AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 21, 2000
AMENDMENT NO. 2
TO
DISCOVERY PARTNERS INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA
(PRIOR TO REINCORPORATION)
DELAWARE
(AFTER REINCORPORATION) 8731 33-0655706
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
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COPIES TO:
HAYDEN J. TRUBITT, ESQ. L. KAY CHANDLER, ESQ.
SHERRY E. SCHNELL, ESQ. JANE K. ADAMS, ESQ.
KIRT W. SHULDBERG, ESQ. DENISE L. WOOLARD, ESQ.
BROBECK, PHLEGER & HARRISON LLP COOLEY GODWARD LLP
12390 EL CAMINO REAL 4365 EXECUTIVE DRIVE, SUITE 1100
SAN DIEGO, CALIFORNIA 92130 SAN DIEGO, CALIFORNIA 92121
(858) 720-2500 (858) 550-6000
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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 statement 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 statement 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 statement number of the earlier effective registration statement for the same offering. [ ] __________
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
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 WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 21, 2000
PROSPECTUS
5,000,000 SHARES
[DISCOVERY PARTNERS LOGO]
COMMON STOCK
This is an initial public offering of common stock by Discovery Partners International, Inc. We are selling 5,000,000 shares of common stock. The estimated initial public offering price is between $15.00 and $17.00 per share.
We have applied for listing of our common stock on the Nasdaq National Market under the symbol DPII.
PER SHARE TOTAL
--------- --------
Initial public offering price............................... $ $
Underwriting discounts and commissions...................... $ $
Proceeds to Discovery Partners International, Inc., before
expenses.................................................. $ $
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Discovery Partners International, Inc. has granted the underwriters an option for a period of 30 days to purchase up to 750,000 additional shares of common stock.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
CHASE H&Q LEHMAN BROTHERS
UBS WARBURG LLC
, 2000
[INSIDE FRONT COVER:]
[DISCOVERY PARTNERS INTERNATIONAL TITLE AND LOGO]
[The words "Offering a Broad Range of Integrated Drug Discovery Products and Services"]
[FRONT GATEFOLD:]
[Depiction of our integrated products and services. The centerpiece of this page is our title and logo, below which are the words "Offering a Broad Range of Integrated Drug Discovery Products and Services." There are an aggregate of six photographs and one graphic that are equally spaced surrounding the logo. The graphic bears the caption "Structural Proteomics(TM) Computational Software and Services," and the photographs bear the captions "HTS-Factory(TM)", "Collections of Chemical Compounds," "Medicinal Chemistry Services," "Nanokan(TM) System," "AutoSort(TM) System" and "Biological Test Development Services."]
TABLE OF CONTENTS
PAGE
----
Prospectus Summary.......................................... 1
Risk Factors................................................ 5
Statements About the Future................................. 14
Use of Proceeds............................................. 14
Dividend Policy............................................. 14
Capitalization.............................................. 15
Dilution.................................................... 17
Selected Consolidated Historical and Pro Forma Financial
Data...................................................... 19
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 21
Business.................................................... 26
Management.................................................. 45
Related Party Transactions.................................. 57
Principal Stockholders...................................... 63
Description of Capital Stock................................ 66
Shares Eligible for Future Sale............................. 71
Underwriting................................................ 73
Legal Matters............................................... 75
Experts..................................................... 75
Where You Can Find More Information......................... 75
Index to Consolidated Financial Statements.................. F-1
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PROSPECTUS SUMMARY
This summary does not contain all of the information you should consider before investing in our common stock. You should read the entire prospectus carefully, including "Risk Factors" on page 5 and our consolidated financial statements and notes to those consolidated financial statements on page F-1, before making an investment decision.
We sell a broad range of products and services to pharmaceutical and biotechnology companies to make the drug discovery process for our customers faster, less expensive and more effective at generating chemical compounds which could lead to marketable drugs, or drug candidates. Our products and services focus on the portion of the drug discovery process that follows the identification of a biological area which a drug would affect in order to treat or prevent an illness, or a drug target, through the point when a drug candidate is ready for clinical trials. Our product and service offerings include:
- Collections, or libraries, of chemical compounds with chemical and physical properties similar to known drugs;
- Proprietary instruments and consumables for automating the process of making libraries of chemical compounds;
- Software and algorithms to generate libraries of chemical compounds, and to leverage and integrate the various areas of drug discovery; and
- Contract services for the testing, screening and optimizing of drug candidates.
We intend to continue to aggressively grow our company through internal
development and acquisition of other companies to expand our range of offerings
and implement leading-edge technologies. We recently acquired three businesses:
Axys Advanced Technologies, Discovery Technologies and Structural Proteomics.
Since inception in 1995, we have sold products to and conducted projects for
over 100 customers, including Aventis, Bayer, Bristol-Myers Squibb, SmithKline
Beecham and Warner-Lambert.
The pharmaceutical industry is under intense pressure to develop new drugs. According to data published by Pharmaceutical Research and Manufacturers of America, the pharmaceutical industry has increased research and development expenditures over five-fold since 1985. Recent advances in genomics and proteomics, the studies of genes and the proteins they encode, have dramatically increased the number of potential drug targets that researchers can advance into drug discovery. We believe there is a lack of resources and a need for better tools and technologies to generate drug candidates from these targets. Additionally, the pharmaceutical industry needs better information earlier in the drug discovery process to avoid large expenditures on compounds that ultimately fail in later testing. Despite recent advances, the drug discovery process remains lengthy, expensive and often unsuccessful.
The broad array of products and technologies that we have assembled allows our pharmaceutical and biotechnology customers to augment their internal capabilities and accelerate the discovery of drug candidates. For example, in our chemistry offering, our technology allows our customers to generate with efficiency and speed large libraries of discrete compounds, with large amounts of each compound. Our patented instruments enable our customers to generate these compound libraries. One of these systems, the NanoKan System(TM), is currently under development and is designed to generate up to one million discrete compounds per year. In addition, we generate and sell chemically-diverse libraries of discrete, drug-like compounds that have well- validated chemistry protocols, which make them easy to re-supply and reproduce.
In our assay development and screening services group, we design and conduct tests that generate information about the activity of compounds against a drug target. We have performed
approximately 60 assay, or test, development and screening projects. Once an assay is developed, it is used for testing compound libraries. After compounds are screened, our medicinal chemists can synthesize variations of promising compounds to improve or optimize their properties and to generate drug candidates. In addition, we use software tools to assist in the design of compound libraries and are developing other tools to provide predictive information earlier in the drug discovery process to reduce time and cost.
Our objective is to create and commercialize a complete, integrated and highly efficient collection of drug discovery technologies to overcome many limitations of the current drug discovery process. To implement this objective, we intend to:
- offer an integrated and complete drug discovery solution
- broaden and deepen our technology through internal invention and acquisition
- target the pharmaceutical and biotechnology industries
- expand customer relationships through integration of products and services
- generate multiple revenue streams
- expand our knowledge base
We maintain Web sites at www.discoverypartners.com, www.axystech.com, www.chemrx.com, www.discovery-tech.com and www.irori.com. Information contained in our Web sites does not constitute a part of this prospectus. Our principal executive offices are located at 9640 Towne Centre Drive, San Diego, California 92121, and our telephone number is (858) 455-8600.
We own a registered trademark and service mark in IRORI(R). We have filed an application for federal registration and claim rights in HTS-FACTORY(TM). We also own the following trademarks and servicemarks: Structural Proteomics(TM), AutoSort(TM), NanoKan(TM), ChemRx(TM), ChemRx AT(TM) and Directed Sorting(TM). This prospectus also includes trademarks owned by other parties.
THE OFFERING
Common stock we are offering..... 5,000,000 shares Common stock to be outstanding after this offering.............. 22,437,204 shares Use of proceeds.................. To fund our operations, including continued |
development and manufacturing of existing products as well as research and development of additional products and services. We also may use a portion of the net proceeds to acquire new businesses or technologies, hire additional personnel and expand our facilities to be able to meet the growing needs of our business.
The share amounts in this table are based on shares outstanding as of May 5, 2000. This table excludes:
- 1,893,870 shares of common stock issuable upon the exercise of options outstanding at a weighted average exercise price of $2.51 per share;
- 905,294 shares of common stock issuable upon the exercise of warrants at a weighted average exercise price of $3.60 per share, of which warrants to purchase 670,209 shares will expire if not exercised at the time of this offering; and
- 1,406,130 additional shares of common stock available for future grant under our 2000 Stock Incentive Plan to become effective at the close of this offering.
Unless otherwise noted, the information in this prospectus:
- assumes that the underwriters' over-allotment option will not be exercised;
- gives effect to the conversion, at the closing of this offering, of all 7,954,781 outstanding shares of preferred stock into 8,016,412 shares of common stock; and
- reflects our reincorporation into Delaware before the completion of this offering.
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The following table sets forth summary financial data for our company. You should read this information together with the financial statements and the notes to those statements appearing elsewhere in this prospectus and the information under "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------- ---------------------------
1997 1998 1999 1999 1999 2000 2000
------- ------- ------- --------- ------ ------- --------
PRO PRO
ACTUAL FORMA(1) ACTUAL FORMA(1)
------- --------- ------- --------
(UNAUDITED) (UNAUDITED)
CONSOLIDATED STATEMENT OF OPERATIONS DATA
Revenue................................. $ 3,150 $ 6,214 $13,076 $27,050 $2,896 $ 5,173 $10,513
Gross margin............................ 1,838 3,428 4,841 15,093 1,133 2,120 6,268
Costs and expenses
Research and development.............. 4,143 5,058 3,539 8,959 969 619 2,183
Selling, general and administrative... 2,528 4,984 4,439 6,418 1,093 1,519 2,169
Amortization of deferred
compensation....................... -- -- 311 311 70 264 264
Amortization of goodwill.............. -- -- -- 3,596 -- 155 1,054
Total operating expenses......... 6,671 10,042 8,288 19,284 2,132 2,557 5,670
Income (loss) from operations........... (4,833) (6,614) (3,447) (4,191) (999) (437) 598
Net loss.............................. $(4,822) $(6,278) $(3,370) $(4,170) $ (973) $(1,630) $(1,062)
======= ======= ======= ======= ====== ======= =======
Net loss per share, basic and
diluted............................ $ (8.85) $ (8.20) $ (3.00) $(0.96) $ (1.23)
======= ======= ======= ====== =======
Shares used in calculating net loss per
share, basic and diluted.............. 545 765 1,125 1,014 1,324
Pro forma net loss per share, basic
and diluted........................ $ (0.44) $ (0.28) $ (0.21) $ (0.07)
======= ======= ======= =======
Shares used in calculating pro forma
net loss per share, basic and
diluted............................ 7,729 15,158 7,939 15,368
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AS OF MARCH 31, 2000
---------------------------------------
PRO FORMA
AS ADJUSTED
ACTUAL PRO FORMA(2) (3)
-------- ------------ -----------
(UNAUDITED)
SELECTED CONSOLIDATED BALANCE SHEET DATA
Cash and cash equivalents................................. $ 984 $ 6,017 $ 79,217
Working capital (deficit)................................. (3,950) 16,337 89,537
Total assets.............................................. 21,750 79,542 152,742
Long term debt............................................ 2,504 2,504 2,504
Redeemable convertible preferred stock.................... 27,907 -- --
Total stockholders' equity (deficit)...................... (19,561) 70,255 143,455
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(2) The Pro Forma consolidated balance sheet data gives effect to the sale of 1,392,503 shares of Series E Preferred Stock in April, 2000, the issuance of 7,429,641 shares of common stock, and promissory note for $550,000 and $50,000 cash for the purchase of AAT in April, 2000, and the conversion of all of our outstanding shares of redeemable preferred stock into common stock upon the closing of this offering.
(3) The Pro Forma As Adjusted consolidated balance sheet gives effect to the sale of 5,000,000 shares of common stock at an assumed initial public offering price of $16 per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses that we will pay.
Please see Note 2 to our financial statements for an explanation of the method used to calculate the net loss per share and the number of shares used in the computation of per share amounts.
RISK FACTORS
You should carefully consider the risks described below together with all of the other information included in this prospectus before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In such an event, the trading price of our common stock could decline, and you may lose all or part of your investment.
RISKS RELATED TO OUR BUSINESS
WE RECENTLY HAVE ACQUIRED SEVERAL BUSINESSES AND FACE RISKS ASSOCIATED WITH INTEGRATING THESE BUSINESSES AND POTENTIAL FUTURE ACQUISITIONS.
We recently completed the acquisitions of Axys Advanced Technologies (AAT), Discovery Technologies and 75% of the stock of Structural Proteomics, and are in the process of integrating these businesses. We plan to continue to review potential acquisition candidates in the ordinary course of our business and our strategy includes building our business through acquisitions. Acquisitions involve numerous risks, including among others, difficulties and expenses incurred in the consummation of acquisitions and assimilation of the operations, personnel and services or products of the acquired companies, difficulties of operating new businesses, the diversion of management's attention from other business concerns and the potential loss of key employees of the acquired company. For example, distance and cultural differences may make it difficult for us to successfully assimilate the operations of our recently acquired assay development and high throughout screening operations (Discovery Technologies) located in Switzerland with our medicinal chemistry operations located in San Diego. Further, integrating the chemistry operations performed by AAT with our existing chemistry operations will cause some key employees to have overlapping functional roles, which may lead to their departure if they are unable or unwilling to assume new or different roles within our merged organization. If we do not successfully integrate the three businesses we recently acquired or any businesses we may acquire in the future, our business will suffer. Additionally, acquisition candidates may not be available in the future or may not be available on terms and conditions acceptable to us. Acquisitions of foreign companies also may involve additional risks of assimilating different business practices, overcoming language and cultural barriers and foreign currency translation. We currently have no agreements or commitments with respect to any acquisition and we may never successfully complete any additional acquisitions.
WE MAY NOT ACHIEVE OR SUSTAIN PROFITABILITY IN THE FUTURE.
We are at an early stage of executing our business plan. We have incurred operating and net losses and negative cash flow from operations since our inception. As of March 31, 2000, we had an accumulated deficit of $21.4 million. For the years ended December 31, 1997, 1998 and 1999 and the three months ended March 31, 2000, we had net losses of $4.8 million, $6.3 million, $3.4 million, and $1.6 million, respectively. We may also in the future incur operating and net losses and negative cash flow from operations, due in part to anticipated increases in expenses for research and product development, acquisitions of complementary businesses and technologies and expansion of our sales and marketing capabilities. We incurred no goodwill charges in the years ended 1997, 1998 and 1999. We incurred goodwill charges in the amount of $155,000 for the three months ended March 31, 2000. Beginning in 2001, goodwill charges for acquisitions we have already made will be $4.2 million per year for the next ten years. Given our acquisition strategy, we expect significant goodwill charges to affect our net income (loss) for the foreseeable future. We may not be able to achieve or maintain profitability. Moreover, if we do achieve profitability, the level of any profitability cannot be predicted and may vary significantly from quarter to quarter.
WE MAY INCUR EXCHANGE LOSSES WHEN FOREIGN CURRENCY USED IN INTERNATIONAL TRANSACTIONS IS CONVERTED INTO U.S. DOLLARS.
For the three months ending March 31, 2000, 12% of our actual revenue was invoiced and our corresponding expenses were incurred in foreign currency, including the British pound, the Swiss franc and the Euro. Currency fluctuations between the U.S. dollar and the currencies in which we do business will cause foreign currency translation gains and losses. We cannot predict the effects of exchange rate fluctuations on our future operating results because of the number of currencies involved, changes in the percentage of our revenue which will be invoiced in foreign currencies, the variability of currency exposure and the potential volatility of currency exchange rates. We do not currently engage in foreign exchange hedging transactions to manage our foreign currency exposure.
IF OUR PRODUCTS AND SERVICES DO NOT BECOME WIDELY USED IN THE PHARMACEUTICAL AND BIOTECHNOLOGY INDUSTRIES, IT IS UNLIKELY THAT WE WILL BE PROFITABLE.
We have a limited history of offering our products and services, including our NanoKan System, informatics tools and collections of chemical compounds. It is uncertain whether our current customers will continue to use these products and services or whether new customers will use these products and services. In order to be successful, our products and services must meet the requirements of the pharmaceutical and biotechnology industries, and we must convince potential customers to use our products and services instead of competing technologies. Market acceptance will depend on many factors, including our ability to:
- convince potential customers that our technologies are attractive alternatives to other technologies for drug discovery;
- manufacture products and conduct services in sufficient quantities with acceptable quality and at an acceptable cost;
- convince potential customers to purchase drug discovery products and services from us rather than developing them internally; and
- place and service sufficient quantities of our products.
Because of these and other factors, our products and services may not gain market acceptance.
WE MAY FAIL TO EXPAND CUSTOMER RELATIONSHIPS THROUGH INTEGRATION OF PRODUCTS AND SERVICES.
We may not be successful in selling our offerings in combination across the range of drug discovery disciplines we serve because integrated combinations of our products and services may not achieve time and cost efficiencies for our customers. In addition, we may not succeed in further integrating our offerings. We may not be able to use existing relationships with customers in individual areas of our business to sell products and services in multiple areas of drug discovery. If we do not achieve integration of our products and services, we may not be able to take advantage of potential revenue opportunities.
OUR SUCCESS WILL DEPEND ON OUR ABILITY TO MANAGE RAPID GROWTH AND EXPANSION.
Growth in our operations has placed and, if we grow in the future, will continue to place a significant strain on our operational, human and financial resources. We recently have acquired three new businesses and we intend to continue to grow our business. We have not expanded our management and infrastructure in advance of anticipated growth, nor do we intend to. Therefore, as we expand our operations we will not necessarily have in place infrastructure and personnel sufficient to accommodate the increased size of our business. Our ability to manage effectively any growth through acquisitions or any internal growth will depend, in large part, on our ability to hire,
train and assimilate additional management, professional, scientific and technical personnel and our ability to expand, improve and effectively use our operating, management, marketing and financial systems to accommodate our expanded operations. These tasks are made more difficult as we acquire businesses in geographically disparate locations, such as our recent acquisitions of Discovery Technologies in Switzerland, AAT in the San Francisco area, and Structural Proteomics in New Jersey.
OUR DIRECTED SORTING PRODUCTS AND OUR LARGE COMPOUND LIBRARIES HAVE LENGTHY SALES CYCLES, WHICH COULD CAUSE OUR OPERATING RESULTS TO FLUCTUATE SIGNIFICANTLY FROM QUARTER TO QUARTER.
Sales of our Directed Sorting products and our large compound libraries typically involve significant technical evaluation and commitment of capital by our customers. Accordingly, the sales cycles, or the time from finding a prospective customer through closing the sale, associated with these products, range from six to eighteen months. Sales of these products are subject to a number of significant risks, including customers' budgetary constraints and internal acceptance reviews that are beyond our control. Due to these lengthy and unpredictable sales cycles, our operating results could fluctuate significantly from quarter to quarter. We expect to continue to experience significant fluctuations in quarterly operating results due to a variety of factors, such as general and industry specific economic conditions which may affect the research and development expenditures of pharmaceutical and biotechnology companies.
A large portion of our expenses, including expenses for facilities, equipment and personnel, are relatively fixed. Accordingly, if revenues decline or do not grow as anticipated, we might not be able to correspondingly reduce our operating expenses. Failure to achieve anticipated levels of revenues could therefore significantly harm our operating results for a particular fiscal period.
Due to the possibility of fluctuations in our revenues and expenses, we believe that quarter-to-quarter comparisons of our operating results are not a good indication of our future performance.
WE DEPEND ON THIRD-PARTY PRODUCTS AND SERVICES AND SOLE OR LIMITED SOURCES OF SUPPLY TO MANUFACTURE SOME COMPONENTS OF OUR DIRECTED SORTING PRODUCTS.
We rely on outside vendors to manufacture components and subassemblies used in our Directed Sorting products. Some of these components and subassemblies are obtained from a single supplier or a limited group of suppliers. We depend on sole-source suppliers for the mesh component of our reactors, the radio frequency (RF) tags used in our commercial products and the two-dimensional bar code tags used in our NanoKan System. These materials are obtained from suppliers on standard commercial terms, and we do not have long-term supply agreements with any of these suppliers. Our reliance on outside vendors generally, and a sole or limited group of suppliers in particular, involves several risks, including:
- the inability to obtain an adequate supply of required components due to manufacturing capacity constraints, a discontinuance of a product by a third-party manufacturer or other supply constraints;
- reduced control over quality and pricing of components; and
- delays and long lead times in receiving materials from vendors.
WE HAVE NOT YET DELIVERED OUR NANOKAN SYSTEM; ALSO, WE FACE RESTRICTIONS ON OUR ABILITY TO SELL THIS PRODUCT TO ADDITIONAL CUSTOMERS.
We have not yet delivered our NanoKan System which we currently are developing for sale to Bristol-Myers Squibb and Aventis. We may not be able to successfully complete development of the NanoKan System and, after development, it may not meet our customers' expectations. Further,
under agreements with Bristol-Myers Squibb and Aventis, we are prohibited from delivering the NanoKan System to any additional customers until one year following the delivery of both systems to Bristol-Myers Squibb and Aventis. We expect to deliver both systems in 2000; however, delivery may be delayed beyond 2000 due to factors beyond our control, such as unexpected development problems or natural disasters. If delivery to Bristol-Myers Squibb or Aventis is delayed, we will not be able to deliver additional NanoKan Systems for a longer period of time and therefore, potential revenues for future sales may be delayed or lost.
OUR CUSTOMERS MAY RESTRICT OUR USE OF SCIENTIFIC INFORMATION, WHICH COULD PREVENT US FROM USING THIS INFORMATION FOR ADDITIONAL REVENUE.
We plan to generate and use information that is not proprietary to our customers and that we derive from performing drug discovery services for our customers. However, our customers may not allow us to use information such as the general interaction between types of chemistries and types of drug targets that we generate when performing drug discovery services for them. Our current contracts restrict our use of scientific information we generate for our customers, such as the biological activity of chemical compounds with respect to drug targets, and future contracts also may restrict our use of scientific information. To the extent that our use of information is restricted, we may not be able to collect and aggregate scientific data and take advantage of potential revenue opportunities.
OUR OPERATIONS COULD BE INTERRUPTED BY DAMAGE TO OUR FACILITIES.
Our results of operations are dependent upon the continued use of our highly specialized laboratories and equipment. Our operations are primarily concentrated in facilities in San Diego, California and near San Francisco, California and Basel, Switzerland. Natural disasters, such as earthquakes, could damage our laboratories or equipment and these events may materially interrupt our business. We maintain business interruption insurance to cover lost revenues caused by such occurrences. However, this insurance would not compensate us for the loss of opportunity and potential adverse impact on relations with existing customers created by an inability to meet our customers' needs in a timely manner.
RISKS RELATED TO OPERATING IN OUR INDUSTRY
THE CONCENTRATION OF THE PHARMACEUTICAL INDUSTRY AND THE CURRENT TREND TOWARD INCREASING CONSOLIDATION COULD HURT OUR BUSINESS PROSPECTS.
The market for our products and services is highly concentrated, with approximately 50 large pharmaceutical companies conducting drug discovery research. The continuation of the current trend toward consolidation of the pharmaceutical industry may reduce the number of our potential customers even further. Accordingly, we expect that a relatively small number of customers will account for a substantial portion of our revenues. Before our recent acquisitions of AAT, Discovery Technologies and Structural Proteomics, in 1999 our net revenue from our three largest customers represented approximately 22%, 20% and 7% of total net revenue, respectively.
Additional risks associated with a highly concentrated customer base include:
- fewer customers for our products and services;
- larger companies may develop in-house technology and expertise rather than using our products and services;
- larger customers may negotiate price discounts or other terms for our products and services that are unfavorable to us; and
- the market for our products and services may become saturated.
For example, because of the heavy concentration of the pharmaceutical industry and the high cost of our NanoKan System, we expect to sell only a small number of NanoKan Systems before we saturate the market for this product. When we are no longer able to sell additional NanoKan Systems, we will be dependent upon the sale of consumables for revenue from this product line. Similarly, there are signs that the market for our AutoSort System is becoming saturated.
THE DRUG DISCOVERY INDUSTRY IS COMPETITIVE AND SUBJECT TO TECHNOLOGICAL CHANGE, AND WE MAY NOT HAVE THE RESOURCES NECESSARY TO COMPETE SUCCESSFULLY.
We compete with companies in the United States and abroad that engage in the development and production of drug discovery products and services. These competitors include companies engaged in the following areas of drug discovery:
- Assay, development and screening, including Aurora Biosciences and Pharmacopeia;
- Combinatorial chemistry instruments, including Argonaut and Bohdan;
- Compound libraries and lead optimization, including Albany Molecular Research and Arqule; and
- Informatics, including MSI division of Pharmacopeia and Tripos.
Academic institutions, governmental agencies and other research organizations also conduct research in areas in which we provide services, either on their own or through collaborative efforts. Also, essentially all of our pharmaceutical company customers have internal departments which provide some of the products and services which we sell, so these customers may have limited needs for our products and services. Even after this offering, many of our competitors including Pharmacopeia will have access to greater financial, technical, research, marketing, sales, distribution, service and other resources than we do.
Moreover, the pharmaceutical and biotechnology industries are characterized by continuous technological innovation. We anticipate that we will face increased competition in the future as new companies enter the market and our competitors make advanced technologies available. Technological advances or entirely different approaches that we or one or more of our competitors develop may render our products, services and expertise obsolete or uneconomical. For example, advances in informatics and virtual screening may render some of our technologies, such as our large compound libraries, obsolete. Additionally, the existing approaches of our competitors or new approaches or technologies that our competitors develop may be more effective than those we develop. We may not be able to compete successfully with existing or future competitors.
OUR SUCCESS WILL DEPEND ON THE PROSPECTS OF THE PHARMACEUTICAL AND BIOTECHNOLOGY INDUSTRIES AND THE EXTENT TO WHICH THESE INDUSTRIES USE THIRD-PARTY ASSISTANCE WITH ONE OR MORE ASPECTS OF THEIR DRUG DISCOVERY PROCESS.
Our revenues depend to a large extent on research and development expenditures by the pharmaceutical, biotechnology and agricultural industries and companies in these industries outsourcing research and development projects. These expenditures are based on a wide variety of factors, including the resources available for purchasing research equipment, the spending priorities among various types of research and policies regarding expenditures during recessionary periods. General economic downturns in our customers' industries or any decrease in research and development expenditures could harm our operations. Any decrease in drug discovery spending by pharmaceutical and biotechnology companies could cause our revenues to decline and adversely impact our profitability.
OUR SUCCESS WILL DEPEND ON OUR ABILITY TO ATTRACT AND RETAIN KEY EXECUTIVES, AND EXPERIENCED SCIENTISTS AND SALES PERSONNEL.
Our future success will depend to a significant extent on our ability to attract, retain and motivate highly skilled scientists and sales personnel. In addition, our business would be significantly harmed if we lost the services of Riccardo Pigliucci, our chief executive officer, or David Coffen, our chief scientific officer. Our ability to maintain, expand or renew existing engagements with our customers, enter into new engagements and provide additional services to our existing customers depends, in large part, on our ability to hire and retain scientists with the skills necessary to keep pace with continuing changes in drug discovery technologies and sales personnel who are highly motivated. Additionally, it is difficult for us to find qualified sales personnel in light of the fact that our sales personnel generally hold Ph.D's. Our employees are "at will" which means that they may resign at any time, and we may dismiss them at any time. We believe that there is a shortage of, and significant competition for, scientists with the skills and experience in the sciences necessary to perform the services we offer. We compete with pharmaceutical companies, biotechnology companies, combinatorial chemistry companies, contract research companies and academic institutions for new personnel. In addition, our inability to hire additional qualified personnel may require an increase in the workload for both existing and new personnel. We may not be successful in attracting new scientists or sales personnel or in retaining or motivating our existing personnel.
THE INTELLECTUAL PROPERTY RIGHTS WE RELY ON TO PROTECT THE TECHNOLOGY UNDERLYING
OUR PRODUCTS AND TECHNIQUES MAY NOT BE ADEQUATE, WHICH COULD ENABLE THIRD
PARTIES TO USE OUR TECHNOLOGY OR VERY SIMILAR TECHNOLOGY AND COULD REDUCE
OUR ABILITY TO COMPETE IN THE MARKET.
Our success will depend on our ability to obtain, protect and enforce patents on our technology and to protect our trade secrets. We also depend, in part, on patent rights that third parties license to us. Any patents we own or license may not afford meaningful protection for our technology and products. Others may challenge our patents or the patents of our licensors and, as a result, these patents could be narrowed, invalidated or rendered unenforceable. In addition, current and future patent applications on which we depend may not result in the issuance of patents in the United States or foreign countries. Competitors may develop products similar to ours which are not covered by our patents. Further, since there is a substantial backlog of patent applications at the U.S. Patent and Trademark Office, the approval or rejection of our or our competitors' patent applications may take several years.
In addition to patent protection, we also rely on copyright protection, trade secrets, know-how, continuing technological innovation and licensing opportunities. In an effort to maintain the confidentiality and ownership of our trade secrets and proprietary information, we require our employees, consultants and advisors to execute confidentiality and proprietary information agreements. However, these agreements may not provide us with adequate protection against improper use or disclosure of confidential information and there may not be adequate remedies in the event of unauthorized use or disclosure. Furthermore, like many technology companies, we may from time to time hire scientific personnel formerly employed by other companies involved in one or more areas similar to the activities conducted by us. In some situations, our confidentiality and proprietary information agreements may conflict with, or be subject to, the rights of third parties with whom our employees, consultants or advisors have prior employment or consulting relationships. Although we require our employees and consultants to maintain the confidentiality of all confidential information of previous employers, their prior affiliations may subject us or these individuals to allegations of trade secret misappropriation or other similar claims. Finally, others may independently develop substantially equivalent proprietary information and techniques, or otherwise gain access to our trade secrets. Our failure to protect our proprietary information and techniques may inhibit or limit our ability to exclude certain competitors from the market.
THE DRUG DISCOVERY INDUSTRY HAS A HISTORY OF INTELLECTUAL PROPERTY LITIGATION AND WE MAY BE INVOLVED IN INTELLECTUAL PROPERTY LAWSUITS, WHICH MAY BE EXPENSIVE.
In order to protect or enforce our patent rights, we may have to initiate legal proceedings against third parties. In addition, others may sue us for infringing their intellectual property rights or we may find it necessary to initiate a lawsuit seeking a declaration from a court that we are not infringing the proprietary rights of others. The patent positions of pharmaceutical, biotechnology and drug discovery companies are generally uncertain. A number of pharmaceutical companies, biotechnology companies, independent researchers, universities and research institutions may have filed patent applications or may have been granted patents that cover technologies similar to the technologies owned by, or licensed to, us or our collaborators. For instance, a number of patents may have been issued or may be issued in the future that could cover certain aspects of our technology that could prevent us from using technology that we use or expect to use. In addition, we are unable to determine all of the patents or patent applications that may materially affect our ability to make, use or sell any potential products. Legal proceedings relating to intellectual property would be expensive, take significant time and divert management's attention from other business concerns, no matter whether we win or lose. The cost of such litigation could affect our profitability.
Further, an unfavorable judgment in an infringement lawsuit brought against us, in addition to any damages we might have to pay, could require us to stop the infringing activity or obtain a license. Any required license may not be available to us on acceptable terms, or at all. In addition, some licenses may be nonexclusive, and therefore, our competitors may have access to the same technology licensed to us. If we fail to obtain a required license or are unable to design around a patent, we may be unable to sell some of our products or services.
WE MAY BE SUBJECT TO LIABILITY REGARDING HAZARDOUS MATERIALS.
Our products and services as well as our research and development processes involve the controlled use of hazardous materials. For example, we sometimes use acids, bases, oxidants, and flammable materials. Acids include trifluoroacetic acid and hydrochloric acid, bases include sodium hydroxide and triethylamine, oxidants include peracids and potassium permanganate, and flammable solvents include methanol, hexane and tetrahydrofuran. We are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of such materials and certain waste products. We cannot completely eliminate the risk of accidental contamination or injury from these materials. In the event of such an accident, we could be held liable for any damages that result, and any such liability could exceed our resources and disrupt our business. In addition, we may have to incur significant costs to comply with environmental laws and regulations related to the handling or disposal of such materials or waste products in the future, which would require us to spend substantial amounts of money.
RISKS RELATED TO THIS OFFERING
OUR STOCK PRICE LIKELY WILL BE VOLATILE, AND YOUR INVESTMENT COULD DECLINE IN VALUE.
The trading price of our common stock likely will be volatile and could be subject to fluctuations in price in response to various factors, many of which are beyond our control, including:
- actual or anticipated variations in quarterly operating results;
- announcements of technological innovations by us or our competitors;
- new products or services introduced or announced by us or our competitors;
- changes in financial estimates by securities analysts;
- conditions or trends in the pharmaceutical and biotechnology industries;
- announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;
- additions or departures of key personnel;
- economic and political factors; and
- sales of our common stock.
Negotiations between us and representatives of the underwriters will determine the initial public offering price of our stock based upon a number of factors. This price may not be indicative of prices that will prevail in the trading market, and you may not be able to sell your shares at or above the initial offering price.
In addition, price and volume fluctuations in the stock market in general, and the Nasdaq National Market and the market for technology companies in particular, have often been unrelated or disproportionate to the operating performance of those companies. Further, the market prices of securities of life sciences companies have been particularly volatile. Conditions or trends in the pharmaceutical and biotechnology industries generally may cause further volatility in the trading price of our common stock, because the market may incorrectly perceive us as a pharmaceutical or biotechnology company. These broad market and industry factors may harm the market price of our common stock, regardless of our operating performance. In the past, plaintiffs have often instituted securities class action litigation following periods of volatility in the market price of a company's securities. A securities class action suit against us could result in potential liabilities, substantial costs and the diversion of management's attention and resources, regardless of whether we win or lose.
THERE MAY NOT BE AN ACTIVE, LIQUID TRADING MARKET FOR OUR COMMON STOCK.
There may not be an active trading market for our common stock following this offering. You may not be able to sell your shares quickly or at the market price if trading in our stock is not active.
OUR EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS OWN A LARGE
PERCENTAGE OF OUR VOTING STOCK AND COULD DELAY OR PREVENT A CHANGE IN OUR
CORPORATE CONTROL OR OTHER MATTERS REQUIRING STOCKHOLDER APPROVAL, EVEN IF
FAVORED BY OUR OTHER STOCKHOLDERS.
Immediately after this offering, our executive officers, directors and principal stockholders, and their respective affiliates, will beneficially own approximately 65.4% of our outstanding common stock. These stockholders, if acting together, would be able to control substantially all matters requiring approval by our stockholders, including the election of all directors and approval of significant corporate transactions. We have agreed to include, as director nominees, a number of nominees of Axys Pharmaceuticals, Inc. which is proportionate to Axys' percentage ownership of our shares. Immediately following this offering, Axys Pharmaceuticals, Inc. will have the right to nominate for election two of seven directors as more fully described on page 61. Axys Pharmaceuticals, Inc., which immediately after this offering will own approximately 33% of our common stock, has agreed to vote all of its stock in favor of management's annual slates of director nominees.
FUTURE SALES OF OUR COMMON STOCK MAY DEPRESS OUR STOCK PRICE.
The market price of our common stock could decline as a result of sales of substantial amounts of our common stock in the public market after the closing of this offering, or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through future offerings of common stock. There will be 22,437,204 shares of common stock
outstanding immediately after this offering, or 23,187,204 shares if the underwriters exercise their over-allotment option in full, based on the number of shares outstanding at May 5, 2000. All of the shares sold in the offering will be freely transferable without restriction or further registration under the Securities Act, except for any shares that our "affiliates," as defined in Rule 144 of the Securities Act, purchase. The remaining 17,437,204 shares of common stock outstanding will be "restricted securities" as defined in Rule 144, of which 8,465,000 shares will be available for sale, subject to Rule 144, immediately following the expiration of the 180 day lock-up period. These shares may be sold in the future without registration under the Securities Act to the extent permitted by Rule 144 or other exemptions under the Securities Act.
After this offering, we intend to register approximately 3,300,000 shares of common stock which our Board of Directors reserved for issuance upon exercise of options granted or reserved for grant under our stock option plans. Once we register these shares, they can be sold in the public market upon issuance, subject to restrictions under the securities laws applicable to resales by affiliates.
YOU WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION.
We expect the initial public offering price of our common stock to be substantially higher than the net tangible book value per share of our common stock. Therefore, if you purchase shares of our common stock in this offering, you will incur immediate and substantial dilution of approximately $11.60 in the pro forma net tangible book value per share of common stock from the price per share that you pay for the common stock (based upon an assumed initial public offering price of $16.00 per share). If the holders of outstanding options or warrants exercise those options or warrants at prices below the initial public offering price, you will incur further dilution.
BECAUSE IT IS UNLIKELY THAT WE WILL PAY DIVIDENDS, YOU WILL ONLY BE ABLE TO BENEFIT FROM HOLDING OUR STOCK IF THE STOCK PRICE APPRECIATES.
We have never paid cash dividends on our capital stock and do not anticipate paying any cash dividends in the foreseeable future.
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER AND BYLAWS COULD MAKE A THIRD-PARTY ACQUISITION OF US DIFFICULT.
Our certificate of incorporation and bylaws contain provisions that could make it more difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders. These provisions could limit the price that investors might be willing to pay in the future for shares of our common stock. See "Description of Securities -- Anti-takeover effects of provisions of the certificate of incorporation and bylaws."
STATEMENTS ABOUT THE FUTURE
This prospectus contains some statements which include words such as "anticipates," "expects," "intends," "plans," "believes," "seeks" and "estimates." These statements are not historical facts but rather are based on current expectations, estimates and projections about our industry, our beliefs and our assumptions. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed, implied or forecasted. These risks and uncertainties include, among others, those described in "Risk Factors" beginning on page 5 and elsewhere in this prospectus.
USE OF PROCEEDS
We estimate that the net proceeds from the sale of the shares of common stock we are offering will be approximately $73.2 million at an assumed initial public offering price of $16.00 per share after deducting the estimated underwriting discounts and commissions and estimated offering expenses. If the underwriters' over-allotment option is exercised in full, we estimate that the net proceeds will be approximately $84.4 million.
We currently intend to use the net proceeds to fund our operations, including continued development and manufacturing of existing products as well as research and development of additional products and services. We also may use a portion of the net proceeds to acquire new businesses or technologies, hire additional personnel and expand our facilities to be able to meet the growing needs of our business. Although we have no current plans, agreements or commitments with respect to any acquisition, we may, if the opportunity arises, use an unspecified portion of the net proceeds to acquire or invest in products, technologies or companies. We intend to use the balance of the net proceeds for general corporate purposes, including working capital. Our management may spend the proceeds from this offering in ways which the stockholders may not deem desirable.
The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the growth of our business.
Until we use the net proceeds of this offering for the above purposes, we intend to invest the funds in short-term, investment-grade, interest-bearing securities. We cannot predict whether the proceeds invested will yield a favorable return.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future. Our board of directors, at its discretion, will make any future determination relating to our dividend policy. The board of directors will consider a number of factors, including future earnings, capital requirements, financial conditions and future prospects, when evaluating the merits of paying any future cash dividends.
CAPITALIZATION
The following table sets forth our capitalization as of March 31, 2000:
- on an actual basis derived from the unaudited financial statements;
- on a pro forma basis to give effect to the issuance of 1,392,503 shares of Series E redeemable preferred stock in April 2000, the automatic conversion of 7,954,781 shares of our redeemable preferred stock outstanding as of the date this prospectus into an aggregate of 8,016,412 shares of common stock upon the closing of this offering, the issuance of common stock, warrant and stock options as consideration for the acquisition of AAT in April, 2000; and
- on a pro forma as adjusted basis to give effect to the receipt of the estimated net proceeds from the sale of 5,000,000 shares of common stock offered by this prospectus at an assumed initial public offering price of $16.00 per share.
