steering Committee, and in the absence of such approval, the
provisions of the most recently approved Commercialization Plan shall remain in
effect. Within sixty (60) days following the end of each calendar quarter after
the filing of the first application for a Regulatory Approval (other than an
application for "orphan drug" designation of a Collaboration Product), each of
Dyax and Genzyme shall provide the other Parties with a reasonably detailed
written report describing the progress to date of all activities for which such
Party was allocated responsibility during such quarter under the
Commercialization Plan, including, if reasonably available, sales information
for each Collaboration Product on a country-by-country basis.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
6.2 Exclusive Engagement. Kallikrein LLC will engage Genzyme on an
exclusive basis to market and sell Collaboration Products within the Territory
for use within the Field. Genzyme will (by itself or through its Affiliates) use
commercially reasonable and diligent efforts to establish each Collaboration
Product in the markets, fulfill market demand and meet the marketing and
distribution goals set forth in the Commercialization Plan for such
Collaboration Product.
6.3 Orders. Genzyme shall provide written notice to Kallikrein LLC of its
requirements for the Collaboration Products, setting forth the quantity of
Collaboration Products required, any specifications therefor and the date
required. Kallikrein LLC, on the date set forth in the applicable requirements
notice, shall deliver the Collaboration Products to Genzyme for sale within the
Territory. All freight, insurance, duties and all other charges associated with
shipment of the Collaboration Products shall be considered Commercialization
Costs for such Collaboration Products only to the extent such costs are not
charged to Genzyme's customers.
6.4 Marketing and Distribution Expenses. Genzyme's ordinary expenses
incurred in the course of performing its marketing and distribution obligations
hereunder shall constitute Commercialization Costs budgeted as part of the
then-effective Commercialization Plan and, as such, shall be reimbursed by Dyax
prior to the satisfaction by Dyax of the Initial Funding Commitment and by
Kallikrein LLC after the satisfaction by Dyax of the Initial Funding Commitment,
but only to the extent that such amounts, together with all other
Commercialization Costs to date during such calendar year, do not exceed
************* of the Commercialization Costs budgeted in the Commercialization
Plan then in effect for such calendar year (except to the extent such excess is
approved by the Steering Committee pursuant to Section 6.1.2 above). Ordinary
marketing and distribution expenses include, but are not limited to, recruitment
costs and salaries and associated expenses for sales and marketing personnel and
support staff, advertising and promotion costs, transportation expenses
including insurance (but only to the extent not charged to customers and only
such proportion of all such costs directly attributable to support of the
Commercialization Plan), duties and taxes, bad debt expense, and costs
associated with cash and other trade discounts and allowances and other
marketing concessions to customers actually allowed and taken.
6.5 Responsibilities of Genzyme. Genzyme shall be solely responsible for
all aspects of the marketing of the Collaboration Products in accordance with
the strategy, policies and procedures established in the Commercialization Plan,
including without limitation the responsibilities described in this Section 6.5.
(a) Genzyme shall be primarily responsible for the
implementation of each Commercialization Plan, including without limitation
setting all terms of sale, including establishing pricing policies, credit terms
and cash discounts and allowances, formulating marketing plans, negotiating
agreements with Third Party distributors (if any), providing patient
information, providing customer support services, providing reimbursement
counseling services and sales force training.
(b) Genzyme shall employ sufficiently trained and experienced
individuals in numbers adequate to carry out its responsibilities under this
Article 6. Sales and support personnel shall be familiar with the Collaboration
Products and with competitive products and shall respond promptly to customer
requests for support.
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(c) Genzyme shall provide instructions and appropriate
training to customers in the proper use and handling of the Collaboration
Products and shall monitor performance of the Collaboration Products.
(d) Genzyme shall have sole responsibility for responding to
all requests for medical information regarding Collaboration Products.
(e) Genzyme shall comply with all laws and government
regulations applicable to the sale of Collaboration Products within the
Territory.
(f) The Collaboration Products shall be sold under trademarks
selected by the Steering Committee and owned by or licensed to Kallikrein LLC in
accordance with Section 9.1.2 hereof.
(g) Genzyme shall maintain complete and accurate records of
all movements and transactions involving Collaboration Products by an
appropriate identifier and by customer so that all such movements and
transactions can be traced quickly and effectively. Upon written request,
Genzyme will provide copies of such records to the other Parties, with access to
facilities used by Genzyme in performing its duties under this Article 6 during
normal business hours and upon reasonable advance notice for the purpose of
inspecting such facilities for compliance with the terms of this Agreement. The
records maintained by Genzyme pursuant to this clause (g) shall be subject to
the other Parties' audit rights under Section 4.5 hereof.
(h) Genzyme shall report to the Steering Committee in writing
the occurrence of each material incident of Collaboration Product performance
required to be reported to regulatory authorities, including without limitation
adverse reaction information in accordance with Section 5.2.3 hereof, within
three (3) business days of the happening of such occurrence.
6.6 Responsibilities of Kallikrein LLC and Dyax. Kallikrein LLC shall
supply Collaboration Products to Genzyme in accordance with notices of
requirements pursuant to Section 6.3 above. Neither Kallikrein LLC nor Dyax
shall actively solicit for its own account sales of Collaboration Products in
the Territory. Any solicitations or requests to purchase Collaboration Products
received by Kallikrein LLC or Dyax from any customer or prospective customer
with its principal address or place of business located in the Territory or who
Kallikrein LLC or Dyax, as the case may be, knows intends to use the
Collaboration Products in the Territory or ship such Collaboration Products into
the Territory shall be immediately referred to Genzyme.
6.7 General and Administrative Services. General and administrative
services required by Kallikrein LLC shall be provided at cost by either or both
of Dyax and Genzyme as determined by the Steering Committee. All such costs, in
addition to general and administrative costs payable to Third Parties (such as
accountants) and general and administrative costs incurred by Dyax and Genzyme
in satisfying their respective obligations under this Agreement, shall be
considered to be Program Costs.
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ARTICLE 7 MANUFACTURE AND SUPPLY
Subject to the terms and conditions of this Agreement, Collaboration
Products shall be manufactured and supplied for preclinical and clinical testing
and for commercial sale upon the following terms and conditions:
7.1 Process Development. The Parties will use commercially reasonable and
diligent efforts to develop a process for the manufacture of each Collaboration
Product and to scale up that process to a scale sufficient to manufacture and
supply (a) the anticipated demand for preclinical studies and clinical trials of
such Collaboration Product in accordance with the projections set forth in the
Development Plan and (b) the anticipated market demand for such Collaboration
Product at the time Regulatory Approval is obtained for such Collaboration
Product in accordance with the projections set forth in the Commercialization
Plan for such Collaboration Product. The development of the process for the
manufacture of Collaboration Products as well as the scale up of such process
and all material issues incident to the development of the ability to produce
Collaboration Products for commercial purposes in sufficient quantity and in a
timely manner will be within the purview of the Program Management Team. The
Parties will use commercially reasonable and diligent efforts, and will cause
any approved Third Party supplier, to make filings necessary to obtain approval
of any license application for a manufacturing facility which may be required as
part of any Regulatory Approval for the first Collaboration Product.
7.2 Manufacture and Supply of Collaboration Products for Clinical Trials.
Dyax will use commercially reasonable and diligent efforts to manufacture and
supply, or to have manufactured and supplied, Collaboration Products for
preclinical studies and clinical trials in quantities and within a time period
sufficient to conduct the activities set forth in the Development Plan. The
Fully Absorbed Cost of Goods for such Collaboration Products shall be deemed
Development Costs and reimbursed in accordance with the terms of this Agreement.
7.3 Manufacture and Supply of Collaboration Products for Commercial Sale.
Kallikrein LLC shall, as determined by the Steering Committee, designate one of
the Parties (the "Manufacturing Party") to manufacture and supply Collaboration
Products (or cause Collaboration Products to be manufactured or supplied) for
commercial sale pursuant to a supply agreement entered into by Kallikrein LLC
and the Manufacturing Party (a "Supply Agreement"). The terms of each Supply
Agreement shall include, without limitation, the terms and conditions set forth
below.
7.3.1 General. Kallikrein LLC shall use commercially reasonable and
diligent efforts to manufacture and supply Collaboration Products to meet market
demand for Collaboration Products ordered in accordance with the terms hereof.
The Manufacturing Party shall be entitled to charge Kallikrein LLC an amount
equal to its Fully Absorbed Cost of Goods for such Collaboration Products. The
costs of any failed or discarded lots shall be borne by the Manufacturing Party
and shall not be considered Program Costs. The Manufacturing Party may
subcontract with Genzyme, Dyax or Third Parties for the manufacture or packaging
of Collaboration Products, as determined by the Steering Committee.
Notwithstanding the foregoing provisions of this Section 7.3.1, to the extent
required by the Regulatory Scheme, any entity selected by the Steering Committee
pursuant to Section 5.3 above may be engaged by Kallikrein LLC to manufacture
Collaboration Products. The respective charges to Kallikrein
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
LLC shall be invoiced following completion of the work, and shall be payable by
Kallikrein LLC within a commercially reasonable time thereafter *************.
7.3.2 Forecasts. The Program Management Team shall establish a
procedure for providing forecasts of customer orders for Collaboration Products
pursuant to Section 6.3 above, updating such forecasts and ordering
Collaboration Product, in each case within time periods sufficient to enable
Kallikrein LLC to manufacture such Collaboration Products to meet such forecasts
in a commercially reasonable and diligent manner.
7.4 Certificates of Analysis. The Manufacturing Party selected pursuant to
Section 7.3 above shall perform, or cause its contract manufacturer(s) to
perform, quality assurance and control tests on each lot of Collaboration
Products before delivery and shall prepare, or cause its contract
manufacturer(s) to prepare and deliver, a written report of the results of such
tests (for purposes of Sections 7.4, 7.5 and 7.6, such contract manufacturer(s)
shall be included in the definition of the term "Manufacturing Party"). Each
test report shall set forth for each lot delivered the items tested,
specifications and results in a certificate of analysis containing the types of
information which shall have been approved by the Program Management Team or
required by the FDA or other applicable regulatory authority. The Manufacturing
Party shall maintain such certificates for a period of not less than five (5)
years from the date of manufacture and for so long as required under applicable
requirements of the FDA or other applicable regulatory authority.
7.5 Certificates of Manufacturing Compliance. The Manufacturing Party
shall prepare, or cause its contract manufacturer(s) to prepare and deliver, and
maintain for a period of not less than five (5) years and for so long as
required under applicable requirements of the FDA or other applicable regulatory
authority for each lot of Collaboration Products manufactured a certificate of
manufacturing compliance containing the types of information which shall have
been approved by the Program Management Team or required by the FDA or other
applicable regulatory authority, which certificate will certify that the lot of
Collaboration Products was manufactured in accordance with the Specifications
and the Good Manufacturing Practices of the FDA or other applicable regulatory
authority as the same may be amended from time to time. The Manufacturing Party
shall advise the other Parties immediately if an authorized agent of the FDA or
other regulatory authority visits any of the Manufacturing Party's manufacturing
facilities, or the facilities where the Collaboration Products are being
manufactured, for an inspection with respect to the Collaboration Products. The
Manufacturing Party shall furnish to the other Parties the report by such agency
of such visit, to the extent that such report relates to Collaboration Products,
within ten (10) business days of the Manufacturing Party's receipt of such
report, and the other Parties shall have the right to comment on any response by
the Manufacturing Party to such inspecting agency.
7.6 Access to Facilities. Each Party shall have the right to inspect those
portions of the manufacturing, finish processing or storage facilities and
testing labs of the Manufacturing Party where Collaboration Products are being
manufactured, finished, stored or tested, or any subcontractor who is
manufacturing, finishing, storing or testing Collaboration Products for the
Manufacturing Party, at any time during regular business hours and upon
reasonable advance notice to ascertain compliance with the Good Manufacturing
Practices of the FDA or other applicable regulatory authority, as the same may
be amended from time to time. Any confidential information disclosed to or
otherwise gathered by the Party conducting such
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inspection during any such inspection shall be deemed "Information" as defined
in Section 10.1 below.
ARTICLE 8 MANAGEMENT
8.1 Program Management Team.
8.1.1 General. The Parties have established a Program Management
Team to oversee and control development of Collaboration Products and to prepare
for and oversee the launch of Collaboration Products. The Program Management
Team shall be composed of not more than three (3) representatives appointed by
Dyax and three (3) representatives appointed by Genzyme. Such representatives
will include individuals with expertise and responsibilities in such areas as
preclinical development, clinical development, manufacturing, regulatory
affairs, marketing, sales management and reimbursement. The Program Management
Team shall meet as needed, but not less than monthly unless the Parties mutually
agree otherwise. The Program Management Team shall appoint one of its members to
act as Secretary. Such meetings shall be at times and places or in such form
(e.g., telephone or video conference) as the members of the Program Management
Team shall agree. A Party may change one or more of its representatives to the
Program Management Team at any time. Members of the Program Management Team may
be represented at any meeting by another member of the Program Management Team
or by a deputy. Any approval, determination or other action agreed to by a
majority of the members of the Program Management Team appointed by each of Dyax
and Genzyme or their deputies present at the relevant Team meeting shall be the
approval, determination or other action of the Program Management Team, provided
at least two (2) representatives of each of Dyax and Genzyme are present at such
meeting. Representatives of either Dyax and Genzyme who are not members of the
Program Management Team may attend meetings of the Program Management Team as
agreed to by the representative members of the other Party. The Program
Management Team may designate project leaders to the extent it deems it
necessary or advisable.
8.1.2 Development Program Functions. During the term of the
Development Program, the Program Management Team shall coordinate, expedite and
control the development of Collaboration Products to obtain Regulatory
Approvals. The Program Management Team will (a) develop and recommend to the
Steering Committee Development Plans (including annual development budgets), (b)
facilitate the flow of information with respect to development work being
conducted for each Collaboration Product throughout the Territory and (c)
discuss and cooperate regarding the conduct of such development work.
8.1.3 Commercialization Functions. Following submission of filings
for Regulatory Approvals for the first Collaboration Product, the functions of
the Program Management Team shall be expanded to include: (a) monitoring the
commercialization of Collaboration Products pursuant to the Commercialization
Plan, including oversight of planning, annual budgeting, manufacturing,
marketing, sales and distribution, and licensing of Collaboration Products; (b)
monitoring actual expenses incurred in the manufacture, marketing, sale and
distribution of Collaboration Products; (c) overseeing any post-marketing
studies of a Collaboration Product and (d) facilitating cooperation regarding
the commercialization and marketing activities of the Parties. In addition,
following the formation of Kallikrein LLC, the Program Management Team shall
function as the operational staff of Kallikrein LLC.
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8.1.4 Minutes. The Program Management Team shall keep accurate
minutes of its deliberations which shall record all proposed decisions and all
actions recommended or taken. The Secretary shall be responsible for the
preparation of draft minutes. Draft minutes shall be sent to all members of the
Program Management Team within five (5) working days after each meeting and
shall be approved, if appropriate, at the next meeting. All records of the
Program Management Team shall at all times be available to all of the Parties.
8.2 Steering Committee.
8.2.1 General. The Parties have established a Steering Committee to
oversee and manage the collaboration contemplated by this Agreement. The
Steering Committee is and shall continue to be composed of three (3)
representatives appointed by Dyax and three (3) representatives appointed by
Genzyme. Such representatives will be senior officers and/or managers of their
respective companies. Genzyme and Dyax shall each designate one (1) of their
respective representatives on the Steering Committee to act as Co-Chairman. The
Steering Committee shall appoint one (1) of its members to act as Secretary. The
Steering Committee will meet as needed but not less than once each calendar
quarter. Such meetings shall be at times and places or in such form (e.g.,
telephone or video conference) as the members of the Steering Committee shall
agree. A Party may change one or more of its representatives to the Steering
Committee at any time. Members of the Steering Committee may be represented at
any meeting by another member of the Steering Committee or by a deputy. Any
approval, determination or other action agreed to by unanimous consent of the
members of the Steering Committee or their deputies present at the relevant
Steering Committee meeting shall be the approval, determination or other action
of the Steering Committee, provided at least two (2) representatives of each of
Dyax and Genzyme are present at such meeting. Representatives of either Dyax and
Genzyme who are not members of the Steering Committee may attend meetings of the
Steering Committee as agreed to by the representative members of the other
Party.
8.2.2 Functions. The Steering Committee shall perform the following
functions: (a) determine the overall strategy for the Program in the manner
contemplated by this Agreement; (b) coordinate the activities of the Parties
hereunder; (c) settle disputes or disagreements that are unresolved by the
Program Management Team; (d) approve any agreements with Third Parties regarding
a Collaboration Product or which involve the grant of any rights related to the
development, manufacture or marketing of a Collaboration Product; (e) review and
approve each Development Plan, including each significant change and annual
update thereto, submitted to it pursuant to Section 5.1.3 hereof; (f) review and
approve each Commercialization Plan, including each significant change and
annual update thereto, submitted to it for approval pursuant to Section 6.1.2
hereof; (g) following the formation of Kallikrein LLC, serve as the governing
body of Kallikrein LLC; and (h) perform such other functions as appropriate to
further the purposes of this Agreement as determined by the Parties.
8.2.3 Minutes. The Steering Committee shall keep accurate minutes of
its deliberations which shall record all proposed decisions and all actions
recommended or taken. The Secretary shall be responsible for the preparation of
draft minutes. Draft minutes shall be sent to all members of the Steering
Committee within ten (10) working days after each meeting and shall be approved,
if appropriate, at the next meeting. All records of the Steering Committee shall
at all times be available to both Dyax and Genzyme.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
8.3 General Disagreements. All disagreements within the Program Management
Team and the Steering Committee shall be subject to the following:
(a) The representatives to the Program Management Team or
Steering Committee will negotiate in good faith for a period of not less than
thirty (30) days to attempt to resolve the dispute. In the case of the Program
Management Team, any unresolved dispute shall be referred to the Steering
Committee for good faith negotiations for an additional period of not less than
thirty (30) days to attempt to resolve the dispute.
(b) In the event that the dispute is not resolved after the
period specified in clause (a), the representatives shall promptly present the
disagreement to the Chief Executive Officers of Dyax and Genzyme or a designee
of such Chief Executive Officer reasonably acceptable to the other Party.
(c) Such executives shall meet or discuss in a telephone or
video conference each of Dyax and Genzyme's views and explain the basis for such
dispute.
(d) If such executives cannot resolve such disagreement within
sixty (60) days after such issue has been referred to them, then such dispute
shall be referred to arbitration as described in Section 14.10 hereof.
ARTICLE 9 INTELLECTUAL PROPERTY RIGHTS
9.1 Ownership. The Parties acknowledge that the ownership rights set forth
herein (a) shall not be affected by the participation in the discovery or
development of an Invention (as defined below) by the Program Management Team or
the Steering Committee in the course of discharging their duties hereunder and
(b) are subject to the license grants set forth in Article 3 above.
9.1.1 Ownership and Assignment of Discoveries and Improvements. All
right, title and interest in all writings, inventions, discoveries, improvements
and other technology, whether or not patentable or copyrightable, and any patent
applications, patents or copyrights based thereon (collectively, the
"Inventions") that are discovered, made or conceived during and in connection
with the Program solely by employees of Dyax or others acting on behalf of Dyax
("Dyax Inventions") shall be owned by Dyax. All right, title and interest in all
Inventions that are discovered, made or conceived during and in connection with
the Program solely by employees of Genzyme or others acting on behalf of Genzyme
("Genzyme Inventions") shall be owned by Genzyme. All right, title and interest
in all Inventions that are discovered, made or conceived during and in
connection with the Program jointly by employees of Dyax and Genzyme ("Joint
Inventions") *************. Each of Dyax and Genzyme shall promptly disclose to
Kallikrein LLC and the other Party the making, conception or reduction to
practice of Inventions by employees or others acting on behalf of such Party.
All Dyax Inventions, Genzyme Inventions and Joint Inventions shall be
automatically licensed to Kallikrein LLC in accordance with the provisions of
Section 3.1 hereof.
9.1.2 Ownership of Trademarks. The Steering Committee shall select
and Kallikrein LLC shall own all trademarks for the sale and use of
Collaboration Products in the Territory, and all expenses thereof shall be
considered Program Costs. All such trademarks shall
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
be registered in the name of Kallikrein LLC if and when registered. In the event
that the applicable laws and regulations of any country in which the Steering
Committee elects to register any such trademark require that such trademark be
registered in the name of an entity other than Kallikrein LLC, or if the
Steering Committee determines that it is in the best interests of the parties,
then the Steering Committee shall select such entity and ensure that a duly
authorized officer of such entity agrees in writing that such entity shall (a)
grant Kallikrein LLC a worldwide, exclusive, fully-paid, royalty-free,
irrevocable (during the term of this Agreement) right and license (with the
right to grant sublicenses) to use such trademark and (b) comply with the
provisions of Article 13 hereof with respect to the ownership and/or disposition
of such trademark in the event this Agreement is terminated and provide the
level of cooperation described in Section 14.1 hereof in connection therewith.
9.1.3 Cooperation of Employees. Each of Dyax and Genzyme represents
and agrees that all employees or others acting on its behalf in performing its
obligations under this Agreement shall be obligated under a binding written
agreement to assign to such Party, or as such Party shall direct, all Inventions
made or conceived by such employee or other person. In the case of non-employees
working for other companies or institutions on behalf of Dyax or Genzyme, Dyax
or Genzyme, as applicable, shall have the right to obtain licenses for all
Inventions made by such non-employees on behalf of Dyax or Genzyme, as
applicable, in accordance with the policies of said company or institution. Dyax
and Genzyme agree to undertake to enforce such agreements (including, where
appropriate, by legal action) considering, among other things, the commercial
value of such Inventions.
9.2 Filing, Prosecution and Maintenance of Patent Rights.
9.2.1 Filing, Prosecution and Maintenance. Each of Dyax and Genzyme
shall be responsible for the filing, prosecution and maintenance of all patent
applications and patents which make up its Patent Rights. *************. For so
long as any of the license grants set forth in Article 3 hereof remain in effect
and upon request of the other Party, each of Dyax and Genzyme agrees to file and
prosecute patent applications and maintain the patents covering the Patent
Rights for which it is responsible in all countries in the Territory selected by
the Steering Committee. Each of Dyax and Genzyme shall consult with and keep the
other fully informed of important issues relating to the preparation and filing
(if time permits), prosecution and maintenance of such patent applications and
patents, and shall furnish to the other Party copies of documents relevant to
such preparation, filing, prosecution or maintenance in sufficient time prior to
filing such document or making any payment due thereunder to allow for review
and comment by the other Party and, to the extent possible in the reasonable
exercise of its discretion, the filing Party shall incorporate all such
comments.
9.2.2 Patent Filing Costs. All costs associated with filing,
prosecuting and maintaining patent applications and patents covering each of
Dyax and Genzyme's Patent Rights and the Joint Patent Rights specific to the
Field in the Territory (including costs relating to patent oppositions,
interferences, reexaminations and reissues) shall be deemed Development Costs;
provided, however, that if the subject matter of any such Patent Rights would
include claims outside the Field, one-half (1/2) of such costs shall be deemed
Development Costs.
9.3 Cooperation. Each of Dyax and Genzyme shall make available to the
other Party (or to the other Party's authorized attorneys, agents or
representatives) its employees, agents or
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consultants to the extent necessary or appropriate to enable the appropriate
Party to file, prosecute and maintain patent applications and resulting patents
with respect to inventions owned by a Party and for periods of time sufficient
for such Party to obtain the assistance it needs from such personnel. Where
appropriate, each of Dyax and Genzyme shall sign or cause to have signed all
documents relating to said patent applications or patents at no charge to the
other Party.
9.4 Notification of Patent Term Restoration. Each of Dyax and Genzyme
shall notify the other Party of (a) the issuance of each United States patent
included within the Patent Rights for which the notifying Party is responsible,
giving the date of issue and patent number for each such patent, and (b) each
notice pertaining to any patent included within the Patent Rights for which the
notifying Party is responsible which it receives as patent owner pursuant to the
Drug Price Competition and Patent Term Restoration Act of 1984, including
notices pursuant to ss.ss.101 and 103 of such Act from persons who have filed an
abbreviated NDA. Such notices shall be given promptly, but in any event within
ten (10) business days after receipt of each such notice pursuant to such Act.
Each of Dyax and Genzyme shall notify the other Party of each filing for patent
term restoration under such Act, any allegations of failure to show due
diligence and all awards of patent term restoration (extensions) with respect to
the Patent Rights for which the notifying Party is responsible.
9.5 No Other Technology Rights. Except as otherwise expressly provided in
this Agreement, under no circumstances shall a Party hereto, as a result of this
Agreement, obtain any ownership interest in or other right to the Patent Rights,
Technology or Manufacturing Know-How of the other Party, including items owned,
controlled or developed by the other Party, or transferred by the other Party to
said Party at any time pursuant to this Agreement. It is understood and agreed
that this Agreement does not grant either Party any license or other right in
the Patent Rights of the other Party for uses other than as specified in Article
3 hereof and this Article 9.
9.6 Enforcement of Patent Rights; Defense of Infringement Actions. Dyax
and Genzyme shall each promptly notify the other in writing of any alleged or
threatened infringement of any patents or patent applications for which it is
responsible pursuant to Section 9.2 above or if either Party, or any of their
respective Affiliates, shall be individually named as a defendant in a legal
proceeding by a Third Party for infringement of a patent because of the
manufacture, use or sale of a Collaboration Product or because of attempts to
invalidate Patent Rights.
9.6.1 First Right to Respond. Each of Dyax and Genzyme shall have
the first right to respond to or defend (in consultation with the Steering
Committee) against such challenge or infringement of the Patent Rights for which
it is responsible pursuant to Section 9.2 above or charge of infringement. Such
right shall be exercised in a diligent and timely manner in order to protect the
rights of the Parties in the Patent Rights. In the event such Party elects to so
respond or defend, the other Party will cooperate with the responding Party's
legal counsel, join in such suits as may be brought by the responding Party to
enforce its Patent Rights, and be available at the responding Party's reasonable
request to be an expert witness or otherwise to assist in such proceedings.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
9.6.2 Sharing of Litigation and Settlement Expenses. The costs
incurred (a) in responding to or defending against a challenge to or
infringement of a Party's Patent Rights specific to the Field or a charge that
the manufacture, use or sale of Collaboration Products infringe upon the Patent
Rights of Third Parties, (b) in settling any such actions, which may not be done
without the prior written consent of the Steering Committee, which consent shall
not be unreasonably withheld or delayed, and (c) as damages paid as a result of
such actions shall be deemed Program Costs.
9.6.3 Second Right to Respond. If a Party does not exercise its
right to respond to or defend against challenges or infringements of its Patent
Rights as provided in Section 9.6.1 above within thirty (30) days of becoming
aware of or being notified of such challenges or infringements, then the other
Party shall have the option to do so at its sole cost; provided that in such
case all amounts so recovered from such Third Party shall be retained by the
Party undertaking such response or defense and the Party so responding shall
have no further obligations to the other Party with respect to the response or
defense thereof.
ARTICLE 10 CONFIDENTIALITY
10.1 Nondisclosure Obligations. Except as otherwise provided in this
Article 10, during the term of this Agreement and for a period of *************
thereafter, the Parties shall, and Dyax shall cause Subsidiary to, maintain in
confidence and use only for purposes specifically authorized under this
Agreement (a) confidential information and data resulting from or related to the
development, commercialization or marketing of Collaboration Products and (b)
all information and data not described in clause (a) but supplied by one Party
to the other under this Agreement or in the course of the Parties' due diligence
investigations prior to the execution of this Agreement and marked or identified
as "Confidential."
For purposes of this Article 10, information and data described in clause
(a) or (b) of the preceding paragraph shall be referred to as "Information." To
the extent it is reasonably necessary or appropriate to fulfill its obligations
or exercise its rights under this Agreement, a Party may disclose Information it
is otherwise obligated under this Section not to disclose to its Affiliates,
sublicensees, employees, consultants, outside contractors and clinical
investigators, on a need-to-know basis and on the condition that such entities
or persons agree to keep the Information confidential for the same time periods
and to substantially the same extent as such Party is required to keep the
Information confidential; and a Party or its sublicensees may disclose such
Information to government or other regulatory authorities to the extent that
such disclosure is reasonably necessary to obtain patents or authorizations to
conduct clinical trials with and to market commercially Collaboration Products.
The obligation not to disclose Information shall not apply to any part of such
Information that: (i) is or becomes patented, published or otherwise becomes
publicly known other than by acts of the Party obligated not to disclose such
Information or its Affiliates or sublicensees in contravention of this
Agreement; (ii) can be shown by written documents to have been disclosed to the
receiving Party or its Affiliates or sublicensees by a Third Party, provided
that such Information was not obtained by such Third Party directly or
indirectly from the other Party under this Agreement; (iii) prior to disclosure
under this Agreement, was already in the possession of the receiving Party or
its Affiliates or sublicensees, provided that such Information was not obtained
directly or indirectly from the other Party under this Agreement; (iv) can be
shown by written documents to have been independently developed by the receiving
Party or its Affiliates without use of the other Party's
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Information or breach of any of the provisions of this Agreement; or (v) is
disclosed by the receiving Party pursuant to a subpoena lawfully issued by a
court or governmental agency, provided that the receiving Party notifies the
other Party immediately upon receipt of any such subpoena.
10.2 Terms of this Agreement; Press Releases. The Parties agree to seek
confidential treatment for any filing of this Agreement with the Securities and
Exchange Commission and shall agree upon the content of the request for
confidential treatment made by each Party in respect of such filing. Except as
permitted by the foregoing provisions or as otherwise required by law, Dyax and
Genzyme each agree not to disclose any terms or conditions of this Agreement to
any Third Party without the prior consent of the other Party. The Parties agree
that all press releases related to the Program shall be issued jointly by Dyax
and Genzyme and that the Party preparing any such press release shall provide
the other Party with a draft thereof reasonably in advance of disclosure so as
to permit the other Party to review and comment on such press release.
10.3 Publications. Each Party recognizes the mutual interest in obtaining
valid patent protection. Consequently, any Party, its employees or consultants
wishing to make a publication (including any oral disclosure made without
obligation of confidentiality) relating to work performed by such Party as part
of the Program (the "Publishing Party") shall transmit to a representative of
the other Party (the "Reviewing Party") on the Program Management Team a copy of
the proposed written publication at least thirty (30) days prior to submission
for publication, or an abstract of such oral disclosure at least ten (10) days
prior to submission of the abstract or the oral disclosure, whichever is
earlier. The Reviewing Party shall have the right to (a) request a delay in
publication or presentation in order to protect patentable information, (b)
propose modifications to the publication for patent reasons or (c) request that
the information be maintained as a trade secret.
If the Reviewing Party requests a delay as described in clause (a) above,
the Publishing Party shall delay submission or presentation of the publication
for a period ************* to enable patent applications protecting each Party's
rights in such information to be filed. Upon the expiration of thirty (30) days,
in the case of proposed written disclosures, or ten (10) days, in the case of an
abstract of proposed oral disclosures, from transmission of such proposed
disclosures to the Reviewing Party, the Publishing Party shall be free to
proceed with the written publication or the oral presentation, respectively,
unless the Reviewing Party has requested the delay described above.
To the extent possible in the reasonable exercise of its discretion, the
Publishing Party shall incorporate all modifications proposed under clause (b)
above. If a trade secret that is the subject of a request made under clause (c)
above cannot be otherwise protected without unreasonable expense to the
Reviewing Party, such information shall be omitted from the publication.
ARTICLE 11 REPRESENTATIONS AND WARRANTIES
11.1 Authorization. Each Party warrants and represents to the other
Parties that (a) it has the legal right and power to enter into this Agreement,
to extend the rights and licenses granted to the other in this Agreement, and to
perform fully its obligations hereunder, (b) this
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Agreement has been duly executed and delivered and is a valid and binding
agreement of such Party, enforceable in accordance with its terms, (c) such
Party has obtained all necessary approvals to the transactions contemplated
hereby and (d) such Party has not made and will not make any commitments to
others in conflict with or in derogation of such rights or this Agreement.
11.2 Intellectual Property Rights. On the LLC Formation Date, and prior to
granting the licenses set forth in Article 3 hereof, the Parties will represent
and warrant to each other as follows:
11.2.1 Dyax will represent and warrant that, as of the LLC Formation
Date, ************* it has the right to (i) enter into the obligations set forth
in this Agreement and (ii) grant the rights and licenses set forth in Article 3
hereof.
11.2.2 Genzyme will represent and warrant that, as of the LLC
Formation Date, (a) the Genzyme Patent Rights and the Genzyme Technology are
free and clear of any lien or other encumbrance and (b) it has the right to (i)
enter into the obligations set forth in this Agreement and (ii) grant the rights
and licenses set forth in Article 3 hereof.
11.3 Warranties.
11.3.1 Genzyme Warranties. Genzyme warrants that (i) any
Collaboration Products delivered by Genzyme pursuant to Section 7.3 hereof, if
any, will conform in all material respects to the Specifications, the conditions
of any applicable Regulatory Approvals regarding the manufacturing process and
any applicable requirements of the Regulatory Scheme regarding the manufacturing
process and (ii) the Collaboration Products sold pursuant to Section 6.2 hereof
will be marketed and sold in all material respects in accordance with the
conditions of all applicable laws and regulations, including any applicable
Regulatory Approvals and any applicable labeling claims.
11.3.2 Dyax Warranties. Dyax warrants that any Collaboration
Products delivered by Dyax pursuant to Sections 7.2 or 7.3 hereof will conform
in all material respects to the Specifications, the conditions of any applicable
Regulatory Approvals regarding the manufacturing process and any applicable
requirements of the Regulatory Scheme regarding the manufacturing process.
11.4 Disclaimer of Representations and Warranties. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT, NONE OF DYAX, GENZYME OR KALLIKREIN LLC
MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, AND THE NON-INFRINGEMENT OF ANY THIRD-PARTY PATENTS OR
PROPRIETARY RIGHTS. ALL UNIFORM COMMERCIAL CODE WARRANTIES ARE EXPRESSLY
DISCLAIMED BY THE PARTIES.
11.5 Limitation of Liability. It is agreed by the Parties that no Party
shall have a right to or shall claim special, indirect or consequential damages,
including lost profits, for breach of this Agreement. Remedies shall be limited
to claims for amounts due hereunder or as otherwise
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
provided in this Agreement, including claims for indemnification as provided in
Section 12.1 hereof.
ARTICLE 12 INDEMNITY
12.1 Indemnity Obligations Prior to the LLC Formation Date. Each Party
(the "Indemnifying Party") shall defend, indemnify and hold harmless the other
Party (the "Indemnified Party") and its directors, officers, employees and
agents from and against any and all claims, liabilities, losses and expenses,
including attorney's fees, incurred by or asserted against the Indemnified Party
or any of the foregoing prior to the LLC Formation Date arising out of the
development, testing, manufacture, handling or storage by the Indemnifying Party
of any Collaboration Product in accordance with the Development Plan or
Commercialization Plan, as the case may be, except to the extent such claims,
liabilities, losses and expenses result from the negligent, reckless or
intentional acts or omissions of the Indemnified Party, in which case the
Indemnified Party shall indemnify and hold harmless the Indemnifying Party and
its directors, officers, employees and agents.
12.2 Kallikrein LLC Indemnity Obligations. The Operating Agreement shall
provide that Kallikrein LLC shall indemnify each of the Members and its
Affiliates, employees and agents (each an "Indemnified Person") for any act
performed by such Indemnified Person within the scope of the authority conferred
upon such Indemnified Person under this Agreement; provided that it shall be a
condition to such indemnity that (a) the Indemnified Person seeking
indemnification acted in good faith and in a manner reasonably believed to be
in, or not opposed to, the best interests of Kallikrein LLC, (b) the act for
which indemnification is sought did not constitute gross negligence or willful
misconduct by such Indemnified Person and (c) payment and indemnification of any
matter disposed of by a compromise payment by such Indemnified Person, pursuant
to consent decree or otherwise, shall have been approved by the Members, which
approval shall not be unreasonably withheld or delayed, or by a court of
competent jurisdiction.
12.3 Insurance.
12.3.1 Kallikrein LLC shall obtain and maintain product liability
insurance with respect to the design, development, manufacture, modification,
distribution and sale of Collaboration Products and comprehensive general
liability insurance, each in amounts reasonably believed by Genzyme and Dyax to
be adequate and customary for the development, manufacture and sale of novel
therapeutic products and for the property of Kallikrein LLC. Each such insurance
policy shall be for an amount determined by the Steering Committee. The
insurance will contain a deductible to be determined by the Steering Committee.
*************. The aforementioned product liability and comprehensive general
liability insurance shall be obtained as soon as practicable after the LLC
Formation Date, but in no event later than ninety (90) days thereafter, from an
insurance carrier approved by the Steering Committee. The costs of all such
insurance shall be included in the Program Costs.
12.3.2 Genzyme and Dyax shall each maintain at their own cost
similar product liability and comprehensive general liability insurance coverage
in amounts reasonably
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
determined by the Steering Committee from time to time. Genzyme and Dyax shall
each also provide coverage for Kallikrein LLC after the LLC Formation Date in
excess of any valid and collectible insurance available from Kallikrein LLC by
including their respective Percentage Interests under their respective product
liability insurance policies to the extent their respective interests appear and
to the extent such Parties are legally obligated to pay. Genzyme shall also
provide coverage for Kallikrein LLC under its property and transit insurance
policies, with the costs of the associated insurance premiums to be included in
the Program Costs subject to reimbursement by Kallikrein LLC within thirty (30)
days after receipt of an invoice therefor.
12.3.3 Each Party will furnish the other Parties a certificate(s)
from an insurance carrier (having a minimum AM Best rating of B) showing all
insurance set forth above.
12.3.4 The insurance certificate(s) showing Kallikrein LLC's
insurance will include the following statement: "The insurance certified
hereunder is applicable to all contracts between Genzyme Corporation, Dyax Corp.
and the Insured. This insurance may be canceled or altered only after ten (10)
days' written notice to Genzyme Corporation and Dyax Corp." The insurance, and
the certificate(s), will (a) name each of Genzyme and Dyax (including their
respective officers, directors, employees, Affiliates, agents, successors and
assigns) as additional insureds with respect to matters arising from this
Agreement, (b) provide that such insurance is primary to any liability insurance
carried by Genzyme and Dyax and (c) provide that underwriters and insurance
companies of Kallikrein LLC may not have any right of subrogation against
Genzyme or Dyax (including their respective officers, directors, employees,
servants, Affiliates, agents, successors and assigns) except in the event a
claim results from Genzyme's or Dyax's respective gross negligence or willful
misconduct. Such certificate(s) shall be made available to each Party upon
reasonable advance request.
12.3.5 The Steering Committee shall review the adequacy of the
insurance described above on a quarterly basis and the Steering Committee shall
have the power to reasonably direct the modification of such insurance.
ARTICLE 13 TERM AND TERMINATION
13.1 Term. The term of this Agreement shall be perpetual unless terminated
pursuant to Section 13.2 below.
13.2 Termination. This Agreement may be terminated in the following
circumstances:
13.2.1 For Certain Material Breaches. If either Dyax or Genzyme (a)
fails to use commercially reasonable and diligent efforts to perform any
material duty imposed upon such Party under this Agreement or a Development Plan
or Commercialization Plan or (b) following the formation of Kallikrein LLC,
fails to make ************* or more capital contributions in accordance with
Article 4 hereof, and such failure to perform is not cured within
*************of written notice thereof from the non-breaching Party, the
non-breaching Party may elect, in its sole discretion, to (i) in the case of
clause (b) above, waive the terms of Article 4 hereof with respect to any one or
more required capital contributions and cause the respective Percentage
Interests and future funding responsibilities of the Parties to be adjusted in
accordance with Section 4.2.1 hereof or (ii) terminate this Agreement with the
consequences set forth in Section 13.3.1 below. *************.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
13.2.2 For Convenience. Either Dyax or Genzyme may elect to
terminate this Agreement for any reason at any time after the satisfaction by
Dyax of the Initial Funding Commitment upon ************* prior written notice
to the other Party (during which ************* period the obligations of the
Parties, including without limitation obligations with respect to the funding of
Program Costs, shall continue in full force and effect) with the consequences
set forth in Section 13.3.2 below.
13.2.3 Upon Change of Control. Either Dyax or Genzyme may terminate
this Agreement with the consequences set forth in Section 13.3.3 in the event
that the other Party is a party to a transaction involving (a) a merger or
consolidation in which such party is not the surviving entity or (b) the sale of
all or substantially all of the assets of such Party to a Third Party.
Termination of this Agreement pursuant to this Section 13.2.3 shall be effective
as of the effective date of such transaction.
13.2.4 Upon Bankruptcy. Either Dyax or Genzyme may terminate this
Agreement with the consequences set forth in Section 13.3.4 below upon the
bankruptcy, insolvency, dissolution or winding-up of the other Party, except in
the case of a petition in bankruptcy filed involuntarily against a Party, if
such petition is dismissed within sixty (60) days of the date of its filing.
13.3 Effects of Termination.
13.3.1 For Certain Material Breaches. In addition to the rights and
duties set forth in Sections 13.4 and 13.5 below, Dyax and Genzyme shall have
the following rights and duties upon termination of this Agreement pursuant to
Section 13.2.1(ii) above:
(a) the non-breaching Party shall obtain from the breaching
Party the irrevocable right and license, with the right to grant sublicenses,
under the breaching Party's Patent Rights, Technology and Manufacturing Know-How
to develop, make, have made, use, offer for sale, sell, have sold, import and
export Collaboration Products in the Field and in the Territory, and the
breaching Party shall execute such documents and take all action as may be
necessary or desirable to effect the foregoing; provided that such license shall
be for the same level of exclusivity as the rights that had been or would be
granted with respect thereto under Section 3.1 hereof; and provided, further,
that any license granted hereunder shall be subject to the obligation of the
non-breaching Party to use commercially reasonable and diligent efforts to
develop and market Collaboration Products pursuant to such license;
(b) if applicable, the breaching Party shall assign and
transfer all of its interest in Kallikrein LLC to the non-breaching Party, and
the non-breaching Party may dissolve Kallikrein LLC in its sole discretion;
provided that in the event that Dyax is the breaching party, it shall also cause
Subsidiary to assign and transfer all of its interest in Kallikrein LLC to
Genzyme.
(c) (i) any licenses granted pursuant to Article 3 shall be
revoked, (ii) if Kallikrein LLC does not yet exist or is dissolved, any
applicable Regulatory Approvals (other than any Regulatory Approvals filed in
the name of an entity other than Kallikrein LLC or the non-breaching Party
pursuant to Section 5.3 hereof), pre-clinical and clinical data owned or
licensed by Kallikrein LLC or the breaching Party and any trademarks owned or
licensed by
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Kallikrein LLC (other than any trademarks registered in the name of an entity
other than Kallikrein LLC or the non-breaching Party pursuant to Section 9.1.2
hereof) shall be assigned or licensed to the non-breaching Party and (iii) any
Regulatory Approvals filed and any trademarks registered in the name of an
entity other than Kallikrein LLC or the non-breaching Party shall be (A)
exclusively licensed to Kallikrein LLC, the non-breaching Party or any Third
Party or Affiliate designated by such Party until such time as Kallikrein LLC,
the non-breaching Party or its designee is qualified to hold such Regulatory
Approvals or trademarks under the applicable provisions of the Regulatory Scheme
and (B) transferred or assigned to Kallikrein LLC, the non-breaching Party or
its designee, as appropriate, as soon as practicable thereafter; and
(d) the non-breaching Party shall become obligated to pay the
breaching Party an amount equal to ************* (the "Breach Buyout Amount"),
payable as follows:
(1) if the non-breaching Party elects to sell or
otherwise dispose of all or any portion of its or its Affiliates' right, title
and interest in the Collaboration Products, then the non-breaching Party shall,
upon any such sale or other disposition, pay the breaching Party an amount equal
to *************;
(2) for as long as the non-breaching Party (together, in
the case of Dyax with Subsidiary) has not sold or otherwise disposed of all or a
portion of its (together in the case of Dyax, with Subsidiaries) right, title
and interest in the Collaboration Products which is equal to or greater than the
breaching Party's (together in the case of Dyax, with Subsidiaries) Percentage
Interest as of the date of termination, the non-breaching Party shall pay the
breaching Party (and, in the event that Dyax is the breaching Party, Subsidiary)
*************
(3) on the ************* the date of termination, the
non-breaching Party shall pay the breaching Party (and, in the event that Dyax
is the breaching Party, Subsidiary) *************;
provided, that the aggregate amount of all payments made under clauses (1), (2)
and (3) shall not exceed the Breach Buyout Amount.
13.3.2 For Convenience. In addition to the rights and duties set
forth in Sections 13.4 and 13.5 below, Subsidiary shall have the following
rights and Dyax and Genzyme shall have the following rights and duties upon
termination of this Agreement pursuant to Section 13.2.2 above:
(a) the non-terminating Party shall have an option exercisable
upon written notice to the terminating Party within the ************* period
provided in Section 13.2.2 hereof to obtain from the terminating Party the
irrevocable right and license, with the right to grant sublicenses, under the
terminating Party's Patent Rights, Technology and Manufacturing Know-How to
develop, make, have made, use, offer for sale, sell, have sold, import and
export Collaboration Products in the Field and in the Territory, and the
terminating Party shall execute such documents and take all action as may be
necessary or desirable to affect the foregoing; provided that such license shall
be for the same level of exclusivity as the rights that had been or would be
granted with respect thereto under Section 3.1; and provided, further, that any
license
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
granted hereunder shall be subject to the obligation of the non-terminating
Party to use commercially reasonable and diligent efforts to develop and market
Collaboration Products pursuant to such license;
(b) if applicable, upon exercise of its license option
provided in paragraph (a) of this Section 13.3.2, the terminating Party shall
assign and transfer all of its interest in Kallikrein LLC to the non-terminating
Party, and the non-terminating Party may dissolve Kallikrein LLC in its sole
discretion;
(c) upon exercise of its license option provided in paragraph
(a) of this Section 13.3.2, (i) any licenses granted pursuant to Article 3 shall
be revoked, (ii) if Kallikrein LLC does not yet exist or is dissolved, any
applicable Regulatory Approvals (other than any Regulatory Approvals filed in
the name of an entity other than Kallikrein LLC or the non-terminating Party
pursuant to Section 5.3 hereof), pre-clinical and clinical data owned or
licensed by Kallikrein LLC or the terminating Party and any trademarks owned or
licensed by Kallikrein LLC (other than any trademarks registered in the name of
an entity other than Kallikrein LLC or the non-terminating Party pursuant to
Section 9.1.2 hereof) shall be assigned to the non-terminating Party and (iii)
any Regulatory Approvals filed and any trademarks registered in the name of an
entity other than Kallikrein LLC or the non-terminating Party shall be (A)
exclusively licensed to Kallikrein LLC, the non-terminating Party or any Third
Party or Affiliate designated by such Party until such time as Kallikrein LLC,
the non- terminating Party or its designee is qualified to hold such Regulatory
Approvals or trademarks under the applicable provisions of the Regulatory Scheme
and (B) transferred or assigned to Kallikrein LLC, the non-terminating Party or
its designee, as appropriate, as soon as practicable thereafter;
(d) upon the exercise of its license option provided in
paragraph (a) of this Section 13.3.2, the non-terminating Party shall become
obligated to pay to the terminating Party an amount equal to ************* (the
"Convenience Buyout Amount"), payable on the terms and conditions and in
accordance with the schedule of payments set forth in Section 13.3.1(d), mutatis
mutandis; ************* and
(e) if the license option provided in paragraph (a) of this
Section 13.3.2 is not exercised, then all right, title and interest in the
Collaboration Products shall be sold to the highest bidder within eighteen (18)
months from the date of termination and the proceeds shall be allocated between
the Members in proportion to their Percentage Interests as of the date of
termination and if applicable, Kallikrein LLC shall be dissolved.
13.3.3 Upon a Change of Control. In addition to the rights and
duties set forth in Sections 13.4 and 13.5 below, Dyax and Genzyme shall have
the following rights and duties upon termination of this Agreement pursuant to
Section 13.2.3:
(a) the terminating Party shall have the exclusive,
irrevocable and, except as provided in Section 13.3.3(d), royalty-free right and
license, with the right to grant sublicenses, under the non-terminating Party's
Patent Rights, Technology and Manufacturing Know-How to develop, make, have
made, use, offer for sale, sell, have sold, import and export Collaboration
Products in the Territory and in the Field, and the non-terminating Party shall
execute such documents and take all action as may be necessary or desirable to
effect the foregoing; provided that such license shall be for the same level of
exclusivity as the rights that
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had been or would be granted with respect thereto under Section 3.1; and
provided, further, that any license granted hereunder shall be subject to the
obligation of the terminating Party to use commercially reasonable and diligent
efforts to develop and market Collaboration Products pursuant to such license;
(b) if applicable, the non-terminating Party shall assign and
transfer all of its interest in Kallikrein LLC to the terminating Party, and the
terminating Party may dissolve Kallikrein LLC in its sole discretion; provided
that in the event that Dyax is the non-terminating party, it shall also cause
Subsidiary to assign and transfer all of its interest in Kallikrein LLC to
Genzyme;
(c) (i) any licenses granted to Article 3 shall be revoked,
(ii) if Kallikrein LLC does not yet exist or is dissolved, any applicable
Regulatory Approvals (other than any Regulatory Approvals filed in the name of
an entity other than Kallikrein LLC or the terminating Party pursuant to Section
5.3 hereof), pre-clinical and clinical data owned or licensed by Kallikrein LLC
or the non-terminating Party and any trademarks owned or licensed by Kallikrein
LLC (other than any trademarks registered in the name of an entity other than
Kallikrein LLC or the terminating Party pursuant to Section 9.1.2 hereof) shall
be assigned or licensed to the terminating Party and (iii) any Regulatory
Approvals filed and any trademarks registered in the name of an entity other
than Kallikrein LLC or the terminating Party shall be (A) exclusively licensed
to Kallikrein LLC, the terminating Party or any Third Party or Affiliate
designated by such Party until such time as Kallikrein LLC, the terminating
Party or its designee is qualified to hold such Regulatory Approvals or
trademarks under the applicable provisions of the Regulatory Scheme and (B)
transferred or assigned to Kallikrein LLC, the terminating Party or its
designee, as appropriate, as soon as practicable thereafter; and
(d) the terminating Party (the "Offeror") shall, pursuant to
the conditions set forth in this Section 13.3(d), give the other Party (Genzyme
in the case Dyax is terminating or the Dyax Companies in the case Genzyme is
terminating, in either case the "Offeree") at the time of termination written
notice of the Offeror's intention to purchase Offeree's entire interest in and
to (i) the Collaboration Products as of the date of termination and (ii) if
applicable, the Percentage Interest of the net asset value of Kallikrein LLC as
of the date of termination (the "Notice of Offer"). The Notice of Offer shall
state therein the specific price, terms and conditions under which the Offeror
agrees to purchase Offeree's entire interest in and to (i) the Collaboration
Products as of the date of termination and (ii) if applicable, the Percentage
Interest of the net asset value of Kallikrein LLC as of the date of termination;
provided, however, that the purchase price shall be paid in cash,
publicly-traded and registered securities or as the Parties otherwise agree. The
Offeree shall then have ninety (90) days (the "Acceptance Period") from the
receipt of the Notice of Offer to give notice (the "Notice of Acceptance") of
the Offeree's intention to accept the offer of the Offeror and shall sell
Offeree's entire interest in and to (i) the Collaboration Products as of the
date of termination and (ii) if applicable, the Percentage Interest of the net
asset value of Kallikrein LLC as of the date of termination to Offeror for the
price and upon such terms and conditions as set forth in the Notice of Offer. In
the event the Offeree gives such Notice of Acceptance, a closing shall be held
within ninety (90) days of the receipt of the Notice of Acceptance by the
Offeror. In the event the Offeree elects not to accept the Offeror's offer to
purchase, by giving the Offeror written notice thereof, or by failing to give
the appropriate Notice of Acceptance within the Acceptance Period, the Offeree
shall thereby automatically be bound to purchase Offeror's entire interest in
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and to (i) the Collaboration Products as of the date of termination and (ii) if
applicable, the Percentage Interest of the net asset value of Kallikrein LLC as
of the date of termination for the same price (as adjusted for Percentage
Interest, if necessary) and upon such terms and conditions as specified in the
Notice of Offer. In such event, a closing shall be held within ninety (90) days
of the earlier to occur of the expiration of the Acceptance Period and the date
of receipt of the written rejection, whichever is the first to occur. In
addition to any other remedies provided by this Agreement, in the event the
Offeree rejects the offer contained in the Notice of Offer, but thereafter fails
for any reason to timely close as provided herein above, the Offeree shall, by
such failure to close, be deemed to have accepted the original offer contained
in the Notice of Offer, and shall thereafter sell Offeree's entire interest in
and to (i) the Collaboration Products as of the date of termination and (ii) if
applicable, the Percentage Interest of the net asset value of Kallikrein LLC as
of the date of termination to the Offeror pursuant to the terms of the Notice of
Offer. For purposes of Sections 13.3.3 (a)-(c) above, the Party purchasing the
other Party's interest in (i) the Collaboration Products and (ii) if applicable,
the Percentage Interest of the net asset value of Kallikrein LLC shall be deemed
to be the terminating Party and the other Party shall be deemed to be the
non-terminating Party.
13.3.4 Upon Bankruptcy. In addition to the rights and duties set
forth in Sections 13.4 and 13.5 below, Dyax and Genzyme shall have the following
rights and duties upon termination of this Agreement pursuant to Section 13.2.4
above:
(a) the terminating Party shall obtain from the
non-terminating Party the irrevocable right and license, with the right to grant
sublicenses, under the non-terminating Party's Patent Rights, Technology and
Manufacturing Know-How to develop, make, have made, use, offer for sale, sell,
have sold, import and export Collaboration Products in the Field and in the
Territory, and the non-terminating Party shall execute such documents and take
all action as may be necessary or desirable to affect the foregoing; provided
that such license shall be for the same level of exclusivity as the rights that
had been or would be granted with respect thereto under Section 3.1 hereof; and
provided, further, that any license granted hereunder shall be subject to the
obligation of the terminating Party to use commercially reasonable and diligent
efforts to develop and market Collaboration Products pursuant to such license;
(b) if applicable, the non-terminating Party shall assign and
transfer all of its interest in Kallikrein LLC to the terminating Party, and the
terminating Party may dissolve Kallikrein LLC in its sole discretion;, provided
that in the event that Dyax is the non-terminating Party, it shall also cause
Subsidiary to assign and transfer all of its interest in Kallikrein LLC to
Genzyme.
(c) (i) any licenses granted to Article 3 shall be revoked,
(ii) if Kallikrein LLC does not yet exist or is dissolved, any applicable
Regulatory Approvals (other than any Regulatory Approvals filed in the name of
an entity other than Kallikrein LLC or the terminating Party pursuant to Section
5.3 hereof), pre-clinical and clinical data owned or licensed by Kallikrein LLC
or the non-terminating Party and any trademarks owned or licensed by Kallikrein
LLC (other than any trademarks registered in the name of an entity other than
Kallikrein LLC or the terminating Party pursuant to Section 9.1.2 hereof) shall
be assigned or licensed to the terminating Party and (iii) any Regulatory
Approvals filed and any trademarks registered in the name of an entity other
than Kallikrein LLC or the terminating Party shall be (A) exclusively licensed
to Kallikrein LLC, the terminating Party or any Third Party or Affiliate
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
designated by such Party until such time as Kallikrein LLC, the terminating
Party or its designee is qualified to hold such Regulatory Approvals or
trademarks under the applicable provisions of the Regulatory Scheme and (B)
transferred or assigned to Kallikrein LLC, the terminating Party or its
designee, as appropriate, as soon as practicable thereafter; and
(d) the terminating Party shall become obligated to pay to the
non-terminating Party an amount equal to ************* (the "Bankruptcy Buyout
Amount"), payable on the terms and conditions and in accordance with the
schedule of payments set forth in Section 13.3.1(d), mutatis mutandis.
13.3.5 Fair Value. For purposes of this Section 13.3, the "Fair
Value" of a Party's interest in the Collaboration Products shall be the amount
an informed and willing buyer under no compulsion to buy would be willing to pay
and an informed and willing seller under no compulsion to sell would be willing
to accept for all right, title and interest in such Party's interest in the
Collaboration Products, determined as of the date of termination, which
determination shall be made by the mutual agreement of Dyax and Genzyme. In the
event that Dyax and Genzyme are unable to agree upon the Fair Value within one
hundred and twenty (120) days of the date of termination, the Fair Value shall
be determined by an investment banking firm selected by mutual agreement of Dyax
and Genzyme, and the costs and expenses incurred in connection with the
engagement of such investment banking firm shall be shared equally by Dyax and
Genzyme.
13.4 Inventory. Upon the termination of this Agreement, if Genzyme does
not obtain a license pursuant to Section 13.3 hereof, Dyax shall have the option
to repurchase Genzyme's inventory of Collaboration Products acquired by Genzyme
pursuant to Article 6 hereof. Within ten (10) days after such termination, Dyax
shall elect in writing to either (a) permit Genzyme to sell off its remaining
inventory of Collaboration Products, provided that Genzyme shall comply with all
of the terms and conditions of this Agreement restricting such selling
activities as in effect immediately prior to such termination, or (b) repurchase
Genzyme's inventory of Collaboration Products. If Dyax fails to make such an
election, Genzyme shall be permitted to sell-off its remaining inventory of
Collaboration Products in accordance with clause (a) of this Section 13.4. Any
repurchase of Genzyme's inventory of Collaboration Products shall be at the
price as stated in Genzyme's then-current price list, less a handling charge to
be reasonably determined by the Parties in good faith.
13.5 Survival of Rights and Duties. No termination of this Agreement shall
eliminate any rights or duties of the Parties accrued prior to such termination.
The provisions of Article 1, Sections 2.2, 3.4, 4.3, 4.5, 9.1.1, 9.1.3, 9.3,
9.5, Article 10, Article 12, Sections 13.2, 13.3, 13.4, 14.1, 14.3, 14.4, 14.8,
14.9, 14.10 and 14.11 hereof shall survive any termination of this Agreement.
ARTICLE 14 MISCELLANEOUS
14.1 Cooperation. If either Dyax or Genzyme (the "Assuming Party") shall
assume the Program rights from the other Party (the "Responsible Party") in
accordance with the provisions of Article 13 hereof, the Responsible Party shall
promptly provide to the Assuming Party (or any Third Party or Affiliate
designated by the Assuming Party) all Technology, Manufacturing Know-How and
access to regulatory filings sufficient to allow the Assuming Party to perform
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
the duties assumed. The Responsible Party shall further use its best efforts to
provide all assistance required by the Assuming Party with respect to such
transfer so as to permit the Assuming Party to begin to perform such duties as
soon as possible to minimize any disruption in the continuity of supply or
marketing of Collaboration Products. If the Responsible Party is the
Manufacturing Party for a Collaboration Product, the Responsible Party shall, at
the option of the Assuming Party, supply such Collaboration Product to the
Assuming Party, at a mutually agreeable price not to exceed the Fully Allocated
Cost of Goods for such Collaboration Product, until the earlier of: (i)
************* from the effective date of termination and (ii) *************
after the Assuming Party delivers notice to the Responsible Party that the
Assuming Party is able to manufacture such Collaboration Product. In addition,
if upon the date this Agreement is terminated Collaboration Products are being
manufactured in facilities owned or leased by the Responsible Party (including
facilities subleased by Kallikrein LLC from the Responsible Party), the
Responsible Party agrees to lease such facilities to the Assuming Party on
commercially reasonable terms *************.
14.2 Exchange Controls. All payments due hereunder shall be paid in United
States dollars. If at any time legal restrictions prevent the prompt remittance
of part or all payments with respect to any country in which Collaboration
Products are sold, payment shall be made through such lawful means or methods as
the Parties may determine in good faith.
14.3 Withholding Taxes. If applicable laws or regulations require that
taxes be withheld from payments made hereunder, the Party paying such taxes will
(a) deduct such taxes, (b) timely pay such taxes to the proper authority and (c)
send written evidence of payment to the Party from whom such taxes were withheld
within sixty (60) days after payment. Each Party will assist the other Party or
Parties in claiming tax refunds, deductions or credits at such other Party's
request and will cooperate to minimize the withholding tax, if available, under
various treaties applicable to any payment made hereunder.
14.4 Interest on Late Payments. Any payments to be made hereunder that are
not paid on or before the date such payments are due under this Agreement shall
bear interest, to the extent permitted by applicable law, at the Base Rate of
interest declared from time to time by BankBoston, N.A. in Boston,
Massachusetts, calculated on the number of days payment is delinquent.
14.5 Force Majeure. Neither Party shall be held liable or responsible to
the other Party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected Party, including without limitation fire, floods,
embargoes, war, acts of war (whether war is declared or not), insurrections,
riots, civil commotions, strikes, lockouts or other labor disturbances, acts of
God or acts, omissions or delays in acting by any governmental authority or the
other Party; provided, however, that the Party so affected shall use
commercially reasonable and diligent efforts to avoid or remove such causes of
non-performance, and shall continue performance hereunder with reasonable
dispatch wherever such causes are removed. Each Party shall provide the other
Parties with prompt written notice of any delay or failure to perform that
occurs by reason of force majeure. The Parties shall mutually seek a resolution
of the delay or the failure to perform in good faith.
36
<PAGE>
14.6 Assignment. This Agreement may not be assigned or otherwise
transferred by any Party without the consent of the other Parties; provided,
however, that either Dyax or Genzyme may, without such consent, assign its
rights and obligations under this Agreement (a) in connection with a corporate
reorganization, to any member of an affiliated group, all or substantially all
of the equity interest of which is owned and controlled by such Party or its
direct or indirect parent corporation or (b) in connection with a merger,
consolidation or sale of substantially all of such Party's assets to an
unrelated Third Party; provided, however, that such Party's rights and
obligations under this Agreement shall be assumed by its successor in interest
in any such transaction and shall not be transferred separate from all or
substantially all of its other business assets, including without limitation
those business assets that are the subject of this Agreement. Any permitted
assignee shall assume all obligations of its assignor under this Agreement. Any
purported assignment in violation of this Section 14.6 shall be void.
14.7 Severability. Each Party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the Parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the Parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement that it is to be
reasonably assumed that the Parties would not have entered into this Agreement
without the invalid provisions.
14.8 Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the Parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery or courier), by a next business day delivery
service of a nationally recognized overnight courier service or by courier,
postage prepaid (where applicable), addressed to such other Party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor in accordance with this Section 14.8 and
shall be effective upon receipt by the addressee.
If to Dyax: Dyax Corp.
or Subsidiary One Kendall Square
Cambridge, Massachusetts 02139
Attention: President
Facsimile: (617) 225-2501
with a copy to: Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: Nathaniel S. Gardiner
Facsimile: (617) 227-4420
If to Genzyme: Genzyme Corporation
One Kendall Square
Cambridge, Massachusetts 02139
37
<PAGE>
Attention: President
Facsimile: (617) 374-7423
with a copy to: Genzyme Corporation
One Kendall Square
Cambridge, Massachusetts 02139
Attention: Chief Legal Officer
Facsimile: (617) 252-7553
If to Kallikrein Kallikrein LLC
LLC (if such c/o Genzyme Corporation
notice is sent One Kendall Square
by Dyax): Cambridge, Massachusetts 02139
Attention: President
Facsimile: (617) 374-7423
with a copy to: Genzyme Corporation
One Kendall Square
Cambridge, Massachusetts 02139
Attention: Chief Legal Officer
Facsimile: (617) 252-7553
If to Kallikrein Kallikrein LLC
LLC (if such c/o Dyax Corp.
notice is sent One Kendall Square
by Genzyme): Cambridge, Massachusetts 02139
Attention: President
Facsimile: (617) 225-2501
with a copy to: Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: Nathaniel S. Gardiner
Facsimile: (617) 227-4420
14.9 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts without regard to
any choice of law principle that would dictate the application of the laws of
another jurisdiction.
14.10 Arbitration. Any disputes arising between the Parties relating to,
arising out of or in any way connected with this Agreement or any term or
condition hereof, or the performance by either Party of its obligations
hereunder, whether before or after termination of this Agreement (a "Dispute"),
which has not resolved in accordance with the provisions of Section 8.3 hereof,
shall be finally resolved by binding arbitration as herein provided.
14.10.1 General. Except as otherwise provided in this Section 14.10,
any arbitration hereunder shall be conducted under the commercial rules of the
American Arbitration Association. Each such arbitration shall be conducted in
the English language by a panel of
38
<PAGE>
three (3) arbitrators (the "Arbitration Panel"). Each of Dyax and Genzyme shall
appoint one (1) arbitrator to the Arbitration Panel and the third arbitrator
shall be appointed by the two (2) arbitrators appointed by Dyax and Genzyme. The
Arbitration Panel shall be convened upon delivery of the Notice of Arbitration
(as herein defined). Any such arbitration shall be held in Boston,
Massachusetts. The Arbitration Panel shall have the authority to grant specific
performance, and to allocate between the Parties the costs of arbitration in
such equitable manner as it shall determine. Judgment upon the award so rendered
may be entered in any court having jurisdiction or application may be made to
such court for judicial acceptance of any award and an order of enforcement, as
the case may be.
14.10.2 Procedure.
(a) Whenever a Party (the "Claimant") shall decide to
institute arbitration proceedings, it shall give written notice to that effect
(the "Notice of Arbitration") to the other Party (the "Respondent"). The Notice
of Arbitration shall set forth in detail the nature of the Dispute, the facts
upon which the Claimant relies and the issues to be arbitrated (collectively,
the "Arbitration Issues"). Within fifteen (15) days of its receipt of the Notice
of Arbitration, the Respondent shall send the Claimant and the Arbitration Panel
a written Response (the "Response"). The Response shall set forth in detail the
facts upon which the Respondent relies. In addition, the Response shall contain
all counterclaims which the Respondent may have against the Claimant which are
within the Arbitration Issues, whether or not such claims have previously been
identified. If the Response sets forth a counterclaim, the Claimant may, within
fifteen (15) days of the receipt of the Response, deliver to the Respondent and
the Arbitration Panel a rejoinder answering such counterclaim.
(b) Within fifteen (15) days after the later of (i) the
expiration of the period provided in Section 14.10.2(a) above for the Claimant
to deliver a rejoinder or (ii) the completion of any discovery proceedings
authorized by the Arbitration Panel: (A) the Claimant shall send to the
Arbitration Panel a proposed resolution of the Arbitration Issues and a proposed
resolution of any counterclaims set forth in the Response, including without
limitation the amount of monetary damages, if any, or other relief sought (the
"Claimant's Proposal"); and (B) the Respondent shall send to the Arbitration
Panel a proposed resolution of the Arbitration Issues, a proposed resolution of
any counterclaims set forth in the Response and a proposed resolution of any
rejoinder submitted by the Claimant, including without limitation the amount of
monetary damages, if any, or other relief sought (the "Respondent's Proposal").
Once both the Claimant's Proposal and the Respondent's Proposal have been
submitted, the Arbitration Panel shall deliver to each Party a copy of the other
Party's proposal.
(c) The Arbitration Panel shall issue an opinion with respect
to any Dispute, which opinion shall explicitly accept either the Claimant's
Proposal or the Respondent's Proposal in its entirety (the "Final Decision").
The Arbitration Panel shall not have the authority to reach a Final Decision
that provides remedies or requires payments other than those set forth in the
Claimant's Proposal or the Respondent's Proposal. The concurrence of two (2)
arbitrators shall be sufficient for the entry of a Final Decision. The
arbitrators shall issue a Final Decision within one (1) month from the later of
(i) the last day for submission of proposals under Section 14.10.2(b) above or
(ii) the date of the final hearing on any Dispute held by the Arbitration Panel.
A Final Decision shall be binding on both Parties.
39
<PAGE>
14.11 Injunctive Relief. The Parties hereby acknowledge that a breach of
their respective obligations under Article 10 hereof may cause irreparable harm
and that the remedy or remedies at law for any such breach may be inadequate.
The Parties hereby agree that, in the event of any such breach, in addition to
all other available remedies hereunder, the non- breaching Party or Parties
shall have the right to obtain equitable relief to enforce Article 10 hereof.
14.12 Entire Agreement. This Agreement and the Operating Agreement contain
the entire understanding of the Parties with respect to the subject matter
hereof. All express or implied agreements and understandings, either oral or
written, heretofore made are expressly merged in and made a part of this
Agreement, including, but not limited to the Confidential Disclosure Agreement
and modifications thereof dated October 1, 1997. This Agreement may be amended,
or any term hereof modified, only by a written instrument duly executed by both
Parties hereto. Each of the Parties hereby acknowledges that this Agreement is,
and the Operating Agreement will be, the result of mutual negotiation and
therefore any ambiguity in their respective terms shall not be construed against
the drafting Party.
14.13 Headings. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
14.14 Independent Contractors. It is expressly agreed that Dyax and
Genzyme shall be independent contractors and that, except as Members of
Kallikrein LLC, the relationship between the two Parties shall not constitute a
partnership, joint venture or agency. Neither Dyax nor Genzyme shall have the
authority to make any statements, representations or commitments of any kind, or
to take any action, which shall be binding on the other, without the prior
consent of the other Party to do so.
14.15 Waiver. Except as expressly provided herein, the waiver by either
Party hereto of any right hereunder or of any failure to perform or any breach
by the other Party shall not be deemed a waiver of any other right hereunder or
of any other failure to perform or breach by said other Party, whether of a
similar nature or otherwise, nor shall any singular or partial exercise of such
right preclude any further exercise thereof or the exercise of any other such
right.
14.16 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
40
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
GENZYME CORPORATION
By: /s/ Peter Wirth
------------------------------------
Title:
---------------------------------
DYAX CORP.
By: /s/ Keith S. Ehrlich
-----------------------------------
Title:
---------------------------------
41
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
SCHEDULE 1.10
DYAX PATENT RIGHTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
COUNTRY APPLICATION NUMBER FILING DATE STATUS
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Abandoned in favor of
U.S. (Markland 1) ************* 1/11/94 US *************
- ---------------------------------------------------------------------------------------
U.S. CIP (Markland 1A) ************* 3/10/94 Pending
- ---------------------------------------------------------------------------------------
U.S. Patent 5,795,865
U.S. CIP (Markland 1B) ************* 9/25/96 issued 8/18/98
- ---------------------------------------------------------------------------------------
U.S. Div. (Markland 1B
Div) ************* 8/17/98 Pending
- ---------------------------------------------------------------------------------------
Canada (Markland 1B) ************* 1/11/95 Pending
- ---------------------------------------------------------------------------------------
EPO (Markland 1B) ************* 1/11/95 Pending
- ---------------------------------------------------------------------------------------
Japan (Markland 1B) ************* 1/11/95 Pending
- ---------------------------------------------------------------------------------------
PCT (Markland 1B) ************* 1/11/95
- ---------------------------------------------------------------------------------------
</TABLE>
42
<PAGE>
SCHEDULE 1.17
GENZYME PATENT RIGHTS
None
43
<PAGE>
Schedule 1.28
OPERATING AGREEMENT
of
KALLIKREIN LLC
dated as of _________________
44
<PAGE>
TABLE OF CONTENTS
ARTICLE 1. FORMATION AND MEMBERSHIP..........................................1
1.1 Formation.........................................................1
1.2 Members...........................................................1
1.3 Management........................................................1
ARTICLE 2. OFFICES, NAME, ETC................................................2
2.1 Principal Office..................................................2
2.2 Registered Office; Resident Agent.................................2
2.3 Name..............................................................2
2.4 Term..............................................................2
2.5 Business Ventures.................................................2
ARTICLE 3. PURPOSES AND POWERS...............................................2
3.1 Purpose...........................................................2
3.2 Powers............................................................2
ARTICLE 4. MEMBERS AND THEIR CONTRIBUTIONS AND LOANS.........................2
4.1 Contributions.....................................................2
4.2 Capital Accounts..................................................3
4.3 Loans.............................................................4
4.4 Additional Members................................................4
4.5 Liability of Members..............................................4
4.6 Withdrawal of Members.............................................4
ARTICLE 5. ALLOCATIONS.......................................................4
5.1 Certain Definitions...............................................4
5.2 Allocations of Profit and Loss....................................6
5.3 Special Allocations...............................................6
ARTICLE 6. DISTRIBUTIONS.....................................................8
6.1 Distribution of Company Funds.....................................8
ARTICLE 7. INDEMNIFICATION...................................................9
7.1 Indemnification of Members........................................9
ARTICLE 8. ASSIGNABILITY OF MEMBERSHIP INTERESTS............................10
8.1 Assignment.......................................................10
8.2 Substitute Members...............................................10
8.3 Rights of Assignees..............................................11
8.4 Other Restrictions...............................................11
45
<PAGE>
ARTICLE 9. FISCAL YEAR, ACCOUNTING, INSPECTION OF BOOKS.....................11
9.1 Fiscal Year and Accounting.......................................11
9.2 Inspection of Books..............................................11
ARTICLE 10. DISSOLUTION.....................................................11
10.1 Events of Dissolution...........................................11
10.2 Consent to Continue Company.....................................12
10.3 Distribution Upon Dissolution...................................12
ARTICLE 11. GENERAL PROVISIONS..............................................12
11.1 Complete Agreement; Modification................................12
11.2 Governing Law; Severability.....................................13
11.3 Notice..........................................................13
11.4 Pronouns........................................................13
11.5 Titles..........................................................13
11.6 Successors and Assigns..........................................13
11.7 Counterparts....................................................13
46
<PAGE>
OPERATING AGREEMENT
OF
KALLIKREIN LLC
THIS OPERATING AGREEMENT (the "Agreement") is made and adopted as of
______ __, by and among Genzyme Corporation, a Massachusetts corporation having
its principal place of business at One Kendall Square, Cambridge, Massachusetts
02139 ("Genzyme"), Dyax Corp., a Delaware corporation having its principal place
of business at One Kendall Square, Cambridge, MA 02139 ("Dyax"), [Subsidiary], a
Delaware corporation and a wholly-owned subsidiary of Dyax having its principal
place of business at One Kendall Square, Cambridge, MA 02139 (""Subsidiary") and
such other persons who may become members of Kallikrein LLC (the "Company") in
accordance with law or the terms hereof (hereinafter collectively referred to as
the "Members" and individually as a "Member"). Dyax and Subsidiary are
hereinafter collectively referred to as the "Dyax Companies." Capitalized terms
used but not defined herein shall be given the same meaning as provided in the
Collaboration Agreement dated as of September ___, 1998 between Dyax and Genzyme
(the "Collaboration Agreement").
ARTICLE 1. FORMATION AND MEMBERSHIP
1.1 Formation. The Company has been organized as a limited liability
company pursuant to the Delaware Limited Liability Company Act (the "Act"). The
Act shall govern the rights and liabilities of the parties hereto except as
otherwise expressly stated herein.
1.2 Members. The sole initial Member of the Company was Dyax. Following
the execution and delivery of the Collaboration Agreement, Dyax assigned one
percent (1%) of its interest in the Company to Subsidiary, and Subsidiary was
admitted as a Member of the Company. The Company elected under Section 754 of
the Internal Revenue Code of 1986, as amended ("IRC"), to apply the provisions
of Sections 734(b) and 743(b) of the IRC. Thereafter, effective upon execution
and delivery of the Purchase Agreement of even date herewith by and between Dyax
and Genzyme (the ""Purchase Agreement"), Dyax has sold and assigned to Genzyme a
fifty percent (50%) interest in the Company (subject to adjustment as provided
herein and in Section [4.2.1] of the Collaboration Agreement). Upon execution
and delivery of this Agreement, Dyax and Subsidiary each hereby consent to the
admission of Genzyme as a Member of the Company and Genzyme is hereby admitted
as a Member of the Company. Hence, the Members of the Company are those persons
listed on Schedule A attached hereto, as amended from time to time.
1.3 Management. The Company shall be managed by the Steering Committee
provided for in Section [8.2] of the Collaboration Agreement
1
<PAGE>
ARTICLE 2. OFFICES, NAME, ETC.
2.1 Principal Office. The principal office of the Company shall be located
at One Kendall Square, Cambridge, Massachusetts 02139 or such place within the
Commonwealth of Massachusetts as may be determined by the Members from time to
time. The Company shall maintain its records at such address.
2.2 Registered Office; Resident Agent. The name and address of the
Company's registered agent for service of process in the State of Delaware shall
be Corporation Service Company, 1013 Centre Road, Wilmington, Delaware
19805-1297. The name and address of the Company's registered agent for service
of process in the Commonwealth of Massachusetts shall be Genzyme Corporation,
One Kendall Square, Cambridge, Massachusetts 02139.
2.3 Name. The business of the Company shall be conducted under the name of
"Kallikrein LLC".
2.4 Term. The term of the Company shall commence upon the filing of the
Certificate of Formation (the "Effective Date") and shall be perpetual until it
is terminated as hereinafter provided.
2.5 Business Ventures. Any Member may engage independently or with others
in other business ventures of every nature and description, and neither the
Company nor any Member shall have any rights in and to such independent ventures
or the income or profits derived therefrom; provided, however, that a Member's
participation in such venture is subject to and consistent with the provisions
of Section [2.2] of the Collaboration Agreement.
ARTICLE 3. PURPOSES AND POWERS
3.1 Purpose. The purpose of the Company is to: (i) develop and
commercialize the Collaboration Products; (ii) act as a partner in limited
partnerships, general partnerships and limited liability partnerships, and as a
member of limited liability companies; and (iii) engage in any other business
permitted under the Act that the Members shall deem desirable or expedient.
3.2 Powers. The Company shall have all the powers necessary or convenient
to the conduct, promotion or attainment of the business, trade, purposes or
activities of the Company, including, without limitation, all the powers of an
individual, partnership, corporation or other entity.
ARTICLE 4. MEMBERS AND THEIR CONTRIBUTIONS AND LOANS
4.1 Contributions.
2
<PAGE>
(a) Each Member has agreed to contribute the amounts and/or property set
forth in Sections [3.1, 3.2, 3.5, 4.1 and 4.2] of the Collaboration Agreement.
The amount so contributed is hereinafter referred to as each Member's "Capital
Contribution". The cash and agreed value of any property contributed by each
Member as of the date hereof is set forth in Schedule A attached hereto.
(b) Pursuant to the terms of the Collaboration Agreement, Dyax, on behalf
of the Dyax Companies, and Genzyme have undertaken to make monthly Capital
Contributions to the Company in the amount equal to fifty percent (50%) of all
Program Costs following satisfaction of the Initial Funding Commitment.