MARCH 31, 2000
--------------------------------------------
PRO FORMA AS
ACTUAL PRO FORMA ADJUSTED
------------ ------------ ------------
Long-term obligations, less current portion...... $ 2,504,493 $ 2,504,493 $ 2,504,493
Redeemable convertible preferred stock:
Authorized shares -- 7,333,333 actual,
9,033,333 pro forma and none pro forma as
adjusted; Issued and outstanding shares --
6,562,278 actual, none pro forma and none
pro forma as adjusted....................... 27,906,717 -- --
Stockholders' equity
Preferred stock:
Authorized shares -- none actual, none pro
forma and 1,000,000 pro forma as adjusted;
Issued and outstanding shares -- none
actual, pro forma and pro forma as
adjusted.................................... -- -- --
Common stock:
Authorized shares -- 10,000,000 actual,
20,000,000 pro forma, and 100,000,000 pro
forma as adjusted; Issued and outstanding
shares -- 1,789,068 actual, 17,235,121 pro
forma and 22,235,121 pro forma as
adjusted.................................... 1,789 17,235 22,235
Additional paid-in capital....................... 4,016,372 102,817,163 176,012,163
Deferred stock compensation...................... (1,824,265) (1,824,265) (1,824,265)
Note receivable from shareholder................. (240,000) (240,000) (240,000)
Accumulated other comprehensive loss............. (152,069) (152,069) (152,069)
Accumulated deficit.............................. (21,362,810) (30,362,810) (30,362,810)
------------ ------------ ------------
Total stockholders' equity (deficit)........ (19,560,983) 70,255,254 143,455,254
------------ ------------ ------------
Total capitalization........................ $ 10,850,227 $ 72,759,747 $145,959,747
============ ============ ============
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The table above does not include:
- 1,893,870 shares of common stock issuable upon exercise of options outstanding at a weighted average price of $2.51 per share at May 5, 2000.
- 1,406,130 additional shares of common stock available for future grant under our 2000 Stock Incentive Plan to become effective at the close of this offering. To the extent that these options are exercised, there will be further dilution to new investors.
- Warrants exercisable into 905,294 shares of common stock with a weighted average exercise price of $3.60 per share, of which warrants to purchase 670,209 shares will expire if they are not exercised at the time of this offering.
- Of the total shares outstanding, 366,151 are subject to our right of repurchase as of May 5, 2000.
The above information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and the notes thereto included elsewhere in this prospectus.
DILUTION
Our historical net tangible book value as of March 31, 2000 was approximately $(26.7 million), or $(14.92) per share, based on the number of common shares outstanding as of March 31, 2000. Historical net tangible book value per share is equal to the amount of our total tangible assets less total liabilities, divided by the number of shares of common shares outstanding as of March 31, 2000.
Our pro forma net tangible book value as of March 31, 2000 was approximately $24.7 million, or $1.43 per share, based on the pro forma number of common shares outstanding as of March 31, 2000, calculated after giving effect to the automatic conversion of 6,562,278 shares of our preferred stock outstanding as of March 31, 2000 into 6,623,909 shares of our common stock, conversion of 1,392,503 shares of redeemable Series E preferred stock issued in April 2000 into 1,392,503 shares of common stock and the issuance of 7,429,641 shares of common stock, a $550,000 promissory note and $50,000 in cash as consideration for the acquisition of AAT.
Dilution in pro forma net tangible book value per share represents the difference between the amount per share paid by purchasers of shares of our common stock in this offering and the pro forma net tangible book value per share of our common stock immediately afterwards, after giving effect to the sale of 5,000,000 shares in this offering and after deducting underwriting commissions and estimated offering expenses. This represents an immediate increase in pro forma net tangible book value of $2.97 per share to existing stockholders and an immediate dilution in pro forma net tangible book value of $11.60 per share to new investors. The following table illustrates this per share dilution:
Assumed initial public offering price per share............. $ 16.00
Historical net tangible book value per share as of March
31, 2000............................................... $(14.92)
Increase attributable to conversion of preferred stock,
issuance of Series E Preferred Stock, and acquisition
of AAT................................................. 16.35
-------
Pro forma net tangible book value per share as of March
31, 2000............................................... 1.43
Increase attributable to the offering..................... 2.97
-------
Pro forma net tangible book value per share after the
offering.................................................. 4.40
-------
Dilution per share to new investors......................... $(11.60)
=======
|
The following table summarizes, on a pro forma as adjusted basis as of March 31, 2000, after also giving effect to this offering, the total number of shares of common stock purchased from us and the total consideration and the average price per share paid by existing stockholders and by new investors:
SHARES PURCHASED TOTAL CONSIDERATION
--------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ------------ ------- -------------
Existing stockholders........... 17,235,121 78% $ 96,268,747 55% $ 5.59
New investors................... 5,000,000 22 80,000,000 45 $16.00
---------- --- ------------ ---
Total......................... 22,235,121 100% $176,268,747 100%
========== === ============ ===
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The tables and calculations above assume no exercise of the outstanding or available options or warrants described below:
- 1,893,870 shares of common stock issuable upon the exercise of options outstanding at a weighted average exercise price of $2.51 per share at May 5, 2000;
- 905,294 shares of common stock issuable upon the exercise of warrants outstanding at a weighted average exercise price of $3.60 per share at May 5, 2000; and
- 1,406,130 additional shares available for future grant at May 5, 2000 under our 2000 Stock Incentive Plan to become effective upon the completion of this offering.
To the extent that these options or warrants are exercised, there will be further dilution to new investors. See "Management -- Employee Benefit Plans" for further information regarding our stock option plan and stock purchase plan.
If the underwriters exercise their over-allotment option in full, the following will occur:
- the percentage of shares of our common stock held by existing stockholders will decrease to approximately 75% of the total number of shares of our common stock outstanding after this offering;
- the number of shares of our common stock held by new public investors will increase to 5,750,000, or approximately 25% of the total number of shares of our common stock outstanding after this offering; and
- our pro forma net tangible book value after the offering will increase to $4.74 per share to existing stockholders and our pro forma net tangible book value after the offering will be diluted by $11.26 per share to new investors.
SELECTED CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The following selected consolidated financial data should be read in conjunction with the Discovery Partners International, Inc. ("DPI") and AAT financial statements and the related notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.
- The pro forma statement of operations data for the year ended December 31, 1999 and the three months ended March 31, 2000 should be read in conjunction with the unaudited pro forma financial statements included elsewhere in this prospectus. That data assumes that we purchased AAT (which we actually purchased on April 28, 2000) as of the beginning of each of these periods and is based on our historical operating results and those of AAT for the periods presented, giving effect to:
- amortization of intangibles related to the acquisition,
- decreased interest income representing foregone interest income,
- issuance of shares of common stock to complete the acquisition as if such issuance had occurred at the beginning of each of the periods presented, and
- conversion of all of our outstanding shares of preferred stock as of their original dates of issuance.
- Our statement of operations data for the years ended December 31, 1995, 1996, 1997, 1998 and 1999 and balance sheet data as of December 31, 1995, 1996, 1997, 1998 and 1999 are derived from our audited financial statements, of which the statement of operations data for the years ended December 31, 1997, 1998 and 1999 and balance sheet data as of December 31, 1998 and 1999 are included elsewhere in this prospectus.
- Our statement of operations data for the three months ended March 31, 1999 and 2000 and balance sheet data at March 31, 2000 are derived from our unaudited financial statements included elsewhere in this prospectus.
The unaudited financial statements have been prepared on substantially the same basis as the audited financial statements and include all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of the financial position and results of operations for the periods presented. Historical results are not necessarily indicative of the results that may be expected in the future, and the results of interim periods are not necessarily indicative of results that may be expected for the entire year.
SELECTED CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL DATA (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PERIOD FROM
MARCH 22,
1995 THREE MONTHS
(INCEPTION) TO YEARS ENDED DECEMBER 31, ENDED MARCH 31,
DECEMBER 31, ---------------------------------------------------- ----------------------------
1995 1996 1997 1998 1999 1999 1999 2000 2000
-------------- ------- ------- ------- ------- ----------- ------ ------- -------
PRO PRO
ACTUAL FORMA ACTUAL FORMA
------- ----------- ------- -------
(UNAUDITED) (UNAUDITED)
CONSOLIDATED STATEMENT OF
OPERATIONS DATA
Revenue:.................. $ -- $ 413 $ 3,150 $ 6,214 $13,076 $27,050 $2,896 $ 5,173 $10,513
Cost of revenue........... -- 159 1,312 2,786 8,235 11,957 1,763 3,053 4,245
------- ------- ------- ------- ------- ------- ------ ------- -------
Gross margin.............. -- 254 1,838 3,428 4,841 15,093 1,133 2,120 6,268
Operating expenses:
Research and
development............ 636 2,598 4,143 5,058 3,538 8,959 969 619 2,183
Selling, general and
administrative......... 590 1,637 2,528 4,984 4,439 6,418 1,093 1,519 2,169
Amortization of deferred
compensation........... -- -- -- -- 311 311 70 264 264
Amortization of
goodwill............... -- -- -- -- -- 3,596 -- 155 1,054
------- ------- ------- ------- ------- ------- ------ ------- -------
Total operating
expenses............. 1,226 4,235 6,671 10,042 8,288 19,284 2,132 2,557 5,670
------- ------- ------- ------- ------- ------- ------ ------- -------
Income (loss) from
operations............... (1,226) (3,981) (4,833) (6,614) (3,447) (4,191) (999) (437) 598
Interest income
(expense)................ (10) (45) 14 273 211 155 76 (1,322) (1,336)
Foreign currency gains
(losses)................. -- -- (3) 63 (134) (134) (50) 129 129
Provision for income
taxes.................... -- -- -- -- -- -- -- -- (453)
------- ------- ------- ------- ------- ------- ------ ------- -------
Net (loss)................ $(1,236) $(4,026) $(4,822) $(6,278) $(3,370) $(4,170) $ (973) $(1,630) $(1,062)
======= ======= ======= ======= ======= ======= ====== ======= =======
Net loss per share, basic
and diluted.............. $ (7.36) $(12.95) $ (8.85) $ (8.20) $ (3.00) $ (0.49) $(0.96) $ (1.23) $ (0.12)
======= ======= ======= ======= ======= ======= ====== ======= =======
Shares used in calculating
net loss per share, basic
and diluted.............. 168 311 545 765 1,125 8,555(2) 1,014 1,324 8,754(2)
Pro forma net loss per
share, basic and
diluted.................. $ (0.44) $ (0.28) $ (0.21) $ (0.07)
======= ======= ======= =======
Shares used in calculating
pro forma net loss per
share, basic and
diluted.................. 7,729(1) 15,158(2) 7,939(1) 15,368(2)
|
AS OF DECEMBER 31,
---------------------------------------------------- MARCH 31,
1995 1996 1997 1998 1999 2000
------- ------ -------- ------- -------- -----------
(UNAUDITED)
SELECTED CONSOLIDATED BALANCE SHEET DATA
Cash and cash equivalents................................... $ 34 $4,226 $ 281 $10,715 $ 2,885 $ 984
Working capital (deficit)................................... (460) 4,289 949 8,976 (3,663) (3,950)
Total assets................................................ 820 5,671 3,831 16,596 21,652 21,750
Long term obligations, less current portion................. 76 486 322 96 1,910 2,504
Redeemable preferred stock.................................. 1,474 9,953 11,890 27,907 27,907 27,907
Total stockholders' equity (deficit)........................ (1,237) (5,229) (10,035) (16,298) (19,269) (19,561)
|
(1) We calculated the pro forma net loss per share and shares used in computing pro forma net loss per share as if all of our convertible preferred stock was converted into shares of our common stock on the date of their issuance.
(2) We based net loss per share, basic and diluted, on DPI's weighted average common shares outstanding, after giving effect to the issuance of shares of DPI's common stock used to complete the acquisition as if such issuance had occurred at the beginning of the periods. Pro forma net loss per share, basic and diluted also includes the assumed conversion of all of DPI's outstanding shares of redeemable preferred stock as of their original dates of issuance.
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 the financial statements and the notes to those statements included elsewhere in this prospectus. This discussion may contain forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under "Risk Factors" and elsewhere in this prospectus, our actual results may differ materially from those anticipated in these forward-looking statements.
OVERVIEW
We sell a broad range of products and services to pharmaceutical and biotechnology companies to make the drug discovery process for our customers faster, less expensive and more effective at generating drug candidates. We focus on the portion of the drug discovery process after identification of a drug target through when a drug candidate is ready for clinical trials. We develop, produce and sell collections of chemical compounds that pharmaceutical companies test for their potential use as new drugs or for use as the chemical starting point for new drugs that may be developed from them. We also develop, manufacture and sell proprietary instruments and the associated line of consumable supplies that are used by the pharmaceutical industry in their own in-house drug discovery chemistry operations. Additionally, we provide testing services to the pharmaceutical industry in which chemical compounds are tested for their biological activity as potential drugs. We also provide computational software tools that guide the entire process of chemical compound design, development and testing. We recently acquired three businesses, AAT, Discovery Technologies and Structural Proteomics.
We recognize revenue of product sales as products are shipped. We recognize development and high throughput screening service contract revenues on a percentage of completion basis. Advances received under these contracts are recorded as deferred revenue and recognized as costs are incurred over the terms of the contracts. Revenue from chemistry service agreements is recognized on a monthly basis and is based upon the number of full-time equivalent (FTE) employees that actually worked on each agreement and the agreed-upon rate per FTE per month.
We currently sell our products and services directly to pharmaceutical and biotechnology companies through our sales, marketing, and service personnel located in the United States and Europe. In addition, we sell and service our products in Japan through a distributor.
You should note that the comparisons which follow compare actual results for the applicable periods and do not reflect any pro forma adjustments.
Amortization of stock-based compensation. We have recorded deferred stock compensation in connection with the grant of stock options to employees. As of March 31, 2000, there was approximately $1.8 million of deferred stock compensation to be amortized in future periods. We expect to record amortization of deferred compensation as follows: $664,000 during the remainder of 2000, $661,000 during 2001, $367,000 during 2002; and $108,000 during 2003.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
Revenue. Revenue increased to approximately $5.2 million for the first three months of 2000 from approximately $2.9 million for the first three months of 1999. Revenue increased primarily due to the inclusion of assay screening revenue from our Discovery Technologies group, which was acquired at the end of 1999, and an increase in compound library sales.
Cost of revenues. Cost of revenues increased to approximately $3.1 million for the first three months of 2000 from approximately $1.8 million for the first three months of 1999. Our cost of revenues increased by 73%, while our total revenue increased by 79% between the same periods. As a result, gross margin increased from approximately 39% to approximately 41%, primarily due to reduced material costs of our Directed Sorting products and the impact of higher margins from our assay screening revenue related to the December 1999 acquisition of our Discovery Technologies group.
Research and development expenses. Research and development expenses consist primarily of salaries and benefits, supplies and expensed development materials, and facilities costs and equipment depreciation. Research and development expenses decreased to approximately $619,000 for the first three months of 2000 from approximately $969,000 for the first three months of 1999, primarily due to a shift of development personnel to customer-funded product development programs from our internally-funded product development efforts. We anticipate our research and development expenses will increase over the next few years as we increase our new product development efforts.
Selling, general and administrative expenses. Selling, general and administrative expenses consist primarily of salaries and benefits for sales and marketing and administrative personnel, advertising and promotional expenses, professional services, and facilities costs. Selling, general and administrative expenses increased approximately 39% to $1.5 million for the first three months of 2000 from approximately $1.1 million for the first three months of 1999. The increase was due primarily to increased personnel and related costs necessary to support our growth in operations. We anticipate selling, general and administrative expenses will increase during the foreseeable future to support our business growth efforts.
Stock-based compensation. During the three months ended March 31, 2000, we granted stock options with exercise prices that were less than the estimated fair value of the underlying shares of common stock on the date of grant. As a result, we have recorded and will continue to record deferred stock-based compensation over the period that these options vest. The deferred stock-based compensation expense for the first three months of 2000 was approximately $263,000, compared to approximately $70,000 for the first three months of 1999.
Amortization of goodwill. We recognized approximately $155,000 in goodwill amortization expense for the first three months of 2000 in connection with the acquisition of Discovery Technologies. Since we completed the acquisition at the end of 1999, there was no corresponding goodwill amortization expense for the first three months of 1999. We expect goodwill amortization expense to increase going forward as a result of our acquisition of AAT in April 2000 and our acquisition of Structural Proteomics, Inc. during May 2000. All three acquisitions are being accounted for as purchases.
Interest income. We incurred net interest expense of approximately $1.3 million for the first three months of 2000, due primarily to the existence of $6.0 million of short-term promissory notes and the imputed value of warrants that were issued in connection with the notes. The total $6.0 million in principal plus accrued interest was converted into equity in April 2000, as part of our Series E Preferred Stock financing round. We earned approximately $76,000 in net interest income for the first three months of 1999. We anticipate net interest income will increase significantly following the completion of this stock offering.
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
Revenue. Total revenue increased to approximately $13.1 million in 1999 from approximately $6.2 million in 1998 and $3.1 million in 1997. The revenue increase from 1997 to 1998 was primarily a result of increased sales of our Directed Sorting product line. The revenue increase from 1998 to
1999 was primarily due to increased sales of our Directed Sorting product line and the commencement of the proprietary NanoKan product development contracts with Bristol-Myers Squibb and Aventis.
Cost of revenues. Cost of revenues increased to approximately $8.2 million in 1999 from approximately $2.8 million in 1998 and $1.3 million in 1997. Cost of revenues was approximately 63% of revenues in 1999, compared to approximately 45% in 1998 and 42% in 1997. The higher cost of revenues as a percentage of revenue in 1999 was due primarily to the impact of the NanoKan development program which has a nominal gross margin.
Research and development expenses. Research and development expenses decreased to approximately $3.5 million in 1999 from approximately $5.1 million in 1998 and $4.1 million in 1997. Beginning in mid-1998, certain research and development personnel and related costs were transferred from our internally-funded development of the Directed Sorting product line to the NanoKan development program, which is being funded by our customers, Bristol-Myers Squibb and Aventis. These expenses were accordingly reported as cost of revenues.
Selling, general and administrative expenses. Selling, general and administrative expenses totaled approximately $4.4 million in 1999, compared to approximately $5.0 million in 1998 and $2.5 million in 1997. The decrease in total selling, general and administrative expenses in 1999 was primarily due to severance payments, recruitment, and relocation expenses incurred in 1998, which were not repeated in 1999. The increase in selling, general and administrative expenses from 1997 to 1998 was due primarily to the increased sales and marketing staffing levels and the expanded management team and infrastructure consistent with the revenue growth we experienced. As noted, these initiatives in 1998 included non-recurring expenses for severance payments, recruitment and relocation.
Amortization of deferred compensation. During the year ended December 31, 1999, we granted stock options with exercise prices that were less than the estimated fair value of the underlying shares of common stock on the date of grant. As a result, we have recorded and will continue to record deferred stock-based compensation over the period that these options vest. The deferred stock-based compensation expense for 1999 was approximately $311,000.
Interest income. We had net interest income of approximately $211,000 in 1999, compared to approximately $273,000 in 1998 and $14,000 in 1997. The increase in interest income from 1997 to 1998 was primarily due to higher cash levels resulting from approximately $16.0 million in cash proceeds from the sale of Series D Preferred Stock in June 1998.
LIQUIDITY AND CAPITAL RESOURCES
We have funded our operations principally with $39.0 million of private equity financings and $3.5 million in short-term and long-term debt and equipment financing arrangements. Equity investments came from a series of five preferred stock offerings over the period October 1995 through April 2000.
At March 31, 2000, cash and cash equivalents totaled $984,000 compared to $2.9 million, $10.7 million and $281,000 at December 31, 1999, 1998 and 1997, respectively.
Net cash used in operating activities for the three months ended March 31, 2000 was approximately $3.0 million compared with $3.2 million for the same period in 1999. A net loss of $1.6 million for the first three months of 2000 was offset by non-cash charges of $1.2 million for non-cash interest expense for warrants issued, $263,000 for amortization of deferred compensation and $608,000 for depreciation and amortization expenses. Accounts payable was reduced during the three months ended March 31, 2000 by $2.0 million, primarily due to the payment of $1.7 million in contingent purchase price consideration to the former shareholders of Discovery Technologies Ltd.
Approximately $1.2 million of cash and cash equivalents was used in investing activities during the period for leasehold improvements and the acquisition of capital equipment. Approximately $2.4 million of cash and cash equivalents was provided by financing activities during the period, primarily from a $2.0 million promissory note (which was converted into equity in April 2000).
Net cash used in operating activities was approximately $5.7 million, for the year ended December 31, 1999. Our net loss of $3.4 million, offset by non-cash charges of $670,000, accounted for most of this use, and cash and cash equivalents of $1.0 million were placed in a restricted account in 1999 as collateral against a standby letter of credit. Deferred revenues were reduced by $775,000 in 1999, primarily as a result of the recognition of revenue on the NanoKan development contracts. Increases in accounts receivable and inventory, along with a decrease in accounts payable, used an additional $1.3 million in cash and cash equivalents in 1999.
Approximately $5.0 million in cash was used in 1999 for the acquisition of Discovery Technologies.
In 1999, $4.0 million in promissory notes, less the repayment of $205,000 in equipment financing, provided approximately $3.8 million in net cash from financing activities. We received an additional $2.0 million in cash in March 2000 from the issuance of another promissory note.
In December 1999, our Discovery Technologies group entered into a line of credit with Basel Kantonal Bank for working capital advances, or borrowings up to approximately $1.3 million. Borrowings accrue interest at 4.75% per annum plus 0.25% per quarter. As of March 31, 2000, we had an outstanding loan balance of $763,000. Our Discovery Technologies group also entered into a loan agreement for $1.6 million from Novartis Venture Fund. The loan accrues interest at the rate of 5% per annum and is payable in full by June 2001.
In April 2000, we issued 1,392,503 shares of Series E redeemable convertible preferred stock at $8.00 per share in exchange for the conversion of the $6.0 million in outstanding promissory notes and $5.0 million in additional cash.
In April 2000, we acquired AAT, a wholly-owned subsidiary of Axys Pharmaceuticals, Inc. in exchange for 7,429,641 shares of our common stock, a promissory note in the principal amount of $550,344 and $50,031 in cash.
In May 2000 we acquired 75% of the outstanding shares of Structural Proteomics for total consideration of $1.0 million in cash and 150,000 shares of our common stock. We paid the 150,000 shares of our common stock directly to two shareholders of Structural Proteomics, while we invested the $1.0 million in Structural Proteomics as consideration for newly issued shares.
We anticipate investing up to $7.0 million through December 31, 2001 for leasehold improvements and capital equipment necessary to support future revenue growth. Our actual future capital requirements will depend on a number of factors, including our success in increasing sales of both existing and new products and services, expenses associated with unforeseen litigation, regulatory changes and competition and technological developments, and potential future merger and acquisition activity. We believe our existing cash and cash equivalents, together with the net proceeds of this offering and any cash generated from operations, will be sufficient to fund our operating expenses, debt obligations and capital requirements through at least December 31, 2001.
At December 31, 1999, we had federal and California income tax net operating loss carryforwards of approximately $14.6 million and $10.9 million, respectively. The difference between the federal and California tax operating loss carryforwards is primarily attributable to the capitalization of research and development expenses for California income tax purposes. The federal and California tax net operating loss carryforwards will begin to expire in 2010 and 2003, respectively, unless previously used. We also have federal and California research tax credit carryforwards of approximately $680,000 and $393,000, respectively, which will begin to expire in
2010 unless previously used. We have provided a 100% valuation allowance against the related deferred tax assets as realization of such tax benefits is not assured.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Short-term investments. Our interest income is sensitive to changes in the general level of U.S. interest rates, particularly since a significant portion our investments are and will be in short-term marketable securities. Due to the nature and maturity of our short-term investments, we have concluded that there is no material market risk exposure.
Foreign currency rate fluctuations. The functional currency for the European operations of our IRORI group is the U.S. dollar, and the functional currency for our Discovery Technologies group is the Swiss franc. Our subsidiary accounts are translated from their local currency to the U.S. dollar using the current exchange rate in effect at the balance sheet date, for balance sheet accounts, and using the average exchange rate during the period for revenues and expense accounts. The effects of translation for the European operations of our IRORI group are recorded as foreign currency gains (losses) in the consolidated statement of operations. The effects of translation for our Discovery Technologies group are recorded as a separate component of stockholders' equity. Our European subsidiaries conduct their business with customers in local currencies. Exchange gains and losses arising from these transactions are recorded using the actual exchange differences on the date of the transaction. We have not taken any action to reduce our exposure to changes in foreign currency exchange rates, such as options or futures contracts, with respect to transactions with our European subsidiaries or transactions with our worldwide customers. The net tangible assets of our two European subsidiaries combined were $6.1 million at March 31, 2000. A 1% decrease in the value of the British pound and Swiss franc relative to the U.S. dollar would result in a foreign translation loss of $61,000.
Inflation. We do not believe that inflation has had a material impact on our business or operating results during the periods presented.
RECENT ACCOUNTING PRONOUNCEMENTS
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, will be effective January 1, 2001. This statement establishes accounting and reporting standards requiring that every derivative instrument, including certain derivative instruments imbedded in other contracts, be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement also requires that changes in the derivative's fair value be recognized in earnings unless specific hedge accounting criteria are met. We believe the adoption of SFAS No. 133 will not have an effect on the financial statements because we do not engage in derivative or hedging activities.
In December 1999, the Securities and Exchange Commission released Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, (SAB 101) which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. The Company's revenue recognition policy complies with SAB 101.
BUSINESS
OVERVIEW
Discovery Partners International was founded in 1995 as IRORI, a company that develops and sells instruments and associated consumables to pharmaceutical companies for the generation of large numbers of chemical compounds for drug discovery. In October 1998, we changed our name to Discovery Partners International with the objective to create and commercialize a complete, integrated and highly efficient collection of drug discovery technologies focused from after identification of a drug target through when a drug candidate is ready for clinical trials. Toward this end, in January 1999, we formed a medicinal chemistry department that offers compound libraries and compound optimization services. We were then able to offer both the compound libraries as well as the instrumentation to generate compound libraries. In December 1999, we acquired Discovery Technologies, Ltd. to provide assay development and ultra-high throughput screening services. This addition enabled us to offer the compounds to be screened together with the screening services. In April 2000, we acquired Axys Advanced Technologies to offer large compound libraries, which will operate with ChemRx under the name ChemRx Advanced Technologies. In May 2000, we acquired Structural Proteomics to provide computational software and services. We believe that we currently offer a broad range of integrated drug discovery products and services from a single provider.
INDUSTRY BACKGROUND
THE GENOMICS REVOLUTION
The drug discovery process is undergoing fundamental changes as a result of advances in genomics and proteomics. Genomics and proteomics, the studies of genes and the proteins they encode, have been the subject of intense scientific and commercial focus. Genomics has led to the identification of large numbers of genes encoding potential drug targets, increasing the demand for drug discovery products and services. Drug targets are biological molecules, such as enzymes, receptors, other proteins and nucleic acids, that may play a role in the onset or progression of a disease. Once a company has identified a potential drug target, it must still devote significant time and resources to validating the target and screening libraries of compounds against the target to discover potential drug candidates, which must be optimized further before commencement of human testing. Historically, pharmaceutical and biotechnology companies have used only approximately 500 identified drug targets in the development of drugs. Industry experts predict that the application of genomics and proteomics will lead to the identification of thousands of new drug targets.
THE DRUG DISCOVERY PROCESS
Despite numerous advances and breakthrough technologies in genomics and proteomics, the process of discovering drug candidates from drug targets, as illustrated in the following figure and described below, remains slow, expensive and often unsuccessful.
[DRUG DISCOVERY FLOW DIAGRAM]
DRUG TARGETS. The genomics revolution has identified large numbers of human genes that encode the chemical information for cells to produce the proteins that determine human physiology and disease. Drug discovery organizations are rushing to advance these new drug targets into discovery with varying degrees of target validation, or understanding of their role in disease processes, or understanding of their susceptibility to modulation by chemical compounds. By "modulation" we mean selectively increasing or decreasing the biological activity of a particular drug target.
ASSAYS. Once a researcher has identified a drug target and has validated it as having a role in a disease process, a corresponding set of biological assays, or tests, that relate to the activity of the drug target in the disease process must be developed. These assays are designed to show the effect of chemical compounds on the drug target and/or the disease process. Additionally, assays indicate the relative potency and specificity of interaction between the target and the compounds. The more potent and specific the interaction between the target and the compound, the more likely the compound is to become a drug.
COMPOUND LIBRARIES. Typically, medicinal chemists conduct assays in which they screen libraries consisting of thousands of compounds each to find those compounds that are active in altering the behavior of the drug targets. Traditionally, medicinal chemists generated these compounds for testing by synthesizing them one at a time, or painstakingly isolating them from natural sources. During the last several years, the pharmaceutical industry has developed modular, building block techniques, known as combinatorial chemistry, to more efficiently and productively generate these compounds.
SCREENING. Screening is the process of testing compounds in assays to determine their potential therapeutic value. A typical screening campaign at a pharmaceutical company will entail screening hundreds of thousands of compounds from multiple compound libraries. Today's automated high throughput screening (HTS) systems can test tens of thousands of compounds per day and require only a very small amount of the compound and target material.
HITS-TO-OPTIMIZED-LEADS. A successful screening process will identify a number of compounds, or hits, that show activity against the drug target. One or more of the hits are then selected for optimization based on their potency and specificity against the drug target. The hits selected for the optimization process are generally referred to as "leads."
Optimizing a lead involves repeatedly producing slight variants of the lead and screening them in assays to discover the relationship between the changes in the molecular structure of compounds and the positive or negative effect on biological activity in the assay. These trends are called "structure-activity relationships" (SARs) and are used to produce the compounds that have the optimal effect on the biological activity in the assay. Traditionally, generating structure-activity relationships (SARs) was painstakingly slow. Within the last several years, some pharmaceutical companies have harnessed the modular building block approach called combinatorial chemistry to speed this process. Their medicinal chemists create combinatorially generated "focused libraries" that are made up of dozens to hundreds of compounds, computationally designed to explore the structure-activity relationships (SARs) of leads.
ADME AND TOXICOLOGY. Once a very potent and selective compound with a well understood structure-activity relationship (SAR) is selected for further development, researchers undertake the process of establishing its absorption, distribution, metabolism and excretion, or ADME, and toxicology characteristics. Leads are studied in biochemical assays and animal studies to determine, among other things, whether they are likely to be safe in humans and whether they are likely to stay in the body long enough to perform their intended function. Traditionally, these ADME and toxicology studies are performed at the end of the drug discovery process. There is a significant push in the industry, however, to attempt to provide ADME and toxicology information earlier in the process in order to avoid large expenditures on compounds that will ultimately fail due to their ADME and toxicology characteristics.
DRUG CANDIDATES. If the results of the ADME and toxicology studies performed on a lead are favorable, an investigational new drug application, or IND, may be filed with the Food and Drug Administration requesting permission to begin clinical trials of the drug candidate in humans.
LIMITATIONS OF THE CURRENT INDUSTRY
To meet growth expectations, pharmaceutical companies are under intense pressure to introduce new drugs, and they have increased research and development expenses more than five-fold since 1985. Nevertheless, the number of new drugs approved by the Food and Drug Administration per year has increased only modestly over that period, increasing from 22 in 1985 to 35 in 1999 and ranging from 20 to 53 new drugs in any one year during that period. Despite major scientific and technological advances in areas such as genomics, high throughput screening (HTS) and combinatorial chemistry, the drug discovery process remains lengthy, expensive and often unsuccessful.
We believe that the following remain significant limitations to the current process of drug discovery.
INSUFFICIENT VALIDATION OF TARGETS. Drug discovery organizations are advancing potential new drug targets into discovery with varying degrees of understanding of their role in disease processes and frequently with little understanding of their susceptibility to modulation by compounds. The resources spent on pursuing these potential drug targets could be saved if there were better biological or chemical methods to de-select drug targets exhibiting these characteristics.
INEFFICIENT PRODUCTION OF COMPOUND LIBRARIES. The dramatic increase in the number of potential drug targets has increased the demand for high quality compounds for screening. Traditional methods and instrumentation produce either discrete compounds in small numbers, or produce large numbers of compounds that are not discrete, but are present as mixtures whose
components must be identified later using time-consuming tagging and screening techniques. Further, the processes used to develop compound libraries have been labor intensive and have lacked the efficiencies created by automated instrumentation.
LOW QUALITY COMPOUND LIBRARIES. While combinatorial chemistry has vastly increased the number of compounds available for screening, many of the compounds generated have lacked the qualities necessary to become new drug candidates. Inadequately validated chemistries generate hit compounds that are difficult or impossible to reproduce. In addition, some companies often design libraries without paying adequate attention to diversity of chemical properties contained in the libraries. These oversights result in libraries that have large numbers of redundant, or unproductively similar, compounds. Further, little attention is devoted to the drug-like nature of the compounds leading to hits that are toxic or have other fundamental flaws. Finally, many libraries contain impure compounds that lead to false positives or the inability to reproduce results.
INSUFFICIENT RESOURCES FOR ASSAY DEVELOPMENT, SCREENING AND LEAD OPTIMIZATION. Many pharmaceutical companies have attempted to reduce costs and focus internal efforts on critical and proprietary areas by outsourcing portions of their research and development functions. Many biotechnology and small pharmaceutical companies have biological and genomic expertise but lack the internal capabilities to advance through the drug discovery process. Simultaneously with the increase in outsourcing, the number of drug targets available to drug discovery overall is dramatically increasing.
INADEQUATE INFORMATICS AND COMPUTATIONAL TOOLS. Success of many drug discovery programs is predicated on screening large numbers of compounds, followed by the synthesis and testing of compounds for optimization and for their ADME and toxicology characteristics. This sequential approach is time-consuming and costly. Many of the recent advances in drug discovery have been targeted at streamlining this process and have allowed large numbers of compounds to be generated and tested in higher throughput. However, these advances have been incremental. Pharmaceutical companies can save large expenditures of time and money by increased and earlier input of knowledge about which targets are likely to be receptive to chemical modulation, the likely interaction of chemicals and biological targets and which compounds are likely to have unacceptable ADME and toxicological characteristics prior to testing.
LACK OF AN INTEGRATED, NEUTRAL DRUG DISCOVERY SOLUTION. Many of the companies that provide drug discovery services to the pharmaceutical and biotechnology industries provide limited services. Thus they are unable to provide the knowledge and efficiencies that can be gained by broad experience in multiple facets of drug discovery. Further, customers must use valuable resources to manage multiple vendors and integrate inconsistent or incompatible products. Drug discovery service providers may also demand royalties in return for their services or compete with their customers by conducting internal, proprietary drug discovery activities.
OUR SOLUTION
We bring together a unique combination of drug discovery expertise, technology and services to meet the needs of the pharmaceutical and biotechnology industries. Our customers include most major pharmaceutical companies and numerous biotechnology companies. We believe the broad range of products and services we offer or intend to offer will provide the following benefits:
TARGET VALIDATION. In combination with the Genomics Institute of the Novartis Research Foundation, we are developing methods of validating drug targets that we believe will enable us to identify targets that are important in a disease process and can be modulated by chemical means. We have developed large libraries of highly diverse compounds that are specifically designed to modulate many drug targets. We believe that we will be able to use these libraries to provide early information about whether a drug target is susceptible to chemical modulation and, if so, whether
modulation of its activity has an important effect on the disease process or outcome. If these libraries are successful in providing this information early in the drug discovery process, our customers can save large amounts of money and time.
EFFICIENT PRODUCTION OF COMPOUND LIBRARIES THROUGH OUR DIRECTED SORTING PRODUCTS. Our proprietary combinatorial system, referred to as Directed Sorting, combines the advantages of parallel synthesis, i.e., discrete compounds with large amounts of each compound, and split-and-pool synthesis, i.e., very high productivity, in generating compound libraries. In parallel synthesis, chemists perform multiple chemical reactions simultaneously, or "in parallel". In split-and-pool synthesis, chemists take the product of one set of reactions and repeatedly split them for subsequent sets of reactions. Our proprietary reactors synthesize compounds with high efficiency and speed but keep the compounds discrete in individually tagged reactors, thus avoiding the complexity of mixtures of large numbers of compounds. Our Directed Sorting products have gained widespread acceptance throughout the pharmaceutical industry. We believe that in 1999 more than one million compounds were synthesized by our customers using these products.
HIGH QUALITY COMPOUND LIBRARIES. We invest significant resources developing our compound libraries to save our customers significant time and resources later in the drug discovery process. Our chemistries are repeatable and our compounds rapidly replenishable because we produce detailed synthesis protocols, or recipe books, for each library. We are able to rapidly create focused libraries containing slight variations of hits from our original discovery or targeted libraries to study structure-activity relationships (SARs). We designed our discovery libraries for maximum diversity using proprietary computer algorithms. Over 100 medicinal chemists, both internal and external, review each of our libraries for drug-like properties. Finally, after synthesis, we use multiple analytical methods to ensure a high degree of compound purity. As a consequence, our libraries contain highly diverse, drug-like compounds of high purity.
BROAD RANGE OF PRODUCTS AND SERVICES FOR ASSAY DEVELOPMENT, CHEMISTRY AND SCREENING. We currently offer a broad range of drug discovery products and services targeted at areas of significantly expanded demand from pharmaceutical and biotechnology companies -- assay development, chemistry and screening. We have performed over 60 different assays for our customers. We also provide access to more than one million discrete compounds, of which over 600,000 come from many of the world's leading compound suppliers and over 450,000 are internally generated. We are expanding our libraries at a rate of approximately 250,000 compounds per year. Our high throughput screening system, HTS-Factory, is capable of screening more than 100,000 compounds per day for most biochemical assays. In addition, our team of more than 65 chemists and biologists has worked on numerous hit and lead optimization projects for our customers.
DEVELOPMENT OF AN INFORMATICS AND COMPUTATIONAL TOOLS KNOWLEDGE BASE. We are developing state-of-the-art computational software tools to generate predictive information in the early stages of drug discovery. We design our tools to correlate information on families of drug targets and compounds with screening data to predict which drug targets are likely to be receptive to chemical modulation and be the right point of chemical intervention in a disease, and which chemical structures are likely to react favorably with large families of drug targets or produce unacceptable ADME or toxicological results. Initially, we have developed computer algorithms that allow us to design libraries of compounds with maximum diversity, thereby reducing the number of compounds that must be screened. We believe that our computational tools will have the potential to fundamentally alter the drug discovery process, reducing the time and cost involved.
INTEGRATED DRUG DISCOVERY PRODUCTS AND SERVICES ON ATTRACTIVE TERMS. We offer a broad range of integrated drug discovery products and services on terms and conditions that we believe make our products and services easy to purchase. We believe that our integrated approach provides unique value to our customers. For example, we believe that it is highly important to our screening customers that we provide both assay development services and access to compounds for screening.
Generally, we do not request royalties from our customers and do not compete with them. We believe that our fee-for-service terms and focus on our customers' needs rather than our own drug development efforts makes our product and service offerings more attractive to our customers.
OUR STRATEGY
Our objective is to create and commercialize a complete, integrated and highly efficient drug discovery platform optimized to overcome many of the limitations associated with the slow and expensive traditional drug discovery process. To implement our objective, we intend to:
OFFER AN INTEGRATED AND COMPLETE DRUG DISCOVERY SOLUTION FROM DRUG TARGET TO DRUG CANDIDATE. We intend to offer our customers a complete suite of drug discovery technologies, products and services that address speed and cost considerations in the drug discovery process. We currently offer large ready-made proprietary libraries of well-defined, drug-like compounds and sell Directed Sorting instrument systems to help our customers rapidly build compound libraries, both of which we believe speed the generation of hits and leads. We have expertise in developing assays and offer high throughput screening (HTS) services. We offer medicinal chemistry lead optimization services and use our proprietary informatics to support all steps of the drug discovery process. We expect to complete the creation of our drug discovery platform by adding products and services at the early stages of drug discovery in drug target validation and at the later stages, including expanding into ADME and toxicology services.