If either Genzyme or Dyax (on behalf of the Dyax Companies) fails to
make all or any portion of a monthly Capital Contribution, the other Member may
elect to make such Contribution (or a portion thereof). If either Genzyme or
Dyax (on behalf of the Dyax Companies) fails to make all or any portion of a
monthly Capital Contribution, the Percentage Interests (as defined below) shall
be adjusted to correspond to the percentage of cumulative Capital Contributions
made by or on behalf of each Member and subsequent monthly Capital Contributions
shall be made by the Members in proportion to their adjusted Percentage
Interests;
(c) No interest shall accrue on any Capital Contributions, and no Member
shall have the right to withdraw or to be repaid any capital it has contributed,
except as otherwise specifically provided in this Agreement.
(d) Each Member's percentage interest ("Percentage Interest") is as set
forth in Schedule A hereto, subject to adjustment as provided in Section 4.1(b)
of this Agreement.
4.2 Capital Accounts. A separate account (a "Capital Account") shall be
maintained for each Member and adjusted in accordance with Treasury Regulation
Section 1.704-1(b) as follows:
(a) There shall be credited to each Member's Capital Account the amount of
such Member's Capital Contribution as of the date, and to the extent, that such
Capital Contribution has been paid, and such Member's allocable share of Net
Profits (and any items in the nature of income or gain separately allocated to
such Member); and there shall be charged against each Member's Capital Account
the amount of all distributions to such Member and such Member's allocable share
of Net Losses (and any items in the nature of losses or deductions separately
allocated to such Member). Capital Contributions made by or on behalf of the
Dyax Companies shall be credited to their Capital Accounts in proportion to
their relative Percentage Interests.
(b) If the Company at any time distributes any of its assets in kind to
any Member, the Capital Account of each Member shall be adjusted to account for
that Member's allocable share (as determined under Section 5.1 below) of the Net
Profits or Net Losses that would have been realized by the Company had it sold
the assets that were distributed at their respective fair market values
immediately prior to their distribution.
3
<PAGE>
(c) In the event any Member's interest is transferred in accordance with
the terms of this Agreement, the transferee shall succeed to the Capital Account
of the transferor to the extent it relates to the transferred interest.
4.3 Loans. The Members shall not make loans to the Company unless the
Members unanimously agree in writing to make such loans.
4.4 Additional Members. Except as otherwise provided in Section 8.2 below
with respect to Substitute Members, additional Members may only be admitted with
the prior written unanimous approval of the Members. Such additional Members
shall execute and acknowledge a counterpart to this Agreement or shall otherwise
evidence in writing their agreement to be bound by the terms hereof in such
manner as the Members shall determine.
4.5 Liability of Members.
(a) No Member shall be liable for the obligations of the Company solely by
reason of being a Member.
(b) No Member shall be required to make any contributions to the capital
of the Company other than as provided in this Article 4.
(c) No Member shall be personally liable to the Company or its other
Members for monetary damages for breach of fiduciary duty as a Member to the
extent permitted by applicable law; provided, however, that this provision shall
not eliminate the liability of a Member (i) for any breach of the Member's duty
of loyalty to the Company or its other Members, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law or (iii) for any transaction from which the Member derived an improper
personal benefit. No amendment to or repeal of this Section 4.5(c) shall apply
to or have any effect on the liability or alleged liability of any Member for or
with respect to any acts or omissions of such Member occurring prior to such
amendment or repeal.
4.6 Withdrawal of Members. No Member shall have the right to withdraw from
the Company or to demand a return of its capital interest at any time except
upon termination and dissolution of the Company, unless agreed to by the
unanimous written consent of the other Members.
ARTICLE 5. ALLOCATIONS
5.1 Certain Definitions. For purposes of this Agreement, the following
terms shall have the meanings given them in this Article 5:
(a) "Adjusted Capital Account" for a Member means such Member's
Capital Account (i) reduced by the net adjustments,
allocations and distributions described in Treasury Regulation
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and
4
<PAGE>
(6) which, as of the end of the Company's taxable year are
reasonably expected to be made to such Member, and (ii)
increased by the sum of (A) the amounts a Member is obligated
to restore to its Capital Account or is deemed obligated to
restore pursuant to the penultimate sentences of Treasury
Regulation Sections 1.704-2(g)(1) and 2(i)(5), (B) the excess,
if any, of such Member's Capital Contribution over such
Member's actual paid-in capital contribution and (C) that
portion of any indebtedness of the Company (other than
"partner nonrecourse debt" as defined in Treasury Regulation
Section 1.704-2(b)(4)) with respect to which the Member bears
the economic risk of loss that such indebtedness would not be
repaid out of the assets of the Company if all of the assets
of the Company were sold at their respective book values as of
the end of the fiscal period and the proceeds from the sales
together with any amounts described in clauses (A) and (B)
above, were used to pay the liabilities of the Company.
(b) "Net Profits" and "Net Losses" mean the taxable income or
loss, as the case may be, for a period (or from a transaction)
as determined in accordance with Section 703(a) of the IRC
(for this purpose, all items of income, gain, loss or
deduction required to be separately stated pursuant to IRC
Section 703(a)(1) shall be included in taxable income or loss)
computed with the following adjustments:
(i) To the extent required by (and in the manner
described in) Treasury Regulation 1.704-1(b)(2),
items of gain, loss and deduction shall be
computed based upon the book values of the
Company's assets rather than upon such assets'
adjusted bases for federal income tax purposes (if
different);
(ii) Any tax-exempt income received by the Company
shall be included as an item of gross income;
(iii) The amount of any adjustments to the adjusted
bases (or book values if clause (i) above applies)
of any assets of the Company pursuant to IRC
Section 743 shall not be taken into account; and
(iv) Any expenditure of the Company described or
treated as being described in IRC Section
705(a)(2)(B) shall be treated as a deductible
expense.
(c) "Member Loan Nonrecourse Deductions" means any Company
deductions that would be Nonrecourse Deductions if they were
not attributable to a liability owed to or guaranteed by a
Member within the meaning and intent of Treasury Regulation
Section 1.704-2(i).
5
<PAGE>
(d) "Member Loan Minimum Gain" has the meaning set forth in
Treasury Regulation Section 1.704-2(i)(3).
(e) "Minimum Gain" has the meaning set forth in Treasury
Regulation Section 1.704-2(d). Minimum Gain shall be computed
separately for each Member in a manner consistent with the
Treasury Regulations under IRC Section 704(b).
(f) "Nonrecourse Deductions" has the meaning set forth in Treasury
Regulation Section 1.704-2(b)(1). The amount of Nonrecourse
Deductions for a taxable year of the Company shall be
determined according to the provisions of Treasury Regulation
Section 1.704-2(c).
(g) "Nonrecourse Liability" means any liability of the Company
with respect to which no Member has personal liability, as
determined in accordance with IRC Section 752 and the Treasury
Regulations promulgated thereunder.
5.2 Allocations of Profit and Loss. As of the end of each fiscal year of
the Company, or at the time any allocation is determined to be necessary by the
Members, Net Profits or Net Losses shall be allocated as follows:
(a) Except as provided in Sections 5.2(b) and 5.3 below, any allocation
required by this Section 5.2 to be made to the Members shall be allocated among
the Members in proportion to their respective Percentage Interests.
(b) With respect to the allocation of Net Losses or Net Profits pursuant
to this Section 5.2 among the Members for any fiscal year in which an additional
or substitute Member is admitted to the Company or there is an adjustment to the
Percentage Interests during such fiscal year, all Net Losses or Net Profits so
allocable shall be allocated in a manner which takes into account the varying
Percentage Interests during such fiscal year based on an accounting convention
chosen by the Members. In no event shall a retroactive allocation of Net Losses
be made pursuant to this Section 5.2.
5.3 Special Allocations. Notwithstanding the provisions of Section 5.2
above, the following allocations of Net Profits and Net Losses and items thereof
shall be made:
(a) If, during any year a Member unexpectedly receives any adjustment,
allocation or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) and, as a result of such adjustment,
allocation or distribution, such Member's Adjusted Capital Account has a
negative balance (computed with the adjustments set forth in clauses (i) and
(ii) of Section 5.1(a)), then items of gross income for such year (and, if
necessary, subsequent years) shall first be allocated to such Member in the
amount necessary to eliminate such negative balance as quickly as possible. This
Section 5.3(a) is intended to constitute a "qualified income offset" provision
within the meaning of the above Treasury Regulations, and shall be so
interpreted.
6
<PAGE>
(b) Nonrecourse Deductions for a taxable year or other period shall be
specially allocated among the Members in proportion to their Percentage
Interests.
(c) Any Member Loan Nonrecourse Deduction for any taxable year or other
period shall be specially allocated to the Member or Members who bear the risk
with respect to the loan to which the Member Loan Nonrecourse Deduction is
attributable in accordance with Treasury Regulation Section 1.704-2(b).
(d) In no event shall Net Losses of the Company be allocated to a Member
if such allocation would cause or increase a negative balance in such Member's
Adjusted Capital Account.
(e) Except as set forth in Treasury Regulation Section 1.704-2(f)(2), (3)
and (4), if, during any taxable year, there is a net decrease in Minimum Gain,
each Member, prior to any other allocation pursuant to this Article 5, shall be
specially allocated items of gross income and gain for such taxable year (and,
if necessary, subsequent taxable years) in an amount equal to that Member's
share of the net decrease in Minimum Gain, computed in accordance with Treasury
Regulation Section 1.704-2(g). Allocation of gross income and gain pursuant to
this Section 5.3(e) shall be made first from gain recognized from the
disposition of Company assets subject to non-recourse liabilities (within the
meaning of the Treasury Regulations promulgated under IRC Section 752), to the
extent of the Minimum Gain attributable to those assets, and thereafter, from a
pro rata portion of the Company's other items of income and gain for the taxable
year. It is the intent of the parties hereto that any allocation pursuant to
this Section 5.3(e) shall constitute a "minimum gain chargeback" under Treasury
Regulation Section 1.704-2(f). With respect to a net decrease in Member Loan
Minimum Gain, items of gross income shall be specially allocated consistent with
the preceding sentence, and Treasury Regulation Section 1.704-2(i)(4).
(f) In the event that Net Profits, Net Losses or items thereof are
allocated to one or more Members pursuant to paragraphs (a) or (d) above,
subsequent Net Profits and Net Losses will first be allocated (subject to the
provisions of paragraphs (a) through (d)) to the Members in a manner designed to
result in each Member having a Capital Account balance equal to what it would
have been had the original allocation of Net Profits, Net Losses or items
thereof pursuant to paragraphs (a) or (d) not occurred.
(g) The respective Percentage Interests in the Net Profits and Net Losses
or items thereof shall remain as set forth above (subject to adjustment as
provided in Section 4.1(b) and Article 5) unless changed by amendment to this
Agreement or by an assignment of an interest in the Company authorized by the
terms of this Agreement. Except as otherwise provided herein, for tax purposes,
all items of income, gain, loss, deduction or credit shall be allocated to the
Members in the same manner as are Net Profits and Net Losses; provided, however,
that if, as a result of clause (i) of Section 5.1(b), the book value of any
property of the Company was used in computing Net Profits or Net Losses, then
items of income, gain, deduction or credit related to such property for tax
purposes shall be allocated among the Members so as to take account of the
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variation between the adjusted basis of the property for tax purposes and its
book value in the manner provided for under IRC Section 704(c).
(h) If a Member's Percentage Interest is reduced (provided the reduction
does not result in a complete termination of the Member's interest in the
Company), the Member's share of the Company's "unrealized receivables" and
"substantially appreciated inventory" (within the meaning of IRC Section 751)
shall not be reduced, so that, notwithstanding any other provisions of this
Agreement to the contrary, that portion of the Net Profit otherwise allocable
upon a liquidation or dissolution of the Company pursuant to Article 5 hereof
which is taxable as ordinary income (recaptured) for federal income tax purposes
shall, to the extent possible without increasing the total gain to the Company
or to any Member, be specially allocated among the Members in proportion to the
deductions (or basis reductions treated as deductions) giving rise to such
recapture.
(i) In each taxable year of the Company, items of deduction and credit
attributable to Program Costs shall be allocated to the Members in proportion to
the Capital Contributions which funded the applicable expenditure.
ARTICLE 6. DISTRIBUTIONS
6.1 Distribution of Company Funds. The timing of distributions by the
Company (other than distributions in dissolution to which Section 10.3 applies)
shall be determined in accordance with the provisions of Section [4.3] of the
Collaboration Agreement. Such distributions shall be made to the Members first
in proportion to the excess of the positive balances in their Capital Accounts
over the amounts of their Capital Contributions, and then in proportion to their
remaining positive Capital Account balances; provided, however, that the amount
distributable to the Members pursuant to this Section 6.1 shall be reduced by
the amount required to fund the budgeted capital, working capital and reserve
requirements of the Company during the one hundred and eighty (180) day period
following the proposed distribution date and by such other amounts as the
Steering Committee reasonably determines to be necessary or appropriate for the
operation of the Company.
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ARTICLE 7. INDEMNIFICATION
7.1 Indemnification of Members.
(a) The Company shall, to the fullest extent permitted by the Act, as
amended from time to time, indemnify each Member, each Member's Affiliates, and
the respective directors, officers, employees and agents of each Member and its
Affiliates (collectively, "Indemnified Persons") from and against all expenses
and liabilities (including counsel fees, judgments, fines, excise taxes,
penalties and amounts paid in settlements) reasonably incurred by or imposed
upon an Indemnified Person in connection with any threatened, pending or
completed action, suit or other proceeding, whether civil, criminal,
administrative or investigative, in which such Indemnified Person may become
involved by reason of (i) any act performed by such Indemnified Person in
connection with the performance of and within the scope of the authority
conferred by the Collaboration Agreement or (ii) such Indemnified Person's
service as a director, officer, manager or member of the Company or any of its
subsidiaries or, if such service was undertaken at the request of the Company,
such Indemnified Person's service as a director, officer or trustee of, or in a
similar capacity with, another organization.
(b) Indemnification may include payment by the Company of expenses in
defending an action or proceeding in advance of the final disposition of such
action or proceeding upon receipt of an undertaking by the Indemnified Person to
repay such payment if it is ultimately determined that such Indemnified Person
is not entitled to indemnification under this Article 7, which undertaking may
be accepted without reference to the financial ability of the Indemnified Person
to make such repayments.
(c) The Company shall not indemnify any Indemnified Person in connection
with a proceeding (or part thereof) initiated by such person unless such
Indemnified Person is successful on the merits, the proceeding was authorized by
the Members or the proceeding seeks a declaratory judgment regarding such
Indemnified Person's own conduct.
(d) The indemnification rights provided in this Article 7 (i) shall not be
deemed exclusive of any other rights to which Indemnified Persons may be
entitled under any law, agreement or vote of disinterested Members or otherwise
and (ii) shall inure to the benefit of the heirs, executors and administrators
of Indemnified Persons. The Company may, to the extent authorized from time to
time by its Members, grant indemnification rights to employees or agents of the
Company or persons other than Indemnified Persons serving the Company and such
rights may be equivalent to, or greater or less than, those set forth in this
Article 7.
(e) No indemnification shall be provided for any Indemnified Person with
respect to (i) any matter as to which such Indemnified Person shall have been
finally adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that such Indemnified Person's action was in the best
interests of the Company, (ii) any act which constitutes gross negligence or
wilful misconduct or (iii) any matter disposed of by a compromise payment by
such Indemnified Person, pursuant to a consent decree or otherwise, unless the
payment and
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<PAGE>
indemnification thereof have been approved by the Members, which approval shall
not unreasonably be withheld, or by a court of competent jurisdiction.
(f) Any amendment or repeal of the provisions of this Article 7 shall not
adversely affect any right or protection of an Indemnified Person with respect
to any act or omission of such Indemnified Person occurring prior to such
amendment or repeal.
ARTICLE 8. ASSIGNABILITY OF MEMBERSHIP INTERESTS
8.1 Assignment.
(a) Except in accordance with Article [13] of the Collaboration Agreement,
a Member may not assign his or her interest in whole or in part to any assignee
which is not already a Member without the prior written consent of all of the
other Members who may or may not consent in their absolute discretion.
(b) An assignment of a Member's interest does not of itself dissolve the
Company or permit the assignee to participate in the business and affairs of the
Company or to become a Member or exercise any rights or powers of a Member.
8.2 Substitute Members. No assignee of a Member's interest (other than an
assignee which is already a Member) shall have the right to be admitted as a
substitute member in place of the assignor (a "Substitute Member") unless:
(a) the assignor shall designate in writing satisfactory to the
other Members the intention that the assignee is to become a Substitute
Member;
(b) the assignee shall agree in writing to be bound by all of the
terms of this Agreement;
(c) all of the other Members consent in writing to the admission of
the assignee as a Substitute Member, which consent may be withheld in
their absolute discretion;
(d) the assignee shall execute and/or deliver such instruments,
including without limitation, an opinion of counsel satisfactory to the
Members, to the effect that such proposed assignment and substitution does
not violate the registration requirements of state or federal securities
laws, and such instrument as the Members deem necessary or desirable to
effect such assignee's admission as a Substitute Member and to evidence
the assignee's acceptance of the terms of this Agreement; and
(e) the assignee shall pay all reasonable expenses in connection
with the assignee's admission as a Substitute Member.
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8.3 Rights of Assignees. An assignee who does not become a Substitute
Member shall succeed only to the rights of the assignor to receive allocations
and distributions from the Company as provided in Articles 5, 6 and 10 hereof,
and shall not have the right to become a Member or exercise any rights or powers
of a Member.
8.4 Other Restrictions. A Member may not pledge, encumber or hypothecate
any of its interest without the consent of the other Members.
ARTICLE 9. FISCAL YEAR, ACCOUNTING, INSPECTION OF BOOKS
9.1 Fiscal Year and Accounting. Except as otherwise approved by the
Members, or required by law, the fiscal year of the Company shall be the
calendar year and the books of the Company shall be kept on the accrual method.
9.2 Inspection of Books. The books of the Company shall at all times be
available for inspection and audit by any Member at the Company's principal
place of business during business hours. The Company shall furnish each Member
with all necessary tax reporting information as to its interest in the Company,
with an annual balance sheet and profit and loss statement and with a cash flow
statement showing any distributions made to the Members, within sixty (60) days
after the close of each fiscal year.
ARTICLE 10. DISSOLUTION
10.1 Events of Dissolution. The term of the Company shall commence on the
Effective Date and shall be in full force and effect until the earliest of the
following:
(a) the sale or disposition of all or substantially all of the
Company property;
(b) the dissolution of the Company by the unanimous written consent
of the Members;
(c) the bankruptcy or dissolution of a Member other than Subsidiary;
provided, however, that if there are at least two (2) remaining Members, the
Members may consent to the continuation of the business of the Company after the
occurrence of such an event, pursuant to Section 18-802 of the Act and Section
10.2 of this Agreement;
(d) the entry of a decree of judicial dissolution under Section
18-802 of the Act;
(e) the occurrence of any event, other than those referred to in
paragraph (d), which causes dissolution of a limited liability company under the
Act; or
(f) upon the occurrence of an event and at the time specified in
Article [13] of the Collaboration Agreement.
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Notwithstanding the dissolution of the Company, the business of the
Company shall continue to be governed by this Agreement until the winding up of
the Company occurs.
10.2 Consent to Continue Company. The Members may vote to continue the
business of the Company within ninety (90) days after the occurrence of an event
of dissolution set forth in Section 10.1(d) of this Agreement, pursuant to and
in accordance with Section 18-801(4) of the Act. The agreement of the remaining
Members holding a majority of the remaining Percentage Interests shall
constitute the consent of the Members to the continuation of the Company.
10.3 Distribution Upon Dissolution.
(a) After payment of liabilities owing to creditors, the Members or
liquidator shall set up such reserves as they deem reasonably necessary for any
contingent or unforeseen liabilities or obligations of the Company, including
the expenses of liquidation. Such reserves may be paid over by the Members or
liquidator to a bank, to be held in escrow for the purpose of paying any such
contingent or unforeseen liabilities or obligations and, at the expiration of
such period as the Members or liquidator may deem advisable, such reserves shall
be distributed to all of the Members or their assigns in the manner set forth in
Section 10.3(b) below. In the event that any part of such net assets consists of
securities or other non-cash assets, the Members or liquidator may (but shall
not be required to) take whatever steps they deem appropriate to convert such
assets into cash or into any other form that would facilitate the distribution
thereof.
(b) After payment has been made pursuant to Section 10.3(a) above, the
Members or the liquidator shall cause the remaining net assets of the Company to
be distributed to and among the Members in proportion to and to the extent of
their positive Capital Account balances (after such balances have been adjusted
to reflect all allocations of Net Profits and Net Losses and distributions
pursuant to Article 6). Cash and non-cash assets shall be distributed to each
Member on a pro rata basis, or in such other manner as the Members may agree,
with all noncash assets being distributed on the basis of their fair market
value.
(c) The Company shall terminate when all property has been distributed
among the Members. Upon such termination, the Members shall execute and cause to
be filed a certificate of cancellation of the Company, as provided for in
Section 18-203 of the Act, and any and all other documents necessary in
connection with the termination of the Company.
ARTICLE 11. GENERAL PROVISIONS
11.1 Complete Agreement; Modification. This Agreement and the
Collaboration Agreement together contain a complete statement of all the
agreements among the parties with respect to the Company. There are no
representations, agreements, arrangements or undertakings, oral or written,
between or among the parties to this Agreement relating to the subject matter of
this Agreement which are not fully expressed in this Agreement. This Agreement
may be amended or modified only with the unanimous consent of the Members.
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11.2 Governing Law; Severability. All questions with respect to the
construction of this Agreement and the rights and liabilities of the parties
shall be determined in accordance with the applicable provisions of the laws of
the State of Delaware, and this Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations of such state. If any provision of this
Agreement, or the application thereof to any person or circumstances, shall, for
any reason and to any extent, be invalid or unenforceable, the remainder of this
Agreement and the application of that provision to other persons or
circumstances shall not be affected but rather be enforced to the extent
permitted by law.
11.3 Notice. All notices, requests, consents and statements hereunder
shall be deemed to have been properly given if mailed from within the United
States by prepaid certified mail, return receipt requested, or if sent by
prepaid telegram, or overnight delivery service, or if hand delivered, addressed
in each case if to the Company at its principal place of business and, if to any
Member, to the address set forth herein, or to such other address or addresses
as any such Member shall have theretofore designated in writing to the Company
in accordance with this Section 11.3.
11.4 Pronouns. Feminine or masculine pronouns shall be substituted for the
neuter pronouns, neuter pronouns for masculine or feminine pronouns, plural for
the singular and the singular for the plural, in any place in this Agreement
where the context may require such substitution.
11.5 Titles. The titles of Articles and Sections are included only for
convenience and shall not be construed as a part of this Agreement or in any
respect affecting or modifying its provisions.
11.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of all parties hereto and their heirs, successors, assigns
and legal representatives.
11.7 Counterparts. This Agreement may be signed in one or more
counterparts and all counterparts so executed shall constitute one agreement
binding on all parties hereto, notwithstanding that all parties have not signed
the original or the same counterpart.
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IN WITNESS WHEREOF, we have affixed our signatures as of the day first
above written.
MEMBERS:
GENZYME CORPORATION
By:__________________________________
Title:_______________________________
Date:________________________________
DYAX CORP.
By:__________________________________
Title:_______________________________
Date:________________________________
SUBSIDIARY
By:__________________________________
Title:_______________________________
Date:________________________________
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Schedule A
Members Capital Contribution Percentage Interest
- ------- -------------------- -------------------
Genzyme Corporation 50.00%
Dyax Corp. 49.00%
Subsidiary 1.00%
-----
TOTAL: 100.00%
15
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
SCHEDULE 3.2
EXTERNAL PRODUCTS
*************
16
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Exhibit 10.26
RESEARCH AND DEVELOPMENT AGREEMENT
This RESEARCH AND DEVELOPMENT AGREEMENT ("Agreement") is made as of this
10th day of March, 1997 (hereinafter "Effective Date") by and between DEBIOPHARM
S.A., having its principal place of business at 17, rue des Terreaux, CH-1000
Lausanne 9, Switzerland ("Debio") and Dyax Corp., having its principal place of
business at One Kendall Square, Bldg. 600, 5th Floor, Cambridge, Massachusetts,
02139, USA ("Dyax") with respect to the following facts:
WITNESSETH:
WHEREAS, Dyax possesses certain know-how and proprietary rights, including
patents (granted and pending) concerning the identification, production and
purification of EPI-HNE4, an inhibitor of human neutrophil elastase, and of
other molecules with similar anti-neutrophil elastase activity;
WHEREAS, Debio possesses expertise in the development and registration of
therapeutic products and wishes to conduct certain "Research," as defined
herein, concerning EPI-HNE4 for the purpose of determining whether EPI-HNE4 has
therapeutic potential in humans; and
WHEREAS, both Dyax and Debio wish to enter into a Research and Development
Agreement, governing the "Research" to be conducted by Debio, which will then
provide Debio with the exclusive option to license certain exclusive rights to
develop and distribute EPI-HNE4 within certain geographic markets;
NOW, THEREFORE, Dyax and Debio agree as follows:
1. Definitions and Interpretations.
Terms, when used with initial capital letters, shall have the meanings set
forth below or at their first use when used in the Agreement.
1.1 "Affiliates" means any corporation or other business entity controlled
by, controlling, or under common control with or by either party to this
Agreement. For this purpose, "control" means direct or indirect beneficial
ownership of more than fifty percent (50%) of the voting stock, or more
than fifty percent (50%) interest in the income, of a party or such
corporation or other business.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.3 "Confidential Information," as used herein shall mean each party's
confidential information, know-how or data, and includes manufacturing,
marketing, personnel and other business information and plans, whether in
oral, written graphic or electronic form, and which is identified as
confidential. Confidential information shall not be deemed confidential,
and the receiving party shall have no obligation with respect to any
information which is (a) known by the receiving party prior to disclosure
by the furnishing party, and reduced to writing by the receiving party,
(b) information which is in the public domain or subsequently enters the
public domain through no fault of either party, (c) information that is
received by the receiving party from an independent third party with the
lawful right to disclose. All test and development data, processes,
methods and other technology developed by Debio pursuant to the Agreement
shall also be "Confidential Information"
1.4 "Debio" shall mean Debiopharm S.A. and Affiliates.
1.5 Dyax" shall mean Dyax Corp. and Affiliates, and their successors and
assigns.
1.6 "EPI-HNE" shall mean molecules, ************* described in the Dyax
patent application designated LEY-1PCT in Exhibit A.
1.7 "EPI-HNE Patent Rights" shall mean the patent applications listed as
Exhibit A, attached hereto and hereby made a part hereof and any and all
continuations, divisions, renewals, reissues, reexaminations,
continuations-in-part and extensions corresponding thereto, and any
patents issuing therefrom.
1.8 "Know-How" shall mean any and all technical information, test and
development data, formulations, processes, ideas, protocols, regulatory
files and the like, which is non-patentable and discovered or developed
pursuant to the Research.
1.9 "Product" means any pharmaceutical formulation containing EPI-HNE for
use in the Field of Use (as defined in Section 15.2), pursuant to EPI-HNE
Patent Rights.
1.10 "Research" by Debio shall mean the procurement, investigation and
study of EPI-HNE4 for the purposes of determining whether EPI-HNE4 has
therapeutic potential in humans for the treatment of cystic fibrosis,
ARDS, or chronic obstructive pulmonary diseases, such as emphysema and
chronic bronchitis, all as set forth in the Research Plan in Exhibit B,
attached hereto and hereby made a part hereof.
2
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.11 "Revenues" shall mean the ************* from the commercial use or
sale of Product, including all payments from sublicensees, less the
following items: (a) *************, (b) payments *************, and (c)
payments ************* (and *************).
1.12 "Territory" means the countries of the European Union, *************
in which Dyax may grant rights to Debio pursuant to Article 15.2.2
2. The Development and Evaluation Work Phase.
2.1 Scope of Agreement.
2.1.1 Obligation of Dyax. To facilitate the Research, Dyax shall provide
************* for use solely in performance of the Research, under the
conditions set forth herein. Dyax shall also provide available information
developed by Dyax and third parties concerning the therapeutic potential
of EPI-HNE in humans.
2.1.2 Obligation of Debio. Debio agrees to perform the Research in
accordance with the Research Plan, as may be amended from time to time by
mutual agreement of the parties. The Research shall be conducted
*************.
2.1.3 Recordkeeping by Debio. Debio agrees to maintain records, in
accordance with generally accepted accounting practices in Switzerland, of
its research and development costs in performing the Research Plan. In the
event such costs are relevant to Revenue sharing in accordance with
Sections 4.4.1 or 15.3, Dyax shall have the right from time to time to
audit such records using an independent accountant.
2.2 Due Diligence and Workmanship. Debio shall use its best efforts to
conduct the Research in accordance with Good Clinical Practices and to
deliver to Dyax reports of the results. However, the parties agree that
the results of the Research cannot be accurately predicted, and that Debio
does not warrant or guarantee that the Research will yield any useful or
anticipated results. The sole obligation of Debio is to diligently pursue
the activities pursuant to the Research.
3
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2.3 Development and Evaluation Phase Research Licenses.
2.3.1 License to Debio. For the term of this Agreement only and as
reasonably necessary to perform the Research (and with no commercial
rights), Dyax grants to Debio an exclusive royalty-free license under the
EPI-HNE Patent Rights, Dyax Know-How, EPI-HNE4 Materials and rights
arising under Section 4.1 herein in the Field of Use for the Territory.
2.3.2 To the best of Dyax's knowledge up to the Effective Date, the
EPI-HNE Patent Rights are valid and effective, as shown in Exhibit A, has
been properly filed, prosecuted and/or issued in the respective offices
and jurisdictions, and all applicable fees due and payable have been paid.
2.3.3 In the event that any of the EPI-HNE Patent Rights under Exhibit A
should not be granted or established by reasonable proof to Debio's
satisfaction, Debio may either terminate this Agreement under Section 8.1
or negotiate a license agreement with the relevant third party, in its
sole discretion, to conduct the Research.
3. Transfer and Handling of Materials.
3.1 Debio shall use the EPI-HNE4 Materials and Dyax Confidential
Information solely for the purposes specified in this Agreement and for no
other purpose, including without limitation, use in any research
activities other than those which relate directly to the purposes
specified herein, or for any commercial purpose. Such use shall be in
compliance with all applicable laws and regulations. Upon conclusion of
the Research, Debio shall return or destroy, as directed by Dyax, all
unused EPI-HNE4 Materials. Debio shall not sell, transfer, disclose or
otherwise provide access to the EPI-HNE4 Materials or Dyax Confidential
Information, any method or process relating thereto or any material that
could not have been made but for the foregoing, to any person or entity
without the prior express written consent of Dyax, except that Debio may
allow access to the EPI-HNE4 Materials to employees or agents for purposes
consistent with the Agreement. Debio will make diligent efforts to ensure
that such employees and agents will use the EPI-HNE4 Materials in a manner
that is consistent with the terms of the Agreement. Dyax shall use Debio
Know-How solely for the purposes specified in this Agreement and for no
other purpose.
3.2 Upon termination of the Agreement and except as provided under any
license agreement, Debio shall immediately cease all use, including,
without limitation, research and commercial use, of the EPI-HNE4 Materials
and Dyax Confidential Information and shall, according to Dyax's
instructions, destroy or return the EPI-HNE4 Materials and any copies or
replications thereof, under the control of Debio.
4
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
3.3 Debio acknowledges and agrees that the EPI-HNE4 Materials may have
biological and/or chemical properties that are unpredictable and unknown
at the time of transfer and that they are to be used with caution and
prudence.
3.4 Title to and ownership rights in the EPI-HNE4 Materials shall remain
with Dyax and Debio will acquire no title thereto as a result of this
Agreement.
4. Ownership of Results.
4.1 Patentable Inventions. Unless otherwise agreed to by the parties in
any license or other agreement, all patentable inventions, improvements
and any patent rights appurtenant thereto, conceived and reduced to
practice pursuant to the Research shall be owned jointly where created
jointly or solely by each party where so created. Licenses to any such
inventions, improvements and patent rights, however owned, shall be
governed by the terms of this Agreement and/or any future license
agreement pertaining to such rights.
4.1.1 If either party identifies or becomes aware of a patentable
invention, that party shall promptly submit a written description of the
subject matter of such invention to the other party. With regard to
inventions with application to the Research or future products within the
Field of Use, ************** shall have primary responsibility for
determining whether to file patent applications in the Territory, and
shall be responsible for determining the timing and scope of a patent
application and for selecting the countries for filing, and for the
filing, prosecution and maintenance of such patent application and all
patents issuing therefrom. Debio and Dyax shall provide to each other all
necessary cooperation relating to the filing, prosecution and maintenance
of such patent applications. All expenses for such matters in the
Territory shall be borne by *************.
4.2 Know-How. Subject to Section 8 and unless otherwise agreed to by the
parties, *************.
4.3 Cooperation. Both Debio and Dyax undertake to promptly notify the
other of any patentable invention, as described in Section 4.1, and to
cause their respective employees to sign and complete all such deeds,
documents, patent applications, assignments, and other instruments and to
do all such acts and things as are necessary to give full force and effect
to the terms and conditions contemplated by the Agreement and to make such
terms and conditions binding on their respective employees.
5
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
4.4 Rights of Dyax. Subject to Debio's rights to add additional countries
to its license pursuant to Section 15.2.2, as for all patentable
inventions and Know-How conceived as a result of the Research and owned
solely or jointly by Debio and subject to restrictions imposed by any
government source of grant monies received by Debio after the Effective
Date:
4.4.1 Outside of the Territory for all therapeutic uses, Dyax shall have
an exclusive license with the right to grant sublicenses; provided that
for any patentable invention and Know-How solely owned by Debio, Dyax
shall pay Debio *************; and
4.4.2 Throughout the world for all non-therapeutic uses, Dyax shall have a
royalty free exclusive license with the right to grant sublicenses.
5. Administration and Indemnification.
5.1 Representatives. Debio and Dyax will designate a person or persons of
their choice to act representatives during the term of this Agreement.
Dyax designates Dr. Edward Cannon and Debio designates Neil L. Brown to
act as representatives under this Agreement. Each party may change its
representative upon reasonable notice to the other party.
5.2 Reports and Access to Data. The parties agree to provide each other
with written detailed Research Status Reports no less frequently than
************* and to provide the other with access to all Know-How and any
information related to any pre-clinical or clinical investigations
developed from the Research.
5.3 Insurance and Indemnification.
5.3.1 Debio shall indemnify and hold harmless Dyax, its employees and
agents against all third party actions, proceedings, claims, demands,
losses, costs, damages or expenses whatsoever which may be brought against
or suffered by Dyax or which Dyax may sustain as a result of use of
Product for testing in or treatment of humans by Debio or under Debio's
supervision.
5.3.2 Both Dyax and Debio agree that *************, the Research or any
other work performed under this Agreement, except as provided for under
6
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Section 5.3.1 or where losses, costs, damages or expenses are the result
of the willful breach of any term hereof by the other party, or by the
other party's servants, agents, employees or subcontractors. Each party
shall indemnify and hold harmless the other party, its employees and
agents against all third party actions, proceedings, claims, demands,
losses, costs, damages or expenses whatsoever which may be brought against
or suffered by the other party or which such party may sustain, as a
result of willful breach of any term hereof by the indemnifying party.
Such indemnification will survive termination of the Agreement.
5.3.3 Each party undertakes to notify the other party if it has any reason
to believe that the use of EPI-HNE, EPI-HNE4 Materials, or Confidential
Information could result in a claim by any third party, and the parties
agree that in such case they shall consult in good faith to take such
remedial actions that are necessary to avoid such liability.
5.3.4 ************* shall take reasonable action to institute and
prosecute legal proceedings against third parties who infringe patents
from the EPI-HNE Patent Rights, or to otherwise defend any issued patent
rights for EPI-HNE4, in the Fields of Use in the Territory. Any such
action, taken under this paragraph, shall be at ************* expense.
************* shall, if requested by ************* and at *************
expense, assist in the prosecution of such action.
5.4 Steering Committee.
5.4.1 The parties agree to form a Steering Committee to oversee the
Research and to undertake a development program to exploit all indications
for EPI-HNE *************. The Steering Committee shall be composed of two
representatives of Debio and two representatives of Dyax. Such Committee
shall meet at least every six months (more frequently, if deemed necessary
by at least two members of the Committee) to discuss the progress of the
Research and to consider options for development of new indications.
Representatives may be accompanied at such meetings by consultants and
experts bound by appropriate confidentiality agreements who may
participate, but may not vote at said meetings. Decisions of the Steering
Committee shall be made by a vote of three or more representatives of the
parties. Each party shall bear their own respective travel and
accommodation expenses, as well as all fees and costs incurred by their
consultants associated with attending such meetings.
6. Confidentiality.
6.1 The parties agree that Confidential Information exchanged during the
course of the Agreement will be accorded confidential treatment and shall not be
used for any other purpose than the performance of this Agreement for a period
of
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
************* from the expiration or termination of the Agreement. Debio and
Dyax may disclose confidential information to candidate sublicensees solely for
the purpose of entering into a business relationship subject to these candidate
sublicensees entering into confidentiality and non-use agreements no less
restrictive than the terms and conditions of Section 6.1.
7. General Provisions.
7.1 Notices. Notices required or permitted to be made or given to either
party hereto pursuant to this Agreement shall be sufficiently made or
given on the date of mailing if sent to such party by certified or
registered mail, postage prepaid, addressed to it at its address set forth
or to such other address as it shall designate by written notice to the
other party as follows:
In the case of Dyax:
Dyax Corp.
One Kendall Square, Bldg. 600, 5th Floor
Cambridge, Massachusetts 02139
Attn: Edward Cannon
In the case of Debio:
Debiopharm S.A.
17, rue des Terreaux
Case Postale 211
CH-1000 Lausanne 9
Switzerland
Attn: Legal Department
Copies to:
Kostopulos & Associates
205 S. Whiting St., Suite 201
Alexandria, VA 22304
Attn: N. Peter Kostopulos
Telecopier: (703) 751-2807
8. Termination.The Agreement can be terminated at anytime depending upon the
following circumstances:
8.1 The Agreement can be terminated by Debio alone, at any time upon three
(3) months written notice to Dyax.
8.2 In the event that the Agreement is terminated by Debio under Section
8.1 or by Dyax under Section 8.3, all rights granted to Debio under
Section 2.3.1 shall revert to Dyax. The parties shall meet immediately to
negotiate an assignment to Dyax to all Know-
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How under Sections 4.1 and 4.2, information under Section 5.2, and all
regulatory filings. With respect to the assignment of any patentable
inventions and/or patent filings which are solely owned by Debio, the
amounts and details will be negotiated in good faith by Debio and Dyax.
8.3 In the event of any breach of any material term or condition of this
Agreement by either party, the non-breaching party shall give sixty (60)
days written notice to the breaching party to correct such breach, along
with a written explanation supporting its reasons for termination. In the
event the breach is not cured with the sixty-day period, the non-breaching
party shall have the following rights:
8.3.1 immediately terminate and/or modify this Agreement; provided,
however the non-breaching party shall continue to have all rights under
this Agreement, including the right to conduct Research under 2.3.1 and
the right to use all patentable inventions under Section 4.1, all know-how
under Section 4.2, information under Section 5.2, and all regulatory
filings, as well as the license options under Section 15; all of which,
under terms and conditions no less favorable than provided for under this
Agreement;
8.3.2 receive losses and damages sustained as a result of the breach(s) by
the breaching party, unless otherwise excluded or limited by a provision
of the Agreement.
9. Term of Agreement. Unless terminated earlier pursuant to Section 8 or other
mutual agreement, this Agreement shall commence upon the Effective Date and
shall terminate upon the expiration of the option set forth in Section 15.
Sections 4.1, 4.4 5.2, 5.3, 6 and 7.1 shall survive expiration or termination of
the Agreement
10. Independent Contractor. The relationship of Debio and Dyax under this
Agreement is intended to be that of an independent contractor. Nothing contained
in this Agreement is intended or is to be construed so as to constitute the
undersigned parties as partners or either party hereto as an agent or employee
of the other. Neither party has any express or implied right or authority under
this Agreement to assume or create any obligations on behalf of or in the name
of the other, or to bind the other party hereto to any contract, agreement or
undertaking with any third party.
11. Complete Agreement. The parties hereto acknowledge that this document sets
forth the entire agreement and understanding of the parties, except for
pre-existing confidentiality obligations between the parties, and supersedes all
prior written or oral agreements or understandings with respect to the subject
matter hereof. No modification of this Agreement shall be deemed to be valid
unless in writing and signed by both parties.
12. Assignment. This Agreement shall be binding upon and inure to the benefit of
the successors or permitted assignees of each of the parties, and may not be
assigned or transferred by either party without the prior written consent of the
other.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
13. Law Governing and Dispute Resolution.
13.1 This Agreement shall be governed by and construed under the laws of
the Commonwealth of Massachusetts.
13.2 In the event the parties are unable to resolve a dispute, the parties
shall engage a single mediator acceptable to both parties. Said mediator
will immediately meet with Senior Vice Presidents of both parties to
discuss the basis for the dispute and to attempt to resolve the dispute.
13.3 Any dispute, controversy or claim arising under, out of or relating
to this Agreement and any subsequent amendments of this Agreement,
including, without limitation, its formation, validity, binding effect,
interpretation, performance, breach or termination, as well as non
contractual claims, shall be referred to and finally determined by
arbitration in accordance with the WIPO Arbitration Rules. The arbitral
tribunal shall consist of three arbitrators. The place of arbitration
shall be Geneva, Switzerland. The language to be used in the arbitral
proceedings shall be English.
14. Execution. This Agreement shall be executed in two (2) counterparts, each of
which shall be deemed an original, but both of which together shall constitute
one and the same instrument.
15. Option to Obtain License. Dyax hereby grants to Debio an option to enter
into an exclusive license to manufacture, have manufactured, use and sell
EPI-HNE products in the Territory (the "License Agreement"), for a period of
three (3) years after the Effective Date subject to extension until completion
of the ************* in the Research Plan if such ************* has been started
(the "Option Period"). Debio shall not ************* to Dyax for entering into
the License Agreement. Such a license with Debio shall include, among other
things, the following terms:
15.1 Definitions. The license agreement shall incorporate definitions from
the Research and Development Agreement, plus additional definitions deemed
appropriate by the parties.
15.2 Grant of Rights Dyax shall grant exclusive rights, including the
right to sublicense, to make, have made, use and sell Product, under the
EPI-HNE Patent Rights, Dyax Know-How, inventions and know-how developed
under Sections 4.1 and 4.2 in this Agreement, for the following
therapeutic uses: *************, such as ************* ("Field of Use").
15.2.1 Other Indications. Debio shall have the ************* a license in
the Territory for the rights to any other therapeutic indication outside
of the Field of Use, provided that a third party does not already control
the licensing of such rights.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
15.2.2 Additional Countries. If at the time of the license in the
Territory set forth in this Section 15 is granted to Debio and rights to
commercialize EPI-HNE in the Field of Use ************* outside the
Territory *************, Dyax shall grant Debio a right of first refusal
to such other countries. Dyax will ************* to Debio of
*************. Debio shall ************* after the ************* during
which *************. If Debio *************, Dyax shall *************.
Before ************* with *************, Dyax *************.
15.3 Royalties.
15.3.1 Payments to Dyax. As to rights granted by Dyax to Debio, Debio
shall pay Dyax ************* of all Revenues received by Debio in the
Field of Use in the Territory. Prior to sharing such Revenues with Dyax,
Debio shall be entitled to ************* equal to *************. In the
event that *************, the parties agree *************.
15.3.2 Duration of Payments. Payments under 15.3.1 shall continue on a
country-by-country basis until the expiration or finally determined
invalidity of all patents, granted or to be granted, covering the products
for which Revenues are being received in each country, or for
************* from the first Commercial Sale of Product in each country,
whichever is longer, provided that revenues are being received on the
Product.
15.4 Territory. The territory will be the same geographic areas as defined
in the Agreement.
15.5 Exercise of the option. At any time during the Option Period, Debio
may notify Dyax that Debio exercises the option. Debio and Dyax shall then
meet at their mutual convenience to negotiate in good faith the remaining
terms of the License Agreement.
15.5.1 If Debio and Dyax have not signed the License Agreement within
************* from the exercise of the option,
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
either party may refer the matter to mediation followed, in the absence of
an agreement, by arbitration.
15.5.2 The License Agreement will be effective no later than *************
after the commencement of the mediation, even if the final agreement is
reached later or the final decision is rendered later.
15.5.3 Mediation. Any disagreement as to the terms of the License
Agreement shall be submitted to mediation in accordance with the WIPO
Mediation Rules. The place of mediation shall be Geneva. The language to
be used in the mediation shall be English.
15.5.4 Arbitration. If, and to the extent that, any such disagreement as
to the terms of the License Agreement has not been settled pursuant to the
mediation within ************* of the commencement of the mediation, it
shall, upon the filing of a Request for Arbitration by either party, be
referred to and finally determined by arbitration in accordance with the
WIPO Expedited Arbitration Rules. Alternatively, if, before the expiration
of the said period of *************, either party fails to participate or
to continue to participate in the mediation, the disagreement as to the
terms of the License Agreement shall, upon the filing of a Request for
Arbitration by the other party, be referred to and finally determined by
arbitration in accordance with the WIPO Expedited Arbitration Rules. The
place of arbitration shall be Geneva. The language to be used in the
arbitral proceedings shall be English.
15.5.4.1 Within a short period to be fixed by the Arbitral Tribunal, each
party shall submit to the Arbitral Tribunal a full proposal for the
License Agreement, which will not be communicated to the other party. The
Arbitral Tribunal shall then decide which of the two proposals is closer
to the common intent of the parties as evidenced by documentary record
between the two parties, including, but not limited to the research and
development program and correspondence between the parties. The Arbitral
Tribunal is authorised to decide ex8aequo et bono. The Arbitral Tribunal
may not take some terms in one proposal and some other terms in the other
proposal, but shall choose one proposal and decide that it shall
constitute the License Agreement deemed entered into by the parties.
16. Force Majeure.
16.1 Neither party shall be liable for a failure to comply with a
provision herein, if it is prevented from performing the said provision
because of force majeure, this notion being defined as an event beyond the
control of the parties hereto and independent from their will including,
but not limited to, strikes or other labor trouble, war,
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insurrection, fire, flood, explosion, discontinuity in supply of power,
court order or governmental interference.
16.2 Despite the event of force majeure, either party hereto shall
undertake reasonable efforts to comply to the extent possible with its
obligations vis-a-vis the other party, pursuant to this Agreement.
16.3 The party invoking an event of force majeure must notify it forthwith
to the other party, and must specify which one or ones of its obligations
it is being prevented from complying with, and the nature of force
majeure, and must give an estimate of the period during which it is likely
that it shall be prevented from complying with the said obligation or
obligations.
17. Miscellaneous.
17.1 In the event that, during the duration of this Agreement, the
regulations in force at the time of its execution are drastically
modified, or in the event that the data on which the parties hereto relied
to enter into this Agreement change in such a manner that one party shall
suffer severe hardship, which could not reasonably be foreseen as of the
date on which this Agreement was executed, the parties hereto shall then
meet and adapt the conditions of this Agreement to the new situation, in a
manner equitable to both parties.
17.2 If any provision of this Agreement should be or become fully or
partly invalid or unenforceable for any reason whatsoever or should
violate any applicable law, this Agreement is to be considered divisible
as to such provision and such provision is to be deemed deleted from this
Agreement, and the remainder of this Agreement shall be valid and binding
as if such provision were not included therein. There shall be substituted
for any such provision deemed to be deleted a suitable provision which, as
far as is legally possible, comes nearest to the sense and purpose of the
stricken provision.
17.3 Failure by any party to enforce any term or provision of this
Agreement in any specific instance or instances hereunder shall not
constitute a waiver by such party of any such term or provision, and such
party may enforce such term or provision in any subsequent instance
without any limitation or penalty whatsoever.
17.4 The headings set forth in this Agreement are for convenience only and
do not qualify or affect the terms or conditions of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
first above written.
DEBIOPHARM S.A. DYAX CORP.
By: /s/ R.Y. Mauvernay By: /s/ L. Edward Cannon
------------------------ ----------------------
11/3/97 3/3/97
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
EXHIBIT A - EPI-HNE Patent Rights
Confidential
DYAX NEUTROPHIL ELASTASE INHIBITOR PATENT RIGHTS
===============================================================================
COUNTRY APPLICATION NO. FILING DATE STATUS
- -------------------------------------------------------------------------------
US ************* ************* Abandoned in
(Ladner 7C) favor of US
*************
- -------------------------------------------------------------------------------
Canada ************* ************* Pending
(Ladner 7C)
- -------------------------------------------------------------------------------
EPO ************* ************* Pending
(Ladner 7C)
- -------------------------------------------------------------------------------
Japan ************* ************* Pending
(Ladner 7C) *************
- -------------------------------------------------------------------------------
PCT ************* *************
(Ladner 7C) *************
- -------------------------------------------------------------------------------
US ************* ************* Allowed
(Ley 1)
- -------------------------------------------------------------------------------
PCT ************* ************* Will go
(Ley 1A) ************* national
6/16/97
===============================================================================
* Priority applciations: USSN ************* filed ************* (Ladner 7
which issued as US Patent 5,223,409) and USSN ************* filed
************* (Ladner 9 abandoned in favor of *************)
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Exhibit 10.27
R&D AND MARKETING COLLABORATION AGREEMENT
This Collaboration Agreement effective as of June 14,1999 (the "Effective Date")
is between Amersham Pharmacia Biotech AB, a Swedish corporation having its
address at Bjorkgatan 30, S-751 84 Uppsala, Sweden ("AP Biotech") and Dyax
Corp., a Delaware corporation having its address at One Kendall Square, Bldg.
600, Cambridge, Massachusetts 02139, USA ("Dyax").
---------------------------------------
Recitals
Whereas AP Biotech possesses technology and expertise to the development,
manufacture and world wide marketing of affinity chromatography media for use in
the separation and purification of biomolecules;
Whereas Dyax possesses technology and expertise for the discovery of proteins
and peptides having novel binding properties and the development and manufacture
of affinity chromatography purification media for use in the separation and
purification of biomolecules;
Whereas AP Biotech and Dyax wish to enter into a collaboration in which AP
Biotech and Dyax will utilise their respective technology and expertise to
develop for customers unique ligands and chromatography media incorporating such
ligands and AP Biotech will market and sell such media on a world wide scale.
Now, hereby the parties do hereby agree as follows:
1. Definitions
1.1 "Affiliate" means any corporation, partnership, or other business entity
controlled by, or controlling, or under common control with any party or
signatory to this Agreement, with "control" meaning direct or indirect
beneficial ownership of at least a fifty percent (50%) interest in the income of
such corporation, partnership, or other business entity, or such other
relationship as, in fact, constitutes actual control.
1.2 "Approved Project" means a Proposed Project which is approved by the
Steering Committee and conducted by the parties in accordance with Section 4.4
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.3 "Biopharmaceutical" means a protein or peptide being developed or sold as a
drug substance, *************.
1.4 "Confidential Information" means trade secrets, confidential or proprietary
information, and all other knowledge, information, documents or materials, that
are furnished by one party to the other party in connection with this Agreement,
which the proprietor takes reasonable measures to protect and which pertains, in
any manner, to subjects which include, but which are not limited to, research
operation, customers (including identities of customers and prospective
customers, identities of individual contacts at customers, preferences, business
or habits, including such customer's Confidential Information), business
relationships, products (including prices, costs, sales or content and including
released or unreleased products), financial information or measures, marketing
or promotion information, business methods, future Business Plans, data bases,
computer programs, designs, models, operating procedures, knowledge of the
organisation, and information received from others that either party is
obligated to treat as confidential. Further the term "Confidential Information"
shall include information which has been disclosed verbally, provided that such
verbal information be confirmed in writing within thirty (30) days of such
disclosure.
1.5 "Exclusive Customer Media" means Products discovered and/or developed in
accordance with an Approved Project exclusively for one customer at such
customer's specific and express request and which are developed, marketed and
sold by AP Biotech under the brand specified in Section 4.6 below.
1.6 "Ligand(s)" means a protein or peptide (any of their sequences), and any
derivatives thereof, which (i) ************* is discovered using Phage Display
Technology, and (iii) results from an Approved Project. For purposes of this
definition, (i) Phage Display Technology shall mean the display of protein or
peptides on a library of filamentous bacteriophage *************.
1.7 "Multi Customer Media" means Products discovered and/or developed in
accordance with an Approved Project without any customer exclusivity, and which
are developed, marketed and sold by AP Biotech under the brand specified in
Section 4.5 below.
1.8 "Net Sales Value" means gross monies or the monetary equivalent of
consideration, whether or not invoiced, billed or received by AP Biotech and its
Affiliates, attributable to the use, sale, lease, or transfer of any Product(s);
less qualifying costs directly attributable to such use, sale, lease, or
transfer and actually allowed and borne by AP Biotech and its Affiliates.
*************
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Products used in testing or as marketing samples to develop or promote the
Product(s) shall not be included as Product(s) used, sold, leased, or
transferred under the definition of Net Sales Value; provided the Products are
supplied to the user at no cost.
1.9 "Products" means affinity chromatography media that contains a Ligand
immobilized on AP Biotech media and is sold by AP Biotech or its Affiliates for
use in the purification of Biopharmaceuticals.
1.10 "Proposed Projects" means a project proposal to develop either a Multi
Customer Media or a Exclusive Customer Media which is made to the Steering
Committee in accordance with Section 4.2 or 4.3.
1.11 "Proprietary Materials" means any tangible chemical, biological or physical
materials (including any Ligand and materials resulting from an Approved
Project) that are furnished by one party to the other party in connection with
this Agreement regardless of whether such materials are specifically designated
as proprietary.
2. Scope of Collaboration
The purpose of this Agreement is to provide the framework for a collaboration
between AP Biotech and Dyax relating to Ligands for use in the field of
purifying Biopharmaceuticals, where (i) the collaboration is under the
supervision of the Steering Committee between the parties in accordance with
Article 3 and 4, (ii) both AP Biotech and Dyax shall jointly market to customers
Dyax's technology and expertise to discover and/or develop *************, all in
accordance with their responsibilities set forth in Section 4.1, (iii)
************* (iv) Dyax shall supply Ligands to AP Biotech for use in Products
in accordance with Article 5, and (v) AP Biotech shall develop, market and sell
Products to customers under a co-branded trademark in accordance with Sections
4.4 and 4.6 (such collaboration, the "Collaboration"). The Collaboration shall
have the term set forth Article 13 herein.
3. Governance
3.1 Creation of Steering Committee. The parties hereby create a Steering
Committee which shall consist of three members from each party, with each party
to provide written notice to the other of the names of such members within
thirty (30) days of the Effective Date. If any member of the Steering Committee
dies, resigns, or becomes incapacitated, the party which designated such member
shall designate his or her successor (whose term shall commence immediately),
and any party may withdraw the designation of any of its members of the Steering
Committee and designate a replacement (whose term shall commence immediately) at
any time by giving notice of the withdrawal and replacement to the other party.
If a member of the
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Steering Committee cannot attend a meeting, that member may appoint a substitute
to attend the meeting in his or her place. The chairperson of the Steering
Committee shall be designated annually on an alternating basis between the
parties. The party not designating the chairperson shall designate one of its
representatives as secretary of the Steering Committee for such year.
3.2 Meetings of the Steering Committee .The first meeting of the Steering
Committee shall occur within ninety (90) days of the Effective Date. Thereafter,
regular meetings of the Steering Committee shall be held semi-annually within
forty-five (45) days of the end of each calendar half year, or at such other
times as the parties may deem appropriate, at such times and places as the
members of the Steering Committee shall from time to time agree. Special
meetings of the Steering Committee may be called by either party on fifteen (15)
days written notice to the other party unless notice is waived by the parties.
All meetings shall alternate between the offices of the parties unless the
parties otherwise agree. In the event a Steering Committee member is unable to
attend a meeting of the Steering Committee, such Steering Committee member may
designate an alternate member who will serve solely for that Steering Committee
meeting.
3.3 Decisions of the Steering Committee. A quorum of the Steering Committee
shall be present at any meeting of the Steering Committee if every member or a
duly appointed substitute are present at such meeting in person or by telephone.
If a quorum exists at any meeting, the unanimous consent of all members of the
Steering Committee present at such meeting is required to take any action on
behalf of the Steering Committee. Unless otherwise specially stated to the
contrary herein, no individual party shall purport to act on behalf of the other
party unless and then only to the extent authorised to do so by the Steering
Committee.
3.4 Responsibility of Steering Committee. The Steering Committee shall be
responsible for oversight of the conduct and progress of the collaborative
efforts and approval of all activities relating thereto; management of the
day-to-day activities being delegated to a project manager to be appointed by
each of AP Biotech and Dyax. The responsibilities of the Steering Committee
shall include but not be limited to:
(i) preparing and recommending overall budgets for the plans for
development *************;
(ii) approving a Business Plan (and any amended plans) to be developed
jointly by the marketing managers appointed by the parties in
accordance with Section 4.1;
(iii) determining which customer projects to pursue;
(iv) assessing, at least once every six months during the initial term of
this Agreement the progress of the Collaboration hereunder
*************;
(v) directing and administering the research programs of both parties
reasonably required to achieve the purposes of this Agreement;
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
(vi) reviewing reports and research results submitted by both parties
over their respective R&D and marketing efforts to achieve the
purposes of this Agreement; and
(vii) reviewing and approving the patent filing and prosecution of
jointly-owned inventions pursuant to Article 9.
3.5 Steering Committee Reports. Within ten (10) days following each meeting the
Steering Committee held pursuant to Section 2.2, the secretary of the Steering
Committee shall prepare and send to the members of the Steering Committee a
detailed written report of actions taken at the meeting in such form and
containing such detail as shall be determined by the Steering Committee.
3.6 Deadlock. In the event that the Steering Committee cannot reach agreement
with respect to any matter that is subject to its decision-making
authority, then the matter shall be referred to the an executive person of
each of the parties with authority to bind his principal. In the event
that such executives cannot resolve the dispute then the dispute shall be
referred to the dispute resolution procedure described in Section 8 for
final and binding determination.
4. Marketing and Development Collaboration
4.1 Joint Marketing. AP Biotech and Dyax shall each jointly market to its
customers the Collaboration to provide customers with Products within the field
of the purification of Biopharmaceuticals under the joint branding of Section
4.6. Dyax shall be solely responsible for marketing ************* and AP Biotech
shall be solely responsible for marketing *************, provided that each
party shall have the right to include general information about the other
party's technology and capabilities in its marketing efforts. Both parties shall
approve all marketing materials used in the joint marketing of the
Collaboration. All marketing efforts shall be made in accordance with a Business
Plan to be developed by the marketing managers appointed by the parties and
approved by the Steering Committee within ninety (90) days of the Effective Date
hereof (the "Business Plan"). The Business Plan, as may be amended and approved
in amended form, shall specify the details of the joint marketing efforts, i.e.,
*************. Such marketing efforts may result in a customer request for
either Multi Customer Media or Exclusive Customer Media.
4.2 Multi Customer Media. AP Biotech may request Dyax to submit, or Dyax may
independently submit, a Proposed Project to the Steering Committee to discover a
Ligand and/or develop a Ligand ************* which AP Biotech or Dyax believes
could be commercialised as a Multi Customer Media. *************. Thereafter,
the Steering Committee shall have a period of sixty (60) days in which to accept
or reject the Proposed Project. Upon acceptance of any Proposed Project, the
provisions for
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Approved Project set forth in Section 4.4 below shall apply. In the event that
the Steering Committee rejects any Proposed Project for a Multi Customer Media
then AP Biotech or Dyax, as the case may be, shall be free to develop such
request or proposal alone or in collaboration with a third party, subject to any
rights or licenses it may require from the other party.
4.3 Exclusive Customer Media. In the event that, as a result of the joint
marketing efforts, a customer forwards a specific and express request to either
AP Biotech or Dyax for the discovery and/or development of a Exclusive Customer
Media, the party receiving the request shall forward the request as a Proposed
Project to the Steering Committee. The Steering Committee shall have a period of
sixty (60) days in which to accept or reject the Proposed Project. Upon
acceptance of any Proposed Project, the provisions for Approved Projects set
forth in Section 4.4 below shall apply. In addition, the parties shall work
together to jointly offer, negotiate and reach agreement with any such customers
*************. In the event that the Steering Committee rejects any Proposed
Project for a Custom Design Media then AP Biotech or Dyax, as the case may be,
shall be free to develop such request or proposal alone or in collaboration with
a third party, subject to any rights or licenses it may require from the other
party.
4.4. Approved Projects. Each Proposed Project approved by the Steering Committee
in accordance with Sections 4.2 and 4.3 above shall be considered an Approved
Project which shall be managed by the project managers appointed according to
Section 3.4. For each such Approved Project, Dyax shall submit a proposal to AP
Biotech *************. Dyax shall then use reasonable commercial efforts to
*************. Thereafter, AP Biotech agrees to use reasonable commercial
efforts to *************. AP Biotech shall then market and supply the resulting
Multi Customer Media to multiple customers or Exclusive Customer Media to the
specified customer, *************. Dyax shall supply ************* to AP Biotech
in accordance with Section 5 below and *************.
4.5 Exclusive Nature of Collaboration. With respect to all Approved Projects
resulting from the Business Plan set forth in Section 4.1, as amended, and with
respect to all Multi-Customer Media and Exclusive Customer Media developed
pursuant to Section 4.2, 4.3 and 4.4, AP Biotech and Dyax shall collaborate
exclusively with each other. Further neither AP Biotech nor Dyax shall
individually approach any target customer for Exclusive Customer Media
identified in the Business Plan referred to in Section 4.1 above, as amended,
for purposes of entering into a business relationship with such customer for
************* which would compete with ************* for such customer; provided
however, that joint marketing activities must occur with such customer for such
application within ************* of the approval of the Business Plan and an
Approved Project be initiated with such customer for such application within
************* of such approval.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
4.6 Branding. AP Biotech and Dyax agrees to jointly market the Collaboration,
and AP Biotech agrees to market and sell Products, under a combination of their
respective corporate names and logos, that is "Amersham Pharmacia Biotech" and
the "Drop design" and "Dyax Corp." and "Dyax "D" Logo", or such other trademark
or trade name as the parties may agree to. In the latter case the parties shall
jointly own such trademark or trade name and agree only to use it in connection
with the Collaboration. The parties shall cause such trademark or trade name to
be registered in every country where other than minimal sales can be expected
and shall equally share the cost of doing so. Such use shall be subject to the
provisions of Section 8 below.
4.7 Costs. Unless otherwise expressly provided for in this Agreement or
separately agreed to in writing, *************.
5. Supply of Ligands
5.1 Subject to Section 6.2, Dyax shall supply AP Biotech with all its
requirements for ************* Ligands for the development, sales promotions and
sales of Products. If Dyax chooses to outsource the manufacture of such Ligands,
AP Biotech shall have the right to approve the manufacture in advance and such
Ligands shall be supplied to AP Biotech *************. If Dyax chooses to
manufacturer such Ligands itself, AP Biotech shall have the rights to inspect
and approve Dyax's manufacturing facilities and such Ligands shall be supplied
to AP Biotech *************. With respect to each Product, the parties shall
enter into a supply agreement *************.
5.2 For ************* Ligands, AP Biotech shall have the right to contract with
third party suppliers to purchase all of its requirements for such Ligands for
the development, sales promotions and sales of Product. AP Biotech shall notify
Dyax of the name of any such third party supplier and agrees that any contract
with such supplier shall permit Dyax to purchase Ligand from such supplier for
use outside the Collaboration.
6. License to AP Biotech
Dyax grants to AP Biotech and its Affiliates a non exclusive,
************* worldwide license to the Ligands to develop, use and sell Products
in accordance with the terms and conditions of this Agreement. Further, such
license shall not include any rights of further license or sublicense, and shall
be subject to the grant of exclusive rights to a customer for a particular
Exclusive Customer Media pursuant to Section 4.3.
6.2 Dyax further grants to AP Biotech a non exclusive, ************* worldwide
license to make, have made, use and sell the Ligands in order to develop, use
and sell Products (i) for those Ligands which ************* are supplied in
accordance with
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Section 5.2, and (ii) for any Ligand that Dyax is unable or unwilling to supply
to AP Biotech in sufficient quantities required for AP Biotech to satisfy
customer demands for Products. AP Biotech may only invoke such license under
subsection (ii) if Dyax has failed to deliver Ligands in accordance with the
relevant supply agreement and in compliance with the relevant technical
specifications for a period of ************* after such delivery was due AP
Biotech, or immediately if Dyax notifies AP Biotech of its inability to supply.
Such license to AP Biotech under subsection (ii) shall terminate when Dyax
provides written evidence that it has the ability meet such customer demand on a
continuing and consistent basis in accordance with the terms of the supply
agreement.
7. Royalties.
7.1 Royalties. In consideration for the grant of rights from Dyax hereunder, AP
Biotech shall pay to Dyax *************.
7.2 Records. AP Biotech and its Affiliates shall at all times during the term of
this Agreement keep accurate records of its sales of the Products in sufficient
detail to enable the royalties payable on Net Sales Value to be determined and
the reports due under Section 7.4 to be provided to Dyax.
7.3 Audits. Dyax shall have the right at its own expense to appoint an
independent certified public accounting firm, such firm to be reasonably
acceptable to AP Biotech, to audit AP Biotech's and/or its Affiliate's records
which are necessary to verify the royalties payable under this Agreement. Such
audits shall be performed during normal business hours and may not be called for
more frequently than once in any calendar year and no later than one year after
the end of the reporting period to be audited
7.4 Payments and Reports. The ************* amount set forth in Section 7.1
above shall be paid to Dyax *************. The ************* set forth in
Section 7.1 above shall be reported and paid by AP Biotech on behalf of itself
and its Affiliates *************. Such payments shall be made to the account
specified in writing by Dyax or otherwise as instructed by Dyax.
*************.
The ************* shall be payable in United States dollars ($) at the rate of
exchange between Swedish Kronor and $ quoted by the Wall Street Journal on the
last day of the reporting period.
7.5 Taxes. Withholding or other taxes assessed on Dyax in connection with the
payment of running royalties (but not prepaid royalties) due hereunder and which
AP Biotech is required by law to deduct and withhold when making payments, shall
be paid by AP Biotech to the competent authority on behalf of Dyax. The
originals of the
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
official government receipt for such taxes paid by AP Biotech on Dyax's behalf,
shall so indicate such fact and shall be sent by AP Biotech to Dyax not later
than thirty (30) working days after the date of payment, indicating net payment
of royalties to which such taxes relate, and in accordance with the instructions
given by Dyax. Upon receipt of such government receipt the sums so paid by AP
Biotech shall be credited by Dyax in partial discharge of the AB Biotech's
obligation ************* as provided for herein.
8. Trademarks
8.1 Dyax agrees that:
(i) AP Biotech has ************* a license to use the trademarks
*************;
(ii) Dyax may only use such trademarks for the purpose, and during the
term of this Agreement;
(iii) any rights it may acquire in such trademarks shall be assigned to AP
Biotech absolutely;
(iv) it shall not do or omit to do anything whereby in AP Biotech's
opinion the goodwill and reputation of such trademarks is prejudiced
or damaged.
8.2 AP Biotech agrees that
(i) Dyax is the owner of the trademarks "Dyax" and "Dyax "D" Logo";
(ii) AP Biotech may only use such trademarks and trade names for the
purpose, and during the term of this Agreement;
(iii) any rights it may acquire in such trademarks and trade names shall
be assigned to Dyax absolutely;
(iv) it shall not do or omit to do anything whereby in Dyax's opinion the
goodwill and reputation of such trademarks and trade names is
prejudiced or damaged.
9. Ownership of Inventions & Publications
9.1 Subject to any pre-existing rights of third parties, Dyax shall be the sole
owner of all inventions, whether or not patentable, ************* made during
Dyax's discovery and/or development of Ligands. Subject to any pre-existing
rights of third parties, AP Biotech shall be the sole owner of all inventions,
whether or not patentable,
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
*************. Such ownership shall be irrespective of whether or not such
inventions have been conceived and reduced to practice by employees or agents of
either AP Biotech or Dyax. For all other inventions, inventorship shall be
determined in accordance with United States federal patent law, with each party
to own the inventions of its own employees or agents. For solely owned
inventions, the owner shall be responsible for decisions, actions and costs
relating to obtaining patent protection for such inventions. For jointly owned
inventions, the parties shall mutually agree upon and jointly share
responsibility for decisions, actions and costs relating to obtaining patent
protection for such inventions and either party shall be free to exploit any
such invention but neither party may enforce any such jointly owned patent
without the agreement of the other party.
9.2 Subject to any third party restriction on disclosure and/or the need to
delay publication in order to file for patent protection pursuant to Section 9.1
above, the parties will jointly seek to publish (in oral or written form) on
results of Approved Projects. Such publications will be approved by the Steering
Committee and used by both parties in accordance with Section 4.1 for the joint
marketing of the Collaboration.
10. Indemnification
10.1 AP Biotech shall defend, indemnify and hold Dyax and its affiliates (the
"Dyax Indemnitees") harmless from, against, for and in respect of any and all
damages, losses, costs and expenses (including, without limitation, reasonable
attorney's fees and expenses of litigation) incurred by or imposed on the Dyax
Indemnitees or any of them in connection with any claims, suits, actions,
proceedings or judgments concerning AP Biotech's performance under this
Agreement or any product sold by AP Biotech to a third party, (including
infringement of a third party's intellectual property rights), unless such
injury or damage is caused by an act, negligent or otherwise of any of the Dyax
Indemnitees.
10.2 Dyax shall defend, indemnify and hold AP Biotech and its affiliates (the
"AP Biotech Indemnitees") harmless from, against, for and in respect of any and
all damages, losses, costs and expenses (including, without limitation,
reasonable attorney's fees and expenses of litigation) incurred by or imposed on
the AP Biotech Indemnitees or any of them in connection with any claims, suits,
actions, proceedings or judgments concerning AP Biotech's performance under this
Agreement or any product sold by AP Biotech to a third party, (including
infringement of a third party's intellectual property rights), unless such
injury or damage is caused by an act, negligent or otherwise of any of the AP
Biotech Indemnitees.
11. Confidential Information and Proprietary Materials
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11.1 Subject to Sections 4.1, 9.2 and 16.2, each party undertakes to treat any
and all Confidential Information and Proprietary Materials as strictly
confidential and not to transfer, distribute or otherwise disclose it to any
third party for any purpose whatsoever and undertakes not to make use of any
such Confidential Information or Proprietary Materials, or any part thereof, for
any purpose other than for the purposes of this Agreement without the disclosing
party's prior written consent.
11.2 In the event of the either party visiting any of the establishments of the
other, the visiting party undertakes that any further information which may come
to its knowledge, as a result of any such visit, shall be kept strictly
confidential and that any such information will not be divulged to any third
party and will not be made use of in any way by the visiting party under any
circumstances.
11.3 The undertakings in Clauses 1 and 2 shall not apply to:
11.3.1 Information or materials which at the time of disclosure is
published or otherwise generally available to the public.
11.3.2 Information or materials which after disclosure by the discloser is
published or becomes generally available to the public, otherwise
than through any act or omission on the part of the recipient.
11.3.3 Information or materials which the recipient can show by reasonable
written record was in its possession at the time of disclosure and
which was not acquired directly or indirectly from the discloser.
11.3.4 Information or materials rightfully acquired from a third party who
did not obtain it under pledge of secrecy to the discloser or
another.
11.3.5 Information or materials which has been developed by the Recipient
independently of the Confidential Information or Proprietary
Materials received from the discloser.
11.4 The Confidential Information and Proprietary Materials shall not be deemed
to be in the public domain merely because any part of said Confidential
Information or Proprietary Materials is embodied in general disclosures or
because individual features, components or combinations thereof are known to the
public.
11.5 Each shall use any Proprietary Materials received from the other party
solely for the purposes of this Agreement and then in compliance with all
applicable laws and regulations and not for any in vivo experiments on human or
animal subjects. The recipient of the Proprietary Materials assumes all
liability for damages that may arise from the use, storage, or disposal of any
Proprietary Materials it receives and agrees
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
to defend, indemnify and hold the Proprietary Materials harmless from and
against any such losses, claims, demands, except to the extent caused by the
negligence or wilful misconduct of the party providing such Proprietary
Materials.
12. Representations and Warranties
12.1 Representations and Warranties. Both AP Biotech and Dyax warrant and
represent to each other, (i) that each has the legal right to enter into this
Agreement, (ii) that each has taken the necessary action to authorise the
execution of the Agreement, (iii) that the performance of their respective
obligations hereunder will not result in the breach of any agreement to which
either is a party, and (iv) that neither party controls any patent right or
other intellectual property right which are necessary for the other party to
carry out its rights and obligations by this Agreement.
12.2 Disclaimer of Warranties. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT,
DYAX AND AP BIOTECH EACH DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NON-INFRINGEMENT WITH RESPECT TO ANY OF THE LIGANDS AND THE PRODUCTS
IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES SUCH AS LOSS OF PROFITS OR BUSINESS OPPORTUNITIES.
13. Term & Termination
13.1 Term. This agreement shall commence on the Effective Date and continue for
an initial period of *************, subject to renewal upon mutual written
agreement of the parties.
13.2 Termination for Material Breach or Default. This Agreement may be
terminated by either party upon sixty (60) days written notice to the other
party if the other party materially breaches or becomes in default of any
provision hereof, unless such breach or default is corrected or reasonable
efforts are being made to correct such breach or default within the notice
period.
13.3 Insolvency etc.. Either party shall be entitled to terminate this Agreement
immediately upon written notice to the other if that other party becomes
insolvent or makes an arrangement with its creditors or has a receiver or
administrator appointed to the whole or any part of its assets or if an order is
made or a resolution passed for its winding up, unless such order or resolution
is part of a scheme for its amalgamation or reconstruction.
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13.4 Effects of Termination Upon termination or expiration of the Agreement, all
rights and obligations of AP Biotech and Dyax shall terminate except with
respect to Ligands and Products resulting from Approved Projects existing as of
the effective date of termination or expiration. For such Ligands and Products,
the provisions of Articles 5, 6 and 7 shall survive termination. In addition,
the provisions of Articles 9, 10, 11 and 12 shall survive termination or
expiration of this Agreement and shall continue in full force and effect.
14. Force Majeure
14.1 The obligations of either party hereunder shall be excused or suspended to
the extent performance is prevented or delayed by any future condition, which
(i) is beyond the reasonable control, and without the fault or negligence, of
the Party affected thereby, (ii) was not foreseeable by such Party at the time
this Agreement was entered into, and (iii) could not have been prevented by such
Party taking reasonable steps. Such conditions shall include but not be limited
to war, mobilisation, riots, fire, explosion, flood, insurrection, embargo,
currency restriction, shortage of transport, general shortage of material and
acts or omissions or governments in their sovereign capacity.
14.2 The party invoking Section 13.1 hereof shall, within seven (7) days after
commencement of the condition there mentioned, give written notice thereof , and
of the anticipated consequences thereof, to the other Party. Within seven (7)
days after termination or cessation of such condition, the affected party shall
give further written notice to the other Party detailing the actual results of
such condition.
14.3 In the event of any such condition, the Party affected thereby shall take
all reasonable measures to mitigate and minimise the effect of the condition,
and to resume as promptly as possible the diligent performance of its
obligations under this Agreement. Nothing in this Section 13 shall, however,
obligate either Party to settle strikes or other labour disputes except on terms
and conditions which it, in the exercise of its sole discretion, deems
appropriate.
15. Governing Law & Dispute Resolution
15.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
15.2 All disputes arising in connection with the present contract shall be
submitted to an executive person of each party having the power to enter into a
binding decision on behalf of their respective principals for decision. If such
executive cannot resolve the issue within forty-five (45) days then such dispute
shall be finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with said Rules. The arbitration
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procedures shall take place in New York, NY and shall be held in the English
language, provided that documents may be presented in other languages.
15.3 This agreement and any award rendered pursuant to it shall be governed by
the 1958 Convention on the Recognition and Enforcement of Foreign Arbitration
Awards. Judgment upon the award rendered may be entered in any court having
jurisdiction or application may be made to such court for a judicial acceptance
of the award or an order of enforcement, as the case may be.
16. Miscellaneous
16.1 Publicity. Subject to Section 4.1, no press release, advertising,
promotional sales literature, or other promotional oral or written statements to
the public in connection with or alluding to work performed under this Agreement
or the relationship between the parties created by it, having or containing any
reference to AP Biotech or Dyax shall be made by either party without the prior
written approval of the other party, except for restatements of
previously-approved statements and disclosures required by applicable law or
regulation. Notwithstanding the foregoing, the parties agree to promptly
announce this Agreement and its general subject matter in a mutually agreed upon
press release.
16.2 Amendments. No provision of this Agreement may be amended, modified or
otherwise changed, other than by an instrument in writing duly executed on
behalf of the parties to this Agreement.
16.3 Assignment. Neither party shall have the right to assign it without the
prior written consent of the other party except that a party may assign the
Agreement to a subsidiary or an affiliate over which its exercises control or to
another entity in conjunction with the sale of the assets to which this
Agreement relates. Any unauthorised assignment or transfer or sub-license shall
be invalid and of no effect.
16.4 Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties hereto with respect to the subject matter hereof and no
party shall be liable or bound to the other in any other manner, except as set
forth herein.
16.5 Notices. Any notice which either party may wish to send to the other shall
be deemed to have been duly sent if delivered or posted by airmail to such party
at the address as set out in this clause or to such other address as may have
been notified pursuant to the provisions of this clause and if delivered shall
be deemed to have been received on the day of delivery and if posted then on the
seventh working day next following the day of posting, provided, however, that
any such notice may be sent by facsimile and shall be deemed to have been
received at the beginning of the working day next following the day of
transmission if the receiving machine causes the sending
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machine to print the answer back code of the receiving machine at the beginning
and end of an uninterrupted transmission.
If to AP Biotech: Amersham Pharmacia Biotech AB
Attention: Johan von Heijne
Bjorkgatan 30
S-751 84 Uppsala
Sweden
Telefax: +46 18 16 63 17
With a copy to:
Legal Department
Telefax: +46 18 16 53 22
If to Dyax: Dyax Corp.
Attention: Robert A. Dishman
One Kendall Square, Bldg. 600
Cambridge, Massachusetts 02139
USA
Telefax: +1 617 225 2501
16.6 Relationship. In making and performing this Agreement, the parties are
acting and shall act at the times as independent contractors, and nothing
contained in this Agreement shall be construed or implied to create any agency,
partnership or employer and employee relationship between AP Biotech and Dyax.