BROADEN AND DEEPEN OUR TECHNOLOGY THROUGH INTERNAL INVENTION AND ACQUISITION. We have assembled our current suite of advanced technologies, products and services through both internal invention and acquisition. We developed our lead optimization capabilities and our Directed Sorting instrument systems and consumables internally. We gained our assay development and screening capabilities, our ability to generate and sell large discovery libraries of compounds and our informatics technology and products through acquisition. We intend to continue to invest in internal research and development and aggressively acquire and integrate cutting edge products and services in order to stay at the forefront of drug discovery technology.
TARGET THE PHARMACEUTICAL AND BIOTECHNOLOGY INDUSTRIES. We will focus on providing drug discovery products and services to the pharmaceutical and biotechnology markets. In a 2000 report, Pharmaceutical Research and Manufacturers of America estimates that the pharmaceutical industry alone will spend more than $25 billion on research and development in 2000, of which more than 30% will be spent on compound synthesis and extraction of compounds from natural products, screening, and pharmacological and pre-clinical ADME and toxicology. Before our recent acquisitions of AAT, Discovery Technologies and Structural Proteomics, the pharmaceutical and biotechnology industries provided 96% of our revenues in 1999, and we expect a large portion of our revenues to come from those industries for the foreseeable future. We currently have 16 business development and marketing personnel targeting pharmaceutical and biotechnology customers worldwide. Due to the similar nature of pharmaceutical development and agrochemical development, we also sell our products and services to the agrochemical industry and expect to do so in the future. Further, we do not intend to compete with our customers by conducting drug discovery for our own account.
EXPAND CUSTOMER RELATIONSHIPS THROUGH INTEGRATION OF PRODUCTS AND SERVICES. We will use existing relationships with customers in individual areas of our business to sell products and services in multiple areas of drug discovery. We believe that our customers can best take advantage of the time and cost efficiencies of our products and services in integrated combinations. For example, we believe that our lead optimization group will be in the best position to optimize hits generated using our compound libraries because our group will best understand the underlying synthesis chemistry.
GENERATE MULTIPLE REVENUE STREAMS. We sell a variety of products and services and have more than 100 customers. Our multiple revenue streams reduce the potential negative consequences to us if any one of our product or service areas ceases to be productive. We expect to continue to sell to our customers primarily for current revenue but when appropriate, we also may accept milestone payments or royalties based on the success of the ultimate pharmaceutical product. We believe that the success of our business is not dependent upon the realization of milestone or royalty payments.
EXPAND OUR KNOWLEDGE BASE. Because of the large number and diversity of our customers, we generate and are exposed to large amounts of highly useful information about the drug discovery process and about the general interaction between types of chemistries and types of drug targets. Much of this information is not specific to or proprietary to our customers and increases our understanding of the interaction of the drug targets we work on and the chemistries we apply to them as well as of the drug discovery process itself. We believe this information will enable our customers and us to conduct drug discovery work faster, less expensively and with a greater likelihood of success. Our ultimate goal is to use this information to streamline the drug discovery process and to create new revenue opportunities for us.
PRODUCTS AND SERVICES
We sell products and services designed to make the drug discovery process faster, less expensive and more likely to generate a drug candidate. The products and services provided by our four principal product groups, ChemRx Advanced Technologies (which includes the former AAT), Discovery Technologies, IRORI and Structural Proteomics can be purchased individually or as integrated solutions, depending on our customers' requirements. As described below, we currently offer products and services in many functional disciplines of the drug discovery process. We intend to continue to add to our functional offerings in order to provide a comprehensive and integrated suite of drug discovery services to our pharmaceutical and biotechnology customers.
ASSAYS
Our Discovery Technologies group provides assay development services for pharmaceutical, biotechnology and agrochemical discovery. Our team of scientists is particularly experienced in working with major disease target types such as protein kinases, G-protein-coupled receptors, cellular assays, specific assays in the cancer field and crop protection assays. We are highly experienced with all commonly used detection technologies including photometric, fluorometric, luminometric, homogeneous time resolved fluorescence, fluorescence polarization and isotopic with flash plate or filtration readouts. Biological systems about which we have particular expertise include enzymes, receptor-ligand interaction, protein-protein interaction, reporter-gene assay in pro- and eukaryotic cells, cellular proliferation, differentiation and physiologic response, and microbial growth. We have performed approximately 60 assay development and screening projects for approximately 15 customers including Japan Tobacco, Novartis Crop Protection and BioChem Pharma.
COMPOUND LIBRARIES
COMBINATORIAL CHEMISTRY INSTRUMENTS -- DIRECTED SORTING TECHNOLOGY. Through our IRORI line of products and services, we develop and manufacture proprietary instruments and consumables for compound library synthesis to pharmaceutical and biotechnology organizations. Our instruments are based on a patented core technology referred to as Directed Sorting, which enables our customers to generate large collections of compounds.
- Directed Sorting -- Our Directed Sorting technology produces discrete compounds in large amounts, synthesized with very high productivity. The pharmaceutical industry has widely
adopted our Directed Sorting technology, and we estimate that in 1999 over one million compounds were synthesized by our customers using this technique. Directed Sorting combines the key advantages, while avoiding the drawbacks, of the two traditional synthesis techniques -- parallel synthesis and split-and-pool synthesis.
- Parallel synthesis -- Parallel synthesis yields discrete compounds and large amounts of each compound. Virtually all chemists in the industry find this result favorable. However, chemists must perform a large number of reactions to generate large libraries. Automating parallel synthesis helps to eliminate the tedium of the process, but does little to address the limited number of compounds that can be synthesized per unit time and per reaction.
- Split-and-pool synthesis -- The split-and-pool technique is significantly more productive than parallel synthesis but produces compounds in mixtures whose components must be identified using various tagging and screening techniques. Therefore, this technique has found limited commercial applicability.
In the Directed Sorting process, we synthesize each unique compound in a library in a separate micro-reactor that contains a unique, electronically readable tagging device. A micro-reactor is a semi-porous container that allows the chemical reagents and solvents used in the synthesis process to pass in and out of it without allowing the compound being synthesized inside to escape. In this way, we can process tens, hundreds or even thousands of micro-reactors simultaneously through a synthesis step in the same reaction vessel, which can be a large flask or beaker. At the end of each chemical synthesis step, a computer that reads the electronic tags directs the sorting of the micro- reactors for the next synthesis step. The sharing of reaction vessels by many micro-reactors provides huge productivity gains. For example, using only 30 reactions, Directed Sorting can complete a 1,000 compound library that results from a three-step synthesis procedure using ten reagents in each step. Using parallel synthesis, this same library would require between 1,110 and 3,000 reactions to complete.
Our current products based on the Directed Sorting technology include an automated chemistry system (the AutoSort System) and a manual chemistry system. We are also developing an ultra-high throughput chemistry system that can generate up to one million discrete compounds per year (the NanoKan System). All of these systems include hardware and software platforms and use disposable microreactors that provide ongoing revenues for every compound that is synthesized using these products. Typical library sizes generated by the manual chemistry system are less than 1,000 compounds, by the AutoSort System are 1,000 to 10,000 compounds and by the NanoKan System are greater than 10,000 compounds. We have over 100 customers using the Directed Sorting technology.
We designed the NanoKan System for customers that need to generate up to one million compounds per year. We have entered into contracts to develop NanoKan Systems for Bristol-Myers Squibb and Aventis. We are nearing the completion of the NanoKan System development project and we plan to deliver the first two systems to Aventis and Bristol-Myers Squibb in the third and fourth quarters of 2000. Under these agreements, we have retained the rights to use this technology internally and may deliver this product to additional customers after one year following delivery to Bristol-Myers Squibb and Aventis.
PROPRIETARY LIBRARIES. We offer a broad range of compound libraries for assay screening and rapid hit-to-lead activities. Our customers for compound libraries include Allergan, Daiichi and Warner-Lambert.
Discovery Libraries. We generate and sell proprietary discovery libraries, which are collections of diverse, drug-like compounds that are designed using computer programs to systematically explore specified areas of chemical space or types of chemistry. They are used in the initial stages of screening in which very little information is known about which compounds will alter the
activity of the drug target in the assay. To date, we have produced over 450,000 diverse compounds comprising over 100 distinct libraries. We are generating new compounds at a rate of approximately 250,000 per year.
Targeted Libraries. We design and sell targeted libraries selected for a specified type of drug target. These libraries are a group of highly related compounds used much like discovery libraries, but they provide a more insightful medicinal chemistry starting point.
Focused Libraries. We are able to rapidly generate focused libraries based on hits from our discovery or targeted libraries because we have previously invested significant resources in the development of each library of compounds. Focused libraries explore subtle changes in the compound structure to quickly elicit structure-activity relationships (SARs) and evolve lead compounds. In addition, we develop focused libraries from hits generated by our customers.
Chemistry Protocols. We may sell licenses to the detailed protocols, or chemical recipes, for generating our libraries to customers that purchase those libraries. This enables our customers to replenish compounds and to create additional compounds.
We have created and use a combinatorial chemistry technology platform employing parallel synthesis and our Directed Sorting system. Our approach provides the following advantages:
- Purity: Maximum purity is important to minimize false positives during screening. We can deliver compounds that are greater than 90% pure depending on customer specifications. Our quality control measures include high performance liquid chromatography (HPLC), mass spectroscopy (MS), nuclear magnetic resonance (NMR), evaporative light scattering detection (ELSD) and weight percent analysis, coupled with a proprietary high throughput purification process;
- Diversity: Each library of approximately 5,000 drug-like compounds is designed to contain a set of highly diverse compounds using our proprietary three-dimensional chemical mapping and differentiation software;
- Ease of optimization: The individual chemistries for each library are highly validated and characterized. This allows rapid generation of focused libraries around hits and rapid follow-up and modification by medicinal chemistry programs; and
- Re-supply and reproducibility: Our synthesis approaches produce large quantities that allow rapid and cost effective restocking of customers' supplies. Our highly validated chemistries allow us or our customers to re-synthesize larger quantities on demand.
SCREENING
We offer a wide range of assay development services and ultra-high throughput screening services to customers in the pharmaceutical, biotechnology and agrochemical industries. We have an experienced staff of scientists located at our facility near Basel, Switzerland. For an additional fee, we also offer our customers access to over 600,000 compounds from many of the world's leading compound suppliers plus over 450,000 internally developed compounds. This unique combination of offerings has achieved rapid market acceptance. We currently have 15 assay development and screening customers including BioChem Pharma, Japan Tobacco and Novartis Crop Protection.
We can perform a wide range of assays in our HTS-Factory, including heterogeneous and homogeneous time-resolved fluorescence assays, isotopic assays, fluorescence polarization assays and enzyme-linked immuno sorbent assays (ELISA). We are currently developing proprietary technologies for G-protein coupled receptors (GPCR) and protein-protein interaction screening. This broad capability allows us to offer screening services for virtually any type of biological or biochemical target.
Our HTS-Factory is based on a proprietary platform of integrated automation, instrumentation, liquid handling, engineering, robotics, computers and sophisticated data collection software. The HTS-Factory has a screening capacity of more than 100,000 compounds per day for most biochemical assays.
A majority of our screening customers also take advantage of our access to compounds produced by other leading compound library providers. This unique offering allows our customers access to a large and diverse collection of compounds without the need to store and manage the compound collections in their own facilities.
We deliver a list of hits to our screening customers. We also provide hit follow-up and verification services and, in many cases, actual physical samples of the hit compounds. We anticipate that our screening services will lead to additional revenue opportunities based on requests for chemistry-based hit and lead optimization services.
HITS-TO-OPTIMIZED-LEADS
We offer the following products and services to advance early stage screening hits to become optimized drug leads.
FOCUSED LIBRARIES. We design and produce custom focused libraries based upon hits identified from screening. These hits may be from our compound libraries, the customer's internal compound collection or even from another compound library supplier. Focused libraries consist of combinatorially generated compounds that represent systematic variations of hits. Medicinal chemists use these focused libraries to begin refining hits to optimize the properties that have an effect on the drug target in the assay. Because we invest significant resources in the development of each of our compound libraries, we are able to generate focused libraries based on hits from our discovery or targeted libraries more rapidly than when we begin from an isolated hit resulting from a customer's compound collection.
We now have approximately 120 scaffolds, the molecular cores around which compound libraries are built, with validated chemistries and 30 additional scaffolds in development from which focused libraries may be produced. Our focused library customers include Axys Pharmaceuticals, Kirin, Pharmacia and Roche.
MEDICINAL CHEMISTRY. We also provide a wide range of medicinal chemistry and lead optimization services. In advancing a hit to a drug candidate, we use focused libraries and/or traditional medicinal chemistry methods. This includes the synthesis of compounds that modify the original hit or lead for improved potency, selectivity and other pharmaceutical characteristics. We have an experienced group of synthetic organic chemists and medicinal chemists with expertise in both solid phase chemistry and solution phase chemistry. In some cases we provide medicinal chemistry services in conjunction with our computational drug discovery efforts to design and construct small libraries of compounds to act on specific targets of known structure. Our customers for hit to lead services include AstraZeneca, DGI Biotechnologies, DuPont Pharmaceuticals, Hisamitsu and Signal Pharmaceuticals.
DRUG DISCOVERY INFORMATICS
Through our majority-owned Structural Proteomics group, we are developing computational tools that we believe will allow us to substantially increase our knowledge, which can be applied in the earlier stages of drug discovery to significantly reduce the time and cost of developing a drug. We currently have computer algorithms that allow us to design libraries of compounds with maximum diversity, thereby reducing the number of compounds which we must screen. When screened against large numbers of potential drug targets, we believe these large and highly diverse
libraries will provide significant information about which drug targets are amenable to modulation by chemical means. We are developing a protein (drug target) family analysis tool which we believe will allow us to use screening data to correlate drug target families with the types of compounds which will likely bind to them. Using this tool, we hope to be able to design highly effective targeted libraries for whole drug target families. In addition, we hope to use this tool to efficiently design potent compounds to a hit on a particular drug target and to efficiently search databases of compounds available from other vendors for likely hits. We expect to further use our computational tools and screening data to help predict ADME and toxicological reactions to classes of compounds. This will allow our customers to avoid spending money and time on hits and leads that will ultimately fail due to their ADME and toxicological characteristics.
We initiated development work on our informatics offering in the first half of 2000. We currently have two Small Business Innovation Research (SBIR) grants to support this work, and we have signed a licensing and collaborative development agreement with SmithKline Beecham to improve methods for protein family analysis and the use of this information in drug design. We have not yet initiated any meaningful development work on the predictive ADME and toxicology informatics tools.
COMPONENT SUPPLY
We depend on sole-source suppliers for the mesh component of our reactors, the radio frequency (RF) tags used in our commercial products and the two-dimensional bar code tags used in our NanoKan system. These items are obtained from suppliers on standard commercial terms. We have no long-term supply agreements for these items.
SALES AND MARKETING
Our senior executives coordinate global management of our key customers and manage our general sales and marketing efforts for our drug discovery offerings to major pharmaceutical customers worldwide. We are in the process of integrating our recently acquired businesses to offer multiple coordinated products and services to our customers.
Currently our sales and marketing is staffed as follows:
UNITED STATES: A total of 12 professionals are engaged in selling and marketing our products. They operate from our headquarters in San Diego as well as our facilities near San Francisco or from their residences in New Jersey and California.
EUROPE: A total of four professionals, operating in the United Kingdom and in Switzerland, are engaged in selling and marketing our products.
JAPAN: All of our products are promoted by third party representatives with the assistance of our personnel from the U.S. or Europe. Contracts are negotiated by and placed directly with us and the third party representatives receive a commission.
In addition to direct selling efforts we also use industry trade shows and industry journal advertising for sales and marketing.
RESEARCH AND DEVELOPMENT
Our research and development expenses totaled approximately $4.1 million in 1997, $5.1 million in 1998 and $3.5 million in 1999. None of these expenses was funded by outside parties. We conduct research and development programs in four primary areas as follows:
CORE INSTRUMENTATION TECHNOLOGY. These projects include the development of new instrumentation technologies of the type that led to the development of our current IRORI products, including the NanoKan System. Core technology projects have also expanded beyond synthesis technology to include the development of other drug discovery instrumentation. We implement projects on our own behalf and in collaboration with customers to develop specific instruments we identify as product opportunities. In collaborative projects, we seek to retain the intellectual property and commercialization rights.
DRUG DISCOVERY INFORMATICS. We have initiated drug discovery informatics projects that we believe will lead to a host of new products and services. We have begun to develop informatics tools that will aid in the design of new compound libraries that are optimized for potency toward a specific drug target and minimized for interactions with other undesired targets. Additionally, we are developing computational software and algorithms that may provide rapid advances in the areas of high throughput genomic sequencing, high throughput protein structure determination and cell-based and target-based virtual screening.
CHEMISTRY AND CHEMISTRY PROCESS DEVELOPMENT. Our chemistry and chemistry process development programs are designed to give us a competitive advantage in the number of compound libraries available to us and in the quality and reproducibility of the libraries. We have initiated an effort to expand our combinatorial chemistry programs into the area of natural products chemistry to further increase the drug-like qualities of our compound libraries. We have also launched research and development projects to develop chemistry-based products for target validation.
ASSAY DEVELOPMENT AND HIGH THROUGHPUT SCREENING. We are investing in new assay development and high throughput screening (HTS) technologies that we believe will allow us to broaden our product and service offerings. We are continually expanding our portfolio of assays and believe that current research and development programs will allow us to address virtually every type of homogeneous or heterogeneous drug discovery assay, and a wide range of agrochemical assays. Our high throughput screening (HTS) facility is operational, and we have initiated programs designed to increase both its capabilities and capacity.
CUSTOMERS
The following commercial customers have purchased one or more of our drug discovery products and services.
PHARMACEUTICAL, AGRICULTURAL AND OTHER COMPANIES
3M Company
Abbott
Allergan
American Cyanamid
Amgen
Ares-Serono
AstraZeneca
Aventis
Bayer
Boehringer Ingelheim
Bristol-Myers Squibb
Daiichi
Dainippon Pharmaceuticals
Dow Agro Sciences
DuPont Pharmaceuticals
Eli Lilly
Glaxo Wellcome
Hisamitsu Pharmaceutical
Hoffmann-LaRoche
Japan Tobacco
Johnson & Johnson
Kirin
L'Oreal
Merck
Merck KgaA
Novartis
Organon (Akzo Nobel)
Monsanto
Parke-Davis (Warner-
Lambert)
Pfizer
Pharmacia & Upjohn
Procter & Gamble
Rhone-Poulenc
Agrochemicals
Schering Plough
SmithKline Beecham
Synthelabo
Takeda
Wyeth Ayerst Research
(AHP)
Zeneca Agrochemicals
BIOTECHNOLOGY COMPANIES
3-Dimensional Pharmaceuticals
Analyticon
Biogen
BioMega
Cephalon
Coelacanth Chemical Corporation
CombiChem
Corvas
Cubist
Elitra
Epix Medical
Genentech
Genetics Institute (AHP)
Genomic Institute of the
Novartis Research
Foundation
Gilead Sciences
Guilford Pharmaceuticals
Intercardia
IRBM
ISIS Pharmaceuticals
Magainin Pharmaceuticals
Menarini Ricerche
Metaphore Pharmaceuticals
Mitotix
Molecumetics
NeoKimia
Novalon
Orchid Biocomputers
Protein Design Labs
Signal Pharmaceuticals
Synaptic
Versicor
Vertex
The following table contains each customer that represented over ten percent of our revenue for the indicated periods. The pro forma percentages for the year ended December 31, 1999 and the three months ended March 31, 2000 assume that we purchased AAT as of the beginning of each of those periods and is based on our historical operating results and those of AAT for the periods presented.
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- ----------------
1997 1998 1999 1999 2000 2000
---- ---- ------ ----- ------ ------
PRO PRO
ACTUAL FORMA ACTUAL FORMA
------ ----- ------ ------
Aventis..................................... 17% -- 22% 17% -- --
DuPont Merck Pharmaceutical................. 16% -- -- -- -- --
Bristol-Myers Squibb........................ 10% -- 20% 10% 12% 26%
SmithKline Beecham.......................... -- 23% -- -- -- --
Japan Tobacco............................... --.. -- -- -- 22% 11%
Warner-Lambert.............................. -- -- -- 22% -- --
Daiichi..................................... -- -- -- -- -- 13%
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For our last three fiscal years, the revenues that we derived from all foreign countries taken as a whole were as follows:
- in 1997, $855,000, which represented 27% of our total revenues for that year;
- in 1998, $2.6 million, which represented 42% of our total revenues for that year; and
- in 1999, $3.4 million, which represented 26% of our total revenues for that year.
We have entered into the following material customer contracts:
AGREEMENT WITH BRISTOL-MYERS SQUIBB COMPANY
On May 22, 1998, we entered into an Agreement with Bristol-Myers Squibb Company pursuant to which we will provide Bristol-Myers with a NanoKan System and NanoKans, or receptacles, used by the NanoKan System to create compounds.
We expect to deliver the NanoKan System to Bristol-Myers by the fourth quarter of 2000. Bristol-Myers agreed to purchase a fixed quantity of NanoKans from us, and, after we have delivered those, to have us supply all of Bristol-Myers' requirements for NanoKans in the future. The total revenue we will receive from the sale of the NanoKan System is $4.0 million, of which we have received $2.0 million. We will sell NanoKans on a per-unit basis, and the minimum fixed quantity of NanoKans that Bristol-Myers has agreed to purchase will provide us with $500,000 in revenue in total.
We agreed not to supply more than one other NanoKan System to any third party during the period beginning on May 22, 1998 and ending on the first anniversary of the date that Bristol-Myers accepts its NanoKan System from us. However, we retained title to all software and inventions embodied in the NanoKan System so that we can use this technology internally.
Bristol-Myers may terminate this agreement at any time prior to the date that Bristol-Myers accepts the NanoKan System from us. In this event, Bristol-Myers must return all portions of the NanoKan System that we previously delivered, all licenses granted under the agreement will terminate and Bristol-Myers must make one more installment payment of the purchase price. In addition, the requirements arrangement described above will continue for an indefinite period, but Bristol-Myers will have the right to terminate it at any time after the seventh anniversary of the date that Bristol-Myers accepts the NanoKan System from us. Upon termination by Bristol-Myers, the licenses granted under the agreement will become perpetual.
AGREEMENT WITH AVENTIS (FORMERLY RHONE-POULENC RORER INTERNATIONAL, INC.)
On June 15, 1998, we entered into an Agreement with Aventis pursuant to which we will provide Aventis with a NanoKan System and NanoKans.
We will deliver the NanoKan System to Aventis by the fourth quarter of 2000. Aventis agreed to purchase a fixed quantity of NanoKans, and, after we have delivered those to Aventis, to have us supply all of Aventis' requirements for NanoKans in the future. The total revenue we will receive from the sale of the NanoKan System is $4.0 million, of which we have received $3.0 million. We will sell NanoKans on a per-unit basis, and the minimum fixed quantity of NanoKans that Aventis has agreed to purchase will provide us with $2.0 million in revenue in total.
We agreed not to supply more than one other NanoKan System to any third party during the period beginning on June, 1998 and ending on the first anniversary of the date that Aventis accepts its NanoKan System from us. However, we retained title to all software and inventions embodied in the NanoKan System so that we can use this technology internally.
Aventis may terminate this agreement at any time prior to the date that Aventis accepts the NanoKan System from us. In this case, Aventis must return all portions of the NanoKan System that we previously delivered, all licenses granted under the agreement will terminate and Aventis must make one more installment payment of the purchase price. In addition, the requirements arrangement described above will continue for an indefinite period, but Aventis will have the right to terminate it at any time after the seventh anniversary of the date that Aventis accepts the NanoKan System from us. Upon termination by Aventis, the licenses granted under the agreement will become perpetual.
AGREEMENT WITH WARNER-LAMBERT COMPANY
Under this Agreement, which AAT entered into on May 15, 1998, we will synthesize and provide to Warner-Lambert Company a library of compounds. We own all intellectual property rights in the compounds that are delivered, but grant Warner-Lambert a license to use this intellectual property to the extent required to perform its drug discovery research. Warner-Lambert may not provide access to the compounds to any third party that will use the compounds for general screening purposes. We also grant Warner-Lambert a license to our some of our software and our know-how and patents relating to the production of the compounds for Warner-Lambert, and to make, use and sell products containing the compounds we deliver.
Warner-Lambert will pay an aggregate price of $20.5 million for the compounds, of which AAT has received $13.7 million. Warner-Lambert will also pay us a royalty of 2.5% of its net sales of drugs embodying licensed technology.
This agreement expires upon the later of May 15, 2001 or our delivery of all of the compounds to be delivered. The intellectual property licenses will survive expiration of the contract. In addition, Warner-Lambert may terminate this agreement at any time if we fail to meet delivery milestones. In this case, Warner-Lambert may keep all compounds that we delivered and it paid for, and the intellectual property licenses we granted with respect to those compounds.
Finally, either party may terminate the agreement upon the material, unremedied breach of the other party. If we committed the breach, Warner-Lambert will keep all of the compounds that we delivered and Warner-Lambert paid for. Warner-Lambert will receive exclusive rights to an additional fifty compounds and the intellectual property licenses granted with respect to those compounds will survive termination. If Warner-Lambert committed the breach, Warner-Lambert will return to us the compounds that are the subject of the breach and the licenses granted with respect to those compounds will terminate.
INTELLECTUAL PROPERTY
To establish and protect our proprietary technologies and products, we rely on a combination of patent, copyright, trademark and trade secrets laws, as well as confidentiality provisions in our contracts.
We have implemented an aggressive patent strategy designed to maximize our intellectual property rights. We are pursuing patent coverage in the United States and those foreign countries that are home to the majority of our anticipated customer base. We currently own fourteen issued patents in the United States and have received notices of allowance for four additional patent applications. In addition, our patent portfolio includes pending patent applications in the United States and corresponding international and foreign filings in major industrial nations.
United States patents issued from applications filed prior to June 8, 1995 have a term of the longer of 20 years from the earliest priority date or 17 years from issue. Fourteen of our applications were filed prior to June 8, 1995 and nine of these applications have issued. United
States patents issued from applications filed on or after June 8, 1995 have a term of 20 years from the application filing date or earlier claimed priority. Patents in most other countries have a term of 20 years from the date of filing of the patent application. Our remaining patent applications, including the applications from which five of our issued patents were derived, were filed after June 8, 1995. Because the time from filing to issuance of patent applications is often several years, this process may result in a shortened period of patent protection, which may adversely affect our ability to exclude competitors from our markets. Our issued United States patents have expiration dates ranging from April 2015 to July 2017. None of our licenses will expire within the next ten years other than the Trega license which will expire in the United States in March of 2005. Our success will depend to a significant degree upon our ability to develop proprietary products and technologies and to obtain patent coverage for the products and technologies. We intend to continue to file patent applications covering any newly-developed products and technologies.
Patents provide some degree of protection for our proprietary technology. However, the pursuit and assertion of patent rights, particularly in areas like pharmaceuticals and biotechnology, involve complex determinations and, therefore, are characterized by some uncertainty. In addition, the laws governing patentability and the scope of patent coverage continue to evolve, particularly in biotechnology and due to the time between the filing and granting of a patent application, we may be infringing upon the patent rights of a third party without any knowledge of the patent. As a result, patents might not issue from any of our patent applications or from applications licensed to us. The scope of any of our issued patents may not be sufficiently broad to offer meaningful protection. In addition, our issued patents or patents licensed to us may be successfully challenged, invalidated, circumvented or rendered unenforceable so that our patent rights might not create an effective competitive barrier. Moreover, the laws of some foreign countries may not protect our proprietary rights to the same extent as do the laws of the United States. Any patents issued to us or our strategic partners may not provide a legal basis for establishing an exclusive market for our products or provide us with any competitive advantages or that the patents of others will not have an adverse effect on our ability to do business or to continue to use our technologies freely. In view of these factors, our intellectual property positions bear some degree of uncertainty.
The source code for our proprietary software is protected both as a trade secret and as copyrighted works.
We also rely in part on trade secret protection of our intellectual property. We attempt to protect our trade secrets by entering into confidentiality agreements with third parties, employees and consultants. Our employees also sign agreements requiring that they assign to us their interests in inventions and original expressions and any corresponding patents and copyrights arising from their work for us. However, it is possible that these agreements may be breached, invalidated or rendered unenforceable, and if so, there may not be an adequate corrective remedy available. Despite the measures we have taken to protect our intellectual property, parties to our agreements may breach the confidentiality provisions in our contracts or infringe or misappropriate our patents, copyrights, trademarks, trade secrets and other proprietary rights. In addition, third parties may independently discover or invent competing technologies or reverse engineer our trade secrets or other technology.
Although we are not a party to any legal proceedings, in the future, third parties may file claims asserting that our technologies or products infringe on their intellectual property. We cannot predict whether third parties will assert such claims against us or our licensees or against the licensors of technology licensed to us, or whether those claims will harm our business. If we are forced to defend against such claims, whether they are with or without merit, and whether they are resolved in favor of or against us, our licensees or our licensors, we will incur significant expenses and diversion of management's attention and resources. As a result of such disputes, we may have to develop at a substantial cost non-infringing technology or enter into licensing agreements. These
agreements, if necessary, may be unavailable on terms acceptable to us, or at all, which could seriously harm our business or financial condition.
ASSIGNMENT AGREEMENT WITH ONTOGEN CORPORATION. On December 17, 1998, we entered into an Assignment Agreement with Ontogen Corporation pursuant to which we acquired all of Ontogen's ownership interest in two U.S. patents entitled "Methods and Apparatus for Synthesizing Labeled Combinatorial Chemistry Libraries." We granted Ontogen a perpetual license to use the technology described in the patents, including the right to use it commercially, but Ontogen may not sublicense the technology. Pursuant to this agreement, we paid Ontogen a total of $1.0 million in two installments. We paid the last of these two installments in January of 1999.
NON-EXCLUSIVE SUBLICENSE AGREEMENT WITH TREGA BIOSCIENCES, INC. On May 1, 1998, we entered into a Non-Exclusive Sublicense Agreement with Trega Biosciences, Inc. pursuant to which we licensed from Trega certain patents for use in connection with NanoKans. Under this agreement, Trega granted to us the non-exclusive, worldwide right to use, make, import and sell NanoKans that are manufactured using technology described by the Trega patents. We have paid Trega a total of $250,000 in two installments. We paid the last of these two installments in June of 1999. We also agreed to pay Trega a percentage of our net sales of NanoKans that use the technology described in the licensed patents. To date we have paid Trega a total of $473,000 in royalties.
This agreement expires as to each country in which NanoKans are sold on the date that the last licensed patent right with respect to a particular country expires. In addition, either party may terminate this agreement upon the material, unremedied breach of the other party. If we breach the contract, the licenses granted to us under the agreement will terminate. If Trega breaches the contract, the licenses will survive termination.
COMPETITION
Competition across the spectrum of drug discovery products and services that we offer is fragmented. However, we face intense competition from a number of companies, including those listed below, in each of the functional areas of drug discovery that we serve.
- Assay development and screening. Aurora Biosciences, Cambridge Drug Discovery, Cerep, Evotec, Oncogene Sciences, Pharmacopeia, Tripos, Tropix division of PE Biosystems.
- Combinatorial chemistry instruments. Argonaut, Bohdan and Mimotopes.
- Compound libraries and lead optimization. Albany Molecular Research, ArQule, Array Biopharma, Cambridge Drug Discovery, Oxford Asymmetry, Pharmacopeia and Tripos.
- Informatics. MSI division of Pharmacopeia, Oxford Molecular and Tripos.
Also, in many cases, our pharmaceutical company customers have internal departments which provide products and services similar to ours, so these customers may have limited needs for our products and services. Many of our competitors listed above have greater financial, operational, sales and marketing resources than we have. In addition, these competitors and other companies or research or academic institutions may have developed or could in the future develop new technologies that compete with our products and services or that could render some or all of our products and services obsolete. Any of these or other competitors could also broaden the scope of their drug discovery offerings through acquisition, collaboration or internal development to integrate their offerings and/or compete with us in all phases of drug discovery.
GOVERNMENT REGULATION
We are subject to various federal, state and local laws and regulations relating to the protection of the environment. In the course of our business, we handle, store and dispose of chemicals. The laws and regulations applicable to our operations include provisions that regulate the discharge of materials into the environment. Usually these environmental laws and regulations impose "strict liability," rendering a person liable without regard to negligence or fault on the part of such person. Such environmental laws and regulations may expose us to liability for the conduct of, or conditions caused by, others. We have not been required to expend material amounts in connection with our efforts to comply with environmental requirements and we do not believe that compliance with such requirements will have a material adverse effect upon our capital expenditures, results of operations or competitive position. Because the requirements imposed by these laws and regulations frequently change, we are unable to predict the cost of compliance with these requirements in the future, or the effect of these laws on our capital expenditures, results of operations or competitive position.
EMPLOYEES
As of May 5, 2000, we had 190 employees, of which 115 were in research and development, 16 were in business development, sales and marketing, 26 were in general and administrative, and 33 were in manufacturing. None of our employees is covered by a collective bargaining agreement.
FACILITIES
We occupy approximately 34,500 combined square feet of leased office space and other facilities in San Diego, California for our headquarters and as the base for our marketing and product support operations, research and development and manufacturing activities. We occupy approximately 30,000 square feet of subleased office and laboratory space near San Francisco, California for some of our combinatorial chemistry activities. In addition, we also occupy approximately 12,000 square feet of leased space near Basel, Switzerland for our assay development and high throughput screening (HTS) services.
LEGAL PROCEEDINGS
From time to time, we may be involved in litigation that arises through the normal course of business. As of the date of this prospectus, we are not a party to any litigation we believe could reasonably be expected to have a material adverse effect on our business or results of operations.
SCIENTIFIC ADVISORY BOARD
We have established a scientific advisory board made up of leading scholars in various functional disciplines of the drug discovery process. Members of our scientific advisory board consult with us on matters relating to the development of our products and services described elsewhere in this prospectus. We reimburse members of our scientific advisory board for the reasonable expenses of attending meetings of the scientific advisory board. We may also provide some of the members with options to purchase shares of our common stock. The members of our scientific advisory board are as follows:
ADVISOR TITLE/INSTITUTION
------- -----------------
Paul Anderson, Ph.D. ......... Vice President, DuPont Pharmaceuticals
Daniel Bellus, Ph.D. ......... Professor of Organic Chemistry, University of Fribourg,
Switzerland
Colin Dollery, Ph.D. ......... Senior Consultant, R&D, SmithKline Beecham
Gerd Folkers, Ph.D. .......... Professor of Pharmaceutical Chemistry,
ETH-Zurich-Irchel
Barry Honig, Ph.D. ........... Department of Biochemistry and Molecular Biophysics,
Columbia University
Richard Labaudiniere, Former Senior Director, Lead Discovery, Rhone-Poulenc
Ph.D. ...................... Rorer
K.C. Nicolaou, Ph.D. ......... Chairman, Department of Chemistry, The Scripps Research
Institute
Julius Rebek, Ph.D. .......... Director, The Skaggs Institute for Chemical Biology
Michael C. Venuti, Ph.D. ..... Senior Vice President Research, Axys Pharmaceuticals
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MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
The following persons are our executive officers, directors and key employees as of May 5, 2000:
NAME AGE POSITION
---- --- --------
Executive Officers and Directors
Riccardo Pigliucci.................. 53 President, Chief Executive Officer and Chairman
Jack Fitzpatrick.................... 46 Chief Financial Officer, Vice President Finance
and Administration and Secretary
David Coffen, Ph.D.................. 61 Chief Scientific Officer
A. Grant Heidrich, III(2)........... 47 Director
Dieter Hoehn(1)..................... 59 Director
Alan J. Lewis, Ph.D.(1)............. 54 Director
Donald B. Milder(2)................. 46 Director
Andrew E. Senyei, M.D.(1)........... 50 Director
John P. Walker(2)................... 51 Director
Key Employees
Richard Brown, Ph.D................. 47 President, IRORI
Arnold Hagler, Ph.D................. 58 Chief Executive Officer, Structural Proteomics
John Lillig......................... 50 Chief Technologist
Robert Reed, Ph.D. ................. 38 President, ChemRx Advanced Technologies
Heinrich Zinsli, Ph.D............... 58 Chief Executive Officer, Discovery Technologies
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(2) Member of the compensation committee.
Riccardo Pigliucci has served as our President and Chief Executive Officer since May 1998 and chairman of our board of directors since May 1999. He previously served as Chief Executive Officer of Life Sciences International PLC, a supplier of scientific equipment and consumables to research, clinical and industrial markets, from 1996 to 1997. Prior to that, he held numerous management positions during his 23-year career at Perkin-Elmer Corporation, a life science and analytical instrument company, including President and Chief Operating Officer from 1993 to 1995. Mr. Pigliucci is also a director of Epoch Pharmaceuticals, Inc., a biotechnology company, Biosphere Medical, a medical device company, and Dionex Corporation, a provider of instrumentation and related accessories and chemicals, and a trustee of The Worcester Foundation for Biomedical Research, a not-for-profit biomedical research foundation. He is a member of the Advisory Board of Chemical & Engineering News. He received his degree in industrial chemistry from the Chemical Institute of Milan, Italy.
Jack Fitzpatrick has served as our Chief Financial Officer since September 1997. From 1995 until joining us, he served as Chief Financial Officer of Broadband Innovations, Inc., a telecommunications technology company formerly known as Multichannel Communication Sciences, Inc. Mr. Fitzpatrick received a B.A. in applied mathematics, an M.S. in computer science and an M.B.A. from Harvard University.
David Coffen, Ph.D. has served as our Chief Scientific Officer since November 1998. From 1995 until joining us, he served as Senior Vice President of Chemistry at ArQule, Inc., a drug discovery company focusing on lead generation, qualification and optimization programs. Prior to joining ArQule, Dr. Coffen held the position of Vice President Molecular Sciences at Hoffmann-La Roche
Inc., a research-oriented healthcare group, where he served in numerous research and development positions during his 24-year career. Dr. Coffen received a B.S. in chemistry from the University of Toronto and a Ph.D. in organic chemistry from the Massachusetts Institute of Technology.
A. Grant Heidrich, III has served as a member of our board of directors since October 1995. He joined Mayfield Fund, a venture capital firm, in 1982 and has been a general partner or managing member of several venture capital funds affiliated with Mayfield Fund since 1983. Mr. Heidrich serves on the board of directors of Millennium Pharmaceuticals, Inc., a genomics and life-sciences research company, and serves as Chairman of Tularik Inc., a biotechnology company. He received a B.A. in human biology from Stanford University and an M.B.A. from Columbia University Graduate School of Business.
Dieter Hoehn has served as a member of our board of directors since November 1996. Since May 1996, Mr. Hoehn has been a self-employed management consultant. From 1984 until 1996, he was a member of the senior corporate management of the Hewlett-Packard Company, a provider of computing and imaging products, measurement solutions and services, where he served as Vice President in charge of the Bioscience Program from May 1995 until his retirement in April 1996 and Vice President in charge of the Analytical Products Group from May 1987 to April 1995. Mr. Hoehn also served as Vice Chairman of the Board of Directors of Hewlett-Packard Shanghai Analytical Products Co., Ltd., China, an analytical instruments company, and as a director of Yokogawa Analytical Systems, Inc., Japan, an analytical instruments company, until April 1999. He is a member of the Advisory Board of the Barnett Institute at Northeastern University. Mr. Hoehn received a B.S. in electrical engineering from the Technical College in Loerrach, Germany.
Alan J. Lewis, Ph.D. has served as a member of our board of directors since April 2000. Since 1996, Dr. Lewis has been Chief Executive Officer and a director of Signal Pharmaceuticals, Inc., a drug discovery company. From 1994 to 1996, he was President of Signal. Prior to joining Signal, Dr. Lewis worked for 15 years at the Wyeth-Ayerst Research division of American Home Products Corporation, a pharmaceutical company, where he served as Vice President of Research from 1990 to 1994. Dr. Lewis currently serves as a Director of Allergan Specialty Therapeutics, Inc. a pharmaceutical company. Dr. Lewis received a B.S. in physiology and biochemistry from Southampton University and a Ph.D. in pharmacology from the University of Wales in Cardiff and completed his post-doctoral training at Yale University.