At no time shall any party make commitments or incur any charges or expenses for
or in the name of the other party.
16.8 Severability. The invalidity or unenforceability of one or more provisions
of this Agreement shall not affect the validity or enforceability of any of the
other provisions hereof, and this Agreement shall be construed in all respects
as if such invalid or unenforceable provisions were omitted.
16.9 Waiver. Any delay in enforcing a party's rights under this Agreement or any
waiver as to a particular default or other matter shall not constitute a waiver
of a party's right to the future enforcement of its rights under this Agreement,
excepting only as to an expressed written and duly signed waiver to a particular
matter for a particular period of time.
Signed of and on behalf of Signed for and on behalf of
Amersham Pharmacia Biotech AB Dyax Corp.
Signature: /s/ Johan von Heijne... Signature: /s/ Robert A. Dishman
-------------------- ---------------------
Position:......................... Position:.......................
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Date:............................. Date:..........................
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Exhibit 10.28
JOINT COLLABORATION AGREEMENT
THIS LICENSE AGREEMENT (this "Agreement"), effective as of October 1, 1997 (the
"Effective Date"), is between DYAX CORP., a Delaware corporation, having places
of business at One Kendall Square, Bldg. 600, 5th Fl., Cambridge, Massachusetts
02139 and 1500 Avon Street Extended, Charlottesville, VA 22902 ("DYAX"); and
CROPTECH DEVELOPMENT CORPORATION, a Virginia corporation, having its principal
place of business at 1861 Pratt Drive, Blacksburg, Virginia 24060 ("CROPTECH").
RECITALS
WHEREAS, DYAX and CROPTECH have submitted a proposal to the Advanced Technology
Program administered by the National Institute of Standards and Technology
("NIST") to undertake a joint venture to conduct the Researched Program, as
defined herein;
WHEREAS, NIST has selected such proposal for funding, with such funding to be
governed by a NIST Cooperative Agreement;
WHEREAS, DYAX and CROPTECH wish to enter into an agreement setting forth their
respective rights and responsibilities in respect to the Research Program.
WHEREAS, the Parties have selected CropTech Development Corporation to serve as
the Administrator (the "Administrator") for the joint venture and wish to
authorize that organization to perform certain functions, specifically including
execution of the NIST Cooperative Agreement and thereby binding all the Parties
to the terms and conditions of that Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall have the
meanings specified below:
1.1. "CropTech Technology" shall mean any and all know-how, data, technology,
equipment, biological or chemical materials, inventions and patent rights
relating to ************* and the ************* (including,
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
without limitation the *************), which is owned or controlled by CROPTECH
prior to the Effective Date or which results from the Research Program.
1.2. "Dyax Technology" shall mean any and all know-how, data, technology,
equipment, biological or chemical materials, inventions and patent rights
relating to ************* (including, without limitation, *************), and
which is owned or controlled by DYAX prior to the Effective Date or which
results from the Research Program.
1.3. "Government Use License" shall mean a non-exclusive, non-transferrable,
irrevocable, paid-up license which may be granted to the United States
government as set forth in Section 2.4(d) below.
1.4. "Party" or "Parties" shall mean the parties identified in the Form
NIST-Form-1263 contained in the proposal.
1.5. "Products" shall mean proteins and production technologies utilizing
CropTech Technology and Dyax Technology, and which are listed on Attachment C,
as may be amended from to time by the parties.
1.6. "Research Products" shall mean the research program as described on a
project by project basis in Attachment A, which may be amended from time to time
by the parties.
ARTICLE 2. RESEARCH PROGRAM
2.1. Conduct of Research Program. DYAX and CROPTECH agree to work together to
diligently conduct each project of the Research Program, as set forth in
Attachment A hereto, and to carry out their respective responsibilities as set
forth in the Research Program and the NIST Cooperative Agreement. Further, the
parties agree to contribute the funds and internal and external resources which
are set forth in the estimated multi-year budget set forth in Attachment B.
2.2. Administration of the Research Program. The parties agree that CropTech
Development Corporation shall serve as the administrator for the joint
collaboration ("Administrator") and is authorized to execute a NIST Cooperative
Agreement with NIST and communicate with NIST on the progress of each project of
the Research Program. DYAX and CROPTECH shall each promptly appoint two
representatives to a Management Committee. The Management Committee shall meet
no less frequently than semi-annually during Research Program and shall have the
following responsibilities:
(i) administering the Research Program in accordance with all legal and
regulatory requirements, including review of all progress reports;
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
(ii) monitor the expenditures of each party for each project in
accordance with *************.
(iii) discussing and reaching agreement on the ************* of Products
resulting from each project of the Research Program.
2.3. Record & Reports. Each party shall retain industry standard records of all
data generated during the Research Program. During the Research Program, each
party shall provide the Management Committee, as defined below, with regular
written reports, no less frequently than *************, of the status of the
program and a summary of the data and results as of that date.
2.4. Ownership of Intellectual Property.
(a) The protection of intellectual property rights, including any
invention conceived or first reduced to practice in the course of
the Research Program, all technical information generated in the
course of the Research Program and trade secrets under the Research
Program will be in accordance with the NIST Cooperative Agreement
and the Proposal which is attached to this Agreement as Attachment D
subject to Section 2.4(d) below.
(b) DYAX shall own all Dyax Technology and CROPTECH shall own all
CropTech Technology, subject to certain rights retained by the
government in accordance with the NIST Cooperative Agreement.
(c) For inventions resulting from the Research Program, inventorship
shall be determined in accordance with federal law governing patent
inventors, and ownership shall be determined in accordance with (a)
above. Each party shall have responsibility for the cost and
decisions in filing for, maintaining and defending patent
applications and patents for their respective inventions. Further
each party shall provide reasonable cooperation to the other on such
patent matters.
(d) The United States may reserve a nonexclusive, nontransferable,
irrevocable paid-up license to practice or have practiced for or on
behalf of the United States any intellectual property that arises
out of the Research Program, but shall not, in the exercise of such
license, publicly disclose proprietary information related to such
license.
(e) Dyax and CropTech hereby authorize that, in accordance with the
Advanced Technology Program rules and regulations, specifically 15
CFR ss.295.8(a)(1), title to
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
inventions arising from assistance by the Program will vest in a
company or companies incorporated in the United States. Title to any
such intellectual property shall not be transferred or passed,
except to a company incorporated in the United States, until the
expiration of the first patent obtained in connection with such
intellectual property. Nothing in this paragraph shall be construed
to prohibit the licensing to any company of intellectual property
rights arising from assistance provided under this Section.
2.5. Confidential Information. In connection with the performance of their
respective obligations under this Agreement, each party intends to disclose
certain confidential information and materials to the other party, to include
CropTech Technology and Dyax Technology (the "Confidential Information"). During
the term of this Agreement and for a period of ************* thereafter, each
party shall maintain all Confidential Information in strict confidence, except
that the receiving party may disclose or permit the disclosure of any
Confidential Information to its directors, officers, employees, consultants,
advisors and commercial partner candidates who are obligated to maintain the
confidential nature of such Confidential Information and who need to know such
Confidential Information for the purposes set forth in this Agreement; and each
party shall use all Confidential Information solely for the purposes set forth
in this Agreement. The obligations of confidentiality and non-use set forth
above shall not apply to the extent that the receiving party can demonstrate
that Confidential Information: was in the public domain or became party of the
public domain prior through no fault of the receiving party; was independently
developed or discovered by the receiving party prior to the time of its
disclosure under this Agreement; is or was disclosed to the receiving party at
any time by a third party having no obligation of confidentiality with respect
to such Confidential Information; or is required to be disclosed to comply with
applicable laws or regulations, or with a court or administrative order.
ARTICLE 3. COMMERCIAL RIGHTS & OBLIGATIONS
3.1. Commercialization of Products. No later than ************* of completion of
each project set forth in the Research Program, the parties shall meet and
negotiate and agree upon a ************* for the Product resulting from each
project, the terms of which shall be set forth in a *************. If the
parties are unable to reach agreement for any Product, the matter shall be
resolved in accordance with Section 6.2 herein.
3.2. No Rights of License. Except for the rights set forth in this Agreement,
neither DYAX nor CROPTECH grants to the other party any rights or licenses to
any of its trade secrets, know-how, technology, intellectual property or patent
rights.
4
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES & INDEMNIFICATION
4.1. Representations and Warranties. Each party represents and warrants to the
other that it has the legal right and power to enter into this Agreement, to
extend the rights and licenses granted to the other in this Agreement, and to
fully perform its obligations hereunder, and that the performance of such
obligations will not conflict with it charter documents or any agreements,
contracts, or other arrangements to which it is a party. Further, each party
represents and warrants to the other that it will be solely responsible for
analyzing, defending and/or licensing any patent rights of third parties which
relate to its activities for the Research Program.
4.2. Disclaimers. Nothing in this Agreement shall be construed as a warranty or
representation by either party of the success of the Research Program or of the
Dyax Technology or the CropTech Technology.
4.3. Indemnification by DYAX. DYAX agrees to indemnify, defend, and hold
harmless CROPTECH and its directors, officers, employees, and agents (the
"CROPTECH Indemnitees") against any liability, damage, loss or expense
(including reasonable attorneys fees and expenses of litigation) incurred by or
imposed upon any of the CROPTECH Indemnitees as a result of any claims, suits,
actions, demands, or judgments concerning the negligent, willful or infringement
acts of DYAX or its directors, officers, employees, and agents, including,
without limitation, any acts of patent infringement.
4.4. Indemnification by CROPTECH. CROPTECH agrees to indemnify, defend, and hold
harmless DYAX and its directors, officers, employees, and agents (the "DYAX
Indemnities") against any liability, damage, loss or expense (including
reasonable attorneys fees and expenses of litigation) incurred by or imposed
upon any of the DYAX Indemnities as a result of any claims, suits, actions,
demands, or judgments concerning the negligent, willful or infringement acts of
CROPTECH or its directors, officers, employees, and agents, including, without
limitation, any acts of patent infringement.
ARTICLE 5. TERM AND TERMINATION.
5.1. Term. Unless sooner terminated as provided herein, this Agreement shall
commence on the Effective Date and shall remain in effect until each
*************, as set forth in Article 3.
5.2. Voluntary Termination. Either party shall have the right to terminate this
Agreement for any reason upon 3 months notice during the Research Program. In
the event of such termination the rights and obligations of the parties shall be
governed by the NIST Cooperative Agreement.
5
<PAGE>
5.3. Termination for Material Breach. In the event that either party commits a
material breach of any of its obligations under this Agreement, including
failure to make timely payment of any amounts due, the non-breaching party may
terminate this Agreement upon 60 days written notice to the other party, unless
the party in breach cures such breach within the 60 days notice period.
5.4. Effect of Termination. Notwithstanding anything to the contrary in this
Article 5, upon the expiration of termination of this Agreement, the following
provisions shall survive the expiration or termination of this Agreement:
Articles 4 & 6 and Sections 2.4, and any obligations to NIST or the other party
as set forth in the NIST Cooperative.
ARTICLE 6. MISCELLANEOUS
6.1. Notices. All notices required or permitted to be given pursuant to this
Agreement shall be in writing and shall be deemed to have been duly given upon
the date of receipt if delivered by hand, international overnight courier,
confirmed facsimile transmission, or registered or certified mail, return
receipt requested, postage prepaid to the following addresses or facsimile
numbers:
If to DYAX: If to CROPTECH:
Dyax Corp. CropTech Development Corporation
One Kendall Square 1861 Pratt Drive
Bldg. 600 5th Fl. Blacksburg, VA 24060
Cambridge, MA 02139 Attention: Chief Executive
Attention: Chief Executive Officer Officer
Facsimile: (617) 225-2501 Facsimile: (540) 231-8223
Either party may change its designated address and facsimile number by notice to
the other party in the manner provided in this Section.
6.2. Dispute Resolution. In the event either party has a dispute regarding any
of the terms of this Agreement, that party shall notify the other party in
writing. The parties shall use their best efforts to resolve the dispute
amicably at the Management Committee, or if the Management Committee is
unsuccessful in reaching resolution, the parties shall refer the matter for
resolution by their Chief Executive Officers. If such attempts are not
successful in resolving the dispute within a period of ************* following
the notice of dispute, either party may refer the dispute to the American
Arbitration Association for hearing and resolution within *************, using
one mutually agreed upon arbitrator with industry experience relevant to this
Agreement and at a forum in the Charlottesville, Virginia area. Upon reference
of the dispute for arbitration, neither party shall contest such dispute in a
court of law until the completion of the arbitration process.
6
<PAGE>
6.3. Powers of Attorney. By signing this Agreement, the Parties grant to
Administrator a Power of Attorney for the sole purpose of binding each Party to
the terms and conditions of the NIST Cooperative Agreement.
6.4. Press Releases & Use of Names. The parties shall mutually agree upon any
press release or similar public disclosure concerning this Agreement.
6.5. Headings & Counterparts. All headings in this Agreement are for convenience
only and shall not affect the meaning of any provisions hereof. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, and all of which together shall be deemed to be one and the same
instrument.
6.6. Assignment. This Agreement may not be assigned by either party without the
prior written consent of the other party, except that either party may assign
this Agreement to any of its Affiliates or to a successor in connection with the
merger, consolidation, or sale of all or substantially all of its assets or that
portion of its business pertaining to the subject matter of this Agreement, with
prompt written notice to the other party of any such assignment.
6.7. Compliance With Law. Nothing in this Agreement shall be construed so as to
require the commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement and any statute, law, ordinance
or treaty, the latter shall prevail, but in such event the affected provisions
of the Agreement shall be conformed and limited only to the extent necessary to
bring it within the applicable legal requirements.
6.8. Amendment and Waiver. This Agreement may be amended, supplemented, or
otherwise modified only by means of a written instrument signed by both parties.
Any waiver of any rights or failure to act in specific instance shall relate
only to such instance and shall not be construed as an agreement to waive any
rights or fail to act in any other instance, whether or not similar.
6.9. Precedence. Should there be any conflict between the terms and conditions
of this Agreement and the NIST Cooperative Agreement, the NIST Cooperative
Agreement shall take precedence.
6.10. Severability. In the event that any provision of this Agreement shall, for
any reason, be held to be invalid or unenforceable in any respect, such
invalidity or unenforceability shall not affect any other provision hereof, and
the parties
7
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
shall negotiate in good faith to modify the Agreement to preserve their original
intent.
6.11. Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements or understandings between the parties relating to the subject matter
hereof.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the date first above written.
DYAX CORP. CROPTECH DEVELOPMENT CORPORATION
By: /s/ Henry E. Blair By: /s/ David N. Radin
Name: Henry E. Blair Name: David N. Radin
Title: Chairman & CEO Title: President
Attachments:
Attachment A: *************
Attachment B: *************
Attachment C: *************
Attachment D: *************
8
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Attachment A
Research Program (project by project)
*************
9
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Attachment B
Multi-year Budget
*************
10
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Attachment C
Products
*************
11
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Attachment D
NIST Proposal
*************
12
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Exhibit 10.29
DEVELOPMENT AGREEMENT
for
AFFINITY CHROMATOGRAPHY PURIFICATION MEDIA
THIS AGREEMENT, effective as of September 29, 1997 (the "Effective Date"), is
made by and between DYAX CORP., a Delaware corporation ("DYAX"), and GENETICS
INSTITUTE, INC. a Delaware corporation ("CUSTOMER").
WHEREAS DYAX possesses technology and expertise related to the discovery of
proteins and peptides having novel binding properties and the development and
manufacture of affinity chromatography purification media for use in the
separation and purification of proteins;
WHEREAS CUSTOMER is engaged in the discovery, development and manufacture of
************* ("Customer Product");
WHEREAS DYAX and CUSTOMER wish to enter into a collaboration in which DYAX will
utilize its technology and expertise to develop for CUSTOMER a unique affinity
ligand and chromatography purification media (the "Dyax Product") for use by
CUSTOMER in the purification of Customer Product.
NOW, HEREBY the parties do hereby agree as follows:
ARTICLE 1. DISCOVERY PHASE
1.1. Conduct of Discovery Phase. DYAX agrees to devote commercially reasonable
resources and efforts to the diligent conduct of the work described in the
Discovery Phase section of the Work Plan Outline included in Exhibit 1 attached
hereto. The Discovery Phase shall commence on the Effective Date and is expected
to continue for a period of *************. The Discovery Phase shall end when
DYAX has delivered to CUSTOMER the Discovery Phase Deliverables described in the
Work Plan Outline. During the Discovery Phase, DYAX's Project Director shall
meet with representatives of CUSTOMER at the reasonable request of CUSTOMER to
respond to questions and facilitate the exchange of appropriate information on
the progress of the Discovery Phase. In addition, Dyax shall submit a quarterly
summary progress report to CUSTOMER and a final written report as set forth in
the Work Plan Outline.
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.2. Discovery Phase Payments. In consideration of the rights granted to
CUSTOMER herein and undertaking the Discovery Phase, CUSTOMER agrees to pay DYAX
************* of execution of this Agreement.
1.3. Initiation of the Development Phase. ************* following its receipt of
the Discovery Phase Deliverables, CUSTOMER shall notify DYAX in writing of
whether it intends to proceed to the Development Phase of the collaboration.
Prior to the initiation of work under the Development Phase, DYAX and CUSTOMER
shall negotiate in good faith any modifications to the Development Phase section
of the Work Plan Outline set forth in Exhibit 1 attached hereto and any
resulting change to the Development Phase payments, and the relevant provisions
of Exhibit 1 and Article 2 shall be amended accordingly by written agreement.
ARTICLE 2. DEVELOPMENT PHASE
2.1. Conduct of Development Phase. If CUSTOMER elects to proceed to the
Development Phase, DYAX agrees to devote commercially reasonable resources and
efforts to the diligent conduct of the work described in the Development Phase
section of the Work Plan Outline included in Exhibit 1 attached hereto, as such
section may be amended in accordance with Section 1.3 of this Agreement. The
Development Phase is expected to continue for a period of ************* and
shall end when DYAX has delivered to CUSTOMER the Development Phase Deliverables
described in the Development Phase Section of the Work Plan Outline, as such
section may be amended in accordance with Section 1.3 of this Agreement. During
the Development Phase, DYAX's Project Director shall meet with representatives
of CUSTOMER at the reasonable request of CUSTOMER to respond to questions and
facilitate the exchange of appropriate information on the progress of the
Development Phase. In addition, DYAX shall submit a quarterly summary progress
report to CUSTOMER and a final written report as set forth in the Work Plan
Outline.
2.2. Development Phase Payments.
(a) In consideration of the performance by DYAX of the Development Phase,
CUSTOMER agrees to pay DYAX ************* for each Dyax Product candidate for
which DYAX is to initiate Development Phase work., payable with the written
notification pursuant to Section 1.3 of this Agreement or upon completion of any
negotiations entered into in accordance with such Section, whichever is later.
In the event CUSTOMER desires DYAX to expand the Development Phase
*************, CUSTOMER agrees to pay DYAX in advance ************* for each
additional *************; and
(b) CUSTOMER further agrees to pay DYAX *************, payable within 30
days of the occurrence of the delivery by DYAX of the first ************* which
meets the Milestone requirements for the Development Phase set forth in the Work
Plan Outline.
2.3 Initiation of the Optimization Phase. Within 60 days following its
receipt of the Development
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Phase Deliverables described in Exhibit 1, CUSTOMER shall notify DYAX in writing
of whether it intends to proceed to the Optimization Phase of the collaboration.
Prior to the start of work under the Optimization Phase, DYAX and CUSTOMER shall
negotiate in good faith an Optimization Phase section to be set forth in an
expanded Work Plan Outline and shall agree upon the Optimization Phase payments,
and Exhibit 1 and Article 3 of this Agreement shall be amended accordingly by
written agreement.
ARTICLE 3. OPTIMIZATION PHASE
3.1. Conduct of Optimization Phase. If CUSTOMER elects to proceed to the
Optimization Phase and subject to the successful completion of the negotiations
described in Section 2.3, DYAX agrees to devote commercially reasonable
resources and efforts to the diligent conduct of the work to be described in the
Optimization Phase section in the expanded Work Plan Outline of the amended
Exhibit 1. The Optimization Phase is expected to continue for a period to be
determined by such Work Plan Outline and shall end when DYAX has delivered to
CUSTOMER the Optimization Phase Deliverables described in such Work Plan
Outline. During the Optimization Phase, DYAX's Project Director shall meet with
representatives of CUSTOMER at the reasonable request of CUSTOMER to respond to
questions and facilitate the exchange of appropriate information on the progress
of the Optimization Phase. In addition, DYAX shall submit a quarterly summary
progress report to CUSTOMER and, if required by the expanded Work Plan Outline,
a final written report as set forth in the Work Plan Outline.
3.2. Optimization Phase Payments. In consideration of the performance by DYAX of
the Optimization Phase, CUSTOMER agrees to make the payments to DYAX agreed to
by DYAX and CUSTOMER in accordance with Section 2.3 of this Agreement.
*************. In further consideration of the performance by DYAX of the
Optimization Phase, CUSTOMER agrees to pay DYAX a ************* milestone,
payable upon completion of the Optimization Phase if the milestone is achieved.
ARTICLE 4. RIGHTS TO DYAX PRODUCTS
4.1 Within ************* of completion of the Development Phase or, if CUSTOMER
elects to proceed with the Optimization Phase, within ************* of
completion of the Optimization Phase, CUSTOMER shall notify DYAX of whether it
wishes to acquire an exclusive license to manufacture and use the Dyax Products
for the purification of Customer Product. If CUSTOMER does desire such a
license, then the parties shall promptly meet, negotiate in good faith and
mutually agree upon the terms and conditions of such license to CUSTOMER, which
shall be set forth in a license agreement. Such terms shall include payment of
*************.
ARTICLE 5. CONFIDENTIAL INFORMATION
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
5.1. Disclosure of Confidential Information.
(a) In connection with the performance of their respective obligations
under this Agreement, each party intends to disclose certain confidential
information and materials to the other party relating to the Customer Product
and Dyax Products, including such information and materials as are developed
hereunder ( the "Confidential Information"). During the term of this Agreement
and for a period of (5) years thereafter, each party shall maintain all
Confidential Information in strict confidence, except that the Receiving Party
may disclose or permit the disclosure of any Confidential Information to its
directors, officers, employees, consultants, and advisors who are obligated to
maintain the confidential nature of such Confidential Information and who need
to know such Confidential Information for the purposes set forth in this
Agreement; and use all Confidential Information solely for the purposes set
forth in this Agreement.
(b) The obligations of confidentiality and non-use set forth above shall
not apply to the extent that the Receiving Party can demonstrate that certain
Confidential Information: was in the public domain prior to the time of its
disclosure under this Agreement; entered the public domain after the time of its
disclosure under this Agreement through means other than an unauthorized
disclosure resulting from an act or omission by the Receiving Party; was
independently possessed, developed or discovered by the Receiving Party prior to
the time of its disclosure under this Agreement; or is or was disclosed to the
Receiving Party at any time, whether prior to or after the time of its
disclosure under this Agreement, by a third party having no fiduciary
relationship with the Disclosing Party and having no obligation of
confidentiality with respect to such Confidential Information; or is required to
be disclosed to comply with applicable laws or regulations, or with a court or
administrative order.
ARTICLE 6. INTELLECTUAL PROPERTY
6.1. Definitions. As used in this Agreement, the term "Invention" means any
development, conception, technique, process, invention, material, discovery, or
improvement, whether or not patentable, that arises as a result of the
performance of this Agreement. "Dyax Invention" shall mean an Invention, other
than a Customer Invention, that is discovered, developed, conceived, or reduced
to practice during the performance of this Agreement and which relates to the
Dyax Product candidates, *************. "Customer Invention" shall mean an
Invention, other than a Dyax Invention, that is discovered, developed,
conceived, or reduced to practice during the performance of this Agreement and
which relates to CUSTOMER's proprietary technology and/or Customer Product.
Inventions shall be characterized as Dyax Inventions or Customer Inventions
irrespective of whether such Inventions are made by DYAX or CUSTOMER. In order
to effect the foregoing, CUSTOMER agrees to assign to DYAX any interest it has
in any Dyax Invention and DYAX agrees to assign to CUSTOMER any interest it has
in Customer Inventions.
6.2. Ownership & Rights to Intellectual Property. DYAX shall have sole ownership
and control of all Dyax Inventions. CUSTOMER shall have sole ownership and
control of all Customer
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Inventions. Each party's rights to any Invention relevant to the manufacture,
use and sale of a Dyax Product shall be governed by this Agreement and by any
License agreement between the parties.
ARTICLE 7. TERM AND TERMINATION
7.1. Term. This Agreement shall commence on the Effective Date and continue
until termination pursuant to this Article 8 or expiration as a result of
CUSTOMER's failure to proceed to continue with this Agreement or as a result of
CUSTOMER's termination pursuant to Section 7.2.
7.2. Termination by CUSTOMER . Provided that CUSTOMER has made all payments
specified in this Agreement which have become due and payable, CUSTOMER shall
have the right to terminate this Agreement at any time by giving *************
notice to DYAX. CUSTOMER agrees to promptly pay DYAX for uncompensated costs and
milestone payments for work completed by DYAX prior to the termination date,
including for any work done during the ************* termination notice period.
CUSTOMER agrees that no refund of any sums paid to DYAX shall be due upon any
such termination.
7.3. Termination for Material Breach. This Agreement may be terminated by either
party upon ************* notice to the other party if any provision hereof is
materially breached, unless such breach is corrected within the *************
notice period. Such termination right shall be in addition to, and not in lieu
of, any other rights or remedies available to the non-breaching party by law or
in equity.
7.4. Consequences of Termination and Survival. Upon any termination of this
Agreement by CUSTOMER or by DYAX pursuant to Section 7.3, any rights granted to
CUSTOMER under this Agreement shall cease and DYAX will have the unrestricted
and exclusive right to any Dyax Product, Dyax Inventions and the results of the
Work Plan Outline and CUSTOMER shall have the unrestricted and exclusive right
to any Customer Inventions. Termination of this Agreement shall not relieve
either party of its obligations incurred prior to termination. The provisions of
Article 5. and Article 6 and Section 7.4 shall survive expiration or termination
of this Agreement.
ARTICLE 8. GENERAL PROVISIONS
8.1. Notices. Any notices permitted or required by this Agreement shall be sent
by facsimile, registered mail or a recognized private mail carrier service and
shall be effective when received if sent and addressed as follows or to such
other address as may be designated by a party in writing:
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
If to DYAX: President, Separations Division
Dyax Corp.
One Kendall Square, Bldg. 600, 5th Fl.
Cambridge, MA 02139
Telephone: (617)225-2500
Fax: (617)225-2501
If to CUSTOMER: *************
Genetics Institute, Inc.
One Burtt Road
Andover, MA 01810
Telephone: *************
Fax: *************
with a copy to: *************
Genetics Institute, Inc.
87 Cambridge Park Drive
Cambridge, MA 02140
Fax: *************
8.2. Entire Agreement; Amendment. This Agreement and the Exhibits set forth the
entire understanding of the parties with respect to the subject matter hereof
and supersedes all prior agreements, written and oral, between the parties. No
modification of any of the terms of this Agreement shall be deemed to be valid
unless it is in writing and signed by the party against whom enforcement is
sought.
8.3. Force Majeure. Neither party shall be held liable or responsible to the
other party nor be deemed to have defaulted under or breached this Agreement for
failure or delay in performing any term of this Agreement when such failure or
delay is caused by or results from causes beyond the reasonable control of the
affected party, including but not limited to fire, floods, embargoes, war, acts
of war (whether war is declared or not), riots, strikes, lockouts or other labor
disturbances, lawsuits, acts of God or acts, omissions or delays in acting by
any court, governmental authority or the other party.
8.4. Warranties. DYAX hereby represents and warrant to CUSTOMER that, to the
best of its knowledge, its use of the technologies and processes contemplated to
be used in performance of this Agreement and the use of the resulting Dyax
Product candidates and Dyax Products will not infringe the intellectual property
rights of any third party; provided, however, that such representation and
warranty shall exclude any intellectual property rights relating to Customer
Product. WITH RESPECT TO ANY DYAX PRODUCT CANDIDATE OR DYAX PRODUCT, DYAX
DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, WHETHER EXPRESSED OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, OR ANY WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE
OF TRADE. Neither
<PAGE>
party shall be liable to the other for consequential, incidental, indirect or
punitive damages arising from the performance or nonperformance of such party
under this Agreement.
8.5. Waiver; Severability. No waiver by either party of any default, right or
remedy shall be effective unless in writing, nor shall any such waiver operate
as a waiver of any other or of the same default, right or remedy, respectively,
on a future occasion. In the event that any term or provision of this Agreement
shall violate any applicable statute, ordinance or rule of law in any
jurisdiction in which it is used, such provision shall be ineffective to the
extent of such violation without invalidating any other provision hereof.
8.6. Assignment. This Agreement may not be assigned or otherwise transferred by
either party without the consent of the other party; provided, however, that
either DYAX or CUSTOMER may, without such consent, assign its rights and
obligations under this Agreement (i) in connection with a corporate
reorganization to an affiliate, all or substantially all of the equity interest
of which is owned and controlled by such party or its parent corporation, or
(ii) in connection with a merger, consolidation or sale of substantially all of
such party's assets to an unrelated third party. Any permitted assignee shall
assume all obligations of its assignor under this Agreement.
8.7. Independent Parties. This Agreement shall not be deemed to create any
partnership, joint venture, or agency relationship between the parties. Each
party hereto is acting as an independent contractor.
8.8. Governing Law. This Agreement shall be governed by and construed under the
laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
DYAX CORP. GENETICS INSTITUTE, INC.
By: /s/ L. Edward Cannon By: /s/ Carl R. Illian
--------------------------- --------------------------
Name: _________________________ Name: ________________________
Title: ________________________ Title: _______________________
Exhibits
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Exhibit 1 - Work Plan Outline
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
WORK PLAN OUTLINE
*************
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
March 6, 1998
*************
*************
Genetics Institute, Inc.
One Burtt Road
Andover, MA 01810
Re: Development Agreement for Affinity Chromatography Purification Media between
Dyax Corp. and Genetics Institute, Inc. dated September 29, 1997 (the
"Agreement")
Dear *************:
As we have discussed, we would like to amend the above-referenced
Agreement, as set forth below.
Section 5.1.(a) of the Agreement shall be amended to add the following
sentence: "The parties also agree that a Receiving Party may disclose the
Confidential Information to existing and prospective commercial partners who are
under like obligations of confidentiality and non-use as set forth in this
Section 5.1, solely for evaluation in connection with purposes set forth in this
Agreement."
If this agreement accurately sets forth the terms of the amendment, please
sign two copies of this letter and return one to me for our files.
By and on behalf of
DYAX CORP.
By: __________________
Pamela A. Hay
Vice President, Licensing & Legal
AGREED by and on behalf of:
GENETICS INSTITUTE, INC.
________________________
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
AMENDMENT 1
TO THE
DEVELOPMENT AGREEMENT FOR
AFFINITY CHROMOTOGRAPHY PURIFICATION MEDIA
This Amendment (the "Amendment"), effective as of July 20, 1998, is made
by and between DYAX CORP. ("DYAX") and GENETICS INSTITUTE, INC. ("CUSTOMER").
WHEREAS, DYAX and CUSTOMER are parties to a Development Agreement for
Affinity Chromotography Purification Media of September 29, 1997, as amended by
letter agreement dated March 6, 1998 (the "Agreement"); and
WHEREAS, the parties wish to amend the Agreement, on the terms and
conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Exhibit 1. The sections entitled ************* set forth in Exhibit 1
to the Agreement are hereby deleted in their entirety and Attachment 1 to this
Amendment is hereby substituted in its place as the revised and complete work
plan outline for the *************.
2. Development Phase. Section 2.2 of the Agreement is hereby deleted in
its entirety and the following language is hereby substituted in its place:
"(a) In consideration of the performance by DYAX of Part A of the
Development Phase, CUSTOMER agrees to pay DYAX *************. Such amounts
shall be payable within 10 days of execution of this Amendment.
(b) In consideration of the performance by DYAX of Part B of the
Development Phase, CUSTOMER agrees to pay DYAX *************. Such amounts
shall be payable *************.
(c) In further consideration of the work undertaken by DYAX during the
Development Phase, CUSTOMER agrees to pay DYAX ************* within 30
days of DYAX's delivery to CUSTOMER ************* which meets the
milestone requirements for the Development Phase set forth in Part C of
the Work Plan Outline."
3. Optimization Phase. Section 3.2 of the Agreement is hereby deleted in
its entirety and the following language is hereby substituted in its place:
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
"In consideration of the performance by DYAX of the Optimization Phase,
DYAX and CUSTOMER shall mutually agree on the amount to be paid by
CUSTOMER for the Optimization Phase in accordance with Section 2.3.
************* of such agreed-upon amount shall be paid by CUSTOMER at the
initiation of the Optimization Phase and ************* of such agreed-upon
amount shall be paid by CUSTOMER upon the completion of the Optimization
Phase. In further consideration of the performance by DYAX of the
Optimization Phase, CUSTOMER shall pay DYAX a milestone fee of
************* if the milestone is achieved. The milestone shall be a
process performance milestone mutually agreed to by the parties in
accordance with Section 2.3. The milestone fee *************."
4. Rights to Dyax Products. Article 4 of the Agreement is hereby deleted
in its entirety and the following language is hereby substituted in its place:
"4.1. General. Within ************* of completion of the Development
Phase, or if CUSTOMER elects to proceed with the Optimization Phase,
within ************* of completion of the Optimization Phase, CUSTOMER
shall notify DYAX whether it wishes to acquire an exclusive license to
manufacture and use any or all of the Dyax Products for the purification
of Customer Product. If CUSTOMER elects to exercise its option to obtain
such a license, the parties shall promptly meet, negotiate in good faith,
and mutually agree on the terms and conditions of such license to
CUSTOMER, which terms and conditions shall be set forth in a license
agreement. Any such license agreement shall contain the terms and
conditions set forth in Sections 4.2-4.9 and such other standard terms and
conditions as are agreed to by the parties. If CUSTOMER does not elect to
exercise its option to obtain a license to any of the Dyax Products, the
terms and conditions set forth in Sections 4.2-4.9 shall be of no force
and effect.
4.2. License, Right of First Refusal and Exclusive Arrangement.
(a) DYAX shall grant CUSTOMER an exclusive worldwide license to all DYAX
know-how and patent rights to make and use the Dyax Products for the
purpose of purifying ************* Customer Product ************* for
************* (such products so purified are hereinafter collectively
referred to as "Licensed Products"). Such exclusive license shall include
the right to sublicense to affiliates, third party marketing partners, and
contract manufacturers. The exclusive license to the DYAX patent rights
shall be for the life of the DYAX patent rights. The exclusive license to
the DYAX know-how shall be for a period of ************* from the first
commercial sale of the first Licensed Product in any country. Thereafter,
the know-how license shall convert to a fully-paid up non-exclusive
license. Subsequent to the expiration of the foregoing exclusive licenses
(but not pursuant to a conversion to non-exclusivity in accordance with
Section 4.8), if DYAX grants a non-exclusive license to the DYAX know-how
to a third party to make and use any of the Dyax Products for the purpose
of purifying a ************* product for a *************, CUSTOMER shall
be entitled to *************.
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
(b) DYAX shall grant CUSTOMER *************.
(c) In addition to the exclusive licenses to the Dyax Products granted to
CUSTOMER for *************.
4.3. License Fee. CUSTOMER shall pay DYAX a license fee ************* upon
the execution of the license agreement, provided that, in the event that
CUSTOMER shall have elected to proceed with the Optimization Phase and
DYAX shall have achieved the process performance milestone agreed upon for
the Optimization Phase *************.
4.4 . ************* CUSTOMER shall pay to DYAX an annual exclusivity
maintenance fee *************. In any given calendar year, CUSTOMER
*************. This provision shall apply until the first full calendar
year subsequent to the calendar year in which the first commercial sale of
a Licensed Product occurs. Thereafter, the provisions of Section 4.7 shall
apply.
4.5. Benchmark Payments. CUSTOMER shall be required to make the following
payments to DYAX upon achievement of the following benchmarks,
*************:
Benchmark Payment
--------- -------
First ************* *************
by CUSTOMER or any of its affiliates
or sublicensees for a Licensed Product
First ************* *************
by CUSTOMER or any of its affiliates or
sublicensees for a Licensed Product
First ************* *************
by CUSTOMER or any of its affiliates
or sublicensees for a Licensed Product
First ************* Licensed *************
Product in the United States or any country
in Europe by Customer or any of its affiliates
or sublicensees
4.6. Royalties. CUSTOMER shall pay DYAX earned royalties at the rate
************* of sales of Licensed Products made during each calendar year
by CUSTOMER and its affiliates and sublicensees and ************* of
Licensed
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Products ************* made during each calendar year by CUSTOMER and its
affiliates and sublicensees. With respect to each Licensed Product the
manufacture of which occurs in a country where the Dyax Product utilized
in the manufacture is covered by a valid claim of DYAX patent rights,
royalties shall be payable on such Licensed Product for the life of such
DYAX patent rights. With respect to each Licensed Product that utilizes a
Dyax Product in its manufacture, whether or not the manufacture occurs in
a country where the Dyax Product is covered by a valid claim of DYAX
patent rights, royalties shall be payable on such Licensed Product for a
period ************* from the first commercial sale of the first Licensed
Product in any country. Under no circumstances shall CUSTOMER be obligated
to pay multiple royalties for the licenses to the DYAX patent rights and
know-how granted pursuant to this Article 4; only one royalty shall be due
on the sale of a Licensed Product.
CUSTOMER shall be entitled to deduct ************* pursuant to Section 4.4
and ************* pursuant to Section 4.5 from the royalties due DYAX
pursuant to this Section 4.6; *************.
4.7. ************* CUSTOMER shall pay DYAX an annual exclusivity
maintenance fee **************.
4.8. Conversion to Non-Exclusivity. In the event that CUSTOMER shall fail
to pay the annual exclusivity maintenance fee called for by either Section
4.4 or Section 4.7 in any given calendar year, DYAX's sole remedy shall be
the right to convert the exclusive licenses granted to CUSTOMER to
non-exclusive licenses and to convert the exclusive arrangement set forth
in Section 4.2(c) to a non-exclusive arrangement. **************.
4.9. *************
5. Confidentiality. Section 5.1 of the Agreement is hereby amended to
include an additional sentence at the end thereof as follows:
"Further, the parties agree that each party may disclose the Confidential
Information of the other party to ************* in order to accomplish the
purposes of this Agreement, provided that ************* agrees to
obligations of confidentiality and non-use which are acceptable to the
other party."
6. Patent Prosecution. Section 6.2 of the Agreement is hereby amended to
include an additional sentence at the end thereof as follows:
"DYAX agrees to file for patent protection on all Dyax Product candidates
and such patent rights shall be included in the license grant to CUSTOMER
pursuant to Article 4."
7. Capitalization. Capitalized terms used herein and not otherwise defined
shall have the meanings given such terms in the Agreement.
<PAGE>
8. Other. All other terms and conditions of the Agreement shall remain in
full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hand and seal as of
the date set forth above.
DYAX CORP.
By: ______________________
Name: ____________________
Title: ___________________
GENETICS INSTITUTE, INC.