Donald B. Milder has served as a member of our board of directors since November 1996. Since March 1989, he has served as a general partner of Crosspoint Venture Partners, a venture capital firm. From September 1985 to March 1989, Mr. Milder served as Chief Executive Officer of Infusion Systems, a medical delivery device company. Mr. Milder serves as a director of Websense, Inc., a provider of employee Internet management products. He received a B.A. in economics from Union College and an M.B.A. from Harvard Business School.
Andrew E. Senyei, M.D. has served as a member of our board of directors since April 1995. He has served as managing partner of Enterprise Partners, a venture capital firm, since 1999 and as general partner since 1988. Prior to joining Enterprise Partners, Dr. Senyei was a practicing clinician and Adjunct Associate Professor of Obstetrics, Gynecology and Pediatrics at the University of California, Irvine. Dr. Senyei received a B.A. in biology from Occidental College and an M.D. from Northwestern University.
John P. Walker has served as a member of our board of directors since April
2000. Since February 1993, Mr. Walker has served as Chairman, Chief Executive
Officer and a director of Axys Pharmaceuticals, Inc., a public biopharmaceutical
company. Since 1996, Mr. Walker has been Chairman of the Board of Signal
Pharmaceuticals, Inc., a drug discovery company. From 1993 to December 1997, he
was President and Chief Executive Officer of Arris Pharmaceutical Corporation, a
predecessor corporation of Axys. Prior to his association with Arris, Mr. Walker
was the Chairman and Chief Executive Officer of Vitaphore Corporation, a
biomaterials company which was sold in
1990 to Union Carbide, a company operating in the plastics and chemicals industry. Mr. Walker serves as Chairman of the Board of Directors of Microcide Pharmaceuticals, Inc., a biotechnology company, and as a director of Geron Corporation, a biotechnology company, and the Biotechnology Industry Organization. He received a B.A. from the State University of New York, at Buffalo.
Richard Brown, Ph.D. has served as President of our IRORI group since August 1999 and has been with us since 1996. From 1983 to 1995, he served as Director of Marketing for Zymark Corporation, a provider of laboratory automation products and services. Dr. Brown received a B.A. in chemistry from Massachusetts State College and a Ph.D. in chemistry from the University of Massachusetts.
Arnold Hagler, Ph.D. has served as Chief Executive Officer and Chairman of Structural Proteomics since May 2000. In 1997, Dr. Hagler founded ScienceMedia.com, an educational software company, and currently serves as its CEO and Chairperson. From 1984 to June 1997, Dr. Hagler was with Biosym Technologies, Inc., a computational software company which he founded. Since 1998 Dr. Hagler has been Adjunct Professor of Chemistry at the University of Massachusetts at Amherst. He received a B.S. in chemistry and a Ph.D. in physical chemistry from Cornell University.
John Lillig has served as Chief Technologist since August 1999 and has been with us as a Vice President since August 1996. From 1991 until 1996, he served as Division Manager of the Analytical Systems Division of Bio-Rad Laboratories, a provider of analytical instrumentation and clinical diagnostics. Prior to that, Mr. Lillig served in positions of increasing responsibility, including Director of Engineering, for over 18 years at Beckman Instruments, a provider of laboratory systems. Mr. Lillig received a B.S. in electrical engineering from California Polytechnical University.
Robert Reed, Ph.D. has served as President of ChemRx Advanced Technologies since April 2000. Prior to that, he served as President of Axys Advanced Technologies, Inc. a subsidiary of Axys Pharmaceuticals, Inc., a public biopharmaceutical company, from July 1999 until Axys Advanced Technologies was acquired by us. Dr. Reed was Vice President and General Manager of the Advanced Technologies Division of Axys Pharmaceuticals from January 1998 to July 1999. He joined Axys Pharmaceuticals in April 1997 as Senior Director of Corporate Development. From February 1995 until April 1997, Dr. Reed was Manager of Strategic Research and Development in the pharmaceutical products division of Abbott Laboratories, a health care products and services company. Dr. Reed received a B.S. in biochemistry from Miami University and a Ph.D. in biochemistry from Boston University School of Medicine, specializing in structural biophysics.
Heinrich Zinsli, Ph.D. has served as Chief Executive Officer of Discovery Technologies since September 1999. Prior to that, beginning in 1997, he served as its Chairman. From 1989 until 1996, he was the head of Corporate Business Development at Ciba-Geigy Ltd., a chemical and pharmaceutical company. Dr. Zinsli also serves as a director of Paradigm Genetics, a biotechnology company, and Plasmon, PLC, an information storage technology company. Dr. Zinsli had over 30 years of experience at Ciba-Geigy Ltd. He received his Ph.D. in economics from the University of St. Gall, Switzerland.
CLASSIFIED BOARD
Our board of directors currently has seven members. Our Delaware certificate of incorporation will provide for a classified board of directors consisting of three classes of directors, each serving staggered three-year terms. As a result, stockholders will elect a portion of our board of directors each year. Class I directors' terms will expire at the annual meeting of stockholders to be held in 2001, Class II directors' terms will expire at the annual meeting of stockholders to be held in 2002, and Class III directors' terms will expire at the annual meeting of stockholders to be held in 2003. The Class I directors will be Mr. Hoehn and Mr. Milder, the Class II directors will be Dr. Senyei
and Mr. Walker, and the Class III directors will be Mr. Heidrich, Dr. Lewis and Mr. Pigliucci. At each annual meeting of stockholders held after the initial classification, the successors to directors whose terms will then expire will be elected to serve from the time of election until the third annual meeting following election. In addition, our bylaws provide that the authorized number of directors may be changed by an amendment to the bylaws, duly adopted by the board of directors or by the stockholders, or by a duly adopted amendment to our certificate of incorporation. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors.
BOARD COMMITTEES
We established the audit committee of the board of directors in May 1999. The audit committee reviews, acts on and reports to the board of directors on various auditing and accounting matters, including the recommendation of our independent auditors, the scope of the annual audits, fees to be paid to the independent auditors, the performance of our independent auditors and our accounting practices. The members of our audit committee are Mr. Hoehn, Dr. Lewis and Dr. Senyei, each of whom is an independent director.
We established the compensation committee of the board of directors in May 1999. The compensation committee determines the salaries of management employees and benefits for our employees, consultants, directors and other individuals compensated by us. The compensation committee also administers our stock option plans, including determining the stock option grants for our employees, consultants, directors and other individuals. The members of our compensation committee are Mr. Heidrich, Mr. Milder and Mr. Walker, each of whom is an independent director.
DIRECTOR COMPENSATION
We currently pay each of our non-employee directors $1,000 per board meeting attended and $500 for each committee meeting attended, plus the reimbursement of related expenses. In addition, each current non-employee director will receive a non-qualified option to purchase 25,000 shares of our common stock upon the consummation of this offering, each non-employee director will receive a yearly grant of a non-qualified stock option to purchase 10,000 shares of our common stock, and each new non-employee director will be granted a non-qualified stock option to purchase 25,000 shares of our common stock. Each of these option grants will be made pursuant to the terms of our 2000 Stock Incentive Plan.
In the past, we entered into Directorship Agreements with two of our non-employee directors. These agreements provided for payments to the non-employee director of $1,500 per full business day that the non-employee director performed his duties as a director, plus the reimbursement of related expenses. In addition, these agreements provided for a one-time grant of a non-qualified stock option to purchase 10,000 shares of our common stock pursuant to the terms of our 1995 Stock Option/Stock Issuance Plan to be made at the time of execution of the agreements. We entered into a Directorship Agreement with current director Dieter Hoehn on December 16, 1996 and concurrently granted Mr. Hoehn a non-qualified stock option to purchase 10,000 shares of our common stock. This agreement was terminated by us and Mr. Hoehn in May 2000. In 1999, we paid Mr. Hoehn a total of $7,000 under this agreement. We also entered into a Directorship Agreement with former director Dr. Paul Anderson on March 1, 1996 and concurrently granted Dr. Anderson a non-qualified stock option to purchase 10,000 shares of our common stock. This agreement expired when Dr. Anderson ceased serving as a member of our board of directors. In 1999, we paid Dr. Anderson a total of $4,500 under this agreement.
We also issued Mr. Hoehn 5,000 shares of our common stock pursuant to the
terms of our 1995 Stock Option/Stock Issuance Plan on April 23, 1997, and we
granted Mr. Hoehn a non-qualified
option to purchase 10,000 shares of our common stock pursuant to the terms of our 1995 Stock Option/Stock Issuance Plan on August 12, 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our compensation committee currently consists of Mr. Heidrich, Mr. Milder and Mr. Walker. No member of the compensation committee has been an officer or employee of ours at any time. None of our executive officers serves as a member of the board of directors or compensation committee of any other company that has one or more executive officers serving as a member of our board of directors or compensation committee. Prior to the formation of the compensation committee in May 1999, the board of directors as a whole made decisions relating to compensation of our executive officers.
LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS
Our certificate of incorporation limits the liability of directors to the maximum extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except liability for:
- any breach of their duty of loyalty to the corporation or its stockholders;
- acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
- unlawful payments of dividends or unlawful stock repurchases or redemptions; or
- any transaction from which the director derived an improper personal benefit.
The limitation of liability does not apply to liabilities arising under the federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission. Our certificate of incorporation and bylaws provide that we shall indemnify our directors and executive officers and may indemnify our other officers and employees and other agents to the fullest extent permitted by law. We believe that indemnification under our bylaws covers at least negligence and gross negligence on the part of the indemnified parties. Our bylaws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in such capacity, regardless of whether the bylaws would permit indemnification.
We have entered into agreements to indemnify our directors and executive officers in addition to indemnification provided for in our bylaws. These agreements, among other things, provide for indemnification of our directors and executive officers for expenses specified in the agreements, including attorneys' fees, judgments, fines and settlement amounts incurred by our directors or executive officers in any action or proceeding arising out of that person's services as a director or executive officer of Discovery Partners International, Inc., any subsidiary of Discovery Partners International Inc. or any other entity to which the person provides services at our request. In addition, we maintain directors' and officers' insurance. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers.
At present, we are not aware of any pending or threatened litigation or proceeding involving a director, officer, employee or agent in which indemnification would be required or permitted. We are not aware of any threatened litigation or proceeding that might result in a claim for such indemnification.
EXECUTIVE COMPENSATION
The following table shows all compensation received during the year ended December 31, 1999 by our Chief Executive Officer and our four other highest-paid executive officers in that year (collectively referred to as the Named Executive Officers). The table also shows the capacity in which they served, or the title they had, in 1999 while earning that compensation.
LONG-TERM
COMPENSATION
------------
ANNUAL SECURITIES
COMPENSATION UNDERLYING
------------------- OPTIONS/ ALL OTHER
NAME SALARY BONUS SARS COMPENSATION
---- -------- -------- ------------ ------------
RICCARDO PIGLIUCCI........................ $350,000 $123,958 -- $129,416(1)
President and Chief Executive Officer
DAVID COFFEN.............................. 219,000 -- 100,000 --
Chief Scientific Officer
JOHN LILLIG............................... 198,334 47,500 -- --
Chief Technologist; Vice President of
Research and Development
JACK FITZPATRICK.......................... 196,513 47,500 -- --
Chief Financial Officer; Vice President
Finance and Administration
RICHARD BROWN............................. 195,477 47,500 -- --
President, IRORI; Vice President of
Business Development
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OPTIONS
The following table shows information regarding options granted to the executive officers listed in the summary compensation table above during 1999.
Each option represents the right to purchase one share of our common stock. The options generally become vested over four years. See "Management -- Employee Benefit Plans" for more details regarding these options. In 1999, we granted options to purchase an aggregate of 191,500 shares of common stock to officers, employees, directors and consultants.
The potential realizable value at assumed annual rates of stock price appreciation for the option term represents hypothetical gains that could be achieved for the respective options if exercised at the end of the option term. The 5% and 10% assumed annual rates of compounded stock price appreciation are required by the SEC and do not represent our estimate or projection of our future common stock prices. The first set of amounts represents assumed rates of appreciation in the value of our common stock from $1.50, the fair market value on the date of grant as determined by our board of directors. The second set of amounts represents assumed rates of appreciation in the value of our common stock from $16.00, the assumed initial public offering price in this offering, beginning on the options' grant date. Actual gains, if any, on stock option
exercises are dependent on the future performance of our common stock and overall stock market conditions. The amounts reflected in the table may not necessarily be achieved.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL POTENTIAL
REALIZABLE VALUE REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED AT ASSUMED
----------------------- ANNUAL RATES OF ANNUAL RATES OF
NUMBER OF APPRECIATION OF APPRECIATION OF
SECURITIES % OF TOTAL STOCK PRICE FOR STOCK PRICE FOR
UNDERLYING OPTIONS EXERCISE OPTION TERM(2) OPTION TERM(3)
OPTIONS GRANTED TO PRICE PER EXPIRATION ------------------ -----------------------
NAME GRANTED EMPLOYEES SHARE DATE 5% 10% 5% 10%
---- ---------- ---------- --------- ---------- ------- -------- ---------- ----------
David Coffen(1)................. 100,000 52.2 $1.50 01/22/09 $94,334 $239,061 $2,456,231 $3,999,988
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(1) The option vests according to our standard four-year vesting schedule, with a vesting commencement date of November 16, 1998.
(2) Calculation based on appreciation starting from $1.50, the board-determined fair market value as of November 16, 1998.
(3) Calculation based on appreciation starting from the assumed initial public offering price of $16.00.
AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 1999 AND YEAR-END
OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT DECEMBER 31, IN-THE-MONEY OPTIONS AT
ACQUIRED 1999 DECEMBER 31, 1999(1) VALUE OF UNEXERCISED
UPON VALUE ---------------------------- ---------------------------- OPTIONS USING INITIAL
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE OFFERING PRICE(2)
---- -------- -------- ----------- -------------- ----------- -------------- ---------------------
Riccardo Pigliucci... 170,000 $187,000 -- -- -- -- --
David Coffen......... -- -- 100,000 -- $100,000 -- $1,450,000
John Lillig.......... -- -- 100,000 -- 210,000 -- 1,560,000
Jack Fitzpatrick..... -- -- 160,000 -- 343,500 -- 2,503,500
Richard Brown........ -- -- 160,000 -- 343,400 -- 2,503,400
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(2) Assumes an initial offering price of $16.00.
EMPLOYMENT AGREEMENTS
On May 5, 1998, we entered into an employment agreement with Mr. Pigliucci to serve as our President and Chief Executive Officer. This agreement provides an indefinite term and is terminable by Mr. Pigliucci or us at any time without cause. Under this agreement, we pay Mr. Pigliucci an annual base salary of $350,000 (subject to upward adjustments) and an annual target bonus equal to 50% of his base salary (which bonus will be prorated for partial performance of annual goals). In addition, under this agreement we reimbursed Mr. Pigliucci $129,416 for relocation expenses and mortgage assistance in moving from the Weston, Connecticut area to the San Diego area, and Mr. Pigliucci was granted an option to purchase 600,000 shares of our common stock, which vests over a four-year period, with 25% vesting upon the completion of one year of service and the remainder vesting in equal monthly installments over the next 36 months of service. Mr. Pigliucci exercised this option in full in December 1998 and January 1999 and, at Mr. Pigliucci's election, he
paid the purchase price for such shares in the form of two promissory notes to us bearing the minimum applicable federal interest rate. We also granted Mr. Pigliucci the right to maintain his percentage ownership of our equity by purchasing equity securities that are offered by us at any time (with limited enumerated exceptions) on the same terms and conditions as other purchasers, which right does not apply to shares offered in this offering and terminates upon the sale of securities in this offering.
If we terminate Mr. Pigliucci's employment other than for cause, or if Mr. Pigliucci terminates his employment upon our breach of this employment agreement (including in the event this employment agreement is not assumed in full by a successor company upon a change in control), we will automatically retain Mr. Pigliucci as a consultant to us for one year. Under this arrangement, Mr. Pigliucci will be available to provide consulting services to us for up to fifteen hours each month, and we will pay him a monthly consulting fee of one-twelfth of his base salary at the time of termination of his employment.
BENEFIT PLANS
2000 STOCK INCENTIVE PLAN
Introduction. Our 2000 Stock Incentive Plan is the successor equity incentive program to our 1995 Stock Option/Stock Issuance Plan. The board adopted our 2000 plan in June 2000 and our stockholders approved it in June 2000. Our 2000 plan will become effective on the date the underwriting agreement for this offering is signed. At that time, all outstanding options under the predecessor 1995 plan will be transferred to our 2000 plan, and we will make no further option grants under that predecessor plan. The transferred options will continue to be governed by their existing terms, unless our compensation committee elects to extend one or more features of our 2000 plan to those options. Except as otherwise noted below, the transferred options have substantially the same terms as will be in effect for grants made under the discretionary option grant program of our 2000 plan.
Share Reserve. We have authorized 3,300,000 shares of common stock for issuance under our 2000 plan including shares rolled over from our 1995 plan and the AAT stock option plan which we assumed. The number of shares of common stock reserved for issuance under our 2000 plan will automatically increase on the first trading day in January each calendar year, beginning in calendar year 2001, by an amount equal to 2% of the total number of shares of common stock outstanding on the last trading day in December of the preceding calendar year, but in no event will any such annual increase exceed 2,000,000 shares. In addition, no participant in our 2000 plan may be granted stock options, separately exercisable stock appreciation rights and direct stock issuances for more than 500,000 shares of common stock per calendar year.
Equity Incentive Programs. Our 2000 plan is divided into five separate components:
- the discretionary option grant program, under which eligible individuals in our employ or service may be granted options to purchase shares of common stock at an exercise price not less than 100% of the fair market value of those shares on the grant date;
- the stock issuance program, under which such individuals may be issued shares of common stock directly, through the purchase of such shares at a price not less than 100% of their fair market value at the time of issuance or as a bonus tied to the attainment of performance milestones or the completion of a specified period of service;
- the salary investment option grant program, under which our executive officers and other highly compensated employees may be given the opportunity to apply a portion of their base salary to the acquisition of special below-market stock option grants;
- the automatic option grant program, under which option grants will automatically be made at periodic intervals to our non-employee board members to purchase shares of common stock
at an exercise price equal to 100% of the fair market value of those shares on the grant date; and
- the director fee option grant program, under which our non-employee board members may be given the opportunity to apply a portion of the annual retainer fee otherwise payable to them in cash each year to the acquisition of special below-market option grants.
Eligibility. The individuals eligible to participate in our 2000 plan include our officers and other employees, our non-employee board members and any consultants we hire.
Administration. The compensation committee of the board of directors will administer the discretionary option grant program and the stock issuance program. This committee will determine which eligible individuals are to receive option grants or stock issuances under those programs, the time or times when such option grants or stock issuances are to be made, the number of shares subject to each such grant or issuance, the status of any granted option as either an incentive stock option or a non-statutory stock option under the federal tax laws, the vesting schedule to be in effect for the option grant or stock issuance and the maximum term for which any granted option is to remain outstanding. The compensation committee will also have the exclusive authority to select the executive officers and other highly compensated employees who may participate in the salary investment option grant program in the event that program is activated for one or more calendar years.
Plan Features. Our 2000 plan includes the following features:
- The optionee may pay the exercise price for the shares of common stock subject to option grants made under our 2000 plan in cash or in shares of common stock valued at fair market value on the exercise date. The optionee may also exercise the option, without any cash outlay, through a same-day sale program. In addition, the plan administrator may provide financial assistance to one or more optionees in the exercise of their outstanding options or the purchase of their unvested shares by allowing such individuals to deliver a full-recourse, interest-bearing promissory note in payment of the exercise price and any associated withholding taxes incurred in connection with such exercise or purchase.
- The compensation committee will have the authority to cancel outstanding options under the discretionary option grant program, including options transferred from the 1995 plan, in return for the grant of new options for the same or a different number of option shares with an exercise price per share based upon the fair market value of our common stock on the new grant date.
- Stock appreciation rights are authorized for issuance under the discretionary option grant program. Such rights will provide the holders with the election to surrender their outstanding options for an appreciation distribution from us equal to the fair market value of the vested shares of common stock subject to the surrendered option, less the aggregate exercise price payable for those shares. Such appreciation distribution may be made in cash or in shares of common stock. None of the outstanding options under our 1995 plan contain any stock appreciation rights.
- The 2000 plan includes the following change in control provisions which may result in the accelerated vesting of outstanding option grants and stock issuances:
-- In the event that we are acquired by merger or asset sale, each outstanding option under the discretionary option grant program which is not to be assumed by the successor corporation will automatically accelerate in full, and all unvested shares under the discretionary option grant and stock issuance programs will immediately vest, except to the extent our repurchase rights with respect to those shares are to be assigned to the successor corporation.
-- The compensation committee will have complete discretion to structure one or more options under the discretionary option grant program so those options will vest as to all the option shares in the event those options are assumed in the acquisition but the optionee's service with us or the acquiring entity is subsequently terminated. The vesting of outstanding shares under the stock issuance program may be accelerated upon similar terms and conditions.
-- The compensation committee will also have the authority to grant options which will immediately vest in the event we are acquired, whether or not those options are assumed by the successor corporation.
-- The compensation committee may grant options and structure repurchase rights so that the shares subject to those options or repurchase rights will vest in connection with a successful tender offer for more than 50% of our outstanding voting stock or a change in the majority of our board through one or more contested elections for board membership. Such accelerated vesting may occur either at the time of such transaction or upon the subsequent termination of the individual's service.
-- The options currently outstanding under our 1995 plan will immediately vest in the event we are acquired by merger or sale of substantially all our assets, unless those options are assumed by the acquiring entity or our repurchase rights with respect to any unvested shares subject to those options are assigned to such entity.
Salary Investment Option Grant Program. In the event the compensation committee elects to activate the salary investment option grant program for one or more calendar years, each of our executive officers and other highly compensated employees selected for participation may elect, prior to the start of the calendar year, to reduce his or her base salary for that calendar year by a specified dollar amount not less than $10,000 nor more than $50,000. Each selected individual who files such a timely election will automatically be granted, on the first trading day in January of the calendar year for which his or her salary reduction is to be in effect, an option to purchase that number of shares of common stock determined by dividing the salary reduction amount by two-thirds of the fair market value per share of our common stock on the grant date. The option will be exercisable at a price per share equal to one-third of the fair market value of the option shares on the grant date. As a result, the option will be structured so that the fair market value of the option shares on the grant date less the exercise price payable for those shares will be equal to the amount by which the optionee's salary is reduced under the program. The option will become exercisable in a series of 12 equal monthly installments over the calendar year for which the salary reduction is to be in effect.
Automatic Option Grant Program. Under the automatic option grant program, each individual who first becomes a non-employee board member at any time after the completion of this offering will automatically receive an option grant for 25,000 shares on the date such individual joins the board, provided such individual has not been in our prior employ. In addition, on the date of each annual stockholders meeting held after the completion of this offering, each non-employee board member who is to continue to serve as a non-employee board member, including each of our current non-employee board members, will automatically be granted an option to purchase 10,000 shares of common stock, provided such individual has served on our board for at least six months.
Each automatic grant will have an exercise price per share equal to the fair market value per share of our common stock on the grant date and will have a term of 10 years, subject to earlier termination following the optionee's cessation of board service. The option will be immediately exercisable for all of the option shares; however, we may repurchase, at the exercise price paid per share, any shares purchased under the option which are not vested at the time of the optionee's cessation of board service. The shares subject to each initial 25,000-share automatic option grant will vest in a series of 4 successive annual installments upon the optionee's completion of each year of board service over the 4-year period measured from the grant date. The shares subject to each
annual 10,000-share automatic option grant will vest upon the optionee's completion of one year of board service measured from the grant date. However, the shares will immediately vest in full upon certain changes in control or ownership or upon the optionee's death or disability while a board member.
Director Fee Option Grant Program. Should the director fee option grant program be activated in the future, each non-employee board member will have the opportunity to apply all or a portion of any cash retainer fee for the year to the acquisition of a below-market option grant. The option grant will automatically be made on the first trading day in January in the year for which the retainer fee would otherwise be payable in cash. The option will have an exercise price per share equal to one-third of the fair market value of the option shares on the grant date, and the number of shares subject to the option will be determined by dividing the amount of the retainer fee applied to the program by two-thirds of the fair market value per share of our common stock on the grant date. As a result, the option will be structured so that the fair market value of the option shares on the grant date less the exercise price payable for those shares will be equal to the portion of the retainer fee applied to that option. The option will become exercisable in a series of 12 equal monthly installments over the calendar year for which the fee election is to be in effect. However, the option will become immediately exercisable for all the option shares upon the optionee's death or disability while serving as a board member.
Our 2000 plan will also have the following features:
- Outstanding options under the salary investment, automatic option and director fee option grant programs will immediately vest if we are acquired by a merger or asset sale or if there is a successful tender offer for more than 50% of our outstanding voting stock or a change in the majority of our board through one or more contested elections.
- Limited stock appreciation rights will automatically be included as part of each grant made under the salary investment option grant program and the automatic and director fee option grant programs, and these rights may also be granted to one or more officers as part of their option grants under the discretionary option grant program. Options with this feature may be surrendered to us upon the successful completion of a hostile tender offer for more than 50% of our outstanding voting stock. In return for the surrendered option, the optionee will be entitled to a cash distribution from us in an amount per surrendered option share based upon the highest price per share of our common stock paid in that tender offer.
- The board may amend or modify the 2000 plan at any time, subject to any required stockholder approval. The 2000 plan will terminate no later than May 2010.
EMPLOYEE STOCK PURCHASE PLAN.
Introduction. The board adopted our Employee Stock Purchase Plan in June 2000 and our stockholders approved it in June 2000. The plan will become effective immediately upon the signing of the underwriting agreement for this offering. The plan is designed to allow our eligible employees and the eligible employees of our participating subsidiaries to purchase shares of common stock, at semi-annual intervals, with their accumulated payroll deductions.
Share Reserve. We will initially reserve 250,000 shares of our common stock for issuance. The reserve will automatically increase on the first trading day in January each calendar year, beginning in calendar year 2001, by an amount equal to 1.5% of the total number of outstanding shares of our common stock on the last trading day in December in the prior calendar year. In no event will any such annual increase exceed 500,000 shares.
Offering Periods. The plan will have a series of successive overlapping offering periods, with a new offering period beginning on the first business day of February and August each year. Each
offering period will have a duration of 24 months, unless otherwise determined by the compensation committee. However, the initial offering period may have a duration in excess of 24 months and will start on the date the underwriting agreement for this offering is signed and will end on the last business day of July 2002. The next offering period will start on the first business day in August 2000 and will end on the last business day of July 2002.
Eligible Employees. Individuals scheduled to work more than 20 hours per week for more than 5 calendar months per year may join an offering period on the start date of that period. However, employees may participate in only one offering period at a time.
Payroll Deductions. A participant may contribute up to 10% of his or her base salary through payroll deductions, and the accumulated deductions will be applied to the purchase of shares on each semi-annual purchase date. The purchase price per share will be equal to 85% of the fair market value per share on the start date of the offering period in which the participant is enrolled or, if lower, 85% of the fair market value per share on the semi-annual purchase date. Semi-annual purchase dates will occur on the last business day of January and July each year. However, a participant may not purchase more than 1,000 shares on any purchase date, and not more than 300,000 shares may be purchased in total by all participants on any purchase date. Our compensation committee will have the authority to change these limitations for any subsequent offering period.
Reset Feature. If the fair market value per share of our common stock on any purchase date is less than the fair market value per share on the start date of the two-year offering period, then that offering period will automatically terminate, and a new two-year offering period will begin on the next business day. All participants in the terminated offering will be transferred to the new offering period.
Change in Control. Should we be acquired by merger or sale of substantially all of our assets or more than fifty percent of our voting securities, then all outstanding purchase rights will automatically be exercised immediately prior to the effective date of the acquisition. The purchase price in effect for each participant will be equal to 85% of the market value per share on the start date of the offering period in which the participant is enrolled at the time the acquisition occurs or, if lower, 85% of the fair market value per share immediately prior to the acquisition.
Termination. The plan will terminate no later than the last business day of July 2010.
AXYS ADVANCED TECHNOLOGIES, INC. 1999 EQUITY INCENTIVE PLAN
We assumed the Axys Advanced Technologies, Inc. 1999 Equity Incentive Plan in connection with our acquisition of AAT. The 1999 Equity Incentive Plan will continue in existence following the acquisition; however, no further option grants will be made under the Plan. The Plan was adopted by the AAT Board on September 30, 1999 and approved by the AAT shareholders on the same date. Currently, 703,259 options are outstanding under the Plan which continue to be governed by their existing terms. The outstanding options are either incentive stock options or non-statutory stock options which were granted at an exercise price of not less than 100% of the fair market value of the AAT common stock on the grant date. The majority of the options granted under the 1999 Equity Incentive Plan vest according to a four-year schedule. In accordance with the terms of the 1999 Equity Incentive Plan, in the event that AAT is acquired by merger or asset sale the options under the 1999 Equity Incentive Plan will either (i) allow the acquiring corporation to assume any outstanding options or substitute similar stock awards or (ii) in the event the options are not assumed or substituted with similar stock awards, the options shall terminate and cease to be outstanding if not exercised prior to the acquisition.
RELATED PARTY TRANSACTIONS
SALES OF PREFERRED STOCK
Since January 1, 1997 through May 5, 2000, we have issued the following securities in private placement transactions:
- 333,333 shares of our Series C convertible preferred stock, at a purchase price of $6.00 per share, for an aggregate purchase price of $1.9 million in October 1997;
- 2,228,945 shares of our Series D convertible preferred stock, at a purchase price of $7.20 per share, for an aggregate purchase price of $16.0 million in May and June 1998; and
- 1,392,503 shares of our Series E convertible preferred stock, at a purchase price of $8.00 per share, for an aggregate purchase price of $11.1 million in April 2000.
All preferred stock was issued to accredited investors in reliance upon exemption from registration under Section 4(2) of the Securities Act.
The purchasers of more than $60,000 worth of these securities include, among others, the following directors of Discovery Partners International:
SHARES OF
PREFERRED STOCK
-------------------- TOTAL
NAME SERIES D SERIES E CONSIDERATION
---- -------- -------- -------------
Andrew Senyei, M.D.(1)..................................... 141,622 256,519 $3,071,829
A. Grant Heidrich, III(2).................................. 328,820 256,520 4,419,661
Donald B. Milder(3)........................................ 494,614 251,589 5,573,928
Riccardo Pigliucci......................................... 13,889 -- 100,000
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(2) Consists of 312,379 shares of Series D Preferred Stock and 243,694 shares of Series E Preferred Stock held by Mayfield VIII and 16,441 shares of Series D Preferred Stock and 12,826 shares of Series E Preferred Stock held by Mayfield Associates Fund II. Mr. Heidrich, a general partner of each of these entities, disclaims beneficial ownership in such shares, except to the extent of his pecuniary interest in each of the limited partnerships.
(3) Consists of 77,947 shares of Series D Preferred Stock held by Crosspoint Venture Partners-1996 and 416,667 shares of Series D Preferred Stock and 251,589 shares of Series E Preferred Stock held by Crosspoint Venture Partners LS-1997. Mr. Milder, a general partner of each of these entities, disclaims beneficial ownership in such shares, except to the extent of his pecuniary interest in each of the limited partnerships.
ISSUANCES OF PROMISSORY NOTES AND WARRANTS
Since January 1, 1997 through May 5, 2000, we have issued promissory notes and warrants to purchase our capital stock in the transactions described below:
On February 2, 1998, we borrowed a total of $1.5 million from Enterprise Partners III, L.P., Enterprise Partners III Associates, L.P., Mayfield VIII, Mayfield Associates Fund II, and Crosspoint Venture Partners-1996. We issued each of these lending parties a convertible promissory note
bearing interest at 8% per annum. In addition, we issued each of these parties a warrant to purchase a number of shares of our common stock that was tied to the amount of time that the promissory note held by such party had any unpaid balance. Each warrant has an exercise price of $0.40 and is to expire upon the consummation of this offering.
On April 15, 1998, we borrowed an additional total of $900,000 from Enterprise Partners III, L.P., Enterprise Partners III Associates, L.P., Mayfield VIII, Mayfield Associates Fund II, and Crosspoint Venture Partners-1996, and issued each of these lending parties an additional convertible promissory note bearing interest at 8% per annum. In addition, we issued each of these parties a warrant to purchase a number of shares of our common stock that was tied to the amount of time that the promissory note held by such party had any unpaid balance. Each warrant has an exercise price of $0.48 and is to expire upon the consummation of this offering.
On May 22, 1998, each of the convertible promissory notes referenced above was satisfied in full by converting such note into shares of our Series D Preferred Stock, and in connection with those conversions the number of shares for which each warrant referenced above is exercisable was set, in each case according to the following table:
SHARES OF SHARES OF
COMMON STOCK COMMON STOCK
TOTAL PRINCIPAL UNDERLYING UNDERLYING
AND INTEREST 2/2/98 4/15/98
NAME CONVERTED WARRANT WARRANT
---- --------------- ------------ ------------
Enterprise Partners III, L.P. ................... $944,625 18,868 4,471
Enterprise Partners III Associates, L.P. ........ 75,051 1,499 355
Mayfield VIII.................................... 824,127 16,461 3,901
Mayfield Associates Fund II...................... 43,375 866 205
Crosspoint Venture Partners-1996................. 561,216 11,210 2,656
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On December 10, 1999, we borrowed a total of $4.0 million from Enterprise Partners III, L.P., Enterprise Partners III Associates, L.P., Mayfield VIII, and Mayfield Associates Fund II. We issued each of these lending parties a convertible promissory note bearing interest at 8% per annum. In addition, we issued each of these parties a warrant to purchase a number of shares of our Series E Preferred Stock that was tied to the amount of time that the promissory note held by such party had any unpaid balance. Each warrant has an exercise price of $5.00 and is to expire upon the consummation of this offering.
On March 9, 2000, we borrowed an additional $2.0 million from Crosspoint Venture Partners LS-1997, and issued to Crosspoint Venture Partners LS-1997 a convertible promissory note bearing interest at 8% per annum. In addition, we issued Crosspoint Venture Partners LS-1997 a warrant to purchase a number of shares of our Series E Preferred Stock that was tied to the amount of time that its promissory note had any unpaid balance. This warrant has an exercise price of $5.00 and is to expire upon the consummation of this offering.
On April 7, 2000, each of the convertible promissory notes issued on December 10, 1999 and March 9, 2000 was satisfied in full by converting such note into shares of our Series E Preferred Stock, and in connection with those conversions the number of shares for which each warrant
issued on December 10, 1999 and March 9, 2000 is exercisable was set, in each case according to the following table:
SHARES OF SERIES E
TOTAL PRINCIPAL PREFERRED STOCK
AND INTEREST UNDERLYING
NAME CONVERTED WARRANT
---- --------------- ------------------
Enterprise Partners III, L.P. ................ $1,901,112 72,487
Enterprise Partners III Associates, L.P. ..... 151,040 5,759
Mayfield VIII................................. 1,949,552 74,334
Mayfield Associates Fund II................... 102,608 3,912
Crosspoint Venture Partners LS-1997........... 2,012,712 78,246
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CERTAIN OPTION GRANTS AND EXERCISES
On May 5, 2000, we granted Arnold Hagler an option to purchase 50,000 shares of our common stock at a per-share exercise price of $8.00. Twenty-five percent of the shares that are subject to Dr. Hagler's option vest on each anniversary of the grant date.
In connection with our acquisition of AAT on April 28, 2000 we assumed AAT's outstanding stock options, including Robert Reed's AAT option which now represents an option to purchase 225,000 shares of our common stock.
On January 19, 2000, we granted Dr. Heinrich Zinsli an option to purchase 75,000 shares of our common stock at a per-share price of $2.50 with a standard four year vesting schedule, with a vesting commencement date of January 1, 2000.
The 1999 stock option grant to David Coffen is described under the caption "Management -- Options."
From January 1, 1997 through December 31, 1998, we granted options to purchase our common stock to our directors and executive officers in the following transactions:
NUMBER OF
SHARES OF
COMMON STOCK
UNDERLYING
NAME DATE OF GRANT OPTION EXERCISE PRICE
---- ------------- ------------ --------------
Richard Brown..................................... 6/4/97 15,000 $0.20
Jack Fitzpatrick.................................. 9/26/97 75,000 0.30
Richard Brown..................................... 11/25/97 43,000 0.40
Jack Fitzpatrick.................................. 11/25/97 5,000 0.40
John Lillig....................................... 11/25/97 20,000 0.40
Riccardo Pigliucci................................ 5/8/98 600,000 0.40
John Lillig....................................... 5/8/98 80,000 0.40
Richard Brown..................................... 5/8/98 80,000 0.40
Jack Fitzpatrick.................................. 5/8/98 80,000 0.40
Dieter Hoehn...................................... 8/12/98 10,000 1.50
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Since January 1, 1997, options to purchase our common stock were exercised by our directors and executive officers in the following transactions:
NUMBER OF
SHARES OF
COMMON TOTAL
DATE OF STOCK CONSIDERATION
NAME EXERCISE PURCHASED EXERCISE PRICE PAID
---- -------- --------- -------------- -------------
Riccardo Pigliucci....................... 11/30/98 430,000 $0.40 $172,000
Riccardo Pigliucci....................... 1/31/99 170,000 0.40 68,000
Dieter Hoehn............................. 1/18/00 10,000 0.30 3,000
Dieter Hoehn............................. 1/18/00 10,000 1.50 15,000
Richard Brown............................ 3/22/00 22,000 0.20 4,400
Richard Brown............................ 3/22/00 15,000 0.30 4,500
Richard Brown............................ 3/22/00 21,500 0.40 8,600
Jack Fitzpatrick......................... 3/22/00 75,000 0.30 22,500
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OTHER TRANSACTIONS
On May 5, 2000, we entered into a Stock Purchase Agreement with Structural Proteomics, pursuant to which we acquired 75% of the outstanding shares of Structural Proteomics for a total consideration of $1.0 million in cash and 150,000 shares of our common stock. The cash portion of this consideration was for newly issued shares of Structural Proteomics. Arnold Hagler owns 5.5% of the outstanding shares of Structural Proteomics.
In connection with our acquisition of voting stock of Structural Proteomics, on May 5, 2000 we entered into a Rights Agreement with Arnold Hagler and two other shareholders of Structural Proteomics (collectively, the "Founders") pursuant to which Structural Proteomics granted us a right of first offer with respect to all future sales of any class or series of its capital stock. This right of first offer does not apply to securities issued in connection with strategic alliances, and it terminates just prior to Structural Proteomics' initial public offering. In addition, we granted the Founders the option, acting as a group on the first anniversary of the closing of this offering, to exchange up to 25% of the Structural Proteomics stock that they held as of the closing of this offering for a number of shares of our common stock that is based upon a valuation of the common stock of Structural Proteomics that depends upon the total revenues of Structural Proteomics over the previous 12-month period. On each subsequent anniversary of the closing of this offering, the Founders will have the right to similarly exchange an additional 25% of the Structural Proteomics stock they held as of the closing of this offering (plus all other stock eligible to be exchanged pursuant to this agreement that has not previously been exchanged). Further, the Founders granted us the option to exchange shares of our common stock for a portion of the shares of Structural Proteomics stock held by the Founders. If on the first anniversary of the closing of this offering all issued and outstanding shares of Structural Proteomics stock are valued in the aggregate above $30.0 million, we will have the option to exchange our stock for up to 25% of the Structural Proteomics stock held by the Founders as of the closing of this offering. The number of shares of our stock to be exchanged will be calculated on the same basis as for the Founders' option. On each subsequent anniversary of the closing of this offering, we will have the option to similarly exchange our stock for an additional 25% of the Structural Proteomics stock held by the Founders as of the closing of this offering (plus all other stock eligible to be exchanged pursuant to this agreement that has not previously been exchanged). If on the first anniversary of the closing of this offering all issued and outstanding shares of Structural Proteomics stock are valued in the aggregate below $30.0 million, our option reverts to an option, exercisable on the third anniversary of the closing of this offering, to exchange 50% of the Structural Proteomics stock held by the Founders on the date of the closing of this offering for our stock. In that case, the remaining 50% of such
stock would be subject to our exchange option on the fourth anniversary of the closing of this offering.
On April 28, 2000, we acquired AAT from Axys Pharmaceuticals, Inc. John P. Walker, a member of our board of directors, is Chairman, Chief Executive Officer and a director of Axys Pharmaceuticals. Axys Pharmaceuticals owned 10,000,000 shares of the 10,006,250 issued and outstanding shares of common stock of AAT, and received 7,425,000 shares of our common stock, a promissory note in the principal amount of $550,000 and $50,000 in cash as merger consideration. In connection with this merger, we also issued a warrant to Axys to purchase 200,000 shares of our common stock at a per-share price of $8.00.
In connection with our acquisition of AAT, we have entered into a Standstill Agreement with Axys Pharmaceuticals, Inc. pursuant to which Axys Pharmaceuticals has agreed for itself and its affiliates that until the later of the date on which Axys Pharmaceuticals and its affiliates hold less than 5% of our then-outstanding common stock or April 28, 2010, Axys and its affiliates will not, without our prior written consent: (a) acquire any of our voting securities or those of our subsidiaries, (b) solicit proxies for the voting of our voting securities, (c) make any public announcement or submit any proposal for any extraordinary transaction (other than a sale) of our voting securities or assets, (d) form or join in any group for the voting of our voting securities or (e) otherwise seek to influence our management, board or policies. In addition, we agreed that at each annual meeting of our stockholders at any time during which our shares are publicly traded, we will include on our management slate of director nominees the number of persons designated by Axys Pharmaceuticals that Axys Pharmaceuticals could elect (if "cumulative voting" was applicable) solely through the voting of our voting securities that it owns, provided that in any case the maximum number of such persons will be one less than the number that would constitute a majority of the members of our board of directors. In addition, as long as we have a classified board of directors, this will be construed in each year to allow such number of nominees minus the number of previous Axys Pharmaceuticals nominees who will remain on the Board because their three-year terms do not expire that year. After this offering, Axys Pharmaceuticals would be entitled under the Standstill Agreement to nominate 2 of our 7 directors. The 2 designated Axys Pharmaceuticals initial nominees are John Walker and Alan Lewis. Axys Pharmaceuticals agreed, in the Standstill Agreement, to vote each year for the entire management slate of director nominees.
On August 19, 1999, we entered into a Voting Share Purchase Agreement with all of the holders of voting shares of Discovery Technologies, Ltd. ("DTL"), which included Dr. Heinrich Zinsli. Pursuant to this agreement, we purchased forty percent of the voting stock of DTL for an aggregate purchase price of 2,750,000 Swiss francs, which was equivalent to $1.7 million as of March 31, 2000, and we were given the option to purchase the remaining sixty percent of the voting stock of DTL prior to January 31, 2000. On December 23, 1999, we exercised this option and purchased the remaining sixty percent of the voting stock of DTL for an aggregate purchase price of up to 4,250,000 Swiss francs, which was equivalent to $2.6 million as of March 31, 2000, depending on DTL's revenues and EBITDA in each of 1999 and 2000. Dr. Zinsli sold a total of 13.34% of the voting stock of DTL to us pursuant to these agreements and received from us a total of $442,788.
On August 10, 1999, DTL entered into an employment agreement with Dr. Zinsli to serve as President and Chief Executive Officer of DTL. This agreement provides for a term of two years, but will be extended indefinitely upon the mutual agreement of Dr. Zinsli and DTL. Under this agreement, Dr. Zinsli will be paid an annual salary of 162,110 Swiss francs which on March 31, 2000 was equivalent to $97,833 and which is subject to annual review and adjustment. In addition, Dr. Zinsli receives annual payments of 40,000 Swiss francs for insurance, which on March 31, 2000 was equivalent to $24,140; 24,000 Swiss francs as compensation for being a member of DTL's board of directors, which on March 31, 2000 was equivalent to $14,484; 6,000 Swiss francs as a general
allowance, which on March 31, 2000 was equivalent to $3,621; and 800 Swiss francs per month as a car allowance, which on March 31, 2000 was equivalent to $483.
Pursuant to our Key Employment Agreement with Riccardo Pigliucci, Mr. Pigliucci exercised his right to borrow from us the aggregate exercise price of $240,000 to purchase 600,000 shares of our common stock pursuant to stock options held by Mr. Pigliucci. In connection with these exercises, Mr. Pigliucci issued to us a promissory note dated November 30, 1998 and due November 30, 2005, having a principal amount of $172,000 and an interest rate of 4.51% per annum prior to the maturity date and 10% thereafter. Mr. Pigliucci also issued us a promissory note dated January 31, 1999 and due January 31, 2006, having a principal amount of $68,000 and an interest rate of 4.64% per annum prior to the maturity date and 10% thereafter. At the time Mr. Pigliucci issued each of these notes to us, he also entered into a Pledge Agreement with us under which he granted us a security interest in the shares that he purchased using the note as consideration.
Dr. Paul Anderson, a member of our board of directors from March 1996 until April 2000, serves as Vice President of DuPont Pharmaceuticals Company, a significant customer of our ChemRx Advanced Technologies product group. For the years ended December 31, 1997, 1998, and 1999, revenues generated from DuPont Pharmaceuticals were approximately $513,600, $364,300 and $402,910, respectively.
Alan Lewis, a current member of our board of directors, has been Chief Executive Officer and a director of Signal Pharmaceuticals, Inc. since 1996. During 1998 and 1999, we performed services for Signal, and Signal paid us approximately $350,000. In addition, since July 6, 1998 our ChemRx Advanced Technologies group has been performing services for Signal for which Signal is to pay our ChemRx Advanced Technologies group a fixed amount of $100,000 plus various other amounts based on contingencies related to delivery and commercial success of compounds. We acquired AAT, and Mr. Lewis joined our board of directors, in April 2000.
Dr. Andrew Senyei, a current member of our board of directors, is a director of Elitra Pharmaceuticals. Since September 30, 1999 AAT has been performing services for Elitra for which Elitra is to pay a fixed amount of $400,000 plus various other amounts based on contingencies related to delivery and commercial success of compounds.
We have entered into indemnification agreements with all of our officers and directors. These indemnification agreements will require us to indemnify our officers and directors to the fullest extent permitted by Delaware law.
Arrangements pursuant to which certain of our stockholders are entitled to have their shares registered by us for resale are described under the caption "Description of Capital Stock."
We believe that all of our transactions with affiliates were entered into on terms and conditions no less favorable to us than those that could have been obtained from unaffiliated third parties.
PRINCIPAL STOCKHOLDERS
The following table shows information known to us with respect to the beneficial ownership of our common stock as of May 5, 2000, and as adjusted to reflect the sale of the shares of common stock offered under this prospectus by:
- each person or group of affiliated persons who is known by us to own beneficially 5% or more of our common stock;
- each of our directors;
- each executive officer listed in the "Summary Compensation" table above; and
- all of our directors and executive officers as a group.
Except as indicated in the footnotes to this table and subject to community property laws where applicable, the persons named in the table have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them. Beneficial ownership and percentage ownership are determined in accordance with the rules of the SEC. The table below includes the number of shares underlying options and warrants which are exercisable within 60 days from May 5, 2000 and assumes the conversion of all shares of our preferred stock into shares of our common stock prior to this offering. It is therefore based on 17,437,204 shares of our common stock outstanding prior to this offering and 22,437,204 shares outstanding immediately after this offering. The address for those individuals for which an address is not otherwise indicated is: 9640 Towne Centre Drive, San Diego, California 92121.
NUMBER OF PERCENT OWNED PERCENT OWNED
SHARES BEFORE THIS AFTER THIS
BENEFICIAL OWNER OUTSTANDING OFFERING OFFERING
---------------- ----------- ------------- -------------
DIRECTORS AND NAMED EXECUTIVE OFFICERS
Riccardo Pigliucci................................ 614,007 3.5 2.7
Jack Fitzpatrick(1)............................... 160,000 * *
David Coffen(2)................................... 100,000 * *
John Lillig(3).................................... 185,000 1.1 *
Richard Brown(4).................................. 160,000 * *
Dieter Hoehn...................................... 25,000 * *
A. Grant Heidrich III(5).......................... 2,290,824 13.0 10.1
Alan J. Lewis..................................... 0 * *
Donald B. Milder(6)............................... 1,898,031 10.8 8.4
Andrew E. Senyei(7)............................... 2,385,782 13.4 10.4
John P. Walker(8)................................. 7,625,000 43.2 33.7
All directors and executive officers as a group
(14 persons)(9)................................. 15,610,832 82.8 65.4
OTHER FIVE PERCENT STOCKHOLDERS
Axys Pharmaceuticals, Inc.(10).................... 7,625,000 43.2 33.7
Entities Affiliated with Enterprise
Partners(11).................................... 2,385,782 13.4 10.4
Entities Affiliated with Mayfield Fund(12)........ 2,290,824 13.0 10.1
Entities Affiliated with Crosspoint
Ventures(13).................................... 1,898,031 10.8 8.4
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(1) Includes 85,000 shares of common stock issuable upon exercise of stock options exercisable within 60 days of May 5, 2000.
(2) Consists of 100,000 shares of common stock issuable upon exercise of stock options exercisable within 60 days of May 5, 2000.
(3) Includes 100,000 shares of common stock issuable upon exercise of stock options exercisable within 60 days of May 5, 2000.
(4) Includes 101,500 shares of common stock issuable upon exercise of stock options exercisable within 60 days of May 5, 2000.
(5) Includes 1,996,293 shares held by Mayfield VIII and 105,065 shares held by Mayfield Associates Fund II. Also includes 179,995 shares underlying outstanding warrants held by Mayfield VIII and 9,471 shares underlying outstanding warrants held by Mayfield Associates Fund II. Mr. Heidrich, a general partner of each of these entities, disclaims beneficial ownership in such shares, except to the extent of his pecuniary interest in each of the limited partnerships.
(6) Includes 1,086,955 shares held by Crosspoint Venture Partners-1996 and 671,822 shares held by Crosspoint Venture Partners LS-1997. Also includes 61,008 shares underlying outstanding warrants held by Crosspoint Venture Partners-1996 and 78,246 shares underlying outstanding warrants held by Crosspoint Venture Partners LS-1997. Mr. Milder, a general partner of each of these entities, disclaims beneficial ownership in such shares, except to the extent of his pecuniary interest in each of the limited partnerships.
(7) Includes 1,881,709 shares held by Enterprise Partners III, L.P. and 160,848 shares held by Enterprise Partners III Associates, L.P. Also includes 328,430 shares underlying outstanding warrants held by Enterprise Partners III, L.P. and 14,795 shares underlying outstanding warrants held by Enterprise Partners III Associates, L.P. Dr. Senyei, the managing partner of each of these entities, disclaims beneficial ownership in such shares, except to the extent of his pecuniary interest in each of the limited partnerships.
(8) Consists of 7,425,000 shares and a warrant to purchase 200,000 shares held by Axys Pharmaceuticals, Inc. Mr. Walker, Chairman, Chief Executive Officer and a director of Axys Pharmaceuticals, disclaims beneficial ownership in such shares, except to the extent of his pecuniary interest in Axys Pharmaceuticals.
(9) Includes each director and officer listed, and in addition includes Robert Reed, Heinrich Zinsli and Arnold Hagler. Dr. Reed owns 42,188 options to purchase our common stock that are exercisable within 60 days of May 5, 2000. Dr. Zinsli owns 75,000 options to purchase our common stock that are exercisable within 60 days of May 5, 2000. Dr. Hagler owns 50,000 options to purchase our common stock that are exercisable within 60 days of May 5, 2000.
(10) We have entered into a standstill agreement with Axys Pharmaceuticals, Inc. pursuant to which Axys has agreed for itself and its affiliates not to acquire any of our additional voting securities or those of our subsidiaries, and not to undertake any proxy contest. The stockholder's business address is 180 Kimball Way, South San Francisco, CA 94080.
(11) Includes 1,881,709 shares held by Enterprise Partners III, L.P. and 160,848 shares held by Enterprise Partners III Associates, L.P. Also includes 328,430 shares underlying outstanding warrants held by Enterprise Partners III, L.P. and 14,795 shares underlying outstanding warrants held by Enterprise Partners III Associates, L.P. The stockholder's business address is 7979 Ivanhoe Ave., Suite 550, La Jolla, CA 92037. Andrew E. Senyei, the managing partner of each of these entities, disclaims beneficial ownership in such shares, except to the extent of his pecuniary interest in each of the limited partnerships.
(12) Includes 1,996,293 shares held by Mayfield VIII and 105,065 shares held by Mayfield Associates Fund II. Also includes 179,995 shares underlying outstanding warrants held by Mayfield VIII and 9,471 shares underlying outstanding warrants held by Mayfield Associates Fund II. The stockholder's business address is 2800 Sand Hill Road, Menlo Park, CA 94025. A. Grant Heidrich, III, a general partner of each of these entities, disclaims beneficial ownership in such shares, except to the extent of his pecuniary interest in each of the limited partnerships.
(13) Includes 1,086,955 shares held by Crosspoint Venture Partners-1996 and 671,822 shares held by Crosspoint Venture Partners LS-1997. Also includes 61,008 shares underlying outstanding warrants held by Crosspoint Venture Partners-1996 and 78,246 shares underlying outstanding warrants held by Crosspoint Venture Partners LS-1997. The stockholder's business address is 18552 MacArthur Blvd., Suite 400, Irvine, CA 92612. Donald B. Milder, a general partner of each of these entities, disclaims beneficial ownership in such shares, except to the extent of his pecuniary interest in each of the limited partnerships.
DESCRIPTION OF CAPITAL STOCK
The following information describes our common stock and preferred stock, as well as options and warrants to purchase our common stock, and provisions of our certificate of incorporation and our bylaws, all as will be in effect upon the closing of this offering. This description is only a summary. You should also refer to the certificate and bylaws which have been filed with the SEC as exhibits to our registration statement, of which this prospectus forms a part. The descriptions of the common stock and preferred stock, as well as options and warrants to purchase our common stock, reflect changes to our capital structure that will occur upon the closing of this offering in accordance with the terms of the certificate of incorporation.
Upon completion of this offering, our authorized capital stock will consist of 100,000,000 shares of common stock, par value $0.001 per share and 1,000,000 shares of preferred stock, par value $0.001 per share.
COMMON STOCK
As of May 5, 2000, there were 9,420,792 shares of common stock outstanding and held of record by 58 stockholders. There will be 22,437,204 shares of common stock outstanding upon the closing of this offering, which gives effect to the issuance of 5,000,000 shares of common stock offered by us under this prospectus and the conversion of shares of preferred stock discussed below.
Each share of common stock has identical rights and privileges in every respect. The holders of our common stock are entitled to vote upon all matters submitted to a vote of our stockholders and are entitled to one vote for each share of common stock held.
Subject to the prior rights and preferences, if any, applicable to shares of preferred stock or any series of preferred stock, the holders of common stock are entitled to receive such dividends, payable in cash, stock or otherwise, as may be declared by our board out of any funds legally available for the payment of dividends.
If we voluntarily or involuntarily liquidate, dissolve or wind-up, the holders of common stock will be entitled to receive after distribution in full of the preferential amounts, if any, to be distributed to the holders of preferred stock or any series of preferred stock, all of the remaining assets available for distribution ratably in proportion to the number of shares of common stock held by them. Holders of common stock have no preferences or any preemptive conversion or exchange rights. The outstanding common stock is, and the shares offered by us in this offering will be, when used in consideration for payment thereof, fully paid and non-assessable. The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which we may designate and issue in the future. Upon the closing of this offering, there will be no shares of preferred stock outstanding.
PREFERRED STOCK
As of May 5, 2000, there were 7,954,781 shares of convertible preferred stock outstanding. Upon the closing of this offering, all outstanding shares of convertible preferred stock will be converted into 8,016,412 shares of common stock and will be held of record by 14 stockholders. The convertible preferred stock will no longer be authorized, issued or outstanding.
Upon the closing of this offering our board will be authorized to provide
for the issuance of shares of preferred stock in one or more series, and to fix
for each series voting rights, if any, designations, preferences and relative,
participating, optional or other special rights and such qualifications,
limitations or restrictions as provided in a resolution or resolutions adopted
by the board. The board may authorize the issuance of preferred stock with terms
and conditions which could discourage a takeover or other transaction that
holders of some or a majority of common
stock might believe to be in their best interests or in which holders of common stock might receive a premium for their shares over the then market price. We have no present plans to issue any shares of preferred stock.
WARRANTS
As of May 5, 2000, we have outstanding warrants to purchase:
- 443,116 shares of common stock, at a weighted average exercise price of $3.69 per share;
- 225,406 shares of Series A preferred stock, at an exercise price of $2.00 per share, which shares are convertible into 227,440 shares of common stock; and
- 234,738 shares of Series E preferred stock at an exercise price of $5.00 per share, convertible into common stock on a one-for-one basis.
All outstanding warrants for our capital stock will terminate upon consummation of our initial underwritten public offering except for (i) warrants to purchase 33,051 shares of Series A preferred stock (convertible into 33,349 shares of common stock) issued to Comdisco, Inc., and (ii) a warrant to purchase 200,000 shares of common stock issued to Axys Pharmaceuticals, Inc. The Comdisco warrants will expire no later than February 9, 2006; and the Axys warrant will expire no later than May 5, 2005.
OPTIONS
As of May 5, 2000, options to purchase a total of 1,867,847 shares of common stock were outstanding, including options to purchase 1,190,611 shares of common stock issued under our 1995 Stock Option/Stock Issuance Plan, and 703,259 shares of common stock issued to former employees of AAT upon assumption of AAT's 1999 Equity Incentive Plan in connection with our acquisition of AAT. Options to purchase a total of 148,238 shares of common stock remain available for grant under our 1995 Stock Option/Stock Issuance Plan.
REGISTRATION RIGHTS
Under the terms of an agreement with some of our stockholders, after the closing of this offering the holders of 15,921,412 shares of common stock will be entitled to require the registration of their shares under the Securities Act of 1933. The holders of any 6,308,565 of these shares may exercise "demand rights" entitling them to require that we register their shares under the Securities Act of 1933, subject to limitations described in the relevant agreement. We are not required to effect more than two registrations for such holders pursuant to these demand registration rights. These demand rights commence on the earlier of December 31, 2001 or eleven months after the effective date of the first registration statement for a public offering of our securities, and expire five years from such effective date. In addition, Bristol-Myers Squibb and Aventis each maintain an individual right to demand registration of their shares under the Securities Act of 1933, subject to limitations. Their demand rights commence eleven months after the effective date of the first registration statement for a public offering of our securities, and terminate five years from such effective date. Further, after the closing of this offering, holders of all 15,921,412 of these registrable securities will be entitled to piggyback registration rights with respect to the registration of their shares of common stock. If we propose to register any shares of common stock either for our account or for the account of other security holders, the holders of shares having piggyback rights are entitled to receive notice of the registration, subject to some limitations. Further, at any time after we become eligible to file a registration statement on Form S-3, the holders of any 3,184,283 of the registrable securities may require us to file registration statements under the Securities Act of 1933 on Form S-3 with respect to such shares. These registration rights are subject to conditions
and limitations, including the right of the underwriters of an offering to limit the number of shares of common stock held by security holders with registration rights to be included in such registration. We are generally required to bear all of the expenses of all these registrations, including the reasonable fees of a single counsel acting on behalf of all selling stockholders, except underwriting discounts and selling commissions. Registration of any shares of common stock held by security holders with registration rights would result in those shares becoming freely tradable without restriction under the Securities Act of 1933 immediately upon effectiveness of registration.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS
General. Provisions of Delaware law, as well as our certificate of incorporation and bylaws, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, control of us. Such provisions could limit the price that some investors might be willing to pay in the future for our common stock. These provisions of Delaware law and our certificate of incorporation and bylaws may also have the effect of discouraging or preventing certain types of transactions involving an actual or threatened change of control of us, including unsolicited takeover attempts, even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
Delaware Takeover Statute. We are subject to the "business combination" provisions of Section 203 of the Delaware General Corporation Law. Subject to certain exceptions, Section 203 prohibits a publicly-held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:
- the transaction is approved by the board of directors prior to the date the interested stockholder obtained interested stockholder status;
- upon consummation of the transaction that resulted in the stockholders becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by (a) persons who are directors and also officers and (b) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
- on or subsequent to the date the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
A "business combination" includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an "interested stockholder" is a person who, together with affiliates and associates, owns, or within three years did own, 15% or more of the corporation's voting stock. This statute could prohibit or delay the accomplishment of mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us.
Charter and Bylaw Provisions. In addition, certain provisions of our certificate of incorporation and bylaws summarized in the following paragraphs may be deemed to have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by stockholders.
Classified Board of Directors; Removal; Filling Vacancies and Amendment. Our certificate of incorporation and bylaws provide that the board will be divided into three classes of directors serving staggered, three-year terms. The classification of the board has the effect of requiring at least two annual stockholder meetings, instead of one, to replace a majority of members of the board. Subject to the rights of the holders of any outstanding series of preferred stock, the certificate of incorporation authorizes only the board to fill vacancies, including newly created directorships. Accordingly, this provision could prevent a stockholder from obtaining majority representation on the board by enlarging the board of directors and filling the new directorships with its own nominees. The certificate of incorporation also provides that directors may be removed by stockholders only for cause and only by the affirmative vote of holders of two-thirds of the outstanding shares of voting stock.
Stockholder Action; Special Meeting of Stockholders. The certificate of incorporation provides that stockholders may not take action by written consent, but may only take action at duly called annual or special meetings of stockholders. The certificate of incorporation further provides that special meetings of our stockholders may be called only by the chairman of the board of directors, the chief executive officer or a majority of the board of directors. This limitation on the right of stockholders to call a special meeting could make it more difficult for stockholders to initiate actions that are opposed by the board of directors. These actions could include the removal of an incumbent director or the election of a stockholder nominee as a director. They could also include the implementation of a rule requiring stockholder ratification of specific defensive strategies that have been adopted by the board of directors with respect to unsolicited takeover bids. In addition, the limited ability of the stockholders to call a special meeting of stockholders may make it more difficult to change the existing board and management.
Advance Notice Requirements for Stockholder Proposals and Director Nomination. The bylaws provide that stockholders seeking to bring business before an annual meeting of stockholders, or to nominate candidates for election as directors at an annual meeting of stockholders, must provide timely notice thereof in writing. To be timely, a stockholder's notice must be delivered to or mailed and received at our principal executive offices not less than 120 days prior to the date of our annual meeting. The bylaws also specify certain requirements as to the form and content of a stockholder's notice. These provisions may preclude stockholders from bringing matters before an annual meeting of stockholders or from making nominations for directors at an annual meeting of stockholders.
Authorized but Unissued Shares. The authorized but unissued shares of common stock and preferred stock are available for future issuance without stockholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions, employee benefit plans and "poison pill" rights plans. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Supermajority Vote to Amend Charter and Bylaws. The Delaware General Corporation Law provides generally that an amendment to a corporation's certificate of incorporation or bylaws requires the affirmative vote of a majority of the shares entitled to vote on any matter, unless a corporation's certificate of incorporation or bylaws, as the case may be, requires a greater percentage. Following the completion of this offering, our present directors, and executive officers and principal stockholders will beneficially own approximately 65.4% of our common stock. This gives them veto power with respect to any stockholder action or approval requiring either a two-thirds vote or a simple majority.
NASDAQ NATIONAL MARKET
We have applied to list our common stock on the Nasdaq National Market under the trading symbol "DPII."
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no public market for our common stock. The market price of our common stock after this offering could decline as a result of the sale of a large number of shares of our common stock in the market, or the perception that such sales could occur. Such sales also could make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate. Based on the number of shares outstanding at May 5, 2000, after this offering, we will have 22,437,204 shares of common stock outstanding. Of these shares, the shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, unless these shares are purchased by "affiliates" as that term is defined in Rule 144 under the Securities Act. This leaves 17,437,204 shares eligible for sale in the public market as follows:
ELIGIBILITY OF RESTRICTED SHARES FOR SALE IN THE PUBLIC MARKET
NUMBER
DATE OF SHARES
---- ---------
After the date of this prospectus........................... 0
At various times after 180 days from the date of this
prospectus, subject, in some cases, to volume limitations
under Rule 144............................................ 8,465,000
Shares first eligible for sale 270 days after the date of
this prospectus........................................... 8,972,144
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The holders of 99% of our common stock, including all of our directors and officers, together with the holders of options to purchase 1,850,412 shares of common stock and the holders of warrants to purchase 871,945 shares of common stock, have entered into lock-up agreements under which they have agreed with the underwriters not to sell, offer, contract to sell, transfer the economic risk of ownership in, make any short sale, pledge or otherwise dispose of any of their common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, without the prior written consent of Chase Securities Inc.
In general, under Rule 144 of the Securities Act of 1933, a person or persons whose shares are required to be aggregated, including an affiliate, whose shares have been owned for at least one year is entitled to sell, within any three-month period after the date of this prospectus, a number of shares that does not exceed the greater of 1% of the then outstanding shares of common stock -- approximately 224,372 shares immediately after this offering -- or the average weekly trading volume in our common stock during the four calendar weeks preceding the date on which notice of such sale is filed, subject to certain restrictions. In addition, a person who is not deemed to have been an affiliate of ours at any time during the 90 days preceding a sale and whose shares have been beneficially owned by nonaffiliates for at least two years would be entitled to sell such shares under Rule 144(k) without regard to the requirements described above. To the extent that shares were acquired from one of our affiliates, such person's holding period for the purpose of effecting a sale under Rule 144 commences on the date of transfer from the affiliate.
Following 90 days after the date of this prospectus, shares issued upon exercise of options that we granted prior to the date of this offering will also be available for sale in the public market pursuant to Rule 701 under the Securities Act of 1933. Rule 701 permits resales of such shares in reliance upon Rule 144 under the Securities Act of 1933 but without compliance with the restrictions, including the holding-period requirement, imposed under Rule 144. As of May 5, 2000, options to purchase a total of 1,893,870 shares of common stock were outstanding, 1,190,611 of which were currently exercisable, and, upon exercise, 743,212 of which are subject to repurchase by us.
Upon the closing of this offering, we intend to file a registration statement to register for resale the 3,300,000 shares of common stock reserved for issuance under our stock option plans. We expect the registration statement to become effective immediately upon filing. Shares issued upon the exercise of stock options granted under our stock option plans will be eligible for resale in the public market from time to time subject to vesting and, in the case of certain options, the expiration of the lock-up agreements referred to above.
See "Management -- Benefit Plans," "Principal Stockholders," and "Underwriting."
UNDERWRITING
Chase Securities Inc., Lehman Brothers Inc. and UBS Warburg LLC are the representatives of the underwriters. Subject to the terms and conditions of the underwriting agreement, the underwriters named below, through their representatives, have severally agreed to purchase from us the following respective numbers of shares of common stock:
NUMBER
NAME OF SHARES
---- ---------
Chase Securities Inc. ...........................
Lehman Brothers Inc. ............................
UBS Warburg LLC..................................
---------
Total............................................ 5,000,000
=========
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The underwriting agreement provides that the obligations of the underwriters are subject to certain conditions precedent, including the absence of any material adverse change in our business and the receipt of certain certificates, opinions and letters from us, our counsel and the independent auditors. The underwriters are committed to purchase all of the shares of common stock offered by us in this prospectus if they purchase any shares.
The following table shows the per share and total underwriting discounts and commissions we will pay to the underwriters. Such amounts are shown assuming both no exercise and full exercise of the underwriters' over-allotment option to purchase additional shares.
UNDERWRITING DISCOUNTS AND COMMISSIONS
WITHOUT WITH
OVER-ALLOTMENT OVER-ALLOTMENT
EXERCISE EXERCISE
-------------- --------------
Per Share................ $ $
Total.................... $ $
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We estimate that the total expenses of this offering, excluding underwriting discounts and commissions, will be approximately $1.2 million.
The underwriters propose to offer the shares of common stock directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $ per share. The underwriters may allow and such dealers may re-allow a concession not in excess of $ per share to certain other dealers. After the initial public offering of the shares, the offering price and other selling terms may be changed by the underwriters. The representatives have advised us that the underwriters do not intend to confirm discretionary sales in excess of 5% of the shares of common stock offered in this prospectus.
We have granted to the underwriters a 30-day option to purchase up to 750,000 additional shares of common stock at the initial public offering price, less the underwriting discount set forth on the cover page of this prospectus. To the extent that the underwriters exercise this option, each of the underwriters will have a firm commitment to purchase approximately the same percentage of total shares the underwriter purchased in the above table. We will be obligated, pursuant to this option, to sell shares to the underwriters to the extent the option is exercised. The underwriters may exercise this option only to cover over-allotments made in connection with the sale of common stock offered by us.
The offering of the shares is made for delivery when, as and if accepted by the underwriters and subject to prior sale and to withdrawal, cancellation or modification of the offering without notice. The underwriters reserve the right to reject an order for the purchase of shares in whole or in part.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make with respect to these liabilities.
Substantially all of our securityholders and all of our executive officers and directors have agreed or will agree prior to completion of this offering, that they will not, without the prior written consent of Chase Securities Inc., offer, sell or otherwise dispose of any shares of common stock, options or warrants to acquire shares of common stock or securities exchangeable for or convertible into shares of common stock owned by them for a period of 180 days following the date of this prospectus. We have agreed that we will not, without the prior written consent of Chase Securities Inc., offer, sell or otherwise dispose of any shares of common stock, options or warrants to acquire shares of common stock or securities exchangeable for or convertible into shares of common stock for a period of 180 days following the date of this prospectus, except that we may issue shares upon the exercise of options and warrants granted prior to the date hereof and in connection with our employee stock purchase plan of 2000. We may also grant additional options or other awards under our 2000 equity incentive plan. Without the prior written consent of Chase Securities Inc., any additional options granted shall not be exercisable during this 180-day period.
The representatives of the underwriters participating in this offering may over-allot or effect transactions which stabilize, maintain or otherwise affect the market price of the common stock at levels above those which might otherwise prevail in the open market, including by entering stabilizing bids, effecting syndicate covering transactions or imposing penalty bids. A stabilizing bid means the placing of any bid or effecting of any purchase, for the purpose of pegging, fixing or maintaining the price of the common stock. A syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase to reduce a short position created in connection with the offering. A penalty bid means an arrangement that permits the underwriters to reclaim a selling concession from a syndicate member in connection with the offering when common stock sold by the syndicate member are purchased in syndicate covering transactions. Such transactions may be effected on the Nasdaq National Market, in the over-the-counter market, or otherwise. Such stabilizing, if commenced, may be discontinued at any time.
In connection with this offering, the underwriters may make short sales of our common stock and may purchase our shares on the open market 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 the offering. "Covered" short sales are sales made in an amount not greater than the underwriters' over-allotment option to purchase additional shares in the offering. The underwriters may close out any covered short position by either exercising their over-allotment option or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. "Naked" short sales are sales in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering. Similar to other purchase transactions, the underwriters' purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market.
Prior to this offering, there has been no public market for our common stock. The initial public offering price for the shares of common stock will be determined by negotiations among us and the representatives. Among the factors to be considered in determining the initial public offering price will be prevailing market and economic conditions, our revenue and earnings, market valuations of other companies engaged in activities similar to our business operations, our management and other factors deemed relevant.
In addition, at our request, the underwriters have reserved up to 250,000 shares of common stock for sale at the initial public offering price to our directors, business associates and related persons. The number of shares available for sale to the general public will be reduced if such persons purchase the reserved shares. Any reserved shares which are not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered by this prospectus.
In connection with this offering, certain underwriters and selling group members, if any, who are qualified market makers on the Nasdaq National Market may engage in passive market making transactions in our shares of common stock on the Nasdaq National Market in accordance with Rule 103 of Regulation M under the Securities Exchange Act of 1934, as amended. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid of such security; if all independent bids are lowered below the passive market maker's bid, however, the passive market maker must then lower its bid when certain purchase limits are exceeded.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed upon for us by Brobeck, Phleger & Harrison LLP, San Diego, California. Certain attorneys of Brobeck, Phleger & Harrison beneficially own 2,875 shares of our common stock. Cooley Godward LLP, San Diego, California, is acting as counsel for the underwriters in connection with various legal matters relating to the shares of common stock offered by this prospectus.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated financial statements at December 31, 1998 and 1999, and for each of the three years in the period ended December 31, 1999 and the financial statements of Axys Advanced Technologies, Inc. as of December 31, 1998 and 1999 and for the years then ended as set forth in their reports. We have included our financial statements (including those of Axys Advanced Technologies, Inc.) in this prospectus in reliance on their reports, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 (including exhibits, schedules and amendments) under the Securities Act with respect to the shares of common stock to be sold in this offering. This prospectus does not contain all the information set forth in the registration statement. For further information with respect to us and the shares of common stock to be sold in this offering, reference is made to the registration statement. Statements contained in this prospectus as to the contents of any contract, agreement or other document referred to are not necessarily complete. Whenever we make reference in this prospectus to any contract or other document of ours, the reference may not be complete, and you should refer to the exhibits that are a part of the registration statement for a copy of the contract or document.
You may read and copy all or any portion of the registration statement or any other information we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings, including the registration statement, are also available to you on the SEC's web site (http://www.sec.gov).
As a result of this offering, we will become subject to the information and reporting requirements of the Securities Exchange Act, and, in accordance with those requirements, will file periodic reports, proxy statements and other information with the SEC.
This prospectus includes statistical data that were obtained from industry publications. These industry publications generally indicate that the authors of these publications have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. While we believe these industry publications are reliable, we have not independently verified their data.
DISCOVERY PARTNERS INTERNATIONAL, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE
----
DISCOVERY PARTNERS INTERNATIONAL, INC.
Report of Ernst & Young LLP, Independent Auditors........... F-2
Consolidated Balance Sheets as of December 31, 1998 and 1999
and March 31, 2000 (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 and 2000 (Unaudited)................. F-4
Consolidated Statements of Stockholders' Equity (Deficit)
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 and 2000 (Unaudited)................. F-6
Notes to Consolidated Financial Statements.................. F-7
AXYS ADVANCED TECHNOLOGIES, INC.
Report of Ernst & Young LLP, Independent Auditors........... F-21
Balance Sheets as of December 31, 1998 and 1999 and March
31, 2000 (Unaudited)...................................... F-22
Statements of Operations for the years ended December 31,
1998 and 1999 and for the three months ended March 31,
1999 and 2000 (Unaudited)................................. F-23
Statements of Stockholder's/Division Equity for the years
ended December 31, 1998 and 1999 and for the three months
ended March 31, 2000 (Unaudited).......................... F-24
Statements of Cash Flows for the years ended December 31,
1998 and 1999 and for the three months ended March 31,
2000 (Unaudited).......................................... F-25
Notes to Consolidated Financial Statements.................. F-26
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
Unaudited Pro Forma Combined Condensed Balance Sheets as of
March 31, 2000............................................ F-36
Unaudited Pro Forma Combined Condensed Statement of
Operations for the year ended December 31, 1999........... F-37
Unaudited Pro Forma Combined Condensed Statement of
Operations for the three months ended March 31, 2000...... F-38
Notes to Unaudited Pro Forma Combined Condensed Financial
Statements................................................ F-39
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REPORT OF ERNST & YOUNG, LLP, INDEPENDENT AUDITORS
The Board of Directors
Discovery Partners International, Inc.
We have audited the accompanying consolidated balance sheets of Discovery Partners International, Inc. as of December 31, 1998 and 1999 and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the three years in the period ended December 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects the consolidated financial position of Discovery Partners International, Inc. at December 31, 1998 and 1999, and the consolidated results of its operations and its 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.
ERNST & YOUNG LLP
San Diego, California
March 10, 2000, except for Note 11,
as to which the date is , 2000
The foregoing report is in the form that will be signed upon the completion of the restatement of the capital accounts described in Note 11 to the financial statements.
/s/ ERNST & YOUNG LLP
June 22, 2000
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DISCOVERY PARTNERS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
PRO FORMA
STOCKHOLDERS'
DECEMBER 31, EQUITY AS OF
---------------------------- MARCH 31, MARCH 31,
1998 1999 2000 2000
------------ ------------ ------------ -------------
(UNAUDITED) (UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents............................ $ 10,714,889 $ 2,884,639 $ 983,819
Accounts receivable.................................. 1,642,065 2,785,618 3,081,907
Inventories.......................................... 1,107,041 1,517,297 2,462,869
Prepaid and other current assets..................... 327,537 201,284 365,081
------------ ------------ ------------
Total current assets............................... 13,791,532 7,388,838 6,893,676
Property and equipment, net............................ 1,398,517 4,655,227 5,296,150
Restricted cash and cash equivalents and other
assets............................................... 193,314 2,264,200 2,430,034
Patent and license rights, net......................... 1,212,497 1,137,625 1,079,307
Goodwill, net.......................................... -- 6,205,830 6,050,684
------------ ------------ ------------
Total assets....................................... $ 16,595,860 $ 21,651,720 $ 21,749,851
============ ============ ============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses................ $ 2,413,714 $ 2,348,226 $ 2,030,526
Deferred business acquisition payment................ -- 1,721,775 --
Current portion of obligations under capital leases
and equipment notes payable........................ 205,980 226,575 201,815
Line of credit....................................... -- 958,346 762,753
Deferred revenue..................................... 2,196,200 1,935,249 1,849,139
Notes payable to stockholders........................ -- 3,861,920 6,000,000
------------ ------------ ------------
Total current liabilities.......................... 4,815,894 11,052,091 10,844,233
Obligations under capital leases and equipment notes
payable, less current portion........................ 95,685 282,317 935,393
Deferred rent.......................................... 75,824 51,906 55,391
Long-term debt from stockholder........................ -- 1,627,860 1,569,100
Commitments
Redeemable convertible preferred stock, $.001 par
value, 7,333,333 shares authorized, 6,562,278 issued
and outstanding at December 31, 1998 and 1999 and
March 31, 2000; liquidation preference and redemption
value -- $28,048,404 at December 31, 1999; no shares
authorized, issued and outstanding pro forma
(unaudited).......................................... 27,906,717 27,906,717 27,906,717 $ --
Stockholders' equity (deficit):
Preferred stock, $.001 par value, 1,000,000 shares
authorized, no shares issued and outstanding pro
forma (unaudited).................................. -- -- -- --
Common stock, $.001 par value, 10,000,000 shares
authorized, 1,420,973, 1,611,763, and 1,789,068
issued and outstanding at December 31 1998 and 1999
and March 31, 2000, respectively; 100,000,000
shares authorized, 8,410,848 shares issued and
outstanding pro forma (unaudited).................. 1,421 1,612 1,789 8,411
Additional paid-in capital........................... 234,384 1,399,376 4,016,372 31,916,467
Deferred compensation................................ -- (642,282) (1,824,265) (1,824,265)
Note receivable from stockholder..................... (172,000) (240,000) (240,000) (240,000)
Accumulated other comprehensive loss................. -- (55,448) (152,069) (152,069)
Accumulated deficit.................................. (16,362,065) (19,732,429) (21,362,810) (21,362,810)
------------ ------------ ------------ ------------
Total stockholders' equity (deficit)............... (16,298,260) (19,269,171) (19,560,983) $ 8,345,734
------------ ------------ ------------ ------------
Total liabilities, redeemable preferred stock and
stockholders' equity (deficit)................... $ 16,595,860 $ 21,651,720 $ 21,749,851
============ ============ ============
|
See accompanying notes.