By: ______________________
Name: ____________________
Title: ___________________
<PAGE>
Development Phase Program
*************
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
AMENDMENT 2
TO THE
DEVELOPMENT AGREEMENT FOR
AFFINITY CHROMOTOGRAPHY PURIFICATION MEDIA
This Amendment (the "Amendment"), effective as of March 31, 1999, is made
by and between DYAX CORP. ("DYAX") and GENETICS INSTITUTE, INC. ("CUSTOMER").
WHEREAS, DYAX and CUSTOMER are parties to a Development Agreement for
Affinity Chromotography Purification Media of September 29, 1997, as amended by
letter agreement dated March 6, 1998 and Amendment 1 dated July 20, 1998 (the
"Agreement"); and
WHEREAS, the parties wish to further amend the Agreement, on the terms and
conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Optimization Phase. In accordance with Section 2.3 of the Agreement,
CUSTOMER and DYAX acknowledge that CUSTOMER has elected to proceed to the
Optimization Phase. However, notwithstanding the original expectation of the
parties that DYAX would conduct the work to be performed during the Optimization
Phase, CUSTOMER and DYAX agree that CUSTOMER shall conduct the work to be
performed during the Optimization Phase.
2. Optimization Phase Milestone. In accordance with Section 2.3 of the
Agreement, CUSTOMER and DYAX have agreed to the process performance milestone
for the Optimization Phase set forth in Attachment 1 to this Amendment.
3. Conduct of Optimization Phase. Section 3.1 of the Agreement is hereby
deleted in its entirety and the following language is substituted in its place:
"CUSTOMER agrees to devote commercially reasonable and diligent
efforts to conduct the work necessary to achieve the process
performance milestone for the Optimization Phase set forth in
Attachment 1 to this Amendment. During the Optimization Phase,
CUSTOMER shall provide DYAX's Project Director with regular updates
on the progress of the Optimization Phase. Upon completion of the
Optimization Phase, CUSTOMER shall provide DYAX with a final written
report containing the data and results of the Optimization Phase.
*************
4. Optimization Phase Payments. Section 3.2 of the Agreement is hereby
deleted in its entirety and the following language is substituted in its place:
"CUSTOMER shall be responsible for all costs and expenses associated
with its performance of the Optimization Phase. In addition,
CUSTOMER shall pay DYAX a milestone fee ************* upon the
completion of the Optimization Phase if the process performance
milestone for the Optimization Phase is achieved by CUSTOMER.
*************."
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
5. Exercise of License. The first sentence of Section 4.1 of the Agreement
is hereby deleted in its entirety and the following language is substituted in
its place:
"Within ************* of completion of the Optimization Phase, but
in no event later than *************, CUSTOMER shall notify DYAX
whether it wishes to acquire an exclusive license to manufacture and
use any or all of the Dyax Products for the purification of Customer
Product."
6. License Fee. Section 4.3 of the Agreement is hereby deleted in its
entirety and the following language is substituted in its place:
"CUSTOMER shall pay DYAX a license fee ************* upon the
execution of the license agreement, *************."
7. Capitalization. Capitalized terms used herein and no otherwise defined
shall have the meanings given such terms in the Agreement.
8. Other. All other terms and conditions of the Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have set their hand and seal as of
the date set forth above.
DYAX CORP.
By: ______________________
Name: ____________________
Title: ___________________
GENETICS INSTITUTE, INC.
By: ______________________
Name: ____________________
Title: ___________________
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Attachment 1
Optimization Phase Program
The process performance milestone for the Optimization Phase will be met if all
of the following three criteria are achieved:
*************
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Exhibit 10.30
LICENSE, TECHNOLOGY TRANSFER AND TECHNOLOGY SERVICES AGREEMENT
This License, Technology Transfer and Technology Services Agreement
("Agreement") is entered into as of February 2, 2000 (the "Effective Date"), by
and between Dyax Corp., a Delaware corporation with principal offices located at
One Kendall Square, Building 600, Suite 623, Cambridge, Massachusetts 02139
(together with its Affiliates (as defined below), "Dyax"), and Amgen Inc., a
Delaware corporation, One Amgen Center Drive, Thousand Oaks, California
91320-1789 (together with its Affiliates, "Amgen").
WITNESSETH:
WHEREAS, Dyax possesses intellectual property and Know-How (as defined
herein) related to the discovery of proteins, peptides and antibodies having
novel binding properties using phage display, including certain Licensed Patents
(as defined herein);
WHEREAS, Amgen is engaged in the research, development and
commercialization of human pharmaceutical products;
WHEREAS, Amgen wishes for Dyax to transfer and license to Amgen the right
to use certain Original Material (as defined herein) under the terms and
conditions hereof;
WHEREAS, Amgen wishes for Dyax to use its proprietary technology to
construct New Material (as defined herein) which Dyax will license to Amgen for
use under the terms and conditions hereof;
WHEREAS, Amgen desires to obtain licenses from Dyax to use the Licensed
Dyax Material and the Know-How, and to practice the inventions described in the
Licensed Patents in the Field of Use (each as defined herein), and Dyax is
willing to grant such licenses under the terms and conditions hereof.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
premises contained in this Agreement, the parties hereto hereby agree as
follows:
1. DEFINITIONS
1.1 "Affiliate" means a Person that, directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with the Person specified. For the purposes of this definition, "control" shall
mean the possession, direct or indirect, of the power to cause the direction of
the management and policies of a Person, whether through ownership of more than
fifty percent (50%) of the voting securities of such Person, by contract or
otherwise.
1
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.2 *************
1.3 "Amgen Property" shall have the meaning set forth in Section 3.4.
1.4 "BLA" means a Biological License Application as defined in the U.S.
Food, Drug and Cosmetic Act and the regulations promulgated thereunder, as
amended, and any filing under any successor laws and regulations.
1.5 "Code" shall have the meaning set forth in Section 9.4(b).
1.6 "Commercially Reasonable Efforts" means *************.
1.7 "Completed New Material" shall have the meaning set forth in Section
4.2.
1.8 "Confidential Information" shall mean all confidential and/or
proprietary information, materials, Know-How, software and other data, both
technical and nontechnical of a party which is disclosed by such party at any
time during the term of this Agreement pursuant to or in furtherance of this
Agreement, except that which the party receiving such Confidential Information
can establish by competent evidence:
(a) is or later becomes generally available to the public by use,
publication or the like, through no fault of the receiving party, its
officers, directors, agents or employees; or
(b) is obtained from a third party without restriction who had legal right
to disclose the same to the receiving party; or
(c) the receiving party already possessed and obtained from a source other
than the disclosing party prior to receipt thereof from the disclosing
party; or
(d) is independently developed by the receiving party without the use of
Confidential Information belonging to the disclosing party as evidenced by
the receiving party's written records.
1.9 "Controls" or "Controlled" means possession of the ability to grant
licenses or sublicenses without violating the terms of any agreement or other
arrangement with, or the rights of, any Third Party.
1.10 "Default" means a Performance Default or a Representation Default.
1.11 "Defaulting Party" shall have the meaning set forth in Section
9.3(a).
1.12 "Field of Use" means all human therapeutic and prophylactic uses
*************. The Field of Use shall not include *************.
1.13 *************
1.14 "Improvement" means any improvement to any Original Material or New
Material *************.
2
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.15 "IND" means an Investigational New Drug application as defined in the
U.S. Food, Drug and Cosmetic Act and the regulations thereunder, as amended, and
any filing under any successor laws and regulations.
1.16 "Insolvent Party" shall have the meaning set forth in Section 9.4(a).
1.17 "Interim New Material" shall have the meaning set forth in Section
4.2.
1.18 "Know-How" means all information actually disclosed by Dyax to Amgen,
whether or not patentable, constituting materials, methods, processes,
techniques, information and data relating to the Licensed Dyax Material, which
information Dyax treats as proprietary to Dyax and which information is
disclosed to Amgen in a clear writing as proprietary to Dyax.
1.19 "Licensed Dyax Material" means the Original Material, the New
Material, and any Improvements, but shall not include the Amgen Property.
1.20 *************
1.21 "Licensed Patents" means any and all patent applications, and all
continuations, continuations-in-part, patents-of-addition and divisionals of
such patent applications, and any patents that may issue based upon such patent
applications, together with any Supplementary Protection Certificates or the
equivalent thereof, reissues, reexaminations, renewals, certificates of
invention, substitutions, confirmations, re-registrations, revalidations,
restorations and extensions thereof, and all counterparts thereto in countries
outside of the United States, all of which as of the Effective Date are listed
in Exhibit A; provided, however, that "Licensed Patents" shall not include
*************. Dyax shall keep Amgen currently informed in writing of any
additions and amendments to Exhibit A.
1.22 "Licensed Product" means any product in the Field of Use discovered,
made or developed by Amgen *************.
1.23 "Licensed Territory" means worldwide.
1.24 "Milestone Event" shall have the meaning set forth in Section 6.1(b).
1.25 "Milestone Payment" shall have the meaning set forth in Section
6.1(b).
1.26 "NDA" means a New Drug Application as defined in the U.S. Food, Drug
and Cosmetic Act and the regulations thereunder, as amended.
1.27 "New Material" means the phage display library and related reagents
and protocols ************* as set forth in Exhibit B. New Material shall
include the Interim New Material and the Completed New Material.
1.28 "Non-Defaulting Party" shall have the meaning set forth in Section
9.3(a).
3
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.29 "Notice of Default" shall have the meaning set forth in Section
9.3(a).
1.30 "Original Material" means Dyax's proprietary ************* phage
display libraries and related reagents and protocols set forth in Exhibit C.
1.31 "Patent License Effective Date" means February 12, 1999.
1.32 "Patent Rights" means patent applications, patents issuing thereon
and any extensions or restorations by existing or future extension or
restoration mechanisms, including without limitation Supplementary Protection
Certificates or the equivalent thereof, renewals, continuations,
continuations-in-part, divisionals, patents-of-addition, certificates of
invention, extensions, substitutions, confirmations, re-registrations,
re-examinations, revalidations and/or reissues of any patent, and any foreign
counterparts thereof.
1.33 "Performance Default" shall have the meaning set forth in Section
9.3(a).
1.34 "Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an estate, an unincorporated
organization, or any other entity, or a government or any department or agency
thereof.
1.35 "Representation Default" shall have the meaning set forth in Section
9.3(a).
1.36 "Term" means the term of this Agreement, as set forth in Section 9.1.
1.37 "Third Party" means any Person that is not an Affiliate of Amgen or
Dyax.
2. REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Dyax.
(a) Corporate Power. Dyax is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
full corporate power and authority to enter into this Agreement and to carry out
the provisions hereof.
(b) Due Authorization. The execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of Dyax, and the person executing this Agreement on behalf of Dyax has been
duly authorized to do so by all requisite corporate action.
(c) Binding Agreement; No Conflict. This Agreement is and shall be a legal
and valid obligation binding upon Dyax, enforceable in accordance with its
terms. The execution, delivery and performance of this Agreement by Dyax, and
the granting of the licenses to Amgen hereunder, do not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any material law or regulation of any
court, governmental body or administrative
4
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
or other agency having jurisdiction over it.
(d) Grant of Rights. Dyax has not, and will not during the Term, grant any
right to any Third Party which would conflict with the rights granted to Amgen
and its Affiliates hereunder.
(e) Validity. Dyax is aware of no action, suit or inquiry or investigation
instituted by any United States federal or state governmental agency which
questions or threatens the validity of this Agreement or the Licensed Patents.
(f) Licensed Patents. Subject to non-exclusive licenses granted to Third
Parties, Dyax possesses the exclusive right, title and interest in and to the
Licensed Patents in the Field of Use in the Licensed Territory, all of which are
as of the Patent License Effective Date and as of the Effective Date
unencumbered by any lien, security interest, or other right or claim of any
Third Party. The Licensed Patents include all Patent Rights owned or Controlled
by Dyax as of the Patent License Effective Date and as of the Effective Date
*************.
(g) Licensed Dyax Material and Know-How. Subject to non-exclusive licenses
granted to Third Parties, Dyax exclusively owns the Licensed Dyax Material and
the Know-How in the Field of Use, all of which are as of the Effective Date
unencumbered by any lien, security interest, or other right or claim of any
Third Party. *************.
2.2 Representations and Warranties of Amgen.
(a) Corporate Power. Amgen is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
full corporate power and authority to enter into this Agreement and to carry out
the provisions hereof.
(b) Due Authorization. The execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of Amgen, and the person executing this Agreement on behalf of Amgen has
been duly authorized to do so by all requisite corporate action.
(c) Binding Agreement. This Agreement is and shall be a legal and valid
obligation binding upon Amgen, enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by Amgen does not conflict
with any agreement or instrument to which it is a party or by which it may be
bound, nor violate any material law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it.
3. GRANT OF LICENSE; AMGEN PROPERTY
3.1 Patent License Grant. Subject to the terms and limitations of this
Agreement, Dyax hereby grants to Amgen as of the Patent License Effective Date a
non-exclusive license in the Licensed Territory under the Licensed Patents to
make, develop
5
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
and use ************* in the Field of Use and to make, have made, use, sell,
offer for sale and import Licensed Products in the Field of Use, *************
no provision of this Agreement shall be deemed to restrict Amgen's ability to
license, sublicense, assign or otherwise transfer any or all of its rights in or
to any Licensed Product or any other Amgen Property.
3.2 Technology License Grant. Dyax hereby grants to Amgen a non-exclusive
license in the Licensed Territory to the Licensed Dyax Material and the Know-How
to make, develop and use ************* in the Field of Use and to make, have
made, use, sell, offer for sale and import Licensed Products in the Field of
Use, ************* no provision of this Agreement shall be deemed to restrict
Amgen's ability to license, sublicense, assign or otherwise transfer any or all
of its rights in or to any Licensed Product or any other Amgen Property.
3.3 Ownership of Licensed Dyax Material; Reservation of Rights. Dyax is
and shall remain the owner of all Licensed Dyax Material and the Know-How,
subject to the rights granted to Amgen set forth in this Agreement. All rights
to the Licensed Patents, the Licensed Dyax Material and the Know-How not
expressly granted under this Agreement, as well as to any other Dyax proprietary
phage display library and to Dyax Patent Rights other than the Licensed Patents,
are reserved to Dyax, including the right to grant the same rights to any Third
Party as Dyax has granted to Amgen hereunder. *************.
3.4 Amgen Property. Amgen shall solely and exclusively own all Licensed
Products, ************* other pharmaceutical or therapeutic products or
candidates made, discovered, derived or developed by Amgen in connection with or
resulting from Amgen's use of the Licensed Dyax Material or the Know-How or
Amgen's use of any method or composition of matter, the use of which would, but
for the licenses granted hereunder, infringe one or more claims of the Licensed
Patents, including but not limited to, *************, all of which shall be
owned exclusively by Amgen without restriction (collectively, the "Amgen
Property"), and Dyax, its officers, directors, employees, agents and consultants
shall have no rights, claims or interests whatsoever (including but not limited
to Amgen's Patent Rights and any other intellectual property rights) in or to
the Amgen Property, *************.
3.5 *************
4. DYAX DELIVERABLES
4.1 Original Material. Within ************* of the Effective Date, Dyax
shall deliver to Amgen the Original Material set forth on Exhibit C.
4.2 New Material. Dyax shall construct the New Material in accordance with
the specifications set forth in Exhibit B and the timeline set forth in this
Section 4.2. Dyax agrees to devote Commercially Reasonable Efforts to complete
construction of the New Material in accordance with the foregoing specifications
and timeline. During the course of the work, Dyax representatives shall consult
with Amgen representatives upon the request of Amgen in order to facilitate the
exchange of
6
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
information relating to the work being performed by Dyax. Dyax shall deliver to
Amgen ************* as set forth in Exhibit B, *************. Dyax shall deliver
to Amgen the completed New Material (collectively, the "Completed New Material")
as set forth in Exhibit B, *************. The work being performed by Dyax shall
be deemed complete *************.
4.3 Related Technology and Technology Services. During the Term, Dyax
shall provide the following to Amgen:
(a) ************* on such dates as may be mutually determined by Dyax and
Amgen, at a cost of *************, plus all reasonable travel and reasonable
out-of-pocket expenses of such scientist; and
(b) In addition to the services described in Section 4.3(a), telephone and
remote technical support required by Amgen in its use of the Licensed Dyax
Material ************* set forth in Section 4.1, as requested from time to time
by Amgen, at a cost of *************; and
(c) Such additional training and telephone and remote technical support
with respect to the New Material as the parties may subsequently agree in
writing, at a cost of *************; and
(d) *************.
5. DEVELOPMENT AND COMMERCIALIZATION
5.1 Development. Amgen, in its sole discretion, will make all decisions
relating to the development of Licensed Products including, but not limited to,
all decisions relating to the research, pre-clinical development and clinical
development of Licensed Products.
5.2 Commercialization. Amgen, in its sole discretion, will make all
decisions relating to the commercialization of Licensed Products including, but
not limited to, all decisions relating to the promotion, advertising, marketing
and pricing of Licensed Products.
6. AMGEN PAYMENTS
6.1 Patent License Payments. In consideration of the license under the
Licensed Patents granted by Dyax to Amgen pursuant to Section 3.1:
(a) Within ************* after the Effective Date, Amgen shall pay to Dyax
a ************* license fee *************; and
(b) Within ************* days after the occurrence of each of the
following events (each, a "Milestone Event") with respect to a Licensed Product
*************, Amgen will make the following milestone payments (each, a
"Milestone Payment") to Dyax:
7
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Milestone Event Milestone Payment
--------------- -----------------
************* *************
************* *************
************* *************
Notwithstanding the foregoing, a Milestone Payment shall only be due and
payable *************.
(c) Amgen shall not be obligated to make any Milestone Payment under
Section 6.1(b) more than once with respect to any Licensed Product, and upon the
making of all Milestone Payments with respect to any Licensed Product Amgen
shall have a fully paid-up, unrestricted license under the Licensed Patents to
make, have made, use, sell, offer to sell and import such Licensed Product in
the Field of Use in the Licensed Territory, *************. No provision of this
Agreement shall be deemed to restrict Amgen's ability to license, sublicense,
assign or otherwise transfer any or all of its rights in or to any Licensed
Product or any other Amgen Property.
(d) Amgen shall not be obligated to make any Milestone Payment under
Section 6.1(b) *************, Amgen shall have a fully paid-up, unrestricted
license under the Licensed Patents to make, have made, use, sell, offer to sell
and import all Licensed Products in the Field of Use in the Licensed Territory,
*************. No provision of this Agreement shall be deemed to restrict
Amgen's ability to license, sublicense, assign or otherwise transfer any or all
of its rights in or to any Licensed Product or any other Amgen Property.
6.2 Technology Payments. In consideration of the license pursuant to
Section 3.2 with respect to the Original Material, and the deliverables provided
to Amgen pursuant to Section 4.1, Amgen shall pay Dyax the sum *************
following the date Amgen receives from Dyax the Original Material as provided in
Section 4.1. In consideration of the license pursuant to Section 3.2 with
respect to the New Material, and the deliverables provided to Amgen pursuant to
Section 4.2, Amgen shall pay Dyax the sum *************.
6.3 Payments in United States Dollars; No Additional Consideration. All
payments due under this Agreement shall be made in United States dollars. The
parties hereby agree that the payments set forth in Sections 6.1 and 6.2
constitute all payments due and payable under this Agreement, and that no
additional consideration shall be payable by Amgen under this Agreement.
7. CONFIDENTIALITY
7.1 Non-Disclosure of Confidential Information. Except to the extent
expressly authorized by this Agreement, neither party shall (i) disclose,
publish or make available any Confidential Information disclosed to it by the
other to any Third Party,
8
<PAGE>
nor to any employees who do not need to know or have access to such Confidential
Information or (ii) transfer or otherwise use or exploit any such Confidential
Information.
8. INDEMNIFICATION
8.1 Indemnification by Amgen. Amgen shall indemnify and hold Dyax, its
officers, directors, employees and agents harmless from all liability, loss,
damage and cost arising out of (a) any claim, demand, suit or other action of
any nature brought by any Third Party (other than claims by any Third Party
relating to infringement of Third Party Patent Rights as provided in Section
2.1(g)) arising out of the using of the Licensed Dyax Material or the Know-How
or the making, having made, using, selling, offering to sell or importing of
Licensed Products by, on behalf of, or under authority of, Amgen or (b) any
representation or warranty by Amgen set forth herein being untrue in any
material respect when made or material breach or material default by Amgen of
any of its obligations hereunder. Dyax will notify Amgen in the event it becomes
aware of a claim for which indemnification may be sought hereunder.
Notwithstanding the foregoing, no Person shall be entitled to indemnification
under this Section 8.1 against any liability, damage, cost (including reasonable
attorneys' fees) or expense arising out of Dyax's negligence, recklessness or
willful misconduct.
8.2 Indemnification by Dyax. Dyax shall indemnify and hold Amgen, its
officers, directors, employees and agents harmless from all liability, loss,
damage and cost arising out of (a) any claim, demand, suit or other action of
any nature brought by any Third Party arising out of the making, having made,
using, selling, offering to sell, licensing, offering to license or importing of
the Licensed Dyax Material or the Know-How or the practice of the claimed
subject matter of the Licensed Patents by, on behalf of, or under authority of,
Dyax or any Third Party licensee of Dyax or (b) any representation or warranty
by Dyax set forth herein being untrue in any material respect when made or
material breach or material default by Dyax of any of its obligations hereunder.
Amgen will notify Dyax in the event it becomes aware of a claim for which
indemnification may be sought hereunder. Notwithstanding the foregoing, no
Person shall be entitled to indemnification under this Section 8.2 against any
liability, damage, cost (including reasonable attorneys' fees) or expense
arising out of Amgen's negligence, recklessness or willful misconduct.
8.3 Dyax Disclaimer of Warranties. Nothing in this Agreement shall be
construed as a warranty or representation by Dyax that Amgen's use of the
Licensed Patents, the Licensed Dyax Material or the Know-How will result in the
discovery of any Licensed Intermediate or any Licensed Product. EXCEPT AS SET
FORTH IN SECTION 2.1 HEREOF, DYAX DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND
WITH RESPECT TO THE LICENSED PATENTS, THE LICENSED DYAX MATERIAL AND THE
KNOW-HOW, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR THE
WARRANTY OF NONINFRINGEMENT.
9
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
9. TERM; TERMINATION
9.1 Term. Subject to the provisions of Section 9.5, the Term shall
commence as of the Effective Date and, unless terminated earlier pursuant to
this Section 9, shall terminate upon the expiration of the last to expire of the
Licensed Patents. Upon the expiration of the Term, Amgen shall have an
unrestricted license to make, have made, use, sell, offer to sell and import all
Licensed Products in the Field of Use in the Licensed Territory, subject to any
outstanding payment obligations in accordance with Section 6.1. Notwithstanding
the foregoing, this Agreement may be earlier terminated pursuant to Section 9.2.
9.2 Termination of Agreement for Convenience. At any time during the Term,
Amgen may, upon ************* notice to Dyax, terminate this Agreement, subject
to the provisions of Section 9.5.
9.3 Default.
(a) In the event any representation or warranty made hereunder by either
party shall have been untrue in any material respect ("Representation Default")
or upon any material breach or material default of an obligation of this
Agreement by a party ("Performance Default"), the party not in default
("Non-Defaulting Party") must first give the other party ("Defaulting Party")
written notice thereof ("Notice of Default"), which notice must state the nature
of the Representation Default or Performance Default in reasonable detail and
request the Defaulting Party cure such default within thirty (30) days. If the
Defaulting Party shall dispute the existence, extent or nature of any default
set forth in a Notice of Default, the parties shall use good faith efforts to
resolve the dispute.
(b) In the event of (i) a Representation Default by Dyax wherein the
underlying facts shall not have been brought into conformity with the
representation and warranty within the period set forth in Section 9.3(a) after
receipt of a Notice of Default (or, if the underlying facts of such
Representation Default cannot be brought into conformity within such period and,
in the determination of Amgen, Dyax shall have failed to commence substantial
remedial actions to bring such facts into conformity within such period and to
diligently pursue the same) or (ii) a Performance Default by Dyax that shall not
have been cured within the period set forth in Section 9.3(a) after receipt of a
Notice of Default (or, if such Performance Default cannot be cured within such
period and, in the determination of Amgen, Dyax shall have failed to commence
substantial remedial actions to cure such Performance Default within such period
and to diligently pursue the same), then upon such failure of Dyax to cure such
Representation Default or Performance Default, Amgen (in addition to any other
remedies which may be available to Amgen at law or equity), at its option, may
terminate this Agreement. Upon such termination by Amgen, Amgen shall have an
unrestricted license to make,
10
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
have made, use, sell, offer to sell and import all Licensed Products in the
Field of Use in the Licensed Territory *************.
(c) In the event of a Performance Default by Amgen that shall not have
been cured within the period set forth in Section 9.3(a) after receipt of a
Notice of Default (or, if such Performance Default cannot be cured within such
period and, in the determination of Dyax, Amgen shall have failed to commence
substantial remedial actions to cure such Performance Default within such period
and to diligently pursue the same), Dyax (in addition to any other remedies
which may be available to Dyax at law or equity), at its option, may terminate
this Agreement, subject to the provisions of Section 9.5.
9.4 Insolvency or Bankruptcy.
(a) In addition to any other remedies available to it by law or in equity,
either party may terminate this Agreement upon providing written notice to the
other party (the "Insolvent Party"), in the event the Insolvent Party shall have
become insolvent or bankrupt or shall have made an assignment for the benefit of
its creditors, or there shall have been appointed a trustee or receiver of the
Insolvent Party, or for all or a substantial part of its property, or any case
or proceeding shall have been commenced or other action taken by or against the
Insolvent Party in bankruptcy or seeking reorganization, liquidation,
dissolution, winding-up arrangement, composition or readjustment of its debts or
any other relief under any bankruptcy, insolvency, reorganization or other
similar act or law of any jurisdiction now or hereafter in effect, or there
shall have been issued a warrant of attachment, execution, distraint or similar
process against any substantial part of the property of the Insolvent Party, and
any such event shall have continued for forty-five (45) days undismissed,
unbonded and undischarged.
(b) All rights and licenses granted under or pursuant to this Agreement by
Amgen or Dyax are, and shall otherwise be deemed to be, for purposes of Section
365(n) of the U.S. Bankruptcy Code (the "Code"), licenses of rights to
"intellectual property" as defined under Section 101 of the Code. The parties
agree that each party which shall be a licensee of such rights under this
Agreement shall retain and may fully exercise all of its rights and elections
under the Code. The parties further agree that, in the event of the commencement
of a bankruptcy proceeding by or against either party under the Code, the party
hereto which shall not be a party to such proceeding shall be entitled to a
complete duplicate of (or complete access to, as appropriate) any such
intellectual property and all embodiments of such intellectual property, and
same, if not already in their possession, shall be promptly delivered to them
(i) upon any such commencement of a bankruptcy proceeding upon their written
request therefor, unless the party subject to such proceeding (or a trustee on
behalf of the subject party) elects to continue to perform all of their
obligations under this Agreement or (ii) if not delivered under (i) above, upon
the rejection of this Agreement by or on behalf of the party subject to such
proceeding upon written request therefor by the non-subject party.
(c) In the event Dyax shall be the Insolvent Party and Amgen elects to
terminate this Agreement pursuant to this Section 9.4, all rights and
obligations other
11
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
than those which survive in accordance with Section 9.6 hereunder shall
terminate, provided, however, Amgen shall retain all licenses granted herein
*************.
9.5 Effect of Certain Terminations. Upon the earlier termination of this
Agreement by Amgen pursuant to Section 9.2 or by Dyax pursuant to Section 9.3(c)
or 9.4, the following rights and obligations shall apply:
(a) Neither party hereto shall be released from any liability which, at
the time of such termination, shall have already accrued to the other party or
which shall be attributable to a period prior to such termination nor preclude
either party from pursuing any rights and remedies it may have hereunder or at
law or in equity with respect to any breach of this Agreement; and
(b) Amgen shall dispose of any unused Licensed Dyax Material and shall
have the right to sell or otherwise dispose of any finished Licensed Products
then on hand, and to manufacture, use and/or sell or otherwise dispose of any
raw materials, work-in-process, finished goods, returned and repossessed goods,
and materials of any kind, nature or description used in the manufacture of any
Licensed Products subject to such terminated license then on hand; and
(c) ************* this Section 9.5, and the rights and obligations
thereunder and hereunder, shall remain in full force and effect in accordance
with their respective terms without termination or expiration except as
expressly provided therein, and Sections 7 and 8 shall remain in full force and
effect for a period of ************* following termination or expiration of this
Agreement.
9.6 Effect of Expiration or Certain Terminations. Upon the expiration of
the Term or the earlier termination of this Agreement by Amgen pursuant to
Section 9.3(b) or 9.4, the following rights and obligations shall apply:
(a) Neither party hereto shall be released from any liability which, at
the time of such termination, shall have already accrued to the other party or
which shall be attributable to a period prior to such termination nor preclude
either party from pursuing any rights and remedies it may have hereunder or at
law or in equity with respect to any breach of this Agreement; and
(b) ************* this Section 9.6, and the rights and obligations
thereunder and hereunder, shall remain in full force and effect in accordance
with their respective terms without termination or expiration except as
expressly provided therein, and Sections 7 and 8 shall remain in full force and
effect for a period of ************* following termination or expiration of this
Agreement.
10. MISCELLANEOUS
10.1 Severability. If any provision in this Agreement is, for any reason,
held to be void or of no effect, it shall not affect the validity of the
remaining provisions of
12
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this Agreement, except in the case the absence of such void provision would make
the entire Agreement unworkable.
10.2 Governing Law. This Agreement shall be governed by the laws of the
State of California, without reference to the conflicts of law principles
thereof, and the patent laws of the United States of America. The parties hereto
hereby consent to the jurisdiction and venue of the state and federal courts
located in the State of California, notwithstanding the fact that either party
may now be or hereafter become domiciled in a different state.
10.3 Notices. All notices, requests, approval or consent, and other
communications hereunder shall be deemed to have been sufficiently given if in
writing and shall be personally delivered or sent by facsimile transmission
(receipt verified), or by registered or certified mail (return receipt
requested), postage prepaid, commercial overnight courier, in each case to the
respective address specified below, or such other address as may be specified in
writing to the other party hereto.
13
<PAGE>
If to Amgen: If to Dyax:
Senior Vice President, Corporate Chief Executive Officer
Development, General Counsel Dyax Corp.
and Secretary One Kendall Square
Amgen Inc. Building 600
One Amgen Center Drive Suite 623
Thousand Oaks, CA 91320-1799 Cambridge, MA 02139
Facsimile: (805) 499-8011 Facsimile: (617) 225-2501
With Copy To:
Senior Vice President, Research
10.4 Entire Agreement. This Agreement (including all Exhibits attached
hereto, which are incorporated herein by reference) is a complete integration of
the entire understanding of the parties with respect to its subject matter, and
no prior representations, promises or understanding related to this subject
matter, which are not incorporated in this Agreement shall be binding upon the
parties.
10.5 Assignment. This Agreement shall not be assignable by either party to
any Third Party hereto without the written consent of the other party; provided,
however, a party may assign this Agreement and all of its rights and obligations
under this Agreement, without such consent, to an entity that acquires all or
substantially all of its business or assets to which this Agreement pertains
(including, with respect to Dyax, an entity that acquires all of the Licensed
Patents), whether by merger, consolidation, reorganization, acquisition, sale or
otherwise. Notwithstanding the restrictions in this Section 10.5, no provision
of this Agreement shall be deemed to restrict Amgen's ability to sublicense any
or all of its rights in or to any Licensed Product or any other Amgen Property.
This Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns, and the name of a party appearing herein shall be
deemed to include the names of such party's successors and permitted assigns to
the extent necessary to carry out the intent of this Agreement. Any assignment
not in accordance with this Section 10.5 shall be void.
10.6 Independent Contractors. The parties are independent contractors.
This Agreement shall not be interpreted as making either party the agent,
partner, joint venture or employee of the other. No association, combination or
relation is created between the parties, except as expressly provided.
10.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.8 No Third-Party Beneficiaries. The parties specifically disavow any
desire or intention to create a "third party" beneficiary contract, and
specifically declare
14
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
that no Person, except for the parties and their permitted assigns, shall have
any rights hereunder nor any right of enforcement hereof.
10.9 Public Announcements. Except as otherwise required by law or
regulation (and in such event only after compliance with the terms of this
Section 10.9), neither party shall issue a press release or make any other
disclosure of the existence or of the terms of this Agreement, or otherwise use
the name or trademarks or products of the other party or the names of any
employees thereof, without the prior approval of such press release or
disclosure by the other party hereto. Each party shall submit any such press
release or disclosure to the other party, and the receiving party shall have
************* to review and approve any such press release or disclosure, which
approval shall not be unreasonably withheld. If the receiving party does not
respond within such ************* period, the press release or disclosure shall
be deemed approved. In addition if, in the reasonable opinion of such party's
counsel, a public disclosure shall be required by law, regulation or court
order, including without limitation in a filing with the United States
Securities and Exchange Commission or the United States Food and Drug
Administration, the disclosing party shall provide copies of the disclosure
reasonably in advance of such filing or other disclosure for the nondisclosing
party's prior review and comment, and the nondisclosing party shall provide its
comments, if any, on such announcement as soon as practicable. Notwithstanding
the foregoing, Amgen agrees that Dyax may include Amgen on a list that names
Dyax licensees.
15
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IN WITNESS WHEREOF, the parties, having read the terms of this Agreement
and intending to be legally bound, execute this Agreement effective the day and
year first above written.
DYAX CORP., a Delaware corporation
By: /s/ L. Edward Cannon
--------------------------------------------------
L. Edward Cannon, Executive Vice President
AMGEN INC., a Delaware corporation
By: /s/ Lawrence M. Souza
--------------------------------------------------
Lawrence M. Souza, Senior Vice President, Research
16
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
EXHIBIT A
Licensed Patents
================================================================================
Application/
Country Patent No. Filing Date Patent No. Issue Date
------- ---------- ----------- ---------- ----------
- --------------------------------------------------------------------------------
US 07/664,989* 3/1/91 5,223,409 6/29/93
- --------------------------------------------------------------------------------
US 9,319 1/26/93 5,403,484 4/4/95
- --------------------------------------------------------------------------------
US 08/057,667 6/18/93 5,571,698 11/5/96
- --------------------------------------------------------------------------------
US div 08/415,922 4/3/95 5,837,500 11/17/98
- --------------------------------------------------------------------------------
US div 08/993,776 12/18/97
- --------------------------------------------------------------------------------
US div ************* 11/16/98
- --------------------------------------------------------------------------------
US div ************* 11/16/98
- --------------------------------------------------------------------------------
PCT US89/03731 9/1/89
W09002809 pub 3/22/90
- --------------------------------------------------------------------------------
EPO 89/910702.3 9/1/89 436,597 4/2/97
EP436597 pub 7/17/91
- --------------------------------------------------------------------------------
EPO div 96/112867.5 8/9/96 Allowed
************* 4/16/97 pub
- --------------------------------------------------------------------------------
Japan 89510087 9/1/89
JP4502700 (pub) 5/21/92
- --------------------------------------------------------------------------------
Canada 610,176 9/1/89 1,340,288 12/29/98
- --------------------------------------------------------------------------------
Ireland IR89/2834 9/4/89
- --------------------------------------------------------------------------------
Israel 91501 9/1/89 91501 6/11/98
- --------------------------------------------------------------------------------
Israel 3 divs 5/29/97
- --------------------------------------------------------------------------------
PCT US92/01456 2/27/92
W09215677 (pub) 9/17/92
- --------------------------------------------------------------------------------
EPO 92/908057.0 2/27/92
- --------------------------------------------------------------------------------
Canada 2105300 2/27/92
- --------------------------------------------------------------------------------
Japan 92507558 2/27/92
- --------------------------------------------------------------------------------
PCT US92/01539 2/28/92
W09215679 (pub) 9/17/92
================================================================================
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
================================================================================
EPO 92/908799.7 2/28/92
- --------------------------------------------------------------------------------
Canada 2105303 2/28/92
- --------------------------------------------------------------------------------
Japan 92508216 2/28/92
- --------------------------------------------------------------------------------
EPO ************* 5/18/99**
================================================================================
* CIP of US Serial No. 487,063 filed 3/2/90 which is a CIP of US Serial No.
240,160 filed 9/2/88. All Protein Engineering Corporation patent rights have
been assigned to Dyax Corp.
** Application assigned to TargetQuest B.V., a wholly-owned subsidiary of
Dyax Corp.
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
EXHIBIT B
New Material
*************
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
EXHIBIT C
Original Material
*************
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
Exhibit 10.31
COLLABORATION AND LICENSE AGREEMENT
BETWEEN
HUMAN GENOME SCIENCES, INC.
AND
DYAX CORP.
March 17, 2000
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS..............................................................2
2. LICENSE GRANTS AND NONSUIT...............................................5
3. PAYMENTS AND ROYALTIES...................................................6
4. COLLABORATION, TECHNOLOGY TRANSFER, TRAINING AND SUPPORT................10
5. CONFIDENTIALITY.........................................................11
6. INTELLECTUAL PROPERTY OWNERSHIP.........................................12
7. PATENT PROSECUTION AND LITIGATION.......................................13
8. STATEMENTS AND REMITTANCES..............................................15
9. TERM AND TERMINATION....................................................16
10. WARRANTIES AND REPRESENTATIONS..........................................17
11. INDEMNIFICATION.........................................................18
12. FORCE MAJEURE...........................................................20
13. DISPUTE RESOLUTION......................................................20
14. ENTIRE AGREEMENT........................................................21
15. NOTICES.................................................................22
16. ASSIGNMENT AND CHANGE OF CONTROL........................................22
17. COUNTERPARTS............................................................23
18. WAIVER..................................................................23
19. INDEPENDENT RELATIONSHIP................................................23
20. FURTHER ACTIONS.........................................................23
EXHIBIT A...............................................................27
EXHIBIT B...............................................................29
EXHIBIT C...............................................................30
1
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
COLLABORATION AND LICENSE AGREEMENT
This Agreement ("Agreement") dated as of the 17th of March 2000 (the
"Effective Date"), is entered into by Human Genome Sciences, Inc. ("HGS"), a
Delaware corporation, having its principal offices at 9410 Key West Avenue,
Rockville, Maryland 20850, and Dyax Corp., ("DYAX"), a Delaware corporation
having its principal offices at One Kendall Square, Bldg. 600, Suite 623,
Cambridge, Massachusetts 02139. The parties hereby agree as follows:
1. DEFINITIONS
1.1 "AFFILIATE" shall mean any individual or entity directly or indirectly
controlling, controlled by or under common control with, the specified
individual or entity. For purposes of this Agreement, the direct or indirect
ownership of fifty percent (50%) or more of the outstanding voting securities of
an entity, or the right to receive fifty percent (50%) or more of the profits or
earnings of an entity shall be deemed to constitute control.
1.2 "COLLABORATION PRODUCT" shall mean any product *************,
discovered by DYAX using the DYAX TECHNOLOGY during the COLLABORATION TERM, and
that binds to an HGS TARGET.
1.3 "COLLABORATION TERM" shall mean the period beginning on the Effective
Date and ending on March 15, 2005.