DISCOVERY PARTNERS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------------------- ------------------------
1997 1998 1999 1999 2000
----------- ----------- ----------- ---------- -----------
(UNAUDITED)
Revenues.................................. $ 3,149,479 $ 6,213,736 $13,075,835 $2,896,165 $ 5,173,043
Cost of revenues (exclusive of $7,238, $0
and $3,663 in 1999, and for the three
months ended March 31, 1999 and 2000,
respectively, of stock-based
compensation)........................... 1,311,681 2,785,514 8,234,858 1,762,505 3,052,994
----------- ----------- ----------- ---------- -----------
Gross margin......................... 1,837,798 3,428,222 4,840,977 1,133,660 2,120,049
Cost and expenses:
Research and development (exclusive of
$65,828, $7,463 and $87,846 in 1999,
and for the three months ended March
31, 1999 and 2000, respectively, of
stock-based compensation)............ 4,143,193 5,057,851 3,537,651 969,303 618,981
Selling, general and administrative
(exclusive of $238,322, $62,695 and
$171,858 in 1999, and for the three
months ended March 31, 1999 and 2000,
respectively, of stock-based
compensation)........................ 2,527,902 4,984,645 4,439,021 1,092,984 1,519,285
Amortization of stock-based
compensation......................... -- -- 311,388 70,158 263,367
Amortization of goodwill................ -- -- -- -- 155,146
----------- ----------- ----------- ---------- -----------
Total operating expenses............. 6,671,095 10,042,496 8,288,060 2,132,445 2,556,779
----------- ----------- ----------- ---------- -----------
Loss from operations...................... (4,833,297) (6,614,274) (3,447,083) (998,785) (436,730)
Interest income........................... 106,617 386,058 270,645 97,888 45,612
Interest expense.......................... (92,678) (112,698) (60,003) (21,669) (1,368,036)
Foreign currency gains (losses)........... (2,661) 63,401 (133,923) (49,900) 128,773
----------- ----------- ----------- ---------- -----------
Net loss.................................. $(4,822,019) $(6,277,513) $(3,370,364) $ (972,466) $(1,630,381)
=========== =========== =========== ========== ===========
Historical net loss per share, basic and
diluted................................. $ (8.85) $ (8.20) $ (3.00) $ (0.96) $ (1.23)
=========== =========== =========== ========== ===========
Shares used in calculating historical net
loss per share, basic and diluted....... 544,876 765,263 1,125,040 1,014,418 1,323,860
=========== =========== =========== ========== ===========
Pro forma net loss per share, basic and
diluted................................. $ (0.44) $ (0.21)
=========== ===========
Shares used in calculating pro forma net
loss per share, basic and diluted....... 7,728,820 7,938,689
=========== ===========
|
See accompanying notes.
DISCOVERY PARTNERS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
NOTES ACCUMULATED
COMMON STOCK ADDITIONAL RECEIVABLE OTHER
------------------ PAID-IN DEFERRED FROM COMPREHENSIVE ACCUMULATED
SHARES AMOUNT CAPITAL COMPENSATION STOCKHOLDER LOSS DEFICIT
--------- ------ ---------- ------------ ----------- ------------- ------------
Balance at December 31, 1996....... 895,800 $ 896 $ 32,994 $ -- $ -- $ -- $ (5,262,533)
Common stock issued for
compensation................... 16,800 17 3,523 -- -- -- --
Exercise of options to purchase
common stock................... 44,131 44 11,850 -- -- -- --
Net loss......................... -- -- -- -- -- -- (4,822,019)
--------- ------ ---------- ----------- --------- --------- ------------
Balance at December 31, 1997....... 956,731 957 48,367 -- -- -- (10,084,552)
Exercise of options to purchase
common stock, net of
repurchases.................... 34,242 34 14,447 -- -- -- --
Issuance of common stock in
exchange for a promissory
note........................... 430,000 430 171,570 -- (172,000) -- --
Net loss......................... -- -- -- -- -- -- (6,277,513)
--------- ------ ---------- ----------- --------- --------- ------------
Balance at December 31, 1998....... 1,420,973 1,421 234,384 -- (172,000) -- (16,362,065)
Exercise of options to purchase
common stock, net of
repurchases.................... 20,790 21 5,412 -- -- -- --
Issuance of common stock in
exchange for a promissory
note........................... 170,000 170 67,830 -- (68,000) -- --
Issuance of warrants to purchase
preferred stock................ -- -- 138,080 -- -- -- --
Deferred compensation related to
stock options and restricted
stock.......................... -- -- 953,670 (953,670) -- -- --
Amortization of deferred
compensation................... -- -- -- 311,388 -- -- --
Comprehensive loss:
Foreign currency translation
adjustment................... -- -- -- -- -- (55,448) --
Net loss....................... -- -- -- -- -- -- (3,370,364)
Comprehensive loss............... -- -- -- -- -- -- --
--------- ------ ---------- ----------- --------- --------- ------------
Balance at December 31, 1999....... 1,611,763 1,612 1,399,376 (642,282) (240,000) (55,448) (19,732,429)
Exercise of options to purchase
common stock (unaudited)....... 177,305 177 65,879 -- -- -- --
Issuance of warrants to purchase
preferred stock (unaudited).... -- -- 1,105,767 -- -- -- --
Deferred compensation related to
stock options and restricted
stock (unaudited).............. -- -- 1,445,350 (1,445,350) -- -- --
Amortization of deferred
compensation (unaudited)....... -- -- -- 263,367 -- -- --
Comprehensive loss:
Foreign currency translation
adjustment (unaudited)....... -- -- -- -- -- (96,621) --
Net loss (unaudited)........... -- -- -- -- -- -- (1,630,381)
Comprehensive loss (unaudited)... -- -- -- -- -- -- --
--------- ------ ---------- ----------- --------- --------- ------------
Balance at March 31, 2000
(unaudited)...................... 1,789,068 $1,789 $4,016,372 $(1,824,265) $(240,000) $(152,069) $(21,362,810)
========= ====== ========== =========== ========= ========= ============
TOTAL
STOCKHOLDERS'
EQUITY (DEFICIT)
----------------
Balance at December 31, 1996....... $ (5,228,643)
Common stock issued for
compensation................... 3,540
Exercise of options to purchase
common stock................... 11,894
Net loss......................... (4,822,019)
------------
Balance at December 31, 1997....... (10,035,228)
Exercise of options to purchase
common stock, net of
repurchases.................... 14,481
Issuance of common stock in
exchange for a promissory
note........................... --
Net loss......................... (6,277,513)
------------
Balance at December 31, 1998....... (16,298,260)
Exercise of options to purchase
common stock, net of
repurchases.................... 5,433
Issuance of common stock in
exchange for a promissory
note........................... --
Issuance of warrants to purchase
preferred stock................ 138,080
Deferred compensation related to
stock options and restricted
stock.......................... --
Amortization of deferred
compensation................... 311,388
Comprehensive loss:
Foreign currency translation
adjustment................... (55,448)
Net loss....................... (3,370,364)
------------
Comprehensive loss............... (3,425,812)
------------
Balance at December 31, 1999....... (19,269,171)
Exercise of options to purchase
common stock (unaudited)....... 66,056
Issuance of warrants to purchase
preferred stock (unaudited).... 1,105,767
Deferred compensation related to
stock options and restricted
stock (unaudited).............. --
Amortization of deferred
compensation (unaudited)....... 263,367
Comprehensive loss:
Foreign currency translation
adjustment (unaudited)....... (96,621)
Net loss (unaudited)........... (1,630,381)
------------
Comprehensive loss (unaudited)... (1,727,002)
------------
Balance at March 31, 2000
(unaudited)...................... $(19,560,983)
============
|
See accompanying notes.
DISCOVERY PARTNERS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------------------- -------------------------
1997 1998 1999 1999 2000
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
OPERATING ACTIVITIES
Net loss............................................ $(4,822,019) $(6,277,513) $(3,370,364) $ (972,466) $(1,630,381)
Adjustments to reconcile net loss to net cash used
in operating activities:
Common stock issued for compensation.............. 3,540 -- -- -- --
Depreciation and amortization..................... 242,550 561,049 360,322 135,676 608,112
Amortization of deferred compensation............. -- -- 311,388 70,158 263,367
Noncash interest expense for warrants issued...... -- -- -- -- 1,243,847
Change in operating assets and liabilities:
Accounts receivable............................. (1,150,870) (334,487) (444,341) 55,154 (296,289)
Inventories..................................... (475,735) (423,365) (357,037) 193,695 (945,573)
Other current assets............................ (179,359) (65,907) 130,727 (178,934) (163,797)
Accounts payable and accrued expenses........... 812,870 1,395,725 (567,171) (1,094,830) (317,700)
Deferred revenue................................ 324,800 1,871,400 (774,987) (426,089) (86,109)
Deferred rent................................... (7,619) 6,069 (23,918) (10,219) 3,485
Restricted cash................................. -- -- (1,000,000) -- 45,200
----------- ----------- ----------- ----------- -----------
Net cash used in operating activities............... (5,251,842) (3,267,029) (5,735,381) (2,227,855) (1,275,838)
INVESTING ACTIVITIES
Purchases of property and equipment................. (525,084) (848,202) (1,112,191) (56,779) (1,038,283)
Deposits and other assets........................... (16,599) (7,331) 181,313 (1,802) (211,034)
Purchase of patents and license rights.............. -- (1,212,497) -- 37,501 --
Acquisition of DTL, net of cash acquired of
$559,946.......................................... -- -- (4,963,444) -- --
Additional cash consideration for acquisition of
DTL............................................... -- -- -- -- (1,721,775)
----------- ----------- ----------- ----------- -----------
Net cash used in investing activities............... (541,683) (2,068,030) (5,894,322) (21,080) (2,971,092)
FINANCING ACTIVITIES
Proceeds from issuance of equipment notes payable... 85,008 -- -- -- 747,150
Principal payments on capital leases and equipment
notes payable..................................... (185,800) (262,165) (205,980) (64,693) (118,835)
Principal payments on line of credit................ -- -- -- -- (195,593)
Issuance of redeemable preferred stock, net of
issuance costs.................................... 1,937,139 13,568,346 -- -- --
Issuance of common stock............................ 11,894 14,481 5,433 2,251 66,056
Proceeds from convertible notes payable............. -- 2,448,395 4,000,000 -- 2,000,000
----------- ----------- ----------- ----------- -----------
Net cash provided by financing activities........... 1,848,241 15,769,057 3,799,453 (62,442) 2,498,778
Effect of exchange rate changes..................... -- -- -- -- (152,668)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents....................................... (3,945,284) 10,433,998 (7,830,250) (2,311,377) (1,900,820)
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents at beginning of period.... 4,226,175 280,891 10,714,889 10,714,889 2,884,639
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents at end of period.......... $ 280,891 $10,714,889 $ 2,884,639 $8,403,512 $ 983,819
=========== =========== =========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid....................................... $ 92,678 $ 112,697 $ 60,004 $ 21,668 $ 124,189
=========== =========== =========== =========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Conversion of convertible notes payable to preferred
stock............................................. $ -- $ 2,448,395 $ -- $ -- $ --
=========== =========== =========== =========== ===========
Issuance of common stock for promissory note........ $ -- $ 172,000 $ 68,000 $ -- $ --
=========== =========== =========== =========== ===========
Issuance of warrant to purchase preferred stock..... $ -- $ -- $ 138,080 $ -- $ 1,105,767
=========== =========== =========== =========== ===========
Deferred acquisition payment for DTL................ $ -- $ -- $ 1,721,775 $ -- $ --
=========== =========== =========== =========== ===========
|
See accompanying notes.
DISCOVERY PARTNERS INTERNATIONAL, INC.
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. ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION AND BUSINESS
Discovery Partners International, Inc. (the "Company") was incorporated in California on March 22, 1995, under the name IRORI. The Company develops and offers libraries of drug-like compounds, proprietary instruments, consumables and computational tools to generate compound libraries, test, screen and optimize potential drugs. In 1998, the Company changed its name to Discovery Partners International, Inc.
CONSOLIDATION
The consolidated financial statements include all the accounts of the Company and its wholly owned subsidiaries, IRORI Europe, Ltd. and Discovery Technologies, Ltd. All intercompany accounts and transactions have been eliminated. The Company has determined that it operates in only one segment.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
INTERIM FINANCIAL INFORMATION
The financial information as of March 31, 2000 and for the three months ended March 31, 1999 and 2000 is unaudited and includes all adjustments, consisting only of normal recurring adjustments, that the Company's management considers necessary for a fair presentation of the Company's operating results and cash flows for such periods. Results for the three month period ended March 31, 2000 are not necessary indicative of results to be expected for the full fiscal year 2000 or any future period.
RECLASSIFICATION
Certain prior year balances have been reclassified to conform to the 1999 presentation.
CASH EQUIVALENTS
The Company considers all highly liquid investments with a remaining maturity of less than three months when purchased to be cash equivalents. At December 31, 1998 and 1999, the cost of cash equivalents was the same as the market value. Accordingly, there were no unrealized gains and losses. The Company evaluates the financial strength of institutions at which significant investments are made and believes the related credit risk is limited to an acceptable level.
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
LONG-LIVED ASSETS
In accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, if indicators of impairment exist, the Company assesses the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If impairment is indicated, the Company measures the future cash flows associated with the use of the asset and records the asset at fair value. While the Company's current and historical operating and cash flow losses are indicators of impairment, the Company believes the future cash flows to be received from the long-lived assets will exceed the assets' carrying value, and accordingly, the Company has not recognized any impairment losses through March 31, 2000.
INVENTORIES
Inventories are recorded at the lower of weighted average cost (approximates first-in first-out) or market. Inventories consist of the following:
DECEMBER 31,
------------------------ MARCH 31,
1998 1999 2000
---------- ---------- ----------
Raw materials.................................. $ 958,811 $ 588,048 $ 779,273
Work-in process................................ -- 601,432 1,070,914
Finished goods................................. 148,230 327,817 612,682
---------- ---------- ----------
$1,107,041 $1,517,297 $2,462,869
========== ========== ==========
|
PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
DECEMBER 31,
------------------------- MARCH 31,
1998 1999 2000
---------- ----------- -----------
Furniture and equipment...................... $1,974,374 $ 4,821,335 $ 5,369,795
Software..................................... -- 362,108 366,038
Leasehold improvements....................... 375,429 633,387 1,052,754
---------- ----------- -----------
2,349,803 5,816,830 6,788,587
Less accumulated depreciation and
amortization............................... (951,286) (1,161,603) (1,492,437)
---------- ----------- -----------
$1,398,517 $ 4,655,227 $ 5,296,150
========== =========== ===========
|
Property and equipment, including equipment under capital leases and equipment notes payable, are stated at cost and depreciated over the estimated useful lives of the assets (three to seven years) or the term of the related lease, using the straight-line method. Amortization of assets acquired under capital leases is included in depreciation expense.
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PATENT AND LICENSE RIGHTS
The Company has purchased patents and license rights for the labeling of chemical libraries and related to products for sale and in development. The purchased patents and license rights are amortized ratably over a period of ten years.
REVENUE RECOGNITION
Product sales, which include the sale of combinatorial chemistry instruments and proprietary libraries, are recorded as products are shipped. Development contract revenues and high-throughput screening service revenues are recognized on a percentage of completion basis. Advances received under these development contracts and high-throughput screening service agreements are recorded as deferred revenue and recognized as costs are incurred over the term of the contract. Revenues from chemistry service agreements is recognized on a monthly basis and is based upon the number of full time equivalent (FTE) employees that actually worked on each agreement and the agreed-upon rate per FTE per month.
The Company does not have a history of significant returns of its products nor does it allow its customers the right to return its products.
RESEARCH AND DEVELOPMENT COSTS
Costs incurred in connection with research and development is charged to operations as incurred.
STOCK-BASED COMPENSATION
The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees and related Interpretations ("APB 25") in accounting for its employee stock options because the alternative fair value accounting provided for under Financial Accounting Standards Board ("SFAS") No. 123, Accounting for Stock-Based Compensation, requires use of option valuation models which the Company believes were not developed for use in valuing employee stock options. Under APB 25, when the exercise price of the Company's employee stock options equals the fair value of the underlying stock on the date of grant, no compensation expense is recognized.
Deferred compensation for options granted to non-employees has been determined in accordance with SFAS No. 123 and EITF 96-18 as the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. Deferred charges for options granted to non-employees are periodically remeasured as the underlying options vest.
COMPREHENSIVE LOSS
SFAS No. 130, Reporting Comprehensive Income, requires the Company to report in the consolidated financial statements, in addition to net income, comprehensive income (loss) and its components including foreign currency items and unrealized gains and losses on certain
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
investments in debt and equity securities. For the year ended December 31, 1999 and the three months ended March 31, 2000, the Company has disclosed comprehensive loss as a component of shareholders' equity. Comprehensive loss was the same as net loss for the years ended December 31, 1997 and 1998.
NET LOSS PER SHARE
Basic and diluted net loss per common share are presented in conformity with the SFAS No. 128, Earnings per Share, and SAB 98, for all periods presented. Under the provisions of SAB 98, common stock and redeemable convertible preferred stock that has been issued or granted for nominal consideration prior to the anticipated effective date of the initial public offering must be included in the calculation of basic and diluted net loss per common share as if these shares had been outstanding for all periods presented. To date, the Company has not issued or granted shares for nominal consideration.
In accordance with SFAS No. 128, basic and diluted net loss per share has been computed using the weighted-average number of shares of common stock outstanding during the period; less shares subject to repurchase. Pro forma basic and diluted net loss per common share, as presented in the statements of operations, has been computed for the year ended December 31, 1999 and for the three months ended March 31, 2000 as described above, and also gives effect to the assumed conversion of preferred stock which will automatically convert to common stock immediately prior to the completion of the Company's initial public offering (using the "as if converted" method) from the original date of issuance.
The Company has excluded all convertible preferred stock, outstanding stock options and warrants, and shares subject to repurchase from the calculation of diluted net loss per common share because all such securities are antidilutive for all applicable periods presented. The total number of shares excluded from the calculations of diluted net loss per share, prior to application of the treasury stock method for options and warrants, were 4,636,150, 7,102,923 and 6,987,176 for the years ended December 31, 1997, 1998 and 1999, respectively, and 7,159,254 and 6,998,140 for the three months ended March 31, 1999 and 2000, respectively. Such securities, had they been dilutive, would have been included in the computation of diluted net loss per share.
RECENTLY ISSUED ACCOUNTING STANDARDS
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, will be effective January 1, 2001. This statement establishes accounting and reporting standards requiring that every derivative instrument, including certain derivative instruments imbedded in other contracts, be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement also requires that changes in the derivative's fair value be recognized in earnings unless specific hedge accounting criteria are met. The Company believes the adoption of SFAS No. 133 will not have an effect on the financial statements because the Company does not engage in derivative or hedging activities.
In December 1999, the SEC released Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. The Company's revenue recognition policy complies with SAB 101.
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FOREIGN CURRENCY TRANSLATION
The financial statements of IRORI Europe, Ltd. are measured using the U.S. dollar as the functional currency. The financial statements of Discovery Technologies, Ltd. are measured using the local currency as the functional currency. Assets and liabilities of the Company are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at the average rate of exchange during the reporting period. The resulting foreign currency gains (losses) for IRORI Europe, Ltd. are included in the consolidated statement of operations. The resulting translation adjustments for Discovery Technologies, Ltd. are unrealized and included as a separate component of other comprehensive income (loss). Transactions denominated in currencies other than the local currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses which are reflected in income as unrealized (based on period-end translations) or realized upon settlement of these transactions.
3. ACQUISITION OF DISCOVERY TECHNOLOGIES, LTD.
On December 31, 1999, the Company acquired Discovery Technologies, Ltd. ("DTL"), located near Basel, Switzerland. The acquisition of DTL was accounted for as a purchase in accordance with the provisions of Accounting Principles Board Opinion ("APB") No. 16. The Company's consolidated financial statements include the financial position of DTL as of December 31, 1999.
A summary of the DTL acquisition costs and allocation to the assets acquired and liabilities assumed is as follows:
Total acquisition costs:
Cash paid at acquisition.................................. $ 3,438,025
Advances to DTL prior to acquisition...................... 1,878,300
Deferred acquisition payment.............................. 1,721,775
Acquisition related expenses.............................. 151,617
-----------
$ 7,189,717
===========
Allocated to assets and liabilities as follows:
Tangible assets acquired.................................. $ 4,999,019
Tangible liabilities assumed.............................. (4,015,132)
Skilled workforce......................................... 400,000
Goodwill.................................................. 5,805,830
-----------
$ 7,189,717
===========
|
The goodwill is amortized on a straight-line basis over a period of ten years from the date of acquisition. The skilled workforce is amortized on a straight-line basis over a period of four years from the date of acquisition. In addition, the agreement provided for additional cash consideration to be issued based upon the 1999 and 2000 operating results, of which $1,721,775 was earned based on the 1999 operating results of DTL. The Company may be required to pay up to an additional $950,000 as consideration based on DTL's operating results for 2000. The value of additional cash consideration will be accounted for as an increase to goodwill.
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
3. ACQUISITION OF DISCOVERY TECHNOLOGIES, LTD. (CONTINUED)
Assuming that the acquisition of DTL had occurred on the first day of the Company's fiscal year ended December 31, 1998, pro forma condensed consolidated financial information would be as follows:
YEARS ENDED DECEMBER 31,
--------------------------
1998 1999
----------- -----------
(UNAUDITED)
Revenues.......................................... $ 8,622,310 $18,131,870
Net loss.......................................... (8,692,454) (3,713,466)
Net loss per share, basic and diluted............. $ (11.36) $ (3.30)
|
This pro forma information is not necessarily indicative of the actual results that would have been achieved had DTL been acquired the first day of the Company's fiscal year ended December 31, 1998, nor is it necessarily indicative of future results.
4. DEBT
EQUIPMENT NOTES PAYABLE
At December 31, 1999, obligations under equipment notes totaled $55,698 payable in monthly installments through the year 2000 with a weighted-average interest rate of 14.58% secured by the assets of the Company. In March 2000, the Company signed two equipment notes payable totaling $747,150 payable in monthly installments through the year 2003 with a weighted-average interest rate of 13.82% secured by assets of the Company.
NOTES PAYABLE TO SHAREHOLDERS
On December 10, 1999, the Company borrowed $4.0 million from certain of its principal investors. The notes accrue interest at 8% per annum and are due and payable on the earlier of the closing of a preferred stock financing round or February 10, 2000. Subsequent to December 31, 1999, the noteholders informally extended the maturity of the notes until the closing of the redeemable convertible Series E preferred stock sale. Deferred interest expense of $138,080 related to the valuation of warrants is offset against the balance of notes payable at December 31, 1999 (see Note 7 and 11).
On March 9, 2000, the Company borrowed $2.0 million from one of its principal investors. The promissory note accrues interest at 8% per annum and is due and payable upon the earlier of the closing of a preferred stock financing round or June 9, 2000. In connection with the note, the Company issued warrants to purchase a variable number of shares of redeemable convertible preferred stock at a purchase price of $5.00 per share (see Note 7 and 11).
LINE OF CREDIT
The Company's wholly owned subsidiary, DTL, has $1.0 million outstanding under a line of credit with a financial institution. Under the terms of the line of credit, the Company has pledged $1.3 million of cash and cash equivalents as collateral. The amount is included in restricted cash and cash equivalents as of December 31, 1999. The line of credit accrues interest at 4.75% per
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
4. DEBT (CONTINUED)
annum plus 0.25% per quarter based on the average borrowed amount and is available until December 31, 2000.
LONG-TERM DEBT
The Company's wholly owned subsidiary, DTL, has approximately $1.6 million in long-term debt as of December 31, 1999. The debt accrues interest at 5% per annum and is due and payable on June 30, 2001 to an investor.
5. COMMITMENTS
LEASES
The Company leases a facility under an operating lease agreement that expires on August 31, 2000. The Company has the option to extend the lease to January 21, 2006. The Company leases a second facility under an operating lease agreement that expires on August 31, 2006. Rent expense was $396,809, $829,343 and $648,788 for the years ended December 31, 1997, 1998 and 1999, respectively, and $220,331 and $206,176 for the three months ended March 31, 1999 and 2000, respectively. Additionally, the Company leases certain equipment under operating leases with initial terms in excess of one year.
Annual future minimum lease obligations, including property and equipment under capital leases, as of December 31, 1999 are as follows:
OPERATING CAPITAL
LEASES LEASES
---------- ---------
2000........................................................ $ 669,436 $ 188,422
2001........................................................ 730,994 148,435
2002........................................................ 741,106 148,435
2003........................................................ 742,672 1,773
2004........................................................ 759,284 --
Thereafter.................................................. 1,300,548 --
---------- ---------
Total minimum lease payments................................ $4,944,040 487,065
==========
Less amount representing interest........................... (33,871)
---------
Total present value of minimum payments..................... 453,194
Less current portion........................................ (170,877)
---------
Non-current portion......................................... $ 282,317
=========
|
At December 31, 1999, cost and accumulated amortization of property and equipment under capital leases was $624,947 and $170,183, respectively. At December 31, 1998, cost and accumulated amortization of property and equipment under capital leases was $211,741 and $126,726, respectively.
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
5. COMMITMENTS (CONTINUED)
LETTER OF CREDIT
The Company signed a standby letter of credit for $700,000 required under the terms of the Company's lease of its facilities. The Company pledged $1.0 million of cash equivalents as collateral for the letter of credit. The amount is included in restricted cash and cash equivalents as of December 31, 1999 and March 31, 2000. The letter of credit expires in fiscal 2004.
6. REDEEMABLE CONVERTIBLE PREFERRED STOCK
A summary of redeemable convertible preferred stock issued and outstanding at December 31, 1999 is as follows:
REDEMPTION
VALUE AND
SHARES ISSUED PREFERENCE IN
AND OUTSTANDING LIQUIDATION
--------------- -------------
Series A........................................ 2,000,000 $ 4,000,000
Series B........................................ 2,000,000 6,000,000
Series C........................................ 333,333 2,000,000
Series D........................................ 2,228,945 16,048,404
--------- -----------
6,562,278 $28,048,404
========= ===========
|
In 1997, the Company issued 333,333 shares of Series C redeemable preferred stock for net proceeds of $1.9 million. In 1998, the Company issued 2,228,945 shares of Series D redeemable preferred stock in exchange for net cash proceeds of $13.6 million and conversion of notes payable of $2.4 million.
The redeemable convertible Series A, B, C, and D preferred stock are convertible, at the option of the holder, into an equal number of shares of the Company's common stock subject to certain anti-dilution adjustments. The Company reserved 6,606,044 shares for issuance upon conversion which includes an additional 43,766 shares issuable pursuant to the anti-dilution provisions. The preferred stock will convert automatically upon the closing of an underwritten public offering of the Company's common stock with proceeds to the Company of at least $15,000,000 and at a price not less than $10.00 per share or upon the consent of 67% of the holders of the outstanding shares. The holders of Series A, B, C, and D preferred stock are entitled to elect five directors to the Board of Directors, and in all other matters the holder of each share of preferred stock is entitled to one vote for each share of common stock into which it would convert.
Anytime after July 17, 2002, upon the request of at least 51% of the holders of preferred stock, the Company shall redeem all of the shares by paying in cash an amount per share equal to $2.00, $3.00, $6.00, and $7.20 plus any declared but unpaid dividends for holders of the redeemable convertible Series A, B, C, and D preferred stock, respectively.
Annual dividends of $0.14, $0.21, $0.42, and $0.504 per share of redeemable convertible Series A, B, C and D preferred stock, respectively, are payable whenever funds are legally available when, and if declared by the Board of Directors. In the event of a liquidation of the Company, holders of redeemable convertible Series A, B, C, and D preferred stock are entitled to a
DISCOVERY PARTNERS INTERNATIONAL, INC.
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. REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)
liquidation preference of $2.00, $3.00, $6.00, and $7.20, respectively, per share plus any declared but unpaid dividends on such shares.
7. SHAREHOLDERS' EQUITY
STOCK OPTIONS
In November 1995, the Company adopted the 1995 Stock Option/Stock Issuance Plan (the "Plan"), under which 1,950,000 shares of common stock are reserved for issuance of stock and stock options granted by the Company. In January 2000, the Company increased the authorized shares in the Plan by 500,000 shares of common stock. The Plan provides for the grant of incentive and nonstatutory options. The exercise price of incentive stock options must equal at least the fair value on the date of grant, and the exercise price of nonstatutory stock options may be no less than 85% of the fair value on the date of grant. The options generally vest over a four-year period and all expire ten years after the date of grant.
A summary of the Company's stock option activity and related information is as follows:
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------ THREE MONTHS ENDED
1997 1998 1999 MARCH 31, 2000
------------------- --------------------- -------------------- ---------------------
WEIGHTED- WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE EXERCISE
OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE
------- --------- --------- --------- -------- --------- --------- ---------
Outstanding at beginning of
period....................... 137,500 $.21 483,720 $.31 980,075 $ .49 934,510 $ .71
Granted...................... 488,885 .33 1,087,700 .51 191,500 1.50 315,500 2.62
Exercised.................... (44,131) .27 (464,242) .40 (190,790) .38 (177,305) .37
Forfeited.................... (98,534) .30 (127,103) .34 (46,275) .75 (1,647) .36
------- ---- --------- ---- -------- ----- --------- -----
Outstanding at end of period... 483,720 $.31 980,075 $.49 934,510 $ .71 1,071,058 $1.33
======= ==== ========= ==== ======== ===== ========= =====
Exercisable.................... 94,648 $.21 204,893 $.35 418,469 $ .53 335,296 $ .63
======= ==== ========= ==== ======== ===== ========= =====
|
Exercise prices for options outstanding as of December 31, 1999 ranged from $0.30 to $1.50. The weighted-average remaining contractual life of those options is approximately eight years. The weighted-average fair value of the options granted in 1997, 1998 and 1999 is $0.07, $0.13 and $0.39 per share, respectively.
At March 31, 2000, options for 319,874 shares were available for future grant.
Pro forma information regarding net income or loss is required by SFAS No. 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of that Statement. The fair value of these options was estimated at the date of grant using the minimum value (derived from the Black-Scholes model) option pricing model with the following weighted average assumptions in 1997, 1998 and 1999: risk-free interest rate of 6.20%, 6.0% and 6.0%, respectively; dividend yield of 0% for all years; and a weighted-average life of five years.
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
7. SHAREHOLDERS' EQUITY (CONTINUED)
For purposes of adjusted pro forma disclosures, the estimated fair value of the options is amortized to expense over the vesting period. The Company's adjusted pro forma information is as follows:
YEARS ENDED DECEMBER 31,
-----------------------------------------
1997 1998 1999
----------- ----------- -----------
Adjusted pro forma net loss......................... $(4,825,506) $(6,296,500) $(3,435,570)
Adjusted pro forma basic net loss per share......... $ (8.86) $ (8.23) $ (3.05)
|
The pro forma effect on net loss for 1997, 1998 and 1999 is not likely to be representative of the pro forma effects on reported net income or loss in future years because these amounts reflect less than four years of vesting.
DEFERRED STOCK COMPENSATION
In conjunction with the Company's initial public offering contemplated by this prospectus and other events which occurred in 1999 and 2000, the Company reviewed its exercise prices and arrived at the estimated fair value for each option grant in 1999 and the first quarter of 2000. With respect to the grant of stock options and sale of restricted stock to employees during the year ended December 31, 1999 and the three months ended March 31, 2000, the Company has recorded deferred stock compensation totaling approximately $1.0 million and $1.4 million, respectively, representing the difference at the date of grant between the exercise or purchase price and estimated fair value of the Company's common stock as estimated by the Company's management for financial reporting purposes in accordance with APB No. 25. Deferred compensation is included as a reduction of stockholders' equity and is being amortized to expense on an accelerated basis in accordance with Financial Accounting Standards Board Interpretation No. 28 over the vesting period of the options and restricted stock. During both the year ended December 31, 1999 and the three months ended March 31, 2000, the Company recorded amortization of stock-based compensation expense of approximately $0.3 million.
WARRANTS
In prior years, the Company has issued warrants to purchase a total of 468,522 shares of common and preferred stock in connection with convertible bridge notes issued to investors and obligations under capital leases. The warrants have exercise prices ranging from $.01 to $2.00 per share. The Company determined the relative fair value of the warrants at issuance was not material; accordingly, no value has been assigned to the warrants.
In connection with the issuance of notes payable in December 1999, the Company issued warrants to investors to purchase a variable number of shares of redeemable convertible preferred stock at a purchase price of $5.00 per share. The number of shares to be issued under the warrants is determined by a formula based on the total number of days the notes payable are outstanding subject to a maximum allowable of 144,656 shares. As of December 31, 1999, warrants to purchase 27,616 shares had been earned. The estimated fair value of the warrants of $138,080 was based on using the Black Scholes valuation model and recorded as deferred interest expense as of December 31, 1999 to be amortized ratably over the term of the notes payable. In March 2000, the
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
7. SHAREHOLDERS' EQUITY (CONTINUED)
Company issued additional notes payable and warrants to purchase a variable number of shares of redeemable convertible preferred stock at a purchase price of $5.00 per share. The number of shares is to be issued under the warrants is determined by a formula based on the total days the warrants are outstanding subject to a maximum allowable of 131,507 shares.
As of March 31, 2000, an additional 193,316 shares were earned for a total of 220,932 shares available for purchase under the warrant agreements. The estimated fair value of the warrants of $1,243,847 was based on using the Black Scholes valuation model and was recorded as interest expense during the three months ended March 31, 2000 as the related notes payable were converted to equity on April 7, 2000.
COMMON SHARES RESERVED FOR FUTURE ISSUANCE
At December 31, 1999, common shares reserved for future issuance consist of the following:
Conversion of convertible redeemable preferred stock........ 6,606,044
Warrants.................................................... 496,138
Stock options............................................... 1,068,237
---------
8,170,419
=========
|
8. INCOME TAXES
At December 31, 1999, the Company had federal and California income tax net operating loss carryforwards of approximately $14,627,000 and $10,934,000, respectively. The difference between the federal and California tax operating loss carryforwards is primarily attributable to the capitalization of research and development expenses for California income tax purposes.
The federal and California tax loss carryforwards will begin to expire in 2010 and 2003, respectively, unless previously utilized. The Company also has federal and California research tax credit carryforwards of approximately $680,000 and $393,000, respectively, which will begin to expire in 2010 unless previously utilized.
Pursuant to Sections 382 and 383 of the Internal Revenue Code, annual use of the Company's net operating loss and credit carryforwards may be limited if cumulative changes in ownership of more than 50% occur during any three year period.
Significant components of the Company's deferred tax assets are shown below. A valuation allowance, of which $320,000 related to 1999, has been recognized to offset the deferred tax assets, as realization of such assets is uncertain.
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
8. INCOME TAXES (CONTINUED)
DECEMBER 31,
--------------------------
1998 1999
----------- -----------
Deferred tax assets:
Net operating loss carryforwards........................ $ 5,257,000 $ 5,776,000
Research and development credits........................ 829,000 935,000
Deferred revenue........................................ 739,000 583,000
Capitalized research and development expenses........... 199,000 179,000
Other, net.............................................. 178,000 49,000
----------- -----------
Total deferred tax assets................................. 7,202,000 7,522,000
Valuation allowance for deferred tax assets............... (7,202,000) (7,522,000)
----------- -----------
Net deferred tax assets................................... $ -- $ --
=========== ===========
|
9. RETIREMENT PLAN
In 1996, the Company established a 401(k) plan covering substantially all employees. The Company pays all administrative fees of the plan. The plan contains provisions allowing for the Company to declare a match up to 25% of funds contributed to the plan by employees. There were no matching contributions declared by the Company for the years ended December 31, 1997, 1998 and 1999.
10. SIGNIFICANT CUSTOMERS, SUPPLIERS AND FOREIGN OPERATIONS
Substantially all of the Company's operations and long-lived assets are based in the United States. DTL located near Basel, Switzerland had long-lived assets totalling $2,354,836 at December 31, 1999.
Major customers, responsible for 10% or more of revenues, include collaborative partners and pharmaceutical and biotechnology companies. The percentages of sales of each of these third party major customers to total revenue derived from third parties for the years ended December 31, 1997, 1998 and 1999 were as follows:
1997 1998 1999
---- ---- ----
Customer A................................................. 17% 4% 22%
Customer B................................................. 16 6 --
Customer C................................................. 10 3 20
Customer D................................................. 9 23 7
|
The Company depends on sole source suppliers for the mesh component of its reactors, the RF tags used in its commercial products and the two dimensional bar code tags used in its NanoKan reactors.
11. SUBSEQUENT EVENTS
ISSUANCE OF PREFERRED STOCK
On April 7, 2000, the Company issued 1,392,503 shares of Series E redeemable convertible preferred stock at $8.00 per share in exchange for the conversion of $6.0 million in notes payable to
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
11. SUBSEQUENT EVENTS (CONTINUED)
shareholders and $5.0 million in cash. The Series E preferred stock has the same conversion features as the Series A, B, C and D redeemable convertible preferred stock (Note 6). Anytime after July 17, 2002, upon the request of at least 51% of the holders of preferred stock, the Company shall redeem all the shares by paying in cash an amount per share equal to $8.00 plus any declared but unpaid dividends for holders of the redeemable convertible Series E preferred stock. Annual dividends of $.56 per share of redeemable convertible Series E preferred stock are payable whenever funds are legally available when, and if declared by the Board of Directors. In the event of a liquidation of the Company, holders of redeemable convertible Series E preferred stock are entitled to a liquidation preference of $8.00 per share plus any declared but unpaid dividends on such shares.
ACQUISITION OF AXYS ADVANCED TECHNOLOGIES, INC.
On April 28, 2000, the Company acquired Axys Advanced Technologies, Inc. ("AAT"), a wholly owned subsidiary of Axys Pharmaceuticals, Inc. The acquisition was accounted for as a purchase in accordance with the provisions of APB No. 16. The Company and Axys will make certain income tax elections so that the total cost of the acquisition will be allocated to the income tax basis of the assets acquired. The Company has obtained a report from Houlihan Valuation Advisors, an independent valuation firm and performed other procedures necessary to complete the purchase price allocation.
A summary of the AAT acquisition costs and allocation to the assets acquired and liabilities assumed is as follows:
Total acquisition costs:
Cash paid at acquisition.................................. $ 50,000
Issuance of promissory note............................... 550,000
Issuance of common stock, warrant and stock options....... 59,769,000
Acquisition related expenses.............................. 250,000
-----------
$60,619,000
===========
Allocated to assets and liabilities as follows:
Tangible assets acquired.................................. $12,143,000
Assumed liabilities....................................... (2,867,000)
In-process research and development....................... 9,000,000
Assembled workforce....................................... 1,300,000
Below market value lease.................................. 1,200,000
Goodwill.................................................. 39,843,000
-----------
$60,619,000
===========
|
The goodwill will be amortized on a straight-line basis over a period of ten years from the date of acquisition. The assembled workforce and below market lease intangible assets will be amortized on a straight-line basis over a period of three and four years, respectively, from the date of acquisition.
The valuation of the in-process research and development was determined based on a discounted cash flow analysis of projected future earnings for each project. The revenue stream
DISCOVERY PARTNERS INTERNATIONAL, INC.
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)
11. SUBSEQUENT EVENTS (CONTINUED)
from each research and development project was estimated based upon its stage of completion as of the acquisition date. The discount rates used for the analysis were adjusted based on the stage of completion to give effect to uncertainties in meeting the projected cash flows. The discount rates used ranged from 20% to 40%.
Assuming that the acquisition of AAT had occurred on the first day of the Company's fiscal year ended December 31, 1998, pro forma condensed consolidated financial information would be as follows:
YEARS ENDED DECEMBER 31,
--------------------------
1998 1999
----------- -----------
(UNAUDITED)
Revenues.......................................... $18,239,000 $27,050,000
Net loss.......................................... (6,976,000) (4,170,000)
Net loss per share, basic and diluted............. $ (0.85) $ (0.49)
|
This pro forma information is not necessarily indicative of the actual results that would have been achieved had AAT been acquired the first day of the Company's fiscal year ended December 31, 1998, nor is it necessarily indicative of future results. The above pro forma condensed financial information does not include a $9.0 million charge for the write-off of in-process research and development.
ACQUISITION OF STRUCTURAL PROTEOMICS, INC.
On May 5, 2000, the Company entered into agreements with Structural Proteomics, Inc. (SPI) and its shareholders to acquire 75% of the outstanding shares of SPI in exchange for $1,000,000 in cash and 150,000 shares of DPI common stock. The acquisition will be accounted for as a purchase in accordance with the provisions of APB No. 16. The pro forma results of operations as if the acquisition of SPI had occurred on the first day of the Company's fiscal year ended December 31, 1998 are not materially different than the reported net loss.
INITIAL PUBLIC OFFERING
In May 2000, the board of directors authorized management of the Company to file a registration statement with the Securities and Exchange Commission permitting the Company to sell shares of its common stock to the public. If the initial public offering is closed under the terms presently anticipated, all of the preferred stock outstanding at March 31, 2000 will convert into common stock. Unaudited pro forma stockholders' equity, as adjusted for the assumed conversion of the preferred stock, is set forth on the balance sheet. The board of directors also approved (subject to stockholder approval) that prior to the effective date of the Offering contemplated by this Prospectus, the Company will reincorporate in Delaware. The financial statements and accompanying notes have been retroactively restated to reflect the effect of the reincorporation in Delaware.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors and Stockholders
Axys Advanced Technologies, Inc.
We have audited the accompanying balance sheets of Axys Advanced Technologies, Inc. (a wholly-owned subsidiary of Axys Pharmaceuticals, Inc.) and its predecessor division of Axys Pharmaceuticals, Inc. as of December 31, 1998 and 1999, and the related statements of operations, stockholder's /division equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Axys Advanced Technologies, Inc. (a wholly-owned subsidiary of Axys Pharmaceuticals, Inc.) and its predecessor division of Axys Pharmaceuticals, Inc. at December 31, 1998 and 1999, and the results of operations and cash flows of Axys Advanced Technologies, Inc. (a wholly-owned subsidiary of Axys Pharmaceuticals, Inc.) and its predecessor division of Axys Pharmaceuticals, Inc. for the years then ended, in conformity with accounting principles generally accepted in the United States.
ERNST & YOUNG LLP
Palo Alto, California
April 7, 2000
AXYS ADVANCED TECHNOLOGIES, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
DECEMBER 31,
--------------------- MARCH 31,
1998(1) 1999(1)(2) 2000(2)
------- ---------- -----------
(UNAUDITED)
ASSETS
Current assets:
Cash..................................................... $ -- $ 60 $ 60
Accounts receivable, trade............................... 2,140 4,406 4,637
Inventories.............................................. 435 2,258 2,072
Deferred tax asset....................................... -- 2,487 2,681
------ ------- -------
Total current assets.................................. 2,575 9,211 9,450
Property and equipment, net................................ 2,510 2,756 3,083
Note receivable from officer............................... 33 75 76
------ ------- -------
$5,118 $12,042 $12,609
====== ======= =======
LIABILITIES AND STOCKHOLDER'S/DIVISION EQUITY
Current liabilities:
Deferred revenue......................................... 333 1,733 1,200
Income taxes payable..................................... -- 3,950 5,008
------ ------- -------
Total current liabilities............................. 333 5,683 6,208
Commitments
Stockholder's/division equity:
Common stock, $0.001 par value, 12,000,000 shares
authorized, 10,000,000 and 10,006,250 shares issued and
outstanding at December 31, 1999 and March 31, 2000,
respectively............................................. -- 10 10
Net contribution from Axys/additional paid-in capital...... 3,321 2,763 1,552
Accumulated/division income................................ 1,464 3,586 4,839
------ ------- -------
Total stockholder's/division equity................... 4,785 6,359 6,401
------ ------- -------
$5,118 $12,042 $12,609
====== ======= =======
|
(2) From June 1999, AAT operated as a separate legal entity.
See accompanying notes
AXYS ADVANCED TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
--------------------- ---------------------
1998(1) 1999(1)(2) 1999(1)(2) 2000(2)
------- ---------- ---------- -------
(UNAUDITED)
Revenues:
Product revenues
Sales to third parties....................... $ 8,512 $12,042 $2,962 $ 4,693
Sales to Axys................................ 363 782 210 114
------- ------- ------ -------
8,875 12,824 3,172 4,807
Licensing and other revenues.................... 3,150 1,150 333 533
------- ------- ------ -------
Total revenues............................. 12,025 13,974 3,505 5,340
Operating costs and expenses:
Cost of goods sold.............................. 3,027 3,480 758 1,132
Research and development........................ 4,674 5,062 1,095 1,474
General and administrative...................... 1,049 1,847 381 617
------- ------- ------ -------
Total operating expenses................... 8,750 10,389 2,234 3,223
------- ------- ------ -------
Income before income taxes........................ 3,275 3,585 1,271 2,117
Provision for income taxes........................ -- 1,463 -- 864
------- ------- ------ -------
Net income........................................ $ 3,275 $ 2,122 $1,271 $ 1,253
======= ======= ====== =======
Basic net income per common share................. $ 0.21 $ 0.13
======= =======
Diluted net income per common share............... $ 0.19 $ 0.11
======= =======
|
(2) From June 1999, AAT operated as a separate legal entity.
See accompanying notes
AXYS ADVANCED TECHNOLOGIES, INC.
STATEMENTS OF STOCKHOLDER'S/DIVISION EQUITY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
NET CONTRIBUTION
COMMON STOCK FROM AXYS/ADDITIONAL ACCUMULATED/
SHARES AMOUNT PAID-IN CAPITAL DIVISION INCOME
---------- ------ -------------------- ---------------
Balance at January 1, 1998......... -- $-- $ 3,736 $(1,811)
Net and comprehensive income for
the period....................... -- -- -- 3,275
Return of Axys contribution........ -- -- (415) --
---------- --- ------- -------
Balance at December 31, 1998....... -- -- 3,321 1,464
Net and comprehensive income for
the period....................... -- -- -- 2,122
Return of Axys contribution........ -- -- (558) --
Issuance of Common Stock........... 10,000,000 10 -- --
---------- --- ------- -------
Balance at December 31, 1999....... 10,000,000 10 2,763 3,586
Net and comprehensive income for
the period (unaudited)........... -- -- -- 1,253
Return of Axys Contribution
(unaudited)...................... -- -- (1,223) --
Issuance of Common Stock on
exercise of stock options
(unaudited)...................... 6,250 -- 12 --
---------- --- ------- -------
Balance at March 31, 2000
(unaudited)...................... 10,006,250 $10 $ 1,552 $ 4,839
========== === ======= =======
|
See accompanying notes
AXYS ADVANCED TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
--------------------- ---------------------
1998(1) 1999(1)(2) 1999(1)(2) 2000(2)
------- ---------- ---------- -------
(IN THOUSANDS) (UNAUDITED)
Cash flows from operating activities
Net income..................................... $ 3,275 $ 2,122 $1,271 $ 1,253
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation................................ 829 976 244 252
Deferred income taxes....................... -- (2,487) -- (194)
Forgiveness of note receivable from
officer................................... 10 -- -- --
Changes in assets and liabilities:
Accounts receivable......................... (1,376) (2,266) (821) (231)
Inventories................................. (435) (1,823) (331) 186
Notes receivable and accrued interest....... (2) (42) -- (1)
Deferred revenue............................ (1,000) 1,400 (333) (533)
Income taxes payable........................ -- 3,950 -- 1,058
------- ------- ------ -------
Net cash provided by operating activities...... 1,301 1,830 30 1,790
Cash flows from investing activities
Expenditures for property and equipment..... (886) (1,222) (16) (579)
------- ------- ------ -------
Net cash used in investing activities.......... (886) (1,222) (16) (579)
Cash flows from financing activities
(Return of capital to) Axys.................... (415) (558) (14) (1,223)
Proceeds from issuance of common stock......... -- 10 -- 12
------- ------- ------ -------
Net cash used in investing activities.......... (415) (548) (14) (1,211)
------- ------- ------ -------
Net increase in cash............................. -- 60 -- --
Cash, beginning of period........................ -- -- -- 60
------- ------- ------ -------
Cash, end of period.............................. $ -- $ 60 $ -- $ 60
======= ======= ====== =======
|
(2) From June 1999, AAT operated as a separate legal entity.
See accompanying notes
AXYS ADVANCED TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Axys Advanced Technologies, Inc. ("AAT" or the "Company") was incorporated in the state of Delaware on June 11, 1999 as a wholly-owned subsidiary of Axys Pharmaceuticals, Inc. ("Axys") and commenced operations as a separate legal entity at that time. Prior to its incorporation and since its inception, March 1, 1996, AAT operated as a division of Axys. AAT conceives, produces and sells large numbers of diverse combinatorial chemistry libraries of drug-like compounds, as well as more focused libraries based around a specific structure. In addition, AAT sells the protocols which provide the basis for making the libraries that are produced and which also provide the basis to make other similar drug-like compounds against biological targets of interest in an effort to identify lead compounds for their drug discovery programs. AAT also provides its enabling technology to certain customers.
The divisional statements of operations for the year ended December 31, 1998 and the 1999 AAT statement of operations (including the pre-incorporation period from January 1 to June 10, 1999) include all revenue and expenses directly attributable to AAT, including a corporate allocation of the costs of facilities, salaries, and employee benefits based on relative headcount. Additionally, incremental corporate administration, finance, and management costs have been allocated to AAT (see Note 9).
All of the allocations reflected in the 1998 and 1999 financial statements are based on assumptions that management believes are reasonable under the circumstances. However, these allocations and estimates are not necessarily indicative of the costs that would have resulted if AAT had been operated on a stand-alone basis.
BASIS OF PRESENTATION
The accompanying financial statements include the operations of AAT as part of Axys (on a carved-out basis as discussed below) from its status as a division of Axys for the year ended December 31, 1998 (the "divisional statements") and for the period January 1 to June 10, 1999 (the pre-incorporation period) and as a separate legal entity from its incorporation through December 31, 1999. The balance sheet at December 31, 1998 represents the assets, liabilities, and divisional equity of AAT as a part of Axys and at December 31, 1999 represents the balance sheet of AAT as a separate legal entity. The divisional financial statements have been derived from the historical books and records of Axys. The balance sheet at December 31, 1998 includes all assets and liabilities specifically identifiable and directly attributable to AAT, which are derived from historical cost information of Axys and which are presented at the carryover basis of Axys. Axys' corporate accounting systems were not designed to track cash receipts and payments and liabilities on a business-specific basis.
INTERIM FINANCIAL INFORMATION
The financial information at March 31, 2000 and for the three months ended March 31, 1999 and 2000 is unaudited but, in the opinion of management, has been prepared on the same basis as the annual financial statements and includes all adjustments (consisting only of normal recurring adjustments) that AAT considers necessary for a fair presentation of the financial position at such date and the operating results and cash flow for such periods. Results for the three months ended
AXYS ADVANCED TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
March 31, 2000 are not necessarily indicative of the results to be expected for any subsequent period.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates, and such differences could be material.
INVENTORIES
Inventories are stated at the lower of cost (weighted average cost) or market. Inventories consist of the following (in thousands):
DECEMBER 31, MARCH 31,
-------------- ---------
1998 1999 2000
---- ------ ---------
Raw materials............................................ $ 69 $ 156 $ 181
Finished goods........................................... 366 2,102 1,891
---- ------ ------
Total.................................................. $435 $2,258 $2,072
==== ====== ======
|
PROPERTY AND EQUIPMENT
Property and equipment are presented at historical carryover basis or cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the term of the lease or economic useful life, whichever is shorter. All other fixed assets have estimated useful lives ranging from 3 to 5 years.
INCOME TAXES
Through May 31, 1999, AAT was not a separate taxable entity for federal, state, or local income tax purposes, and its operations were included in the tax returns of Axys. AAT has recognized income taxes under the liability method. Deferred income taxes are recognized for differences between the financial statement and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.
COMPREHENSIVE INCOME
AAT has adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income", which establishes standards for reporting comprehensive income (loss) and its components in the financial statements. To date, AAT's comprehensive income (loss) has equaled its net income (loss).
AXYS ADVANCED TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
REVENUE RECOGNITION
Sales of chemical compound libraries contain one or more of the following sources of revenue:
- Product Sales: As chemical compound libraries are shipped to customers, AAT records revenue based on the contracted price per compound.
- License Fees: Payments are generally received when compound supply or technology license agreements are signed. These revenues are recognized over the term of the agreement.
- Commitment Fees: Payments received in conjunction with AAT's commitment to perform certain obligations under compound supply or technology license agreements. These revenues are recorded over the course of the relevant agreement, as performance obligations are completed.
RESEARCH AND DEVELOPMENT
Research and development costs are expensed as incurred and include direct costs and research-related overhead expenses.
STOCK-BASED COMPENSATION
As permitted by Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("FAS 123"), AAT has elected to continue to follow Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees" ("APB 25") and related interpretations in accounting for its employee stock option and purchase plans. See Note 4 for pro forma disclosures required by FAS 123.
SEGMENT INFORMATION
In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" which establishes standards for reporting information about operating segments in annual financial statements. The Company has viewed its operations as one segment.
EARNINGS PER SHARE
Basic earnings per share and diluted earnings per share are presented in conformity with Statement of Financial Accounting Standards No. 128, "Earnings Per Share". Basic earnings per share represents net income divided by the 10,000,000 and 10,006,250 weighted-average number of common shares outstanding during the year ended December 31, 1999 and the three month period ended March 31, 2000, respectively. Diluted earnings per share represents net income divided by the weighted-average number of common shares outstanding during the period, adjusted for the incremental dilution of the 984,025 and 894,479 weighted average outstanding stock options for 1999 and 2000, respectively.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Financial Instruments and for Hedging
AXYS ADVANCED TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Activities" ("FAS 133") which provides a comprehensive and consistent standard for the recognition and measurement of derivatives and hedging activities. FAS 133 is effective for fiscal years beginning after June 15, 2000. Management does not anticipate that FAS 137 will have an impact on the Company's results of operations or financial condition when adopted, as the Company holds no derivative financial instruments and does not currently engage in hedging activities.
In December 1999 the SEC issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). SAB 101 requires that license and other up-front fees be recognized over the term of the agreement unless the fee is in exchange for products delivered or services performed that represent the culmination of a separate earnings process. The effect of SAB 101 will not have a material effect on AAT's prior period results.
2. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of AAT's financial instruments, including cash and accounts receivable approximate fair value because of their short maturities.
3. PROPERTY AND EQUIPMENT
Property and equipment consists of the following (in thousands):
DECEMBER 31,
---------------- MARCH 31,
1998 1999 2000
------ ------ ---------
Machinery and equipment................................. $2,946 $3,859 $4,339
Purchased software...................................... 43 47 47
Furniture and office equipment.......................... 90 99 99
Interest in leasehold improvements...................... 2,774 3,070 3,169
------ ------ ------
5,853 7,075 7,654
Less accumulated depreciation and amortization.......... (3,343) (4,319) (4,571)
------ ------ ------
$2,510 $2,756 $3,083
====== ====== ======
|
4. STOCKHOLDERS' EQUITY
Common stock was reserved for issuance as follows:
DECEMBER 31, MARCH 31,
1999 2000
------------ ---------
Stock options......................................... 1,765,000 1,758,750
|
STOCK OPTIONS
Upon incorporation of AAT, the Company adopted an equity incentive plan under which AAT grants incentive stock options or non-qualified stock options at the discretion of the Board of Directors, to employees, directors and consultants to purchase the Company's common stock.
The number of shares to be purchased, their price, and the terms of payment are determined by our Board of Directors, provided that the exercise price for incentive stock options cannot be less than the estimated fair market value on the date of grant. The options granted generally expire
AXYS ADVANCED TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ten years after the date of grant and become exercisable at such times and under such conditions as determined by the Board of Directors (generally over a four or five year period).
A summary of our stock option activities and related information follows:
OUTSTANDING STOCK OPTIONS
---------------------------
WEIGHTED
SHARES NUMBER OF AVERAGE
AVAILABLE SHARES EXERCISE PRICE
--------- --------- --------------
Balances at December 31, 1998........................ -- -- $ --
--------- -------- -----
Shares reserved.................................... 1,765,000 -- --
Options granted.................................... (997,025) 997,025 2.00
Options exercised.................................. -- -- --
Options canceled................................... 13,000 (13,000) 2.00
--------- -------- -----
Balances at December 31, 1999........................ 780,975 984,025 $2.00
--------- -------- -----
Options granted.................................... (23,420) 23,420 2.00
Options exercised.................................. -- (6,250) 2.00
Options canceled................................... 106,716 (106,716) 2.00
--------- -------- -----
Balances at March 31, 2000........................... 864,271 894,479 $2.00
========= ======== =====
|
The weighted average fair value of stock options outstanding under the plan was $0.40 in 1999 and the three months ended March 31, 2000, respectively.
At December 31, 1999 and March 31, 2000, the weighted-average contractual life of outstanding options was 3.75 years and 3.58 years, respectively. Options exercisable at December 31, 1999 were 35,535 at a weighted-average exercise price of $2.00 per share and at March 31, 2000 were 80,299 at a weighed-average exercise price of $2.00 per share.
STOCK-BASED COMPENSATION
The Company has elected to follow APB 25 and related interpretations in accounting for its stock-based compensation plans because, as discussed below, the alternative fair value accounting provided for under SFAS 123 requires use of option valuation models that were not developed for use in valuing employee stock options and employee stock-based awards. There has been no compensation expense under APB 25 with respect to such awards.
PRO FORMA DISCLOSURES
Pro forma information regarding net income and net income per share is required by FAS 123, and has been determined as if the Company had accounted for its stock-based awards under the fair value method of FAS 123. The fair value for these stock-based awards was estimated at the date of grant using a Black-Scholes option-pricing model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's stock-based awards have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company's stock-based awards to its employees.
AXYS ADVANCED TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The fair value of the Company's stock-based awards to employees was estimated assuming no expected dividends, expected life of 4.0 years, expected volatility of 0.65, and a risk-free interest rate of 5.58%.
For purposes of pro forma disclosures, the estimated fair value of the stock-based awards are amortized to pro forma net income over the option's vesting period. The Company's as reported and pro forma information follows (in thousands):
DECEMBER 31, MARCH 31,
1999 2000
------------ ---------
Net income
As reported............................................... $2,122 $1,253
Pro forma................................................. 2,098 1,230
Net income per common share -- basic
As reported............................................... $ 0.21 $ 0.13
Pro forma................................................. 0.21 0.13
Net income per common share -- diluted
As reported............................................... $ 0.19 $ 0.11
Pro forma................................................. 0.19 0.11
|
5. COMMITMENTS
LEASES
The Company occupies office space and laboratory facilities currently leased from Axys. The rent expense allocated by Axys to AAT is based on the square footage of office and laboratory space occupied by AAT and was $254,900, $289,600 and $75,000 for the year ended December 31, 1998 and 1999 and for the three months ended March 31, 2000, respectively.
Effective January 2000, AAT entered into a sub-lease agreement with Axys related to the office and laboratory space occupied by AAT. Future minimum lease payments under the sub-lease arrangement with Axys are as follows (in thousands):
2000........................................................ $ 301,185
2001........................................................ 313,226
2002........................................................ 325,756
2003 and thereafter......................................... 309,522
----------
Total minimum lease payments.............................. $1,249,689
==========
|
RESEARCH AND DEVELOPMENT AGREEMENT
In December 1999, the Company entered into a combinatorial chemistry agreement with a third party whereby AAT is obligated to deliver certain compounds in connection with the collaborative research and development efforts. In the event the collaborative agreement results in a marketable product, the companies will share in revenues generated from the marketable product. The compounds have an estimated cost of $440,000 and are to be delivered through September 2000. There were no compound shipments for the year ended December 31, 1999. Inventory with a cost of $122,000 was shipped to the third party during the three months ended March 31, 2000 and AAT recorded research and development costs associated with the inventory shipped.
AXYS ADVANCED TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. EMPLOYEE BENEFIT PLAN
Axys maintains a 401(k) retirement savings plan that includes all eligible employees of AAT. Each participant in the plan may elect to contribute 1% to 20% of his or her annual salary to the plan, subject to statutory limitations. Axys matches 50% of the first 6% of the salary contributed by the employee. Axys' match is done with Axys stock. The related expense allocated by Axys and charged to AAT operations relative to AAT employees was $47,444 and $68,370 for the years ended December 31, 1998 and 1999, respectively. There was no expense for the three months ended March 31, 2000.
7. INCOME TAXES
The net income incurred for the year ended December 31, 1998 and the pre-incorporation period to June 10, 1999 are attributable to the operations of the Company as a division of Axys and were included in the income tax returns filed by Axys. Because the Company will not receive any benefit for historical operating losses incurred by Ayxs through the pre-incorporation period, no income tax benefit has been reflected for those periods. AAT has recognized income taxes under the liability method.
The provision for income taxes shown in the accompanying statement of operations for the period ended December 31, 1999 and for the three months ended March 31, 2000 consist of the following (in thousands):
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
1999 2000
------------ ---------------
Current:
Federal................................... $ 3,093 $ 828
State..................................... 857 230
------- ------
Totals................................. 3,950 1,058
------- ------
Deferred:
Federal................................... (1,947) (152)
State..................................... (540) (42)
------- ------
Totals................................. (2,487) (194)
------- ------
Totals................................. $ 1,463 $ 864
======= ======
|
The effective rate of the provision for income taxes reconciles to the amount computed by applying the federal statutory rate to income before provision for income taxes as follows (in thousands):
JUNE 11, 1999, THREE MONTHS
DATE OF INCORPORATION, ENDED MARCH 31,
TO DECEMBER 31, 1999 2000
---------------------- ---------------
Income before income taxes.................... $3,575 $2,117
------ ------
Expected tax at 35%........................... 1,251 741
State income tax, net of federal benefit...... 206 122
Other......................................... 6 1
------ ------
Total tax..................................... $1,463 $ 864
====== ======
Effective tax rate............................ 41% 41%
|
AXYS ADVANCED TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Deferred income taxes are recognized for differences between the financial statements and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Significant components of net deferred tax assets at December 31, 1999 and March 31, 2000 consist of the following (in thousands):
DECEMBER 31, MARCH 31,
1999 2000
------------ ---------
Deferred Tax Assets Inventory reserves.................... $2,555 $2,740
Accrued compensation.................................... 121 144
------ ------
2,676 2,884
Deferred tax allowance............................... -- --
------ ------
Total deferred tax assets............................ 2,676 2,884
------ ------
Deferred Tax Liabilities State income tax................. 189 203
------ ------
Net deferred tax asset............................... $2,487 $2,681
====== ======
|
8. REVENUES FROM SIGNIFICANT PARTNERS AND CUSTOMERS
Major customers, responsible for 10% or more of revenues, include drug discovery partners and pharmaceutical and biotechnology companies that purchase AAT compound libraries. The percentages of sales of each of these third party major customers to total revenue derived from third parties for the year ended December 31, 1998 and 1999 and for the three months ended March 31, 2000 were as follows:
1998 1999 2000
---- ---- ----
Customer A................................................. 26% 9% --%
Customer B................................................. 58 45 23
Customer C................................................. 14 13 5
Customer D................................................. -- 14 29
Customer E................................................. -- 7 15
Customer F................................................. -- -- 28
All Others................................................. 2 12 --
--- --- ---
Total...................................................... 100% 100% 100%
=== === ===
|
As of December 31, 1998 and 1999 and March 31, 2000, two, three and four customers comprised 98%, 72% and 86%, respectively, the accounts receivable balances. AAT does not require collateral for potential credit losses. These losses have been immaterial to date.
9. RELATED PARTY TRANSACTIONS OF AAT
TRANSFER OF INVENTORIES
In connection with Axys research and development efforts, AAT transferred inventory, at cost, to Axys. The inventory transfers were $363,000 $782,000, $210,000 and $114,000 for the year ended December 31, 1998 and 1999 and for the three months ended March 31, 1999 and 2000, respectively. These amounts are included in product revenues and cost of goods sold.
AXYS ADVANCED TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FUNDING
AAT utilizes Axys' centralized cash management services and processes related to receivables, payables, payroll, and other activities. AAT's net cash requirements are funded by Axys. Net financing provided by Axys to AAT in 1997 was approximately $3,736,000. The Company returned approximately $415,000, $558,000 and $1,223,000 of Axys' contributions in 1998, 1999 and as of March 31, 2000, respectively. These amounts are included in division equity. Amounts financed by Axys did not bear interest. The average balance due to Axys Pharmaceuticals, Inc. was $3.5 million and $3.0 million for the years ended December 31, 1998 and 1999, respectively.
CORPORATE SERVICES
In accordance with the Staff Accounting Bulletin No. 55, expense allocations have been reflected in these financial statements. These expenses include corporate communications, management compensation and benefits administration, payroll, accounts payable, income tax compliance, and other administration and finance overhead. Allocations and charges were based on either a direct cost pass-through for incremental corporate administration, finance and management costs and a percentage allocation of costs for other services provided based on factors such as headcount and relative expenditure levels. Such allocations and charges totaled approximately $3,229,000 $3,147,000 and $636,000 for the years ended December 31, 1998 and 1999 and for the three months ended March 31, 2000, respectively. Management believes that the basis used for allocating corporate services is reasonable. However, the terms of these transactions may differ from those that would have resulted from transactions among unrelated parties.
10. SUBSEQUENT EVENTS (UNAUDITED)
On April 28, 2000 Axys consummated a definitive agreement with Discovery Partners International, Inc. ("DPI") to merge AAT with a subsidiary of DPI.
DISCOVERY PARTNERS INTERNATIONAL, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
INTRODUCTION
On April 28, 2000, Discovery Partners International, Inc. ("DPI") completed the acquisition of Axys Advanced Technologies, Inc. ("AAT").
The unaudited pro forma combined condensed financial statements which follow have been prepared by DPI based upon the historical financial statements of DPI and AAT, and may not be indicative of the results that may have actually occurred if the combination had been in effect on the date indicated or for the periods presented or which may be obtained in the future. The unaudited pro forma combined condensed statements of operations includes the statements of operations of both DPI and AAT for the year ended December 31, 1999 and the three months ended March 31, 2000. The pro forma combined condensed financial statements should be read in conjunction with the audited financial statements and notes of DPI and AAT included elsewhere in the Prospectus.
The unaudited pro forma combined condensed statements of operations for the year ended December 31, 1999 and the three months ended March 31, 2000 assume the purchase of AAT had been consummated on January 1, 1999. The pro forma information is based on the historical financial statements of DPI and AAT giving effect to the transaction under the purchase method of accounting and the assumptions and adjustments in the accompanying footnotes.
DISCOVERY PARTNERS INTERNATIONAL, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEETS
MARCH 31, 2000
(IN THOUSANDS)
DISCOVERY AXYS
PARTNERS ADVANCED PRO FORMA COMBINED
INTERNATIONAL, INC. TECHNOLOGIES, INC. ADJUSTMENTS PRO FORMA
------------------- ------------------ ----------- ---------
ASSETS
Current assets:
Cash......................................... $ 984 $ 60 $ (50)(c) $ 994
Accounts receivables, net.................... 3,082 4,637 -- 7,719
Inventory.................................... 2,463 2,072 4,428(c) 8,963
Prepaid and other current assets............. 365 2,681 (2,681)(c) 365
-------- ------- -------- --------
Total current assets....................... 6,894 9,450 1,697 18,041
Property and equipment, net.................... 5,296 3,083 -- 8,379
Restricted cash and cash equivalents and other
assets....................................... 2,430 76 -- 2,506
Patent and license rights, net................. 1,079 -- -- 1,079
Intangible assets, net......................... 6,051 -- 38,463(c) 44,514
-------- ------- -------- --------
Total assets............................... $ 21,750 $12,609 $ 40,160 $ 74,519
======== ======= ======== ========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses........ $ 2,030 $ -- $ 250(e) $ 2,280
Income taxes payable......................... -- 5,008 (5,008)(c) --
Current portion of obligations under capital
leases and notes payable................... 202 -- -- 202
Line of credit............................... 763 -- -- 763
Deferred revenue............................. 1,849 1,200 -- 3,049
Notes payable to shareholders................ 6,000 -- 550(c) 6,550
-------- ------- -------- --------
Total current liabilities.................. 10,844 6,208 (4,208) 12,844
Obligations under capital leases and equipment
notes payable, less current portion.......... 936 -- -- 936
Deferred rent.................................. 55 -- -- 55
Long-term debt................................. 1,569 -- -- 1,569
Redeemable convertible preferred stock......... 27,907 -- -- 27,907
Stockholders' equity (deficit)
Preferred stock.............................. -- -- -- --
Common stock................................. 2 10 (10)(a) 9
7(c)
Additional paid-in capital................... 4,016 1,552 (1,552)(a) 63,778
4,047(c)
55,715(c)
Deferred compensation........................ (1,824) -- -- (1,824)
Note receivable from stockholder............. (240) -- -- (240)
Accumulated other comprehensive loss......... (152) -- -- (152)
Accumulated income (deficit)................. (21,363) 4,839 (4,839)(b) (21,363)
(9,000)(d) (9,000)
-------- ------- -------- --------
Total stockholders' equity (deficit)....... (19,561) 6,401 44,368 31,208
-------- ------- -------- --------
Total liabilities, redeemable preferred
stock and stockholders' equity
(deficit)................................ $ 21,750 $12,609 $ 40,160 $ 74,519
======== ======= ======== ========
|
(a) Elimination of existing AAT common stock and additional paid-in capital.
(b) Elimination of AAT's accumulated income.
(c) Issuance of cash of $50,000, issuance of promissory notes to AAT shareholders of $550,000, assumption by DPI of options to purchase common stock of DPI with a value of $3,237,000, issuance of a warrant to purchase 200,000 shares of DPI common stock valued at $810,000, and issuance of DPI common stock valued at $55,722,000. Adjustment to record the net assets of AAT at fair value including a portion of the total purchase price to assembled workforce and below market lease and with costs in excess of net assets acquired allocated to goodwill. The Company obtained a report from an independent valuation firm and performed other procedures to enable it to obtain all information necessary to complete the purchase price allocation.
(d) Write-off of AAT's in-process research and development.
(e) Accrue estimated acquisition costs to be paid by DPI.
See accompanying notes to unaudited pro forma combined condensed financial statements.
DISCOVERY PARTNERS INTERNATIONAL, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
DISCOVERY AXYS
PARTNERS ADVANCED PRO FORMA COMBINED
INTERNATIONAL, INC. TECHNOLOGIES, INC. ADJUSTMENTS PRO FORMA
------------------- ------------------ ----------- -----------
Revenues............................. $13,076 $13,974 $ -- $ 27,050
Cost of revenues..................... 8,235 3,480 242(b) 11,957
------- ------- ------- -----------
Gross margin.................... 4,841 10,494 (242) 15,093
Cost and expenses:
Research and development............. 3,538 5,062 359(b) 8,959
Selling, general and
administrative..................... 4,439 1,847 132(b) 6,418
Amortization of goodwill............. -- -- 3,596(a) 3,596
Amortization of deferred
compensation....................... 311 -- -- 311
------- ------- ------- -----------
Total operating expenses........ 8,288 6,909 4,087 19,284
------- ------- ------- -----------
Income (loss) from operations........ (3,447) 3,585 (4,329) (4,191)
Interest income, net................. 211 -- (56)(f) 155
Other expense........................ (134) -- -- (134)
Provision for income taxes........... -- (1,463) 1,463(c) --
------- ------- ------- -----------
Net income (loss).................... $(3,370) $ 2,122 $(2,922) $ (4,170)(d)
======= ======= ======= ===========
Net loss per share, basic and
diluted............................ $ (0.49)(e)
===========
Shares used in the calculation of
historical net loss per share,
basic and diluted.................. 8,554,681
===========
Pro forma net loss per share, basic
and diluted........................ $ (0.28)(e)
===========
Shares used in the calculation of pro
forma net loss per share, basic and
diluted............................ 15,158,461
===========
|
(b) Adjustment to reflect the twelve-month amortization of assembled workforce and below market lease based on the allocation of the assumed purchase price.
(c) Adjustment to eliminate the provision for income taxes recorded by AAT due to the loss from operations generated by the pro forma adjustments.
(d) The pro forma combined statement of operations does not include a $9.0 million charge for the write-off of in process research and development that will be recorded on April 28, 2000, the closing date of the acquisition of AAT.
(e) Net loss per share, basic and diluted is based on DPI's weighted average common shares outstanding, after giving effect to the issuance of shares of DPI's common stock used to complete the acquisition as if such issuance had occurred at the beginning of the periods. Pro forma net loss per share, basic and diluted also includes the assumed conversion of all of DPI's outstanding shares of redeemable preferred stock as of their original dates of issuance.
(f) Adjustment to record interest expense for the issuance of promissory notes of $550,000 with an interest rate of 8% and the reduction of interest income at an interest rate of 4% due to $50,000 in cash paid to shareholders of AAT and $250,000 in cash paid for estimated acquisition costs.
See accompanying notes to unaudited pro forma combined condensed financial
statements.
DISCOVERY PARTNERS INTERNATIONAL, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
DISCOVERY AXYS
PARTNERS ADVANCED PRO FORMA COMBINED
INTERNATIONAL, INC. TECHNOLOGIES, INC. ADJUSTMENTS PRO FORMA
------------------- ------------------ ----------- -----------
Revenues............................. $ 5,173 $5,340 $ -- $ 10,513
Cost of revenues..................... 3,053 1,132 60(b) 4,245
------- ------ ------- -----------
Gross margins................... 2,120 4,208 (60) 6,268
Cost and expenses:
Research and development............. 619 1,474 90(b) 2,183
Selling, general and
administrative..................... 1,519 617 33(b) 2,169
Amortization of goodwill............. 155 -- 899(a) 1,054
Amortization of deferred
compensation....................... 264 -- -- 264
------- ------ ------- -----------
Total operating expenses........ 2,557 2,091 1,022 5,670
------- ------ ------- -----------
Income (loss) from operations........ (437) 2,117 (1,082) 598
Interest expense, net................ (1,322) -- (14)(f) (1,336)
Other income......................... 129 -- -- 129
Provision for income taxes........... -- (864) 411(c) (453)
======= ====== ======= ===========
Net income (loss).................... $(1,630) $1,253 $ (685) $ (1,062)(d)
======= ====== ======= ===========
Historical net loss per share, basic
and diluted........................ $ (0.12)(e)
===========
Shares used in the calculation of
historical net loss per share,
basic and diluted.................. 8,753,501
===========
Pro forma net loss per share, basic
and diluted........................ $ (0.07)(e)
===========
Shares used in the calculation of pro
forma net loss per share, basic and
diluted............................ 15,368,330
===========
|
(b) Adjustment to reflect the three-month amortization of assembled workforce and below market lease based on the allocation of the assumed purchase price.
(c) Adjustment to reduce the provision for income taxes recorded by AAT by DPI's tax rate of 41% due to the loss from operations generated by the pro forma adjustments.
(d) The pro forma combined statement of operations does not include a $9.0 million charge for the write-off of in process research and development that will be recorded on April 28, 2000, the closing date of the acquisition of AAT.
(e) Net loss per share, basic and diluted, is based on DPI's weighted average common shares outstanding, after giving effect to the issuance of shares of DPI's common stock used to complete the acquisition as if such issuance had occurred at the beginning of the periods. Pro forma net loss per share, basic and diluted, also includes the assumed conversion of all of DPI's outstanding shares of redeemable preferred stock as of their original dates of issuance.
(f) Adjustment to record interest expense for the issuance of promissory notes of $550,000 with an interest rate of 8% and the reduction of interest income at an interest rate of 4% due to $50,000 in cash paid to shareholders of AAT and $250,000 in cash paid for estimated acquisition costs.
See accompanying notes to unaudited pro forma combined condensed financial statements.
DISCOVERY PARTNERS INTERNATIONAL, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS
(IN THOUSANDS)
NOTE 1.
The unaudited pro forma combined condensed financial statements reflect the acquisition of Axys Advanced Technologies, Inc. ("AAT") by Discovery Partners International, Inc. ("DPI") for a purchase price of approximately $60.6 million consisting of cash, notes payable and common stock in April 2000 (see Note 4).
NOTE 2.
The unaudited pro forma combined condensed balance sheet combines DPI's March 31, 2000 unaudited balance sheet with AAT's March 31, 2000 unaudited balance sheet.
NOTE 3.
The unaudited pro forma combined condensed statement of operations for the three months ended March 31, 2000 combines DPI's unaudited statement of operations for the three months ended March 31, 2000 with AAT's unaudited statement of operations for the three months ended March 31, 2000. The unaudited pro forma combined condensed statement of operations for the year ended December 31, 1999 combines DPI's audited statement of operations for the year ended December 31, 1999 with AAT's audited statement of operations for the year ended December 31, 1999. The unaudited pro forma combined condensed statements of operations have been prepared by DPI based upon the historical financial statements of DPI and AAT, and may not be indicative of the results that may have actually occurred if the combination had been in effect on the date indicated or the periods presented or which may be obtained in the future. The pro forma combined condensed financial statements should be read in conjunction with the audited financial statements and notes of DPI and AAT included elsewhere in the Prospectus.
NOTE 4.
Upon the consummation of the acquisition, DPI acquired all of the common stock of AAT in exchange for 7,429,641 shares of common stock of DPI, the assumption by DPI of options to acquire up to 703,259 additional shares of DPI common stock at a weighted average exercise price of $2.72 per share, the issuance of a warrant to purchase 200,000 shares of DPI common stock, the issuance of cash totaling $50,000 and the issuance of promissory notes totaling $550,000. The purchase price is calculated to be $60,619,000 based on the fair market value of $7.50 per share of DPI common stock. The purchase price also includes estimated merger costs of $250,000 and assumed liabilities of $1,200,000. The purchase price for purposes of the unaudited pro forma combined condensed
DISCOVERY PARTNERS INTERNATIONAL, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
NOTE 4. (CONTINUED)
financial statements was allocated as follows based upon the valuation of the
tangible and intangible assets at March 31, 2000, including acquired in-process
research and development:
Total acquisition costs:
Cash paid at acquisition.................................. $ 50,000
Issuance of promissory note............................... 550,000
Issuance of common stock, warrant and stock options....... 59,769,000
Acquisition related expenses.............................. 250,000
-----------
$60,619,000
===========
Allocated to assets and liabilities as follows:
Tangible assets acquired.................................. $14,356,000
Assumed liabilities....................................... (1,200,000)
In-process research and development....................... 9,000,000
Assembled workforce....................................... 1,300,000
Below market value lease.................................. 1,200,000
Goodwill.................................................. 35,963,000
-----------
$60,619,000
===========
|
NOTE 5.
The allocation of the purchase price was applied to the historical balance sheet and historical statements of operations of DPI and AAT to arrive at the unaudited pro forma combined condensed balance sheet at March 31, 2000 and statement of operations for the year ended December 31, 1999 and the three months ended March 31, 2000. Adjustments were made to record the net assets of AAT at their fair value including a portion of the total purchase price to assembled work force and below market lease and costs in excess of net assets acquired were allocated to goodwill. The Company obtained a report from Houlihan Valuation Advisors, an independent valuation firm, and performed other procedures to enable it to obtain all information necessary to complete the purchase price allocation.
The valuation of the in-process research and development charge of $9.0 million was determined based on a discounted cash flow analysis of projected future earnings for each project currently in process. The revenue stream from each research and development project was estimated based upon its stage of completion as of the acquisition date. There are 83 research projects in process related to the development of compound libraries which are to be completed over the next twelve months and at an estimated cost of $3.7 million. The discount rates used to determine the in-process research and development charge were based on the stage of completion of the projects to give effect to uncertainties in meeting the projected cash flows. The discount rates used in the discounted cash flow analysis ranged from 20% to 40%.