1.4 "CONFIDENTIAL INFORMATION" means any scientific, technical, trade or
business information disclosed by one Party to the other Party which is (a)
disclosed in writing or other tangible form and labeled "CONFIDENTIAL" at the
time of disclosure or (b) disclosed verbally and identified as confidential at
the time of disclosure and subsequently summarized and confirmed in writing as
confidential within thirty (30) days of such oral disclosure. "Confidential
Information" does not include information which (a) was known to the Receiving
Party at the time it was disclosed, other than by previous disclosure by the
Disclosing Party, as evidenced by written records at the time of disclosure: (b)
at the time of disclosure or later becomes publicly known under circumstances
involving no breach of this Agreement; (c) is lawfully and in good faith made
available to the Receiving Party by a third party who did not derive it from the
Disclosing Party and who imposes no obligation of confidence on the Receiving
Party; (d) is developed by the Receiving Party independent of any disclosure by
the Disclosing Party, as evidenced by the Receiving Party's written records; or
(e) is required by law or regulation to be disclosed.
1.5 "DIAGNOSTIC FIELD" shall mean all in vitro research, analysis,
detection or diagnostic uses, and not for any in vivo diagnostic, therapeutic,
purification or separations, agricultural, industrial enzyme or other uses.
1.6 "DYAX FIELD" shall mean all agricultural, industrial enzyme, and
purification and separation uses.
2
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.7 "DYAX PATENT RIGHTS" shall mean any and all claims of United States
Patent Nos. 5,223,409, 5,403,484, 5,571,698, and 5,837,500 (collectively, the
"U.S. Patents"), reissues, reexaminations, renewals and extensions thereof, and
all continuations, continuations-in-part and divisionals of the applications for
such U.S. patents and all counterparts thereto in countries outside the United
States, which patents and patent applications as of the Effective Date are
listed in Exhibit A. *************.
1.8 "DYAX TECHNOLOGY" shall mean collectively the ************* phage
libraries listed in Exhibit B, ************* (the "Dyax Libraries") and
associated reagents, protocols, and know-how of DYAX relating to the Dyax
Libraries that are transferred to HGS in accordance with this Agreement, and any
IMPROVEMENTS and associated reagents, protocols and know-how relating to the
Dyax Libraries.
1.9 "FIELD OF USE" shall mean the THERAPEUTIC FIELD, DIAGNOSTIC FIELD,
and/or RESEARCH REAGENT FIELD, *************, or any purification or
separations, agricultural, industrial enzymes or any other uses.
1.10 "FTE" shall mean a full time equivalent employee assigned to HGS
pursuant to Paragraph 4.4.
1.11 "HGS PATENT RIGHTS" shall mean PATENT RIGHTS which HGS owns or which
HGS is licensed to use and which directly relate to a target at the Effective
Date or during the TECHNOLOGY TERM.
1.12 "HGS TARGET" shall mean a target for which HGS has HGS PATENT RIGHTS.
1.13 "IMAGING FIELD" shall mean all in vivo detection or diagnostic uses,
and not for use in any Therapeutic Field or Diagnostic Field.
1.14 "IMPROVEMENTS" shall mean any improvement to the Dyax Libraries made
by DYAX during the COLLABORATION TERM or by HGS during the TECHNOLOGY TERM,
*************.
1.15 "IND" shall mean an Investigational New Drug application filed with
the Food and Drug Administration in the United States of America, or the
successor agency thereto (the "FDA"), or any equivalent filing with the
applicable foreign regulatory authority to commence human clinical testing of a
product in any other country.
1.16 "MAJOR COUNTRY" shall mean the United States, Canada, Japan, United
Kingdom, France, Germany, Italy or Spain.
1.17 "NET REVENUES" shall mean all payments received by HGS and its
AFFILIATES from THIRD PARTIES, whether cash or other consideration, from the
license or sublicense of a COLLABORATION PRODUCT OR NON-COLLABORATION PRODUCT,
less any payments made to reimburse HGS or its AFFILIATES for any actual costs
incurred.
3
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.18 "NET SALES" shall mean the amounts invoiced on the sales of a product
by a Party and its AFFILIATES and their distributors to independent, unrelated
third parties in bona fide arms' length transactions, less the following
deductions properly documented actually allowed and taken by such third parties
and not otherwise recovered by or reimbursed by the Party or its AFFILIATES: (a)
trade, cash and quantity discounts, including charge backs; (b) taxes on sales
(such as sales or use taxes) to the extent added to the sales price and set
forth separately as such in the total amount invoiced; (c) freight, insurance
and other transportation charges to the extent added to the sales prices and set
forth separately as such in the total amount invoiced; (d) amounts repaid or
credited by reason of rejections, defects or returns, or because of retroactive
price reductions, or due to governmental laws or regulations requiring rebates;
(e) import duties; and means further the amount of fair market value of all
other consideration received by the Party or its AFFILIATES in respect of the
product, whether such consideration is in cash, payments in kind, exchange or
other forms; but does not mean sales of the product between or among a Party and
its AFFILIATES. In the event a product is sold in combination with other active
components ("Combination Product"), NET SALES for purposes of royalty payments
on the Combination Products shall be calculated *************.
1.19 "NON-COLLABORATION PRODUCT" shall mean any product *************,
discovered by HGS using the DYAX TECHNOLOGY during the TECHNOLOGY TERM, and that
binds to an HGS TARGET.
1.20 "NON-DYAX PRODUCT" shall mean any product discovered by HGS not using
DYAX TECHNOLOGY, but using inventions claimed in DYAX PATENT RIGHTS and for
which HGS requires a license pursuant this Agreement to DYAX PATENT RIGHTS.
*************.
1.21 "PATENT RIGHTS" shall mean patent applications or patents, author
certificates, inventor certificates, utility certificates, improvement patents,
and models and certificates of addition, and all foreign counterparts of them
and includes divisions, renewals, continuations, continuations-in-part,
extensions, reissues, substitutions, confirmations, registrations,
revalidations, or additions of or to them as well as any supplementary
protection certificate or any other post patent expiration extension of patent
protection in respect to them.
1.22 "RESEARCH PROGRAM IP" shall mean all results of the collaboration
between DYAX AND HGS described in Article 4 herein, including all materials and
data, and all PATENT RIGHTS covering such results; *************.
1.23 "RESEARCH REAGENT FIELD" shall mean the use of ************* for
research purposes.
1.24 "SB/HGS LICENSE AGREEMENT" shall mean the SB/HGS License Agreement
dated June 28, 1996 between SmithKline Beecham Corporation, SmithKline Beecham
p.l.c., and Human Genome Sciences, Inc., and all predecessor and successor
agreements, in each case as amended or supplemented after the date hereof,
including the SB/HGS Diagnostic License Agreement dated July 24, 1997.
4
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.25 "SPC" shall mean a right based upon an underlying patent such as a
Supplementary Protection Certificate.
1.26 "TECHNOLOGY TERM" shall mean the period beginning on the Effective
Date and ending on March 15, 2010.
1.27 "THERAPEUTIC FIELD" shall mean all human therapeutic and prophylactic
uses, *************.
1.28 "THIRD PARTY" shall mean any party, other than HGS or DYAX or an
AFFILIATE of DYAX or HGS.
2. LICENSE GRANTS AND NONSUIT
2.1 DYAX grants to HGS a royalty-free non-exclusive, worldwide license
(without the right to grant sublicenses) to DYAX PATENT RIGHTS,DYAX TECHNOLOGY
and IMPROVEMENTS for HGS to perform research and development solely on HGS'
behalf in the FIELD OF USE during the TECHNOLOGY TERM.
2.2 DYAX hereby grants to HGS a non-exclusive, worldwide license to DYAX
PATENT RIGHTS, DYAX TECHNOLOGY and IMPROVEMENTS to research, develop, make, have
made, use, import, offer to sell and sell COLLABORATION PRODUCTS and
NON-COLLABORATION PRODUCTS in the FIELD OF USE *************.
2.3 DYAX hereby grants to HGS an exclusive, worldwide license to research,
develop, make, have made, use, import, offer to sell and sell COLLABORATION
PRODUCTS in the FIELD OF USE and to sublicense the research, development,
manufacture, use, importation and sale of such COLLABORATION PRODUCTS in the
FIELD OF USE.
2.4 DYAX hereby grants to HGS a non-exclusive, worldwide license to DYAX
PATENT RIGHTS to research, develop, make, have made, use, import, offer to sell
and sell NON-DYAX PRODUCTS in the FIELD OF USE and to sublicense solely the
research, development, manufacture, use, importation and sale of such NON-DYAX
PRODUCTS in the FIELD OF USE.
2.5 Effective July 1, 2001, and subject to conditions set out below, HGS
hereby agrees to grant to DYAX an exclusive worldwide license ************* to
research, develop, make, have made, use, import, offer to sell and sell
COLLABORATION PRODUCTS in the IMAGING FIELD, whenever discovered, and to
sublicense the research, development, manufacture, use, importation and sale of
such COLLABORATION PRODUCTS in the IMAGING FIELD. If a license to any HGS PATENT
is needed to effectuate this license for any product in the IMAGING FIELD, HGS
agrees to grant DYAX a non-exclusive worldwide license to such HGS PATENT.
2.5.1 In the event that DYAX wishes to obtain a license pursuant to
this Paragraph 2.5 to a COLLABORATION PRODUCT in the IMAGING FIELD, DYAX shall
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
submit a written notice to HGS identifying the COLLABORATION PRODUCT and the HGS
TARGET to which it binds.
2.5.2 Within thirty (30) days after receipt of such notice, HGS
shall notify DYAX in writing if HGS does not have the right or the obligation as
defined in Paragraph 2.5.3 to grant DYAX the license under Paragraph 2.5 for
such COLLABORATION PRODUCT. If HGS does not have such right or obligation, HGS
shall not be obligated to grant to DYAX the exclusive license under Paragraph
2.5 for such product. *************.
2.5.3 HGS shall not have the right or the obligation to grant DYAX a
license to research, develop, make, have made, use, import, offer to sell and
sell COLLABORATION PRODUCTS in the IMAGING FIELD, if (1) HGS has previously
granted a license or an option to a license under part or all of HGS PATENT
RIGHTS to a THIRD PARTY for use of the HGS TARGET and/or compounds that bind to
the target in the field of human diagnostics; *************.
2.6 As requested by DYAX with respect to a NON-COLLABORATION PRODUCT, HGS
agrees to discuss with DYAX the possibility of granting to DYAX a license
************* to research, develop, make, have made, use, import offer to sell
and sell NON-COLLABORATION PRODUCTS in the IMAGING FIELD *************.
2.7 *************. No license to any HGS PATENT RIGHTS is granted by this
Paragraph, even if such license is necessary to effectuate the license granted
pursuant to this Paragraph, and no such license to any HGS PATENT RIGHTS shall
be implied.
2.8 *************.
2.9 *************.
2.10 HGS agrees to use commercially reasonable efforts to research and
development, obtain any necessary governmental approvals, market and sell
COLLABORATION PRODUCTS in a MAJOR COUNTRY, and after the end of the
COLLABORATION TERM, upon DYAX's request to provide DYAX with written updates on
such efforts.
3. PAYMENTS AND ROYALTIES
3.1 In consideration of the licenses and rights of ownership granted and
to be granted hereunder, HGS will pay to DYAX within ************* of the
Effective Date *************.
HGS Therapeutic Products
3.2 Subject to Paragraphs 3.4 and 3.11, for each COLLABORATION PRODUCT or
NON-COLLABORATION PRODUCT which is sold in the THERAPEUTIC FIELD, HGS shall pay
to DYAX the following royalties and milestone payments *************:
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
(a) *************;
(b) *************;
(c) *************;
(d) *************
(e) a royalty ************* of such COLLABORATION PRODUCT or
NON-COLLABORATION PRODUCT sold by HGS or its AFFILIATES.
*************.
3.3 Subject to Paragraphs 3.4 and 3.11, if HGS outlicenses a COLLABORATION
PRODUCT or NON-COLLABORATION PRODUCT to a THIRD PARTY for sale in the
THERAPEUTIC FIELD, HGS shall pay to DYAX, in lieu of milestones and royalties,
the following:
(a) ************* NET REVENUE received by HGS from such
outlicense, if the product is outlicensed prior to payment of
the milestone owed pursuant to Paragraph 3.2(a);
(b) ************* NET REVENUE received by HGS from such
outlicense, if the product is outlicensed after payment of the
milestone owed pursuant to Paragraph 3.2(a), but prior to
payment of the milestone owed pursuant to Paragraph 3.2(b);
(c) ************* NET REVENUE received by HGS from such
outlicense, if the product is outlicensed after payment of the
milestone owed pursuant to Paragraph 3.2(b).
3.4 *************.
HGS In Vitro Diagnostic and Research Reagent Products
3.5 Subject to Paragraph 3.11, for each COLLABORATION PRODUCT or
NON-COLLABORATION PRODUCT which is sold by HGS or its AFFILIATES in the
DIAGNOSTIC FIELD or the RESEARCH REAGENT FIELD, HGS shall pay to DYAX the
following royalty:
(a) a royalty of ************* of NET SALES of such COLLABORATION
PRODUCT or NON-COLLABORATION PRODUCT sold by HGS or its
AFFILIATES.
No milestones shall be owed on such products.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
3.6 Subject to Paragraph 3.11, if HGS outlicenses a COLLABORATION PRODUCT
or NON-COLLABORATION PRODUCT to a THIRD PARTY for sale in the DIAGNOSTIC FIELD
or the RESEARCH REAGENT FIELD, HGS shall pay to DYAX, in lieu of the royalty set
forth in Paragraph 3.5, the following:
(a) ************* the portion of NET REVENUES received by HGS from
such outlicense, which portion is attributable to the product
outlicensed. *************.
HGS Non-Dyax Products
3.7 Subject to Paragraphs 3.8 and 3.12, for each NON-DYAX PRODUCT which is
sold by HGS, its AFFILIATES or its licensees, HGS shall pay to DYAX the
following royalty:
(a) a royalty of ************* NET SALES of such NON-DYAX PRODUCT
sold by HGS, its AFFILIATES or its licensees in the
THERAPEUTIC FIELD; and
(b) a royalty of ************* NET SALES of such NON-DYAX PRODUCT
sold by HGS, its AFFILIATES or its licensees in the DIAGNOSTIC
FIELD or the RESEARCH REAGENT FIELD.
3.8 *************.
DYAX Products in the Imaging Field
3.9 Subject to Paragraph 3.13, for each COLLABORATION PRODUCT which is
sold by DYAX or its AFFILIATES in the IMAGING FIELD, DYAX shall pay to HGS the
following royalty:
(a) a royalty of ************* NET SALES of such COLLABORATION
PRODUCT sold by DYAX or its AFFILIATES.
No milestones shall be owed on such products.
3.10 Subject to Paragraph 3.13, if DYAX outlicenses a COLLABORATION
PRODUCT to a THIRD PARTY for sale in the IMAGING FIELD, DYAX shall pay to HGS,
in lieu of the royalty set forth in Paragraph 3.5, the following:
(a) ************* NET REVENUES received by DYAX from such
outlicense, which portion is attributable to the product
outlicensed. *************.
Miscellaneous
3.11 Royalty and revenue obligations under Paragraphs 3.2, 3.3, 3.5 and
3.6, with respect to COLLABORATION OR NON-COLLABORATION PRODUCT, shall terminate
on a
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
country-by-country basis and on a product by product basis on the later of (i)
************* (ii) expiration of the last to expire patent (whether or not owned
by HGS) on the relevant product licensed to HGS under this Agreement which
covers the making, having made, importing, offering to sell or using or selling
of such product in the country in which such product was developed, made, sold
or used.
3.12 Royalty obligations under Paragraph 3.7, with respect to a NON-DYAX
PRODUCT, shall terminate on a country-by-country basis and on a product by
product basis on the later of (i) ************* or (ii) the expiration of the
last to expire patent (whether or not owned by HGS) on the relevant product
licensed to HGS under this Agreement which covers the making, having made,
importing, offering to sell or using or selling of such product in the country
in which such product was developed, made, sold or used.
3.13 Royalty obligations under Paragraphs 3.9 and 3.10, with respect to a
COLLABORATION PRODUCT sold by DYAX in the IMAGING FIELD, shall terminate on a
country-by-country basis and on a product by product basis *************.
3.14 For purposes of this Article 2.10, (a) "Phase III clinical trial"
shall mean a human clinical trial in any country the results of which could be
used as pivotal to establish safety and efficacy of a product as a basis for a
marketing approval application submitted to the FDA or the appropriate
regulatory authority of such other country, or that would otherwise satisfy the
requirements of 21 CFR 312.21(c); and (b) a trial shall be "started" upon the
enrollment of the first patient for such trial. If the nature of a trial earlier
than Phase III is not determined to be pivotal until after completion of the
trial, then any milestone payment that would have been due upon start of a Phase
III trial shall be due upon submission of the trial in support of the filing of
an application for marketing approval in a MAJOR COUNTRY.
3.15 If, at the time when any milestone payment listed in Paragraph 3.2
with respect to a product is due from HGS, HGS has not paid all other milestone
payments (if any) previously listed in such Paragraph with respect to such
product, then at such time HGS shall pay all such unpaid milestone payments (if
any) previously listed in such Paragraph with respect to such product. If, at
the time of the first commercial sale of a product by HGS or its AFFILIATE, HGS
has not paid all milestone payments (if any) listed in Paragraph 3.2 with
respect to such product, then at such time HGS shall pay all such unpaid
milestone payments (if any) listed in such Paragraph with respect to such
product.
3.16 In the event that a party or its AFFILIATE sells product to a THIRD
PARTY that also purchases other products or services from such party or its
AFFILIATE, and such party or its AFFILIATE discounts the purchase price of such
product to a greater degree than it generally discounts the price of its other
products to such customer, then in such case the NET SALES for the sale of such
product to such THIRD PARTY shall be deemed to equal the arm's length price that
third parties would generally pay for such product alone when not purchasing any
other product or service from such party or its AFFILIATE. For purposes of this
provision "discounting" includes establishing the list price at a
lower-than-normal level.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
3.17 The manner in which statements and remittances of royalty and other
payments are handled is as set forth in Article 8 hereof.
4. COLLABORATION, TECHNOLOGY TRANSFER, TRAINING AND SUPPORT
4.1 This collaboration between the parties shall be managed by a Steering
Committee, which shall consist of two (2) senior representatives of each party.
4.1.1 Each party shall notify the other party in writing of its
initial representatives to the Steering Committee within thirty (30) days after
the Effective Date. Each party may substitute one or more representatives from
time to time effective upon written notice to the other party.
4.1.2 The Steering Committee shall meet in person or by conference
call not less than once a quarter during the COLLABORATION TERM.
4.2 Within forty-five (45) days of the Effective Date, DYAX will provide
to HGS Dyax Libraries for HGS' research use in the FIELD OF USE. *************.
4.3 DYAX shall provide training to HGS in the use of such libraries at
either HGS facilities or at DYAX facilities as the parties shall mutually agree.
4.4 Subject to Paragraph 4.5, DYAX shall provide to HGS at DYAX's
facilities ************* FTEs *************. Such FTEs, at HGS' direction, shall
be available for and may be used: *************.
4.4.1 DYAX shall appoint a project team which includes a project
leader ("DYAX PROJECT LEADER") to coordinate the work of the ************* FTEs
and such DYAX PROJECT LEADER shall coordinate with an HGS designated project
leader ("HGS PROJECT LEADER") all work to be done pursuant to this Article.
4.4.2 Within thirty (30) days of the Effective Date, the HGS PROJECT
LEADER, in consultation and collaboration with the DYAX PROJECT LEADER, shall
prepare a six-month work plan for the ************* FTEs.
4.4.3 The DYAX PROJECT LEADER shall be responsible for coordinating
the ************* FTEs and insuring that all diligent efforts are made to
complete the objectives of the work plan in a timely and efficient manner, and
such work of the DYAX PROJECT LEADER shall be part of the FTEs assigned to HGS.
4.4.4 At least once a month, the HGS PROJECT LEADER and the DYAX
PROJECT LEADER shall meet in person or by conference call to discuss the
progress made with respect to the work plan, including the capacity of the FTEs
assigned to HGS, and based on that progress, the HGS PROJECT LEADER shall
prepare a work plan for the following six months in consultation and
collaboration with the DYAX PROJECT LEADER.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
4.5 Upon 90-day notice to DYAX, HGS may request that DYAX increase the
number of FTEs assigned to HGS. Upon 180 day notice, HGS may request that DYAX
decrease the number of FTEs assigned to HGS, *************.
4.6 HGS shall pay to DYAX research support payments based on the level of
FTEs assigned to HGS pursuant to Paragraph 4.4, *************. In addition, HGS
shall reimburse DYAX for any mutually agreed upon out-of-pocket external
expenses incurred during the Research Collaboration, provided, however, DYAX
acknowledges that the payment made pursuant to Paragraph 3.1 is intended, among
other things, to cover the costs of any additional facilities and equipment
required to support the ************* FTEs.
4.7 At any time after the first two years *************, HGS or DYAX may
cancel future research support and the parties' obligations under Paragraphs 4.4
and 4.6 shall terminate.
4.8 As part of the collaboration and if not in conflict with any of DYAX's
existing agreements, HGS shall have the right to enter into one or more
agreements with DYAX for DYAX in the field of high throughput purification of
HGS TARGETS *************, and to discover and develop affinity ligands for the
separation and purification of HGS products or HGS TARGETS for clinical and
commercial use on standard affinity ligand development terms as set forth in
Exhibit C to this Agreement.
5. CONFIDENTIALITY
5.1 During the term of this Agreement and for a period of *************
following the expiration or earlier termination hereof, each party shall
maintain in confidence the CONFIDENTIAL INFORMATION of the other party, and
shall not disclose, use or grant the use of the CONFIDENTIAL INFORMATION of the
other party except on a need-to-know basis to such party's AFFILIATES,
directors, officers and employees, and such party's consultants and
collaborators, to the extent such disclosure is reasonably necessary in
connection with such party's activities as expressly authorized by this
Agreement. To the extent that disclosure to any person is authorized by this
Agreement, prior to disclosure, a party shall obtain written agreement of such
person to hold in confidence and not disclose, use or grant the use of the
CONFIDENTIAL INFORMATION of the other party except as expressly permitted under
this Agreement. Each party shall notify the other party promptly upon discovery
of any unauthorized use or disclosure of the other party's CONFIDENTIAL
INFORMATION. Upon the expiration or earlier termination of this Agreement, each
party shall return to the other party all tangible items regarding the
CONFIDENTIAL INFORMATION of the other party and all copies thereof; provided,
however, that each party shall have the right to retain one (1) copy for its
legal files for the sole purpose of determining its obligations hereunder.
5.2 No public announcement concerning (i) the existence or terms of this
Agreement, (ii) research and/or discoveries made by one party, (iii) milestones
achieved by one party, or (iv) exercise by one party of rights and options
granted under this Agreement, shall be made, either directly or indirectly, by
any other party to this Agreement without prior written notice and, except as
may be legally required, or as may be legally required for a public offering of
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
securities, or as may be required for recording purposes, without first
obtaining the approval of the other party and agreement upon the nature and text
of such announcement, such agreement and/or approval not to be unreasonably
withheld. The party desiring to make any such public announcement shall inform
the other party of the proposed announcement or disclosure at least five (5)
business days prior to public release, and shall provide the other party with a
written copy thereof, in order to allow such other party to comment upon such
announcement or disclosure. This Paragraph shall not apply to any information in
a public announcement that is information essentially identical to that
contained in a previous public announcement agreed to pursuant to this
paragraph.
5.3 The confidentiality obligations under Paragraphs 5.1 and 5.2 shall not
apply to the extent that a party is required to disclose information by
applicable law, regulation or order of a governmental agency or a court of
competent jurisdiction; provided, however, that to the extent practicable, such
party (a) shall provide advance written notice thereof to the other party and
consult with the other party prior to such disclosure with respect thereto, and
(b) shall provide the other party with reasonable assistance, as requested by
the other party, to object to any such disclosure or to request confidential
treatment thereof, and (c) shall take reasonable action to avoid and/or minimize
the extent of such disclosure.
6. INTELLECTUAL PROPERTY OWNERSHIP
6.1 Nothing in this Agreement transfers or licenses any right, title or
interest to DYAX PATENT RIGHTS, DYAX TECHNOLOGY or HGS PATENT RIGHTS except as
expressly set out herein. HGS acknowledges that the licenses to the DYAX
TECHNOLOGY AND DYAX PATENT RIGHTS as granted under Paragraph 2.1, 2.2 and 2.4
are non-exclusive and that DYAX has granted and will continue to grant the same
or similar rights to THIRD PARTIES. HGS further acknowledges that DYAX or THIRD
PARTIES may independently discover, make or develop the same or a similar
product as HGS may discover, make or develop under this Agreement.
6.2 Subject to the rights and licenses granted in this Agreement, DYAX
shall own *************, DYAX TECHNOLOGY, IMPROVEMENTS, and DYAX PATENT RIGHTS.
HGS shall own all HGS TARGETS, HGS PATENT RIGHTS, *************, COLLABORATION
PRODUCTS, NON-COLLABORATION PRODUCTS and NON-DYAX PRODUCTS. Both parties hereby
assign and agree to assign any and all rights, title and interest in inventions
as necessary to effectuate the ownership rights set forth in this Paragraph.
6.3 *************, HGS shall have the non-exclusive worldwide royalty-free
right to *************. Other than as set forth in Article 2, no license to any
DYAX TECHNOLOGY or DYAX PATENT RIGHTS is granted by this Paragraph, even if such
license is necessary to effectuate the right granted pursuant to this Paragraph,
and no such license to any DYAX PATENT RIGHTS or DYAX TECHNOLOGY shall be
implied.
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
7. PATENT PROSECUTION AND LITIGATION
7.1 In connection with the preparation, filing, prosecution (including
oppositions) and maintenance of patents ************* related to a COLLABORATION
PRODUCT *************, HGS shall endeavor to obtain commercially reasonable
patent protection (under the circumstances) *************. HGS (a) shall consult
with DYAX regarding the preparation of such patents, and shall implement all
reasonable requests of DYAX; (b) shall supply DYAX with a copy of each such
patent application as filed, together with notice of its filing date and serial
number; (c) shall consult with DYAX regarding the prosecution and maintenance of
such patents, and shall implement all reasonable requests of DYAX; and (d) shall
inform DYAX promptly of the allowance and issuance of each such patent, together
with the date and patent number thereof, and shall provide DYAX with a copy of
such patent as allowed and then as issued; and (e) shall prosecute all
reexaminations and reissues as reasonably requested by DYAX.
7.2 If HGS elects to abandon any patent application (for which it does not
file a continuation application), not to pursue the filing of any foreign patent
application or not to maintain any patent directed to a COLLABORATION PRODUCT
for which DYAX has obtained a license under Paragraph 2.5, HGS shall give DYAX
written notice thereof not less than ninety (90) days prior to the last day
permitted to timely continue such patent application or to maintain such patent
and protect its rights under this Paragraph 7.2. DYAX shall have the right, at
its sole cost and in its sole discretion, to assume control of the preparation,
filing, prosecution (including oppositions) and maintenance of such patent
application or patent.
7.3 Each party shall cooperate with the other, execute all lawful papers
and instruments and make all rightful oaths and declarations as may be
reasonably necessary in the preparation, filing, prosecution and maintenance of
the patents or any other rights related to *************.
7.4 Both parties will provide the other reasonable assistance to enable
the other to prepare, file, prosecute and maintain patents pursuant to this
Article 7.
7.5 In the event of the institution of any suit by a THIRD PARTY,
7.5.1 against DYAX, its AFFILIATES or licensees (other than HGS) to
the extent it is for patent infringement involving the manufacture, use, import,
offer for sale, sale, distribution or marketing of a COLLABORATION PRODUCT,
*************, sold by DYAX its AFFILIATES or licensees (other than HGS) , DYAX
shall promptly notify HGS in writing. As between HGS and DYAX, DYAX shall be
solely responsible for the cost and expense of such action and any liability
that results therefrom.
7.5.2 against HGS, its AFFILIATES or licensees (other than DYAX) to
the extent it is for patent infringement involving the manufacture, use, import,
offer for sale, sale, distribution or marketing of a COLLABORATION PRODUCT or
NON-COLLABORATION PRODUCT sold by HGS, its AFFILIATES or licensees (other than
DYAX), HGS shall promptly
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
notify DYAX in writing. As between HGS and DYAX, HGS shall be solely responsible
for the cost and expense of such action and any liability that results
therefrom.
The party defending an action under this Paragraph 7.5 shall have full control
over the conduct of the action, including settlement thereof provided such
settlement shall not be made without the prior written consent of the other
party if it would adversely affect the rights of such other party.
7.6 In the event that HGS or DYAX becomes aware of actual or threatened
infringement of a patent related to ************* that claims a COLLABORATION
PRODUCT or NON-COLLABORATION PRODUCT, or the use thereof, that party shall
promptly notify the other party in writing. The owner of such patent shall have
the first right but not the obligation to bring, at its own expense, an
infringement action against any THIRD PARTY and to use the other party's name in
connection therewith. If the owner of the patent does not commence a particular
infringement action within ninety (90) days, the other party, after notifying
the owner in writing, shall be entitled to bring such infringement action, in
its own name and/or in the name of the patent owner, at its own expense to the
extent that such party is licensed thereunder. The foregoing notwithstanding, in
the event that an alleged infringer certifies pursuant to 21 U.S.C. ss.
355(b)(2)(A)(iv) against an issued patent related to ************* that claims a
COLLABORATION PRODUCT or NON-COLLABORATION PRODUCT or the use thereof, as
between the patent owner and the owner of the product, the party receiving
notice of such certification shall immediately notify the other party of such
certification, and if fourteen (14) days prior to expiration of the forty five
(45) day period set forth in 21 U.S.C. ss. 355(c)(3)(C), the owner of the patent
fails to commence an infringement action, the party receiving notice, in its
sole discretion, at its own expense and to the extent that it is licensed under
the patent, shall be entitled to bring such infringement action in its own name
and/or in the name of the patent owner. The party conducting an action under
this Paragraph 7.6 shall have full control over its conduct, including
settlement thereof provided such settlement shall not be made without the prior
written consent of the other licensing party or licensed party if it would
adversely affect the rights of such other party. The licensing party (i.e., the
patent owner) and the licensed party (i.e., the owner of the product) shall
reasonably assist one another and cooperate in any such litigation at the
other's request, each such party paying its own costs and expenses. The party
conducting the litigation shall reimburse the other party for its reasonable and
actual out-of-pocket expenses incurred at the request of the party conducting
the litigation for assisting in the litigation, which reimbursement shall be
made within thirty (30) days of receipt by the party conducting the litigation
of itemized invoices from the assisting party documenting such expenses.
7.7 Any recovery made by a party as the result of an action for patent
infringement it has conducted under Paragraph 7.6 shall be distributed as
follows:
(a) The party conducting the action shall recover its actual
out-of-pocket expenses incurred in connection with the
prosecution of such action, and then shall reimburse the other
party for any unreimbursed actual out-of-pocket expenses.
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(b) To the extent that the recovery from such action exceeds the
total of item (a), the excess shall be kept by the party
conducting the action; provided, however, that to the extent
that (i) the recovery is based on an award of lost
sales/profits, and (ii) the party conducting the action would
have incurred a royalty obligation to the other party based
upon such sales, the party to whom such royalties would have
been due shall receive a proportion of the excess recovery
corresponding to the royalty percentage it would have
otherwise been due.
7.8 The parties shall periodically keep one another reasonably informed of
the status of their respective activities regarding any such litigation or
settlement thereof.
8. STATEMENTS AND REMITTANCES
8.1 DYAX and HGS, as the case may be, shall keep and require its
AFFILIATES and licensees and their distributors to keep complete and accurate
records of all sales and calculations of all amounts owing hereunder. Each party
shall have the right, at its expense, through an independent certified public
accounting firm of nationally recognized standing reasonably acceptable to the
other party, to examine pertinent financial records during regular business
hours upon advance written notice during the life of this Agreement and for
twelve (12) months after its termination for the purpose of verifying and
reporting to HGS or DYAX as to the computation of the payments made hereunder
not more than twenty four (24) months prior to the date of such notice;
provided, however, that such examination shall not take place more often than
once a year; provided further that such accountant shall report only as to the
accuracy of the statements and payments hereunder, including the magnitude and
source of any discrepancy. DYAX, HGS, and their respective AFFILIATES and
licensees and their distributors shall be required to maintain such records for
twenty-four (24) months. The accountant shall execute customary confidentiality
agreements prior to any examination, reasonably satisfactory in form and
substance to both parties, to maintain in confidence all information obtained
during the course of any such examination, except for disclosure to the parties,
as necessary for the above purpose. Each such examination conducted under this
Paragraph 8.1 shall be at the expense of the party conducting such examination,
unless a variation or error producing an increase exceeding ************* of the
amount stated for any period is established in the course of any such
examination, whereupon the reasonable out-of-pocket expenses of conducting such
examination for such period will be paid by the other party.
8.2 Within sixty (60) days after the close of each calendar quarter, DYAX
and HGS, as the case may be, shall deliver to the other party a true accounting
of all amounts owing hereunder during such calendar quarter and shall at the
same time pay all amounts due.
8.3 All royalties and other payments due under this Agreement shall be
payable in U.S. dollars.
8.4 Royalties payable on sales in countries other than the United States
shall be calculated by multiplying the appropriate royalty rate times the sales
in each currency in which
15
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
they are made and converting the resulting amount into United States dollars, at
the rates of exchange as reported in The Wall Street Journal under the caption
"Currency Trading" on the last business day in New York, New York of each
royalty period. If The Wall Street Journal ceases to be published, then the rate
of exchange to be used shall be that reported in such other business publication
of national circulation in the United States as the parties reasonably agree.
All royalty and other payments shall be without deduction of exchange,
collection, or other charges. If, due to restrictions or prohibitions imposed by
a national or international authority, payments cannot be made as aforesaid, the
parties shall consult with a view to finding a prompt and acceptable solution,
and the parties will deal with such monies as the other party may lawfully
direct at no additional out-of-pocket expense to the party owed the royalty.
Notwithstanding the foregoing, if royalties cannot be remitted for any reason
within six (6) months after the end of the calendar quarter during which they
are earned, then the party owing the royalty shall be obligated to deposit the
royalties in a bank account in the country, in which such royalty was earned, in
the name of the other party. Each party shall deduct any taxes which the party
is obligated to pay and/or withhold in a country based on royalties due to the
other based on sales in such country from royalty payments due for such country
under this Agreement and pay them to the proper authorities as required by
applicable laws. Each party shall maintain official receipts of payment of any
such taxes and forward these receipts to the other within sixty (60) days and
shall provide reasonable assistance to the other party in obtaining any credit
or refund of such taxes.
8.5 All payments to be made hereunder shall be by wire transfer of
immediately available funds to an account designated by DYAX or HGS, whoever is
to be the recipient of such funds.
8.6 Any payment due from a party to the other party under this Agreement
that is not paid on the date such payment is due shall bear interest at a rate
per annum equal to the lesser of (a) ************* or (b) the maximum rate
permitted by applicable law, in each case calculated on the number of days such
payment is delinquent. If The Wall Street Journal ceases to be published, then
the prime rate to be used shall be that reported in such other business
publication of national circulation in the United States as the parties
reasonably agree. This Section 8.6 shall in no way limit any other remedies
available to a party.
9. TERM AND TERMINATION
9.1 This Agreement shall come into effect as of the Effective Date, and
unless earlier terminated as provided in this Article 9, shall remain in full
force and effect until the last to expire of the parties' respective royalty
obligations under this Agreement.
9.2 A party shall have the right to terminate this Agreement with respect
to any product (a) upon the breach by the other party of the other party's
obligations to pay any amounts owing hereunder with respect to such product, if
such breach is not cured within thirty (30) days after receipt of written notice
from such party thereof. Notwithstanding the foregoing, a party may not
terminate this Agreement during the pendency of an arbitration proceeding under
16
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
this Agreement in which the other party reasonably contests whether a royalty or
other amount is due hereunder.
9.3 A party shall have the right to terminate this Agreement in its
entirety (a) upon the breach by the other party of the other party's obligations
to pay any amounts owing hereunder, if such breach is not cured within thirty
(30) days after receipt of written notice from such party thereof, or (b) upon
the material breach by the other party of the other party's obligations, if such
breach is not cured within sixty (60) days after receipt of written notice from
such party thereof. Notwithstanding the foregoing, a party may not terminate
this Agreement during the pendency of an arbitration proceeding under this
Agreement in which the other party reasonably contests whether a royalty or
other amount is due hereunder, or whether it has failed to satisfy its other
obligations hereunder.
9.4 Notwithstanding expiration or termination of this Agreement, the
rights and obligations of the parties under Articles 5, 6, 7, 8, 9, 11, and 13,
shall survive such expiration or termination, as well as any provision not
specified in this Paragraph 9.4 which is expressly stated to survive termination
of this Agreement. In addition, Paragraphs 2.7 and 2.8 shall survive expiration
or termination of this Agreement unless such agreement is terminated by HGS as
the result of a breach by DYAX. Upon expiration of a party's royalty obligations
under this Agreement with respect to a product, the licenses granted with
respect to such product under DYAX PATENT RIGHTS, HGS PATENT RIGHTS
************* (as applicable) shall survive on a non-exclusive basis. Upon
termination of this Agreement, whether as to any product or in its entirety, if
the licensee of a party with respect to a product hereunder requests by written
notice to the other party hereunder within thirty (30) days after the effective
date of such termination, the other party shall grant to such licensee a direct
license with respect to such product on the applicable terms and conditions of
this Agreement, provided that such (sub)licensee agrees in writing to be bound
by such terms and conditions.
9.5 The provisions of Paragraphs 9.2 and 9.3 shall not limit the rights
and remedies that may be otherwise available to a party under this Agreement, at
law or in equity.
10. WARRANTIES AND REPRESENTATIONS
10.1 Each of HGS and DYAX hereby represents, warrants and covenants to the
other, as of the date of this Agreement, as follows:
10.1.1 it is a corporation duly organized and validity existing
under the laws of the state of its incorporation;
10.1.2 the execution, delivery and performance of this Agreement by
such party has been duly authorized by all requisite corporate action;
10.1.3 it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, including, without
limitation, the right, power and authority to grant the licenses under Article
2;
17
<PAGE>
10.1.4 The execution, delivery and performance by such party of this
Agreement and its compliance with the terms and provisions hereof to such
party's best knowledge does not conflict with or result in a breach of any of
the terms and provisions of or constitute a default under (i) a loan agreement,
guaranty, financing agreement, agreement affecting a product or other agreement
or instrument binding or affecting it or its property; (ii) the provisions of
its charter documents or bylaws; or (iii) any order, writ, injunction or decree
of any court or governmental authority entered against it or by which any of its
property is bound;
10.1.5 This Agreement constitutes such party's legal, valid and
binding obligation enforceable against it in accordance with its terms subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to the
availability of particular remedies under general equity principles.
10.2 After the Effective Date, (a) HGS shall not enter into any agreement,
or amend, modify, restate or waive any provisions of any other agreement to
which it is or becomes a party, that would materially and adversely affect the
rights and licenses granted to DYAX, and (b) DYAX shall not enter into any
agreement, or amend, modify, restate or waive any provisions of any agreement to
which it is or becomes a party, that would materially and adversely affect the
rights and licenses granted to HGS.
10.3 NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A WARRANTY THAT ANY
PATENT INCLUDED WITHIN DYAX PATENT RIGHTS, HGS PATENT RIGHTS OR RESEARCH PROGRAM
IP ARE VALID OR ENFORCEABLE OR THAT THEIR EXERCISE OR THE EXERCISE OF HGS PATENT
RIGHTS, DYAX PATENT RIGHTS, DYAX TECHNOLOGY or RESEARCH PROGRAM IP PROPERTY DOES
NOT INFRINGE ANY PATENT RIGHTS OF THIRD PARTIES. A HOLDING OF INVALIDITY OR
UNENFORCEABILITY OF ANY SUCH PATENT, FROM WHICH NO FURTHER APPEAL IS OR CAN BE
TAKEN, SHALL NOT AFFECT ANY OBLIGATION HEREUNDER, BUT SHALL ONLY ELIMINATE
ROYALTIES OTHERWISE DUE UNDER SUCH PATENT FROM THE DATE SUCH HOLDING BECOMES
FINAL.
10.4 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN HGS AND DYAX MAKE NO
REPRESENTATIONS OR EXTEND ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NONINFRINGEMENT.
10.5 Each party shall use any materials provided by the other party under
this Agreement in compliance with all applicable laws and regulations.
11. INDEMNIFICATION
11.1 DYAX shall defend, indemnify and hold harmless HGS, its AFFILIATES,
licensors of HGS and each of their respective directors, officers, shareholders,
agents and
18
<PAGE>
employees, from and against any and all liability, loss, damages and expenses
(including reasonable attorneys' fees) as the result of claims, demands, actions
or proceedings by any THIRD PARTY which are made or instituted against any of
them arising out of the development, manufacture, possession, distribution, use,
testing, sale or other disposition of any COLLABORATION PRODUCT by or through
DYAX, its AFFILIATES or any THIRD PARTY granted rights by DYAX under this
Agreement. DYAX's obligation to defend, indemnify and hold harmless shall
include claims, demands, actions or proceedings, whether for money damages or
equitable relief by reason of alleged personal injury (including death) to any
person or alleged property damage, provided, however, the indemnity shall not
extend to any claims against an indemnified party which result from the gross
negligence or willful misconduct of an indemnified party. DYAX shall have the
exclusive right to control the defense of any action which is to be indemnified
in whole by DYAX hereunder, including the right to select counsel reasonably
acceptable to HGS to defend HGS and the indemnified parties hereunder, and to
settle any claim, demand, action or proceeding, provided that, without the prior
written consent of HGS (which shall not be unreasonably withheld or delayed),
DYAX shall not agree to settle any claim, demand, action or proceeding, to the
extent such settlement would have a material adverse effect on HGS. The
provisions of this paragraph shall survive and remain in full force and effect
after any termination, expiration or cancellation of this Agreement and DYAX's
obligations hereunder shall apply whether or not such claims are rightfully
brought. DYAX shall require each (sub)licensee hereunder to agree to indemnify
HGS, in a manner consistent with this Paragraph 11.1.
11.2 HGS shall defend, indemnify and hold harmless DYAX, its AFFILIATES,
licensors of DYAX and each of their respective directors, officers,
shareholders, agents and employees, from and against any and all liability,
loss, damages and expenses (including reasonable attorneys' fees) as the result
of claims, demands, actions or proceedings by any THIRD PARTY which are made or
instituted against any of them arising out of the development, manufacture,
possession, distribution, use, testing, sale or other disposition of any
COLLABORATION PRODUCT, NON-COLLABORATION PRODUCT or NON-DYAX PRODUCT by or
through HGS, its AFFILIATES or any THIRD PARTY granted rights by HGS under this
Agreement. HGS' obligation to defend, indemnify and hold harmless shall include
claims, demands, actions or proceedings, whether for money damages or equitable
relief by reason of alleged personal injury (including death) to any person or
alleged property damage, provided, however, the indemnity shall not extend to
any claims against an indemnified party which result from the gross negligence
or willful misconduct of an indemnified party. HGS shall have the exclusive
right to control the defense of any action which is to be indemnified in whole
by HGS hereunder, including the right to select counsel reasonably acceptable to
DYAX to defend DYAX and the indemnified parties hereunder and to settle any
claim, demand, action or proceeding, provided that, without the prior written
consent of DYAX (which shall not be unreasonably withheld or delayed), HGS shall
not agree to settle any claim, demand, action or proceeding to the extent such
claim, demand, action or proceeding has a material adverse effect on DYAX. The
provisions of this paragraph shall survive and remain in full force and effect
after any termination, expiration or cancellation of this Agreement and HGS'
obligation hereunder shall apply whether or not such claims are rightfully
brought. HGS shall require each licensee hereunder to agree to indemnify DYAX in
a manner consistent with this Paragraph 11.2.
19
<PAGE>
11.3 A person or entity that intends to claim indemnification under this
Article 11 (the "Indemnitee") shall promptly notify the other party (the
"Indemnitor") of any claim, demand, action or proceeding for which the
Indemnitee intends to claim such indemnification, and the Indemnitor, after it
determines that indemnification is required of it, shall assume the defense
thereof with counsel selected by the Indemnitor and reasonably acceptable to the
other party; provided, however, that an Indemnitee shall have the right to
retain its own counsel, with the fees and expenses to be paid by the Indemnitor
if the Indemnitor does not assume the defense or if representation of such
Indemnitee by the counsel retained by the Indemnitor would be inappropriate due
to actual or potential conflicts of interest between such Indemnitee and any
other party represented by such counsel in such proceedings. The indemnity
agreement in this Article 11 shall not apply to amounts paid in settlement of
any claim, demand, action or proceeding if such settlement is effected without
the consent of the Indemnitor, which consent shall not be unreasonably withheld
or delayed. The failure to deliver notice to the Indemnitor within a reasonable
time after the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability to the
Indemnitee under this Article 11, but failure to deliver notice to the
Indemnitor will not relieve it of any liability that it may have to any
Indemnitee otherwise than under this Article 11. The Indemnitee under this
Article 11, its employees and agents, shall reasonably cooperate with the
Indemnitor and its legal representatives in the investigations of any claim,
demand, action or proceeding covered by this indemnification. In the event that
each party claims indemnity from the other and one party is finally held liable
to indemnify the other, the Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.
12. FORCE MAJEURE
12.1 If the performance by a party of any obligation under this Agreement
(other than an obligation for the payment of money) is prevented, restricted,
interfered with or delayed by reason of any reasonably unforeseeable cause
beyond the reasonable control of the party liable to perform, the party so
affected shall, upon giving written notice to the other party, be excused from
such performance to the extent of such prevention, restriction, interference or
delay by such reasonably unforeseeable cause beyond its reasonable control,
provided that the affected party shall use commercially reasonable efforts to
avoid or remove such causes of non-performance and shall continue performance
with the utmost dispatch whenever such causes are removed. When such
circumstances arise, the parties shall discuss what, if any, modification of the
terms of this Agreement may be required in order to arrive at an equitable
solution.
13. DISPUTE RESOLUTION
13.1 All disputes between the Parties arising out of the circumstances and
relationships contemplated by this Agreement including disputes relating to the
validity, construction or interpretation of this Agreement and including
disputes relating to pre-contractual representations shall be in the first
instance referred to the respective Chief Executive Officers of the Parties. If
they fail to agree then any dispute shall be settled by arbitration as follows:
20
<PAGE>
13.2 The dispute may be referred by either party for arbitration in
accordance with the provisions of this Article 13 under the guidelines of the
American Arbitration Association ("AAA") in Wilmington, Delaware under the
commercial rules then in effect for AAA, except as otherwise provided for
herein.
13.2.1 A party shall notify the other in writing should it intend to
initiate arbitration. The parties shall select, by mutual agreement, one
arbitrator within a time period of thirty (30) days after receipt of such
notice. Should no arbitrator be chosen within such period, the AAA shall appoint
the arbitrator within thirty (30) days after the end of such period. Within
thirty (30) days after selection of such arbitrator, each party shall submit to
the arbitrator a proposed resolution of the dispute and the reasons supporting
such resolution. Should either party desire, a joint meeting before the
arbitrator shall be held within thirty (30) days after the end of the above
resolution submission period.
13.2.2 Within thirty (30) days after the later of (i) the end of the
resolution submission period or (ii) holding of a joint meeting, the arbitrator
shall decide the matter.
13.2.3 Unless otherwise agreed to by the parties, the arbitrator
shall make such decisions based on the following factors in descending order of
importance: (a) consistency with the provisions of this Agreement; (b)
consistency with the intent of the parties as reflected in this Agreement; and
(c) customary and reasonable provisions included in comparable agreements. The
decision of the arbitrator will be binding upon the parties without the right of
appeal, and judgment upon the decision may be entered in any court having
jurisdiction thereof.
13.2.4 The parties shall share equally the reasonable documented
cost of such arbitration proceeding, but not the individual cost of the parties
in participating in such proceeding.
13.3 This Article 13 shall not limit in any way the right of a party to
bring an action (and enforce a judgment) for equitable relief in any court of
competent jurisdiction.
13.4 This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware (without reference to the conflicts of law
principles thereof).
14. ENTIRE AGREEMENT
14.1 This Agreement (including Exhibits A, B and C) constitutes the entire
agreement between the parties regarding the subject matter hereof and supersedes
all previous writings, understandings, representations and agreements, except
for the Development Agreement dated July 7, 1999 between the parties. No terms
or provisions of this Agreement shall be varied or modified by any prior or
subsequent statement, conduct or act of either of the parties, except that the
parties may amend this Agreement by written instruments specifically referring
to and executed in the same manner as this Agreement.
21
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15. NOTICES
15.1 Any notice required or permitted under this Agreement shall be in
writing, and shall be delivered to the following addresses of the parties:
HUMAN GENOME SCIENCES, INC.
9410 Key West Avenue
Rockville, Maryland 20850
Attention: Business Development
Fax: 301-762-5181
copy to:
HUMAN GENOME SCIENCES, INC.
9410 Key West Avenue
Rockville, Maryland 20850
Attention: General Counsel
Fax: 301-309-8439
DYAX CORP.
One Kendall Square, BLDG. 600, Suite 623
Cambridge, Massachusetts 02139
Attn: CEO
Fax: 617-225-2501
15.2 Any notice required or permitted to be given concerning this
Agreement shall be effective upon receipt by the party to whom it is addressed.
16. ASSIGNMENT AND CHANGE OF CONTROL
16.1 This Agreement and the licenses herein granted shall be binding upon
and inure to the benefit of the parties and their respective permitted assignees
and successors in interest. Neither this Agreement nor any interest hereunder
shall be assignable by a party without the prior written consent of the other
party and any attempted assignment contrary to this Paragraph 16.1 shall be void
and without force and effect. Notwithstanding the foregoing, a party may assign
this Agreement and all of its rights and obligations hereunder to any AFFILIATE
or to any THIRD PARTY in connection with the transfer or sale of all or
substantially all of its business, or to which it may transfer all or
substantially all of its assets to which this Agreement relates, or in the event
of its merger, consolidation, change in control or similar transaction, without
obtaining the consent of the other party, provided that the assigning party
remains liable under this Agreement and that the THIRD PARTY assignee or
surviving entity assumes in writing all of its obligations under this Agreement
16.2 Notwithstanding Paragraph 16.1, if DYAX is acquired by a
Pharmaceutical Company (as defined below), transfers or sells all or
substantially all of its business or its assets
22
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
to which this Agreement relates to such a company, or in the event of its
merger, consolidation, change in control or similar transaction with such a
company, DYAX shall promptly notify HGS of such transfer, sale or other event.
*************.
17. COUNTERPARTS
17.1 This Agreement may be executed in any number of counterparts, and
each such counterpart shall be deemed an original instrument, but all such
counterparts together shall constitute but one agreement.
18. WAIVER
18.1 Any delay or failure in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party's rights to the future enforcement of its
rights under this Agreement, nor operate to bar the exercise or enforcement
thereof at any time or times thereafter, excepting only as to an express written
and signed waiver as to a particular matter for a particular period of time.
18.2 Notwithstanding the foregoing, in the event DYAX or HGS challenges
whether any payments contemplated hereunder (including, without limitation
royalties or milestones) are due, it shall have the right, but not the
obligation, to make such payments under protest (reserving all rights hereunder)
pending resolution of such dispute.
19. INDEPENDENT RELATIONSHIP
19.1 Nothing herein contained shall create an employment, agency, joint
venture or partnership relationship between the parties hereto or any of their
agents or employees, or any other legal arrangement that would impose liability
upon one party for the act or failure to act of the other party. No party shall
have any power to enter into any contracts or commitments or to incur any
liabilities in the name of, or on behalf of, the other party, or to bind the
other party in any respect whatsoever.
20. FURTHER ACTIONS
20.1 Each party agrees to execute, acknowledge and deliver such further
instruments and to do all such other acts, as may be necessary or appropriate in
order to carry out the purposes and intent of this Agreement.
IN WITNESS WHEREOF, the parties, through their authorized officers, have
executed this Agreement as of the Effective Date.
23
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DYAX CORP.
BY: /s/ Henry E. Blair
------------------------------------------
Henry E. Blair
Chairman and Chief Executive Officer
HUMAN GENOME SCIENCES, INC.
BY: /s/ Arthur M. Mandell
------------------------------------------
Arthur M. Mandell
Senior Vice President, Corporate and
Business Development
24
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
EXHIBIT A
Patent Rights
================================================================================
Application/
Country Patent No. Filing Date Patent No. Issue Date
------- ---------- ----------- ---------- ----------
- --------------------------------------------------------------------------------
US 07/664,989* 3/1/91 5,223,409 6/29/93
- --------------------------------------------------------------------------------
US 9,319 1/26/93 5,403,484 4/4/95
- --------------------------------------------------------------------------------
US 08/057,667 6/18/93 5,571,698 11/5/96
- --------------------------------------------------------------------------------
US div 08/415,922 4/3/95 5,837,500 11/17/98
- --------------------------------------------------------------------------------
US div 08/993,776 12/18/97
- --------------------------------------------------------------------------------
US div ************* 11/16/98
- --------------------------------------------------------------------------------
US div ************* 11/16/98
- --------------------------------------------------------------------------------
PCT US89/03731 9/1/89
W09002809 pub 3/22/90
- --------------------------------------------------------------------------------
EPO 89/910702.3 9/1/89 436,597 4/2/97
EP436597 pub 7/17/91
- --------------------------------------------------------------------------------
EPO div 96/112867.5 8/9/96 Allowed
************* 4/16/97 pub
- --------------------------------------------------------------------------------
Japan 89510087 9/1/89
JP4502700 (pub) 5/21/92
- --------------------------------------------------------------------------------
Canada 610,176 9/1/89 1,340,288 12/29/98
- --------------------------------------------------------------------------------
Ireland IR89/2834 9/4/89
- --------------------------------------------------------------------------------
Israel 91501 9/1/89 91501 6/11/98
- --------------------------------------------------------------------------------
Israel ************* 5/29/97
- --------------------------------------------------------------------------------
PCT US92/01456 2/27/92
W09215677 (pub) 9/17/92
- --------------------------------------------------------------------------------
EPO 92/908057.0 2/27/92
- --------------------------------------------------------------------------------
Canada 2105300 2/27/92
- --------------------------------------------------------------------------------
Japan 92507558 2/27/92
- --------------------------------------------------------------------------------
PCT US92/01539 2/28/92
W09215679 (pub) 9/17/92
- --------------------------------------------------------------------------------
EPO 92/908799.7 2/28/92
- --------------------------------------------------------------------------------
Canada 2105303 2/28/92
- --------------------------------------------------------------------------------
================================================================================
25
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
================================================================================
Japan 92508216 2/28/92
- --------------------------------------------------------------------------------
EPO ************* 5/18/99**
================================================================================
* CIP of US SN487,063 filed 3/2/90 which is a CIP of US SN240,160 filed 9/2/88
All Protein Engineering Corporation patent rights have been assigned to Dyax
Corp. **Application assigned to TargetQuest B.V., a wholly-owned subsidiary of
Dyax Corp.
26
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Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
EXHIBIT B
*************
27
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
EXHIBIT C
DEVELOPMENT AGREEMENT
THIS AGREEMENT, effective as of ______, 2000 (the "Effective Date"), is made by
and between DYAX CORP., a Delaware corporation ("DYAX"), and _________________,
a ________corporation ("CUSTOMER").
WHEREAS DYAX possesses technology and expertise related to the discovery of
proteins and peptides having novel binding properties and the development and
manufacture of affinity chromatography purification media for use in the
separation and purification of proteins;
WHEREAS CUSTOMER is engaged in the discovery, development and manufacture of
[description of each customer product] ( "Customer Product");
WHEREAS DYAX and CUSTOMER wish to enter into a collaboration in which DYAX will
utilize its technology and expertise to develop unique affinity ligands and
chromatography purification media (the "Dyax Product") for use by CUSTOMER in
the purification of the Customer Product.
NOW, HEREBY the parties do hereby agree as follows:
ARTICLE 1. DISCOVERY AND DEVELOPMENT
1.1. Project Plan. The Project Plan, which is attached hereto and incorporated
herein by reference, sets forth a description of the Customer Product, a
description of the work to be undertaken by DYAX in connection with the
discovery, evaluation and development of the Dyax Product candidates, an
estimated timeline, the amount of compensation due DYAX for such work, and the
specification and payment amount for the performance milestones from such work.
The Project Plan shall be considered an integral part of this Agreement.
1.2. Conduct of Work. DYAX agrees to devote commercially reasonable resources
and efforts to the diligent conduct of the work described in the Project Plan.
CUSTOMER agrees to provide the materials set forth in the Project Plan to DYAX
in a timely manner and to cooperate with DYAX in the review and selection of
Dyax Product candidates and in the evaluation of such candidates. During the
course of the work, DYAX's representatives shall consult with representatives of
CUSTOMER at the reasonable request of CUSTOMER to respond to questions and
facilitate the exchange of appropriate information on the progress of the
Project Plan.
1.3. Project Plan Fee. In consideration of the performance by DYAX of the work
set forth in the Project Plan, CUSTOMER agrees to pay DYAX the project fee
specified in the Project Plan, *************.
28
<PAGE>
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.4. Selection of Dyax Product candidates. DYAX shall provide CUSTOMER with a
report identifying Dyax Product candidates. CUSTOMER shall have a period of
************* from receipt of the report to select Dyax Product candidates for
evaluation. CUSTOMER agrees to pay the media development fee set forth in the
Project Plan for each Dyax Product candidate that CUSTOMER selects for
evaluation. *************.
1.5 Evaluation Period and Milestone Payment. CUSTOMER shall have a period of
************* from delivery of the media for the selected candidates to
undertake the necessary experiments to reasonably verify whether the milestone
set forth in the Project Plan has been met. CUSTOMER agrees to pay DYAX the
milestone payment set forth in the Project Plan upon the earlier of verification
by CUSTOMER that the milestone has been met or notification by CUSTOMER to DYAX
of its intent to acquire a license as set forth in Article 2.
ARTICLE 2. RIGHTS TO DYAX PRODUCT
2.1 Exclusive License Rights. Within ************* following the delivery of the
media for the selected Dyax Product candidates to CUSTOMER, CUSTOMER shall
notify DYAX whether it wishes to acquire an exclusive license to, and be
supplied with, any Dyax Product solely for the purpose of the purification of
the Customer Product. If the milestone payment required by paragraph 1.5 has not
yet been paid at the time of giving of such notice, CUSTOMER shall include the
payment with the notice. The parties shall then promptly negotiate in good faith
the terms and conditions of an exclusive license for the applicable Dyax Product
which shall include the following payment and supply terms: *************. Any
decision to license the Dyax Product to CUSTOMER for the purification of the
Customer Product on a non-exclusive basis shall be at the sole discretion of
DYAX and shall contain such payment and supply terms that may be mutually agreed
upon by the parties.
2.2 Research License In the event that CUSTOMER is not prepared to make a
commitment to an exclusive license pursuant to Section 2.1, CUSTOMER may notify
DYAX within ************* following the delivery of the media for the selected
Dyax Product candidates of its desire to acquire a one year Research License.
Upon giving such notice, the parties shall promptly negotiate in good faith the
terms and conditions of a one year Research License which shall include
immediate payment to DYAX of a license fee *************, the limitations of the
license right and the ability of CUSTOMER to obtain research and development
services from DYAX at DYAX's full time equivalent rate.
ARTICLE 3. CONFIDENTIAL INFORMATION
3.1. Disclosure of Confidential Information.
(a) In connection with the performance of their respective obligations
under this Agreement, each party intends to disclose certain confidential
information and materials which it owns to the other party relating to the
Customer Product and the Dyax Products and the Dyax Product candidates,
including such information and materials as are developed hereunder ( the
"Confidential Information"). During the term of this Agreement and for a period
of ************* thereafter,
29
<PAGE>
each party shall maintain all Confidential Information in strict confidence,
except that the Receiving Party may disclose or permit the disclosure of any
Confidential Information to its directors, officers, employees, consultants,
advisors, and customers who are obligated to maintain the confidential nature of
such Confidential Information and who need to know such Confidential Information
for the purposes set forth in this Agreement; and use all Confidential
Information solely for the purposes set forth in this Agreement.
(b) The obligations of confidentiality and non-use set forth above shall
not apply to the extent that the Receiving Party can demonstrate that certain
Confidential Information: was in the public domain prior to the time of its
disclosure under this Agreement; entered the public domain after the time of its
disclosure under this Agreement through means other than an unauthorized
disclosure resulting from an act or omission by the Receiving Party; was
independently developed or discovered by the Receiving Party prior to the time
of its disclosure under this Agreement; or is or was disclosed to the Receiving
Party at any time, whether prior to or after the time of its disclosure under
this Agreement, by a third party having no fiduciary relationship with the
Disclosing Party and having no obligation of confidentiality with respect to
such Confidential Information; or is required to be disclosed to comply with
applicable laws or regulations, or with a court or administrative order.
(c) Notwithstanding the foregoing, the parties may each announce the
existence of this Agreement and that CUSTOMER is a customer of DYAX provided
that the language of any such announcement shall be agreed to in advance by the
parties.
ARTICLE 4. INTELLECTUAL PROPERTY
4.1. Definitions. As used in this Agreement, the term "Invention" means any
development, conception, technique, process, invention, material, discovery, or
improvement, whether or not patentable, that arises as a result of the
performance of this Agreement. "Dyax Invention" shall mean an Invention that is
discovered, developed, conceived, or reduced to practice during this Agreement
and which relates to the Dyax Products or Dyax Product candidates and their
derivatives, including the phage display libraries and technology, and affinity
ligands and media, and the sequence, characteristic and performance information
thereof. "Customer Invention" shall mean an Invention, other than a Dyax
Invention, that is discovered, developed, conceived, or reduced to practice
during this Agreement and which relates to the Customer Product.
6.2. Ownership & Rights to Intellectual Property. DYAX shall have sole ownership
and control of all Dyax Inventions. CUSTOMER shall have sole ownership and
control of all Customer Inventions. Each party's rights to any Invention of the
other shall be governed by this Agreement and by any exclusive license and
supply agreement for the use by CUSTOMER of a Dyax Product in the purification
of the Customer Product or by any research license, either of which may be
entered into by the parties pursuant to Article 2 of this Agreement.
ARTICLE 5. TERM AND TERMINATION
30
<PAGE>
5.1. Term. This Agreement shall commence on the Effective Date and continue
until termination pursuant to this Article 5 or as a result of CUSTOMER'S
decision not to proceed with any license pursuant to Article 2 of this
Agreement.
5.2. Termination by CUSTOMER. Provided that CUSTOMER has made all payments
specified in this Agreement which have become due and payable, CUSTOMER shall
have the right to terminate this Agreement at any time by giving 90 days written
notice to DYAX. CUSTOMER agrees to promptly pay DYAX for uncompensated costs and
milestone payments for work completed by DYAX prior to the termination date,
including for any work done during the 90- day termination notice period.
CUSTOMER agrees that no refund of any sums paid to DYAX shall be due upon any
such termination.
5.3. Termination for Material Breach. This Agreement may be terminated by either
party upon 90 days written notice to the other party if any provision hereof is
materially breached, unless such breach is corrected or reasonable efforts are
being made to correct such breach within the 90-day notice period.
5.4. Consequences of Termination and Survival. Upon termination any rights
granted to CUSTOMER under this Agreement shall cease and CUSTOMER shall return
any Dyax Products or Dyax Product candidates to DYAX. DYAX will have the
unrestricted and exclusive right to any Dyax Product, Dyax Product candidates,
Dyax Inventions and the results of the Project Plan. Termination of this
Agreement shall not relieve either party of its obligations incurred prior to
termination. The provisions of Article 3. and Article 4. and Section 6.4 shall
survive expiration or termination of this Agreement.
ARTICLE 6. GENERAL PROVISIONS
6.1. Notices. Any notices permitted or required by this Agreement shall be sent
by facsimile, registered mail or a recognized private mail carrier service and
shall be effective when received if sent and addressed as follows or to such
other address as may be designated by a party in writing:
If to DYAX: President, Separations Division
Dyax Corp.
One Kendall Square, Bldg. 600
Cambridge, MA 02139
Telephone: (617) 225-2500
Fax: (617) 225-2501
If to CUSTOMER: _________________________
_________________________
_________________________
Attention: ____________
Telephone: (__)___________
31
<PAGE>
Fax: (__)___________
6.2. Entire Agreement; Amendment. This Agreement set forth the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements, written and oral, between the parties. No
modification of any of the terms of this Agreement shall be deemed to be valid
unless it is in writing and signed by the party against whom enforcement is
sought.
6.3. Force Majeure. Neither party shall be held liable or responsible to the
other party nor be deemed to have defaulted under or breached this Agreement for
failure or delay in performing any term of this Agreement when such failure or
delay is caused by or results from causes beyond the reasonable control of the
affected party, including but not limited to fire, floods, embargoes, war, acts
of war (whether war is declared or not), riots, strikes, lockouts or other labor
disturbances, lawsuits, acts of God or acts, omissions or delays in acting by
any court, governmental authority or the other party.
6.4. Warranties. WITH RESPECT TO ANY DYAX PRODUCT CANDIDATE OR DYAX PRODUCT,
DYAX DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, WHETHER EXPRESSED OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, ANY WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF
TRADE OR ANY WARRANTIES OF PATENT VALIDITY OR FREEDOM OF OR FROM PATENT
INFRINGEMENT. Neither party shall be liable to the other for consequential,
incidental, indirect or punitive damages arising from the performance or
nonperformance of such party under this Agreement.
6.5. Waiver; Severability. No waiver by either party of any default, right or
remedy shall be effective unless in writing, nor shall any such waiver operate
as a waiver of any other or of the same default, right or remedy, respectively,
on a future occasion. In the event that any term or provision of this Agreement
shall violate any applicable statute, ordinance or rule of law in any
jurisdiction in which it is used, such provision shall be ineffective to the
extent of such violation without invalidating any other provision hereof.
6.6. Assignment. This Agreement may not be assigned or otherwise transferred by
either party without the consent of the other party; provided, however, that
either DYAX or CUSTOMER may, without such consent, assign its rights and
obligations under this Agreement (i) in connection with a corporate
reorganization to an affiliate, all or substantially all of the equity interest
of which is owned and controlled by such party or its parent corporation, or
(ii) in connection with a merger, consolidation or sale of substantially all of
such party's assets to an unrelated third party. Any permitted assignee shall
assume all obligations of its assignor under this Agreement.
6.7. Independent Parties. This Agreement shall not be deemed to create any
partnership, joint venture, or agency relationship between the parties. Each
party hereto is acting as an independent contractor.
6.8. Governing Law. This Agreement shall be governed by and construed under the
laws of the Commonwealth of Massachusetts.
32
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
DYAX CORP. _____________________
By:____________________________ By: ____________________________
Title: ________________________ Title: _________________________
33
<PAGE>
Exhibit 10.32
INDEMNIFICATION AGREEMENT
[Director]
This Agreement dated ___________, 1998 is between Dyax Corp. (the
"Company"), a Delaware corporation, and _______________________________ (the
"Indemnitee"), who is a director of the Company. Its purpose is to provide the
maximum protection for the Indemnitee against personal liability arising out of
his service to the Company so as to encourage the continuation of such service
and the effective exercise of his business judgment in connection therewith.
The parties hereto agree as follows:
1. Definitions. For purposes of this Agreement, the following terms shall
have the meanings hereafter assigned to them:
(a) "CHANGE IN CONTROL" means the occurence of (i) a change in
control of the Company, not approved by a resolution of the Company's Board
of Directors, of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including
in any event the acquisition by any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) of beneficial ownership,
directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then outstanding
securities, and (ii) within a period of not more than two years after the
event described in the preceding clause (i), a change in the identity of a
majority of the members of the Company's Board of Directors otherwise than
through death, disability or retirement in accordance with the Company's
normal retirement policies.
(b) "CLAIM" means any threatened, pending or completed action, suit
or proceeding, or any inquiry or investigation, whether conducted by the
Company or any other party, that the Indemnitee in good faith believes
might lead to the institution of any such action, suit or proceeding,
whether civil, criminal, administrative, investigative or other.
(c) "EXPENSES" means attorneys' fees and all other costs, expenses
and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in, any Claim relating
to any Indemnifiable Event.
(d) "INDEMNIFIABLE EVENT" means any event or occurrence related to
the fact that the Indemnitee is or was a director, officer, employee, agent
or fiduciary of the Company, or is or was serving at the request of the
Company as a director, officer, employee, trustee, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit plan,
trust or other enterprise, or by reason of anything done or not done by the
Indemnitee in any such capacity.
<PAGE>
(e) "POTENTIAL CHANGE IN CONTROL" means the occurence of (i) any
person's public announcement of an intention to take or to consider taking
actions which if consummated might result in a Change in Control, (ii) the
acquisition by any "person" (as such term is used in Section 13(d) and
14(d)(2) of the Exchange Act) of beneficial ownership, directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities, or
(iii) the adoption by the Company's Board of Directors of a resolution to
the effect that, for purposes of this Agreement, a Potential Change in
Control has occurred.
(f) "REVIEWING PARTY" means the person or body appointed by the
Company's Board of Directors pursuant to Section 2(b), which shall not be
or include a person who is a party to the particular Claim for which the
Indemnitee is seeking indemnification.
2. Basic Indemnification Arrangement.
(a) In the event that the Indemnitee was or is a party to or witness
or other participant in, or is threatened to be made a party to or witness
or other participant in, a Claim by reason of (or arising in part out of)
an Indemnifiable Event, the Company shall indemnify the Indemnitee to the
fullest extent permitted by law as soon as practicable, but in any event no
later than thirty days after written demand is presented to the Company,
against all Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in respect of such Expenses, judgments, fines, penalties or amounts
paid in settlement) of such Claim. If so requested by the Indemnitee, the
Company shall advance (within two business days of such request) all
Expenses to the Indemnitee (an "Expense Advance"). Notwithstanding anything
in this Agreement to the contrary, prior to a Change in Control, the
Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Claim initiated by the Indemnitee against
the Company or any director or officer of the Company (otherwise than to
enforce his rights under this Agreement) unless the Company has consented
to the initiation of such Claim.
(b) In the event of any demand by the Indemnitee for indemnification
hereunder or under the Company's Restated Certificate of Incorporation or
By-laws, the Board of Directors of the Company shall designate a Reviewing
Party, who shall, if there has been a Change of Control of the Company, be
the special independent counsel referred to in Section 3 hereof. The
obligations of the Company under Section 2(a) shall be subject to the
condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the special independent counsel referred to
in Section 3 hereof is involved) that the Indemnitee is not permitted to be
indemnified under applicable law, and the obligation of the Company to make
an Expense Advance pursuant to Section 2(a) shall be subject to the
condition that, if, when and to the extent that the Reviewing Party
determines that the Indemnitee is not permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by the
Indemnitee (who hereby agrees to reimburse the Company) for all such
amounts theretofore paid. If the Indemnitee has commenced legal
- 2 -
<PAGE>
proceedings in a court of competent jurisdiction to secure a determination
that the Indemnitee may be indemnified under applicable law, any
determination made by the Reviewing Party that the Indemnitee is not
permitted to be indemnified under applicable law shall not be binding, and
the Indemnitee shall not be required to reimburse the Company for any
Expense Advance until a final judicial determination is made with respect
hereto (as to which all rights of appeal therefrom have been exhausted or
lapsed). If there has been no determination by the Reviewing Party or if
the Reviewing Party determines that the Indemnitee is not permitted to be
indemnified in whole or in part under applicable law, the Indemnitee shall
have the right to commence litigation in any court in the State of Delaware
having subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, and the Company
hereby consents to service of process and to appear in any such proceeding.
Any determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and the Indemnitee.
3. Change in Control. The Company agrees that if there is a Change in
Control of the Company, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under the Company's
Restated Certificate of Incorporation or By-laws now or hereafter in effect
relating to Claims for Indemnifiable Events, the Company shall seek legal advice
only from special independent counsel selected by the Indemnitee and approved by
the Company (which approval shall not be unreasonably withheld) who has not
otherwise performed services for the Company within the last ten years (other
than in connection with such matters) or for the Indemnitee. Such counsel among
other things, shall render its written opinion to the Company and the Indemnitee
as to whether and to what extent the Indemnitee is permitted to be indemnified
under applicable law. The Company agrees to pay the reasonable fees of the
special independent counsel and to indemnify such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and damages relating
to this Agreement or its engagement pursuant hereto.
4. Establishment of Trust. In the event of a Potential Change in Control,
the Company may create a Trust for the benefit of the Indemnitee (either alone
or together with one or more other indemnitees) and from time to time fund such
Trust in such amounts as the Company's Board of Directors may determine to
satisfy Expenses reasonably anticipated to be incurred in connection with
investigating, preparing for and defending any Claim relating to an
Indemnifiable Event, and all judgments, fines, penalties and settlement amounts
of all Claims relating to an Indemnifiable Event from time to time paid or
claimed, reasonably anticipated or proposed to be paid. The terms of any Trust
established pursuant hereto shall provide that upon a Change in Control (i) the
Trust shall not be revoked or the principal thereof invaded (except as provided
in any of the circumstance described in the following clauses (ii) through
(iv)), without the written consent of the Indemnitee, (ii) the Trustee shall
advance, within two business days of a request by the Indemnitee, all Expenses
to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under
the circumstances under which the Indemnitee would be required to reimburse the
Company under Section 2(b) of this Agreement), (iii) the Trustee shall promptly
pay to the Indemnitee all amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this
- 3 -
<PAGE>
Agreement or otherwise, and (iv) all unexpended funds in such Trust shall revert
to the Company upon a final determination by the Reviewing Party or a court of
competent jurisdiction, as the case may be, that the Indemnitee has been fully
indemnified under the terms of this Agreement. The Trustee shall be a person or
entity satisfactory to the Indemnitee. Nothing in this Section 4 shall relieve
the Company of any of its obligations under this Agreement.
5. Indemnification for Additional Expenses. The Company shall indemnify
the Indemnitee against all expenses (including attorneys' fees) and, if
requested by the Indemnitee, shall (within two business days of such request)
advance such expenses to the Indemnitee, which are incurred by the Indemnitee in
connection with any claim asserted against or action brought by the Indemnitee
for (i) indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or Company By-law or provision of the Company's
Restated Certificate of Incorporation now or hereafter in effect relating to
Claims for Indemnifiable Events or (ii) recovery under any directors' and
officers' liability insurance policies maintained by the Company, regardless of
whether the Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case
may be.
6. Partial Indemnity, Etc. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties and amounts paid in settlement of a
Claim but not for the total amount thereof, the Company shall indemnify the
Indemnitee for the portion thereof to which the Indemnitee is entitled.
Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in defense of Claims
relating to an Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, the Indemnitee shall be indemnified
against all Expenses incurred in connection therewith. In connection with any
determination by the Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that the Indemnitee is not so entitled.
7. No Presumption. For purposes of this Agreement, the termination of
any claim, action, suit or proceeding by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
8. Non-exclusivity, Etc. The rights of the Indemnitee hereunder shall
be in addition to any other rights the Indemnitee may have under the Company's
Restated Certificate of Incorporation and By-laws or the Delaware General
Corporation Law or otherwise. To the extent that a change in the Delaware
General Corporation Law (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded currently under the
Company's Restated Certificate of Incorporation and By-laws and this Agreement,
it is the intent of the parties hereto that the Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change.
- 4 -
<PAGE>
9. Liability Insurance. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, the Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Company director or officer thereunder.
10. Amendments, Etc. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
11. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all such papers and do all such
things as may be necessary or desirable to secure such rights.
12. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against the
Indemnitee to the extent the Indemnitee has otherwise received payment (under
any insurance policy, Restated Certificate of Incorporation, By-law or
otherwise) of the amounts otherwise indemnifiable hereunder.
13. Binding Effect, Etc. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company, spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
the Indemnitee continues to serve as an officer or director of the Company or of
any other enterprise at the Company's request.
14. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of law.
- 5 -
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Indemnification
Agreement as of the date first above written.
DYAX CORP.
By:_________________________________
Title:
____________________________________
[Director]
- 6 -
<PAGE>
Exhibit 21
SUBSIDIARIES OF THE REGISTRANT
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
NAME JURISDICTION OF INCORPORATION/ORGANIZATION
- --------------------------------------------------------------------------------------------
<S> <C>
Biotage, Ltd. England and Wales
- --------------------------------------------------------------------------------------------
Target Quest, LLC California
- --------------------------------------------------------------------------------------------
Target Quest, Inc. California
- --------------------------------------------------------------------------------------------
Target Quest Holding B.V. The Netherlands
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-1 of
our report dated March 29, 2000 relating to the financial statements of Dyax
Corp., which appear in such Registration Statement. We also consent to the
references to us under the headings "Experts" and "Selected Consolidated
Financial Data" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 18, 2000
<PAGE>
EXHIBIT 23.3
Yankwich & Associates
130 Bishop Allen Drive
Cambridge, Massachusetts 02139
Telephone: (617) 491-4343
Facsimile: (617) 491-8801
Leon R. Yankwich
Direct Line: (617) 491-8909
May 15, 2000
Consent of Yankwich & Associates
Yankwich & Associates hereby consents to the reference to the firm under
the caption `Experts' in the Prospectus that is a part of the Registration
Statement on Form S-1 of Dyax Corp.
/s/ Leon R. Yankwich
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-2000
<PERIOD-START> JAN-01-1999 JAN-01-2000
<PERIOD-END> DEC-31-1999 MAR-31-2000
<CASH> 16,726 18,160
<SECURITIES> 0 0
<RECEIVABLES> 3,227 3,093
<ALLOWANCES> (129) (129)
<INVENTORY> 2,912 2,853
<CURRENT-ASSETS> 23,071 24,316
<PP&E> 5,633 6,037
<DEPRECIATION> (2,924) (3,106)
<TOTAL-ASSETS> 29,608 30,845
<CURRENT-LIABILITIES> 7,792 8,243
<BONDS> 0 0
0 0
57,426 57,426
<COMMON> 24 25
<OTHER-SE> (38,150) (41,857)
<TOTAL-LIABILITY-AND-EQUITY> 29,608 30,845
<SALES> 16,833 4,807
<TOTAL-REVENUES> 16,833 4,807
<CGS> 5,515 1,493
<TOTAL-COSTS> 31,141 9,456
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 81 24
<INCOME-PRETAX> (14,308) (4,491)
<INCOME-TAX> (0) 0
<INCOME-CONTINUING> (14,308) (4,491)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (13,187) (4,491)
<EPS-BASIC> (6.81) (1.97)
<EPS-DILUTED> (6.81) (1.97)
</TABLE>