5,000,000 SHARES
LOGO
COMMON STOCK
CHASE H&Q
LEHMAN BROTHERS
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, COMMON SHARES ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF OUR COMMON SHARES.
NO ACTION IS BEING TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES TO PERMIT A PUBLIC OFFERING OF THE COMMON SHARES OR POSSESSION OR DISTRIBUTION OF THIS PROSPECTUS IN THAT JURISDICTION. PERSONS WHO COME INTO POSSESSION OF THIS PROSPECTUS IN JURISDICTIONS OUTSIDE THE UNITED STATES ARE REQUIRED TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY RESTRICTIONS AS TO THIS OFFERING AND THE DISTRIBUTION OF THIS PROSPECTUS APPLICABLE TO THAT JURISDICTION.
UNTIL , 2000 (THE 25TH DAY AFTER COMMENCEMENT OF THIS OFFERING), ALL DEALERS THAT BUY, SELL OR TRADE IN OUR COMMON SHARES, 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.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by the Registrant are as follows. All amounts other than the SEC registration fee, the NASD filing fees and the Nasdaq National Market listing fee are estimates.
AMOUNT
TO BE PAID
----------
SEC registration fee........................................ $ 30,360
NASD filing fee............................................. 12,000
Nasdaq National Market listing fee.......................... 95,000
Legal fees and expenses..................................... 500,000
Accounting fees and expenses................................ 350,000
Printing and engraving...................................... 150,000
Blue Sky fees and expenses (including legal fees)........... 5,000
Transfer agent fees......................................... 3,500
Miscellaneous............................................... 54,140
----------
Total............................................. $1,200,000
==========
|
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). As permitted by the Delaware General Corporation Law, the Registrant's
Certificate of Incorporation includes a provision that eliminates the personal
liability of its directors for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the director's duty of
loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of law,
(iii) under section 174 of the Delaware General Corporation Law (regarding
unlawful dividends and stock purchases) or (iv) for any transaction from which
the director derived an improper personal benefit. As permitted by the Delaware
General Corporation Law, the Bylaws of the Registrant provide that (i) the
Registrant is required to indemnify its directors and officers to the fullest
extent permitted by the Delaware General Corporation Law, subject to certain
very limited exceptions, (ii) the Registrant may indemnify its other employees
and agents as set forth in the Delaware General Corporation Law, (iii) the
Registrant is required to advance expenses, as incurred, to its directors and
executive officers in connection with a legal proceeding to the fullest extent
permitted by the Delaware General Corporation Law, subject to certain very
limited exceptions and (iv) the rights conferred in the Bylaws are not
exclusive. At present, there is no pending litigation or proceeding involving a
director, officer or employee of the Registrant regarding which indemnification
is sought, nor is the Registrant aware of any threatened litigation that may
result in claims for indemnification. Reference is also made to Section 7 of the
Underwriting Agreement, which provides for the indemnification of officers,
directors and controlling persons of the Registrant against certain liabilities.
In addition, certain of the intercompany agreements provide for the
indemnification of officers, directors and controlling persons of the Registrant
against certain liabilities. The indemnification provisions in the Registrant's
Certificate of Incorporation and in its Bylaws may be sufficiently broad to
permit indemnification of the Registrant's directors and executive officers for
liabilities arising under the Securities Act. The Registrant, with approval by
the Registrant's Board of Directors, expects to
II-1
obtain directors' and officers' liability insurance. Reference is made to the following documents filed as exhibits to this registration statement regarding relevant indemnification provisions described above and elsewhere herein:
EXHIBIT
DOCUMENT NUMBER
-------- -------
Form of Underwriting Agreement.............................. 1.1
Form of Certificate of Incorporation of Registrant (to be in
effect in Delaware upon the closing of this offering)..... 3.2
Form of Bylaws of Registrant (to be in effect in Delaware
upon the closing of this offering)........................ 3.4
Form of Indemnification Agreement........................... 10.61
|
The Company has entered into indemnification agreements with each of the Company's directors, a form of which is attached as an exhibit hereto and is incorporated herein by reference.
The Registrant has obtained, and may continue to carry, insurance for the protection of its directors and officers against any liability asserted against them in their official capacities. The rights of indemnification described above are not exclusive of any other rights of indemnification to which the persons indemnified may be entitled under any bylaw, agreement, vote of stockholders or directors or otherwise.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since January 1, 1997, we have issued unregistered securities to a limited number of persons as described below:
(a) Since January 1, 1997 through May 5, 2000, we issued bonus stock grants, totaling 16,800 shares of common stock to several employees and consultants in consideration for services they had provided us. The fair market value of these shares of common stock on the dates of grant was $0.30 per share, resulting in an aggregate fair market value of $5,040. This grants of common stock were issued pursuant to our 1995 Stock Option/Stock Issuance Plan.
(b) On October 31, 1997, we sold 333,333 shares of Series C preferred stock at a price of $6.00 per share to a strategic partner for an aggregate purchase price of $2,000,000.
(c) On May 22 and June 15, 1998 we sold an aggregate of 2,228,945 shares of Series D preferred stock at a price of $7.20 per share to a group of strategic partners and private investors for an aggregate purchase price of $16,048,404.
(d) On April 7, 2000, we sold an aggregate of 1,392,503 shares of Series E preferred stock at a price of $8.00 per share to a group of private investors for an aggregate purchase price of $11,140,024. We received $5,023,000 in cash from this private sale; the remaining $6,117,024 was used to retire several promissory notes held by certain of the investors in this Series E financing.
(e) On April 11, 2000, we issued (i) 7,425,000 shares of common stock valued at $8 per share and a warrant to purchase an additional 200,000 shares of common stock at an exercise price of $8 per share to Axys Pharmaceuticals, Inc. ("Axys"), and (ii) 4,641 shares of common stock to a minority stockholder of AAT in connection with our acquisition of AAT pursuant to that certain Agreement and Plan of Merger between us, Axys, DPII Newco, LLC and AAT.
(f) On May 5, 2000, in conjunction with our acquisition of Structural Proteomics, Inc., we issued 150,000 shares of our common stock to two founders of Structural Proteomics.
II-2
(g) Since January 1, 1997 through May 5, 2000, we have issued warrants to purchase our capital stock in the transactions described below:
On February 2, 1998 and April 15, 1998 we executed convertible promissory notes in favor of certain existing investors. In connection with these promissory notes, we issued warrants to purchase a number of shares of our common stock that was tied to the amount of time that the promissory note held by such party had any unpaid balance. The warrants issued on February 2 have an exercise price of $0.40 and shall expire no later than February 2, 2004; the warrants issued on April 15 have an exercise price of $0.48 per share and shall expire no later than April 15, 2004.
On May 22, 1998, each of the convertible promissory notes referenced above was satisfied in full by converting such note into shares of our Series D preferred stock, and in connection with those conversions the number of shares for which each warrant referenced above is exercisable was set, in each case according to the following table:
SHARES OF SHARES OF
COMMON STOCK COMMON STOCK
UNDERLYING UNDERLYING
2/2/98 4/15/98
NAME WARRANT WARRANT
---- ------------ ------------
Enterprise Partners III, L.P............ 18,868 4,471
Enterprise Partners III Associates,
L.P................................... 1,499 355
Mayfield VIII........................... 16,461 3,901
Mayfield Associates Fund II............. 866 205
Crosspoint Venture Partners-1996........ 11,210 2,656
------ ------
48,904 11,588
|
On December 10, 1999 and March 9, 2000 we executed convertible promissory notes in favor of certain existing investors. In connection with these promissory notes, we issued warrants to purchase a number of shares of our Series E preferred stock that was tied to the amount of time that the promissory note held by such party had any unpaid balance. The warrants issued on December 10 have an exercise price of $5.00 and shall expire no later than December 10, 2006; the warrants issued on March 9 also have an exercise price of $5.00 per share and shall expire no later than April 15, 2004.
On April 7, 2000, each of the convertible promissory notes issued on December 10, 1999 and March 9, 2000 was satisfied in full by converting such note into shares of our Series E Preferred Stock, and in connection with those conversions the number of shares for which each warrant issued on December 10, 1999 and March 9, 2000 is exercisable was set, according to the following table:
SHARES OF
SERIES E
PREFERRED STOCK
UNDERLYING
NAME WARRANTS
---- ---------------
Enterprise Partners III, L.P........................ 72,487
Enterprise Partners III Associates, L.P............. 5,759
Mayfield VIII....................................... 74,334
Mayfield Associates Fund II......................... 3,912
Crosspoint Venture Partners LS-1997................. 78,246
-------
234,739
|
II-3
On April 28, 2000, in conjunction with the Agreement and Plan of Merger between us, Axys Pharmaceuticals, Inc. ("Axys"), DPII Newco, LLC and Axys Advanced Technologies, Inc., we issued a warrant to Axys to purchase 200,000 of our common shares at an exercise price of $8 per share. This warrant shall expire no later than April 28, 2005.
(h) The Registrant from time to time has granted stock options to employees and consultants in reliance upon exemption from registration pursuant to either (1) Section 4(2) of the Securities Act of 1933 or (2) Rule 701 promulgated under the Securities Act of 1933. Information regarding such grants is set forth below:
- From January 1, 1997 through December 31, 1997, we granted options to purchase an aggregate of 488,885 shares of our common stock at exercise prices ranging from $0.30 to $0.40 per share pursuant to our 1995 Stock Option/Stock Issuance Plan.
- From January 1, 1998 through December 31, 1998, we granted options to purchase an aggregate of 1,087,700 shares of our common stock at exercise prices ranging from $0.40 to $1.50 per share pursuant to our 1995 Stock Option/Stock Issuance Plan.
- From January 1, 1999 through December 31, 1999, we granted options to purchase an aggregate of 198,500 shares of our common stock at exercise prices ranging from $1.50 to $2.50 per share pursuant to our 1995 Stock Option/Stock Issuance Plan.
- From January 1, 2000 through May 5, 2000, we granted options to purchase an aggregate of 492,920 shares of our common stock at exercise prices ranging from $2.50 to $8.00 per share pursuant to our 1995 Stock Option/Stock Issuance Plan.
- From May 6, 2000 through July , 2000, we granted options to purchase .
For additional information concerning these transactions, please see "Management -- Benefit Plans" in the Prospectus included in this registration statement.
The above securities were offered and sold by the Registrant in reliance upon exemptions from registration pursuant to either (1) Section 4(2) of the Securities Act of 1933 as transactions not involving any public offering, or (2) Rule 701 promulgated under the Securities Act of 1933. No underwriters were involved in connection with the sales of securities referred to in this Item 15.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
NUMBER DESCRIPTION
-------- -----------
1.1 Form of Underwriting Agreement.
2.1++ Agreement and Plan of Merger among us DPII Newco, LLC, Axys
Pharmaceuticals, Inc., and Axys Advanced Technologies, Inc.,
dated April 11, 2000.
2.2+ Voting Share Purchase Agreement between us and Dr. Heinrich
Zinsli, Dr. Ernst Burgisser, Dr. Helmut Kessmann and
Christoph Grether, dated August 10, 1999.
2.3+ Second Closing Protocol between us and Dr. Heinrich Zinsli,
Dr. Ernst Burgisser, Dr. Helmut Kessmann and Christoph
Grether, dated December 23, 1999.
2.4+ Non-Voting Share Purchase Agreement between us and Novartis
AG, dated December 23, 1999.
2.5+ Stock Purchase Agreement among us, Structural Proteomics,
Inc., Richard Fine and Boris Klebansky, dated May 5, 2000.
3.1+ Restated Articles of Incorporation, as amended, in effect in
California prior to the reincorporation.
|
II-4
NUMBER DESCRIPTION
-------- -----------
3.2+ Certificate of Incorporation in effect in Delaware after the
reincorporation.
3.3+ Bylaws.
3.4+ Bylaws to be in effect upon the closing of this offering.
4.1* Specimen common stock certificate.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
10.1++ Series E Preferred Stock Purchase Agreement among us and the
investors listed on Schedule A thereto, dated April 7, 2000.
10.2+ Second Amended and Restated Investors' Rights Agreement
among us and the investors listed on Schedule A thereto,
dated April 28, 2000.
10.3+ Amendment No. 1 to Amended and Restated Shareholders'
Agreement among us and the investors listed on Schedule A
thereto, dated April 28, 2000.
10.4+ Amendment No. 3 to Voting Agreement among us and the
investors listed therein, dated April 28, 2000.
10.5+ Common Stock Purchase and Asset Contribution Agreement
between Axys Pharmaceuticals, Inc. and Axys Advanced
Technologies, Inc., dated November 17, 1999.
10.6 Technology Assignment and License Agreement between Axys
Pharmaceuticals, Inc. and Axys Advanced Technologies, Inc.,
dated April 28, 2000.
10.7+ Non-Competition and Non-Disclosure Agreement between us and
Axys Pharmaceuticals, Inc., dated April 28, 2000.
10.8++ Indemnity Escrow Agreement between us and Axys
Pharmaceuticals, Inc., dated April 28, 2000.
10.9+ Services Agreement between us and Axys Pharmaceuticals,
Inc., dated April 28, 2000.
10.10+ First Amendment to Sublease between Axys Pharmaceuticals,
Inc. and Axys Advanced Technologies, Inc., dated April 28,
2000.
10.11+ Compound Purchase Agreement between us and Axys
Pharmaceuticals, Inc., dated April 28, 2000.
10.12+ Standstill Agreement between us and Axys Pharmaceuticals,
Inc., dated April 28, 2000.
10.13+ Shareholders Agreement between us and Dr. Heinrich Zinsli,
Dr. Ernst Burgisser and Dr. Helmut Kessmann, dated August
10, 1999.
10.14+ Rights Agreement between us, Structural Proteomics, Inc.,
Richard Fine, Boris Klebansky and Arnold Hagler, dated March
5, 2000.
10.15+ Common Stock Purchase Warrant between us and Enterprise
Partners III, L.P., dated July 18, 1995.
10.16+ Warrant Agreement to Purchase Shares of Series A Preferred
Stock between us and Comdisco, Inc., dated February 9, 1996.
10.17+ Warrant Agreement to Purchase Shares of Series A Preferred
Stock between us and Comdisco, Inc., dated February 9, 1996.
10.18+ Form of Warrant to Purchase Shares of Common Stock between
us and the entities listed on the attached schedule, dated
February 2, 1998.
10.19+ Form of Warrant to Purchase Shares of Common Stock between
us and the entities listed on the attached schedule, dated
April 15, 1998.
10.20+ Form of Warrant to Purchase Shares of Series A Preferred
Stock between us and the entities listed on the attached
schedule, dated May 20, 1998.
10.21+ Warrant to Purchase Common Stock between us and Crosspoint
Venture Partners-1996, dated May 20, 1998.
10.22+ Pledge Agreement between us and Riccardo Pigliucci, dated
November 30, 1998.
|
II-5
NUMBER DESCRIPTION
-------- -----------
10.23+ Promissory Note issued by Riccardo Pigliucci, dated November
30, 1998.
10.24+ Pledge Agreement between us and Riccardo Pigliucci, dated
January 31, 1999.
10.25+ Promissory Note issued by Riccardo Pigliucci, dated January
31, 1999.
10.26+ Promissory Note and Warrant Purchase Agreement between us
and the investors listed on Exhibit A thereto, dated
December 10, 1999.
10.27+ Form of Promissory Note between us and the entities listed
on the attached schedule, dated December 10, 1999.
10.28+ Form of Warrant to Purchase Shares of Capital Stock between
us and the entities listed on the attached schedule, dated
December 10, 1999.
10.29+ Promissory Note and Warrant Purchase Agreement between us
and Crosspoint Venture Partners LS-1997, dated March 9,
2000.
10.30+ Promissory Note between us and Crosspoint Venture Partners
LS-1997, dated March 9, 1999.
10.31+ Warrant to Purchase Shares of Capital Stock between us and
Crosspoint Venture Partners LS-1997, dated March 9, 1999.
10.32+ Master Lease Agreement between us and Comdisco, Inc., dated
February 9, 1996.
10.33+ Master Security Agreement between us and General Electric
Capital Corporation, dated November 1, 1999, as amended.
10.34 Equipment Financing Agreement between us and Lease
Management Services, Inc., dated October 27, 1995, as
amended.
10.35++ Assignment Agreement between us and Ontogen Corporation,
dated December 17, 1998.
10.36+ Standby Letter of Credit between us and Bank of America,
dated February 3, 1999.
10.37++ Non-Exclusive Sublicense Agreement between us and Trega
Biosciences, Inc., dated May 1, 1998.
10.38+ Indemnification Agreement between us and Sokymat, S.A.,
dated April 19, 1999.
10.39++ Strategic Alliance Agreement between us and Bristol-Myers
Squibb Company, dated May 22, 1998.
10.40++ Strategic Alliance Agreement between us and Aventis
(formerly Rhone-Poulenc Rorer International, Inc.), dated
June 15, 1998.
10.41++ Combinatorial Chemistry Agreement between Axys
Pharmaceuticals, Inc. and Warner-Lambert Company, dated May
15, 1998.
10.42+ Letter Agreement between Discovery Technology, Ltd. and
Basler Kantonalbank, dated December 22, 1999.
10.43+ Loan Agreement between Discovery Technology, Ltd. and
Novartis International AG, dated December 23, 1999.
10.44+ Guaranty between us and Novartis International AG, dated
December 23, 1999.
10.45+ Industrial Lease between Irvine Company and us, dated
February 17, 1999.
10.46+ IRORI (Europe) Limited Lease of Unit 5, dated December 22,
1997.
10.47+ Leasehold Contract between Basler Kantonalbank and Discovery
Technology, Ltd., dated June 18, 1997 (English version).
10.48+ Leasehold Contract between Basler Kantonalbank and Discovery
Technology, Ltd., dated June 18, 1997 (German version).
10.49+ Directorship Agreement between us and Dieter Hoehn, dated
December 15, 1996.
10.50 Letter Agreement terminating Directorship Agreement with
Dieter Hoehn, dated May 8, 2000.
|
II-6
NUMBER DESCRIPTION
-------- -----------
10.51+++ Key Employment Agreement between us and Riccardo Pigliucci,
dated April 17, 1998.
10.52+ 1995 Stock Option/Stock Issuance Plan, as amended.
10.53+ 1995 Stock Option/Stock Issuance Plan, Form of Notice of
Grant.
10.54+ 1995 Stock Option/Stock Issuance Plan, Form of Stock Option
Agreement.
10.55+ 1995 Stock Option/Stock Issuance Plan, Form of Stock
Purchase Agreement.
10.56+ 1995 Stock Option/Stock Issuance Plan, Form of Restricted
Stock Issuance Agreement.
10.57+ Axys Advanced Technologies, Inc. 1999 Equity Incentive Plan.
10.58+ Axys Advanced Technologies, Inc. 1999 Equity Incentive Plan,
Form of Stock Option Agreement.
10.59 2000 Stock Incentive Plan.
10.60 2000 Employee Stock Purchase Plan.
10.61+ Form of Indemnification Agreement between us and each of our
directors and officers.
10.62+++ Employment Contract between us and Dr. Heinrich Zinsli,
dated August 10, 1999.
10.63+ Leasehold Contract between Basler Kantonalbank and Discovery
Partners Technology, Ltd., dated January 31, 2000 (English
version).
10.64+ Leasehold Contract between Basler Kantonalbank and Discovery
Partners Technology, Ltd., dated January 31, 2000 (German
version).
21.1+ List of Subsidiaries.
23.1 Consent of Ernst & Young, LLP, independent auditors.
23.2 Consent of Ernst & Young, LLP, independent auditors.
23.3 Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1).
23.4+ Consent of Houlihan Valuation Advisors
24.1+ Powers of Attorney (See Signature Page on Page II-8).
27.1+ Financial Data Schedule.
|
+ Certain confidential portions of this Exhibit were omitted by means of redacting a portion of the text (the "Mark"). This Exhibit has been filed separately with the Secretary of the Commission without the Mark pursuant to the Company's Application Requesting Confidential Treatment under Rule 406 under the Securities Act.
++ Management compensation agreement.
+ Previously filed.
(b) Financial Statement Schedules.
None
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriter 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.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the 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
II-7
in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933 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 of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933 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-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in San Diego, California, on this 21st day of July, 2000.
DISCOVERY PARTNERS INTERNATIONAL, INC.
By: /s/ JACK FITZPATRICK
------------------------------------
Name: Jack Fitzpatrick
Title: Chief Financial Officer
|
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE(S) DATE
--------- -------- ----
/s/ RICCARDO PIGLIUCCI* President, Chief Executive July 21, 2000
-------------------------------------------------------- Officer and Director
Riccardo Pigliucci
/s/ JACK FITZPATRICK Chief Financial Officer July 21, 2000
--------------------------------------------------------
Jack Fitzpatrick
/s/ ANDREW E. SENYEI, M.D.* Director July 21, 2000
--------------------------------------------------------
Andrew E. Senyei, M.D.
/s/ DIETER HOEHN* Director July 21, 2000
--------------------------------------------------------
Dieter Hoehn
/s/ A. GRANT HEIDRICH, III* Director July 21, 2000
--------------------------------------------------------
A. Grant Heidrich, III
/s/ DONALD B. MILDER* Director July 21, 2000
--------------------------------------------------------
Donald B. Milder
/s/ JOHN WALKER* Director July 21, 2000
--------------------------------------------------------
John Walker
/s/ ALAN LEWIS* Director July 21, 2000
--------------------------------------------------------
Alan Lewis
|
* Signed on his behalf by Jack Fitzpatrick, as his attorney in fact.
II-9
INDEX TO EXHIBITS
NUMBER DESCRIPTION
-------- -----------
1.1 Form of Underwriting Agreement.
2.1++ Agreement and Plan of Merger among us DPII Newco, LLC, Axys
Pharmaceuticals, Inc., and Axys Advanced Technologies, Inc.,
dated April 11, 2000.
2.2+ Voting Share Purchase Agreement between us and Dr. Heinrich
Zinsli, Dr. Ernst Burgisser, Dr. Helmut Kessmann and
Christoph Grether, dated August 10, 1999.
2.3+ Second Closing Protocol between us and Dr. Heinrich Zinsli,
Dr. Ernst Burgisser, Dr. Helmut Kessmann and Christoph
Grether, dated December 23, 1999.
2.4+ Non-Voting Share Purchase Agreement between us and Novartis
AG, dated December 23, 1999.
2.5+ Stock Purchase Agreement among us, Structural Proteomics,
Inc., Richard Fine and Boris Klebansky, dated May 5, 2000.
3.1+ Restated Articles of Incorporation, as amended, in effect in
California prior to the reincorporation.
3.2+ Certificate of Incorporation in effect in Delaware after the
reincorporation.
3.3+ Bylaws.
3.4+ Bylaws to be in effect upon the closing of this offering.
4.1* Specimen common stock certificate.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
10.1++ Series E Preferred Stock Purchase Agreement among us and the
investors listed on Schedule A thereto, dated April 7, 2000.
10.2+ Second Amended and Restated Investors' Rights Agreement
among us and the investors listed on Schedule A thereto,
dated April 28, 2000.
10.3+ Amendment No. 1 to Amended and Restated Shareholders'
Agreement among us and the investors listed on Schedule A
thereto, dated April 28, 2000.
10.4+ Amendment No. 3 to Voting Agreement among us and the
investors listed therein, dated April 28, 2000.
10.5+ Common Stock Purchase and Asset Contribution Agreement
between Axys Pharmaceuticals, Inc. and Axys Advanced
Technologies, Inc., dated November 17, 1999.
10.6 Technology Assignment and License Agreement between Axys
Pharmaceuticals, Inc. and Axys Advanced Technologies, Inc.,
dated April 28, 2000.
10.7+ Non-Competition and Non-Disclosure Agreement between us and
Axys Pharmaceuticals, Inc., dated April 28, 2000.
10.8++ Indemnity Escrow Agreement between us and Axys
Pharmaceuticals, Inc., dated April 28, 2000.
10.9+ Services Agreement between us and Axys Pharmaceuticals,
Inc., dated April 28, 2000.
10.10+ First Amendment to Sublease between Axys Pharmaceuticals,
Inc. and Axys Advanced Technologies, Inc., dated April 28,
2000.
|
NUMBER DESCRIPTION
-------- -----------
10.11+ Compound Purchase Agreement between us and Axys
Pharmaceuticals, Inc., dated April 28, 2000.
10.12+ Standstill Agreement between us and Axys Pharmaceuticals,
Inc., dated April 28, 2000.
10.13+ Shareholders Agreement between us and Dr. Heinrich Zinsli,
Dr. Ernst Burgisser and Dr. Helmut Kessmann, dated August
10, 1999.
10.14+ Rights Agreement between us, Structural Proteomics, Inc.,
Richard Fine, Boris Klebansky and Arnold Hagler, dated March
5, 2000.
10.15+ Common Stock Purchase Warrant between us and Enterprise
Partners III, L.P., dated July 18, 1995.
10.16+ Warrant Agreement to Purchase Shares of Series A Preferred
Stock between us and Comdisco, Inc., dated February 9, 1996.
10.17+ Warrant Agreement to Purchase Shares of Series A Preferred
Stock between us and Comdisco, Inc., dated February 9, 1996.
10.18+ Form of Warrant to Purchase Shares of Common Stock between
us and the entities listed on the attached schedule, dated
February 2, 1998.
10.19+ Form of Warrant to Purchase Shares of Common Stock between
us and the entities listed on the attached schedule, dated
April 15, 1998.
10.20+ Form of Warrant to Purchase Shares of Series A Preferred
Stock between us and the entities listed on the attached
schedule, dated May 20, 1998.
10.21+ Warrant to Purchase Common Stock between us and Crosspoint
Venture Partners-1996, dated May 20, 1998.
10.22+ Pledge Agreement between us and Riccardo Pigliucci, dated
November 30, 1998.
10.23+ Promissory Note issued by Riccardo Pigliucci, dated November
30, 1998.
10.24+ Pledge Agreement between us and Riccardo Pigliucci, dated
January 31, 1999.
10.25+ Promissory Note issued by Riccardo Pigliucci, dated January
31, 1999.
10.26+ Promissory Note and Warrant Purchase Agreement between us
and the investors listed on Exhibit A thereto, dated
December 10, 1999.
10.27+ Form of Promissory Note between us and the entities listed
on the attached schedule, dated December 10, 1999.
10.28+ Form of Warrant to Purchase Shares of Capital Stock between
us and the entities listed on the attached schedule, dated
December 10, 1999.
10.29+ Promissory Note and Warrant Purchase Agreement between us
and Crosspoint Venture Partners LS-1997, dated March 9,
2000.
10.30+ Promissory Note between us and Crosspoint Venture Partners
LS-1997, dated March 9, 1999.
10.31+ Warrant to Purchase Shares of Capital Stock between us and
Crosspoint Venture Partners LS-1997, dated March 9, 1999.
10.32+ Master Lease Agreement between us and Comdisco, Inc., dated
February 9, 1996.
10.33+ Master Security Agreement between us and General Electric
Capital Corporation, dated November 1, 1999, as amended.
10.34 Equipment Financing Agreement between us and Lease
Management Services, Inc., dated October 27, 1995, as
amended.
|
NUMBER DESCRIPTION
-------- -----------
10.35++ Assignment Agreement between us and Ontogen Corporation,
dated December 17, 1998.
10.36+ Standby Letter of Credit between us and Bank of America,
dated February 3, 1999.
10.37++ Non-Exclusive Sublicense Agreement between us and Trega
Biosciences, Inc., dated May 1, 1998.
10.38+ Indemnification Agreement between us and Sokymat, S.A.,
dated April 19, 1999.
10.39++ Strategic Alliance Agreement between us and Bristol-Myers
Squibb Company, dated May 22, 1998.
10.40++ Strategic Alliance Agreement between us and Aventis
(formerly Rhone-Poulenc Rorer International, Inc.), dated
June 15, 1998.
10.41++ Combinatorial Chemistry Agreement between Axys
Pharmaceuticals, Inc. and Warner-Lambert Company, dated May
15, 1998.
10.42+ Letter Agreement between Discovery Technology, Ltd. and
Basler Kantonalbank, dated December 22, 1999.
10.43+ Loan Agreement between Discovery Technology, Ltd. and
Novartis International AG, dated December 23, 1999.
10.44+ Guaranty between us and Novartis International AG, dated
December 23, 1999.
10.45+ Industrial Lease between Irvine Company and us, dated
February 17, 1999.
10.46+ IRORI (Europe) Limited Lease of Unit 5, dated December 22,
1997.
10.47+ Leasehold Contract between Basler Kantonalbank and Discovery
Technology, Ltd., dated June 18, 1997 (English version).
10.48+ Leasehold Contract between Basler Kantonalbank and Discovery
Technology, Ltd., dated June 18, 1997 (German version).
10.49+ Directorship Agreement between us and Dieter Hoehn, dated
December 15, 1996.
10.50 Letter Agreement terminating Directorship Agreement with
Dieter Hoehn, dated May 8, 2000.
10.51+++ Key Employment Agreement between us and Riccardo Pigliucci,
dated April 17, 1998.
10.52+ 1995 Stock Option/Stock Issuance Plan, as amended.
10.53+ 1995 Stock Option/Stock Issuance Plan, Form of Notice of
Grant.
10.54+ 1995 Stock Option/Stock Issuance Plan, Form of Stock Option
Agreement.
10.55+ 1995 Stock Option/Stock Issuance Plan, Form of Stock
Purchase Agreement.
10.56+ 1995 Stock Option/Stock Issuance Plan, Form of Restricted
Stock Issuance Agreement.
10.57+ Axys Advanced Technologies, Inc. 1999 Equity Incentive Plan.
10.58+ Axys Advanced Technologies, Inc. 1999 Equity Incentive Plan,
Form of Stock Option Agreement.
10.59 2000 Stock Incentive Plan.
10.60 2000 Employee Stock Purchase Plan.
10.61+ Form of Indemnification Agreement between us and each of our
directors and officers.
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NUMBER DESCRIPTION
-------- -----------
10.62+++ Employment Contract between us and Dr. Heinrich Zinsli,
dated August 10, 1999.
10.63+ Leasehold Contract between Basler Kantonalbank and Discovery
Partners Technology, Ltd., dated January 31, 2000 (English
version).
10.64+ Leasehold Contract between Basler Kantonalbank and Discovery
Partners Technology, Ltd., dated January 31, 2000 (German
version).
21.1+ List of Subsidiaries.
23.1 Consent of Ernst & Young, LLP, independent auditors.
23.2 Consent of Ernst & Young, LLP, independent auditors.
23.3 Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1).
23.4+ Consent of Houlihan Valuation Advisors
24.1+ Powers of Attorney (See Signature Page on Page II-8).
27.1+ Financial Data Schedule.
|
+ Certain confidential portions of this Exhibit were omitted by means of redacting a portion of the text (the "Mark"). This Exhibit has been filed separately with the Secretary of the Commission without the Mark pursuant to the Company's Application Requesting Confidential Treatment under Rule 406 under the Securities Act.
++ Management compensation agreement.
+ Previously filed.
EXHIBIT 1.1
DISCOVERY PARTNERS INTERNATIONAL, INC.
___________ SHARES
COMMON STOCK
UNDERWRITING AGREEMENT
_____ __, 2000
CHASE SECURITIES INC.
Co-Manager
c/o Chase Securities Inc.
One Bush Street
San Francisco, CA 94104
Ladies and Gentlemen:
Discovery Partners International, Inc., a Delaware corporation (herein called the Company), proposes to issue and sell ________________ shares of its authorized but unissued Common Stock, $.001 par value (herein called the Common Stock) (said ___________ shares of Common Stock being herein called the Underwritten Stock). The Company proposes to grant to the Underwriters (as hereinafter defined) an option to purchase up to ____________ additional shares of Common Stock (herein called the Option Stock and with the Underwritten Stock herein collectively called the Stock). The Common Stock is more fully described in the Registration Statement and the Prospectus hereinafter mentioned. As a part of this offering contemplated by this Underwriting Agreement (this "Agreement"), Chase Securities Inc. agreed to reserve out of the Underwritten Stock set forth opposite its name on the Schedule I to this Agreement, up to _________________ shares, for sale to the Company's employees, officers, and directors and other parties associated with the Company, as set forth in the Prospectus under the heading "Underwriting" (the "Directed Share Program"). The Stock to be sold by Chase Securities pursuant to the Directed Share Program (the "Directed Shares") will be sold by Chase Securities pursuant to this Agreement at the public offering price.
The Company hereby confirms the agreements made with respect to the purchase of the Stock by the several underwriters, for whom you are acting, named in Schedule I hereto (herein collectively called the Underwriters, which term shall also include any underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent and warrant that you have been authorized by each of the other Underwriters to enter into this Agreement on its behalf and to act for it in the manner herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the Securities and Exchange Commission (herein called the Commission) a registration statement on Form S-1 (No. 333-36638), including the related preliminary prospectus, for the registration under the Securities Act of 1933, as amended (herein called the Securities Act), of the Stock. Copies of such registration statement and of each amendment thereto, if any, including the related preliminary prospectus (meeting the requirements of Rule 430A of the rules and regulations of the Commission) heretofore filed by the Company with the Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean such registration statement, including all exhibits and financial statements, all information omitted therefrom in reliance upon Rule 430A and contained in the Prospectus referred to below, in the form in which it became effective, and any registration statement filed pursuant to Rule 462(b) of the rules and regulations of the Commission with respect to the Stock (herein called a Rule 462(b) registration statement), and, in the event of any amendment thereto after the effective date of such registration statement (herein called the Effective Date), shall also mean (from and after the effectiveness of such amendment) such registration statement as so amended (including any Rule 462(b) registration statement). The term
1.
Prospectus as used in this Agreement shall mean the prospectus relating to the Stock first filed with the Commission pursuant to Rule 424(b) and Rule 430A (or if no such filing is required, as included in the Registration Statement) and, in the event of any supplement or amendment to such prospectus after the Effective Date, shall also mean (from and after the filing with the Commission of such supplement or the effectiveness of such amendment) such prospectus as so supplemented or amended. The term Preliminary Prospectus as used in this Agreement shall mean each preliminary prospectus included in such registration statement prior to the time it becomes effective.
The Registration Statement has been declared effective under the Securities Act, and no post-effective amendment to the Registration Statement has been filed as of the date of this Agreement. The Company has caused to be delivered to you copies of each Preliminary Prospectus and has consented to the use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ITS SUBSIDIARIES. The Company and is subsidiaries hereby represents and warrants as follows:
(a) Due Incorporation. Each of the Company and its subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has full corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement and the Prospectus and as being conducted, and is duly qualified as a foreign corporation and in good standing in all jurisdictions in which the character of the property owned or leased or the nature of the business transacted by it makes qualification necessary (except where the failure to be so qualified would not have a material adverse effect on the business, properties, financial condition or results of operations of the Company and its subsidiaries, taken as a whole ( a "Material Adverse Effect")).
(b) The Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.
(c) No Applicable Registration or Other Similar Rights. There are no persons with (i) registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement or (ii) registration rights as a result of the filing of the Registration Statement, except for such rights as have been duly waived.
(d) No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any materially adverse change in the business, properties, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business (a "Material Adverse Change"), other than as set forth in the Registration Statement and the Prospectus, and since such dates, except in the ordinary course of business, neither the Company nor any of its subsidiaries has entered into any material transaction not referred to in the Registration Statement and the Prospectus.
(e) Independent Accountants. Ernst & Young LLP who have expressed their opinion with respect to the financial statements (which term as used in this Agreement includes the related notes) and supporting schedules filed with the Commission as a part of the Registration Statement and included in the Prospectus, are independent public or certified public accountants as required by the Securities Act.
(f) Preparation of the Financial Statements. The financial statements filed with the Commission as a part of the Registration Statement and included in the Prospectus present fairly the consolidated financial position of the Company as of and at the dates indicated and the results of its operations and cash flows for the periods specified. The supporting schedules included in the Registration Statement present fairly the information required to be stated therein. Such financial statements and supporting schedules have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. No
2.
other financial statements or supporting schedules are required to be included in the Registration Statement. The financial data set forth in the Prospectus under the captions "Summary--Summary Selected Financial Data," "Selected Financial Data" and "Capitalization" fairly present the information set forth therein on a basis consistent with that of the audited financial statements contained in the Registration Statement.
(g) Company's Accounting System. The Company maintains a system of accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles as applied in the United States and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(h) Capitalization and Other Capital Stock Matters. The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus under the caption "Capitalization" (other than for subsequent issuances, if any, pursuant to employee benefit plans described in the Prospectus or upon exercise of outstanding options or warrants described in the Prospectus). The Common Stock (including the Stock) conforms in all material respects to the description thereof contained in the Prospectus. All of the issued and outstanding Common Stock has been duly authorized and validly issued, is fully paid and nonassessable and has been issued in compliance with federal and state securities laws. None of the outstanding Common Stock was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company other than those accurately described in the Prospectus. The description of the Company's stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Prospectus accurately and fairly presents the information required to be shown with respect to such plans, arrangements, options and rights.
(i) No Consents, Approvals or Authorizations Required. No
consent, approval, authorization, filing with or order of any court
or governmental agency or regulatory body is required in connection
with the transactions contemplated herein, except such as have been
obtained or made under the Securities Act and such as may be required
(i) under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Stock by the Underwriters in the
manner contemplated here and in the Prospectus, (ii) by the National
Association of Securities Dealers, LLC and (iii) by the federal and
provincial laws of Canada and (iv) other applicable foreign
securities laws.
(j) Non-Contravention of Existing Instruments, Agreements,
etc. Neither the issue and sale of the Stock nor the consummation of
any other of the transactions herein contemplated nor the fulfillment
of the terms hereof will conflict with, result in a breach or
violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company (except, in the case of sub-item
(ii), for such conflicts, breaches, violations, liens, charges or
encumbrances that, singly or in the aggregate, would not result in a
Material Adverse Effect) pursuant to, (i) the charter or by-laws of
the Company, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company is a party or bound or to which its property is subject or
(iii) any statute, law, rule, regulation, judgment, order or decree
applicable to the Company of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
properties.
(k) No Defaults or Violations. The Company and its
subsidiaries are not in violation or default of (i) any provision of
its charter or by-laws, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject or
(iii) any statute, law, rule, regulation, judgment, order or decree
of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Company or its subsidiaries or any of its properties
3.
except any such violation or default which would not, singly or in the aggregate, result in a Material Adverse Change and except as otherwise disclosed in the Prospectus.
(l) No Actions, Suits or Proceedings. Except as otherwise disclosed in the Prospectus, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or its subsidiaries or the Company's or its subsidiaries' property is pending or, to the best knowledge of the Company, threatened that (i) could reasonably be expected to have a Material Adverse Effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby or (ii) could reasonably be expected to result in a Material Adverse Effect.
(m) All Necessary Permits, Etc. Except as otherwise disclosed in the Prospectus, the Company possesses such valid and current certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct its business, and the Company has not received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could result in a Material Adverse Change.
(n) Title to Properties. Except as otherwise disclosed in
the Prospectus, and except for sales of inventory and other
transactions in the ordinary course of business (or related to the
sale of the Stock) since the date of such financial statements, the
Company has good and marketable title to all of the properties and
assets reflected as owned in the financial statements referred to in
Section 2(f) above, in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the
value of such property and do not materially interfere with the use
made or proposed to be made of such property by the Company. The real
property, improvements, equipment and personal property held under
lease by the Company are held under valid and enforceable leases,
with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real
property, improvements, equipment or personal property by the
Company.
(o) Tax Law Compliance. Except to the extent the failure to
do so would not cause a Material Adverse Effect, the Company has
filed all necessary federal, state and foreign income and franchise
tax returns and paid all taxes required to be paid by it and, if due
and payable, any related or similar assessment, fine or penalty
levied against it. The Company has made adequate charges, accruals
and reserves in the applicable financial statements referred to in
Section 2(f) above in respect of all federal, state and foreign
income and franchise taxes for all periods as to which the tax
liability of the Company has not been finally determined. The Company
is not aware of any tax deficiency that has been or might be asserted
or threatened against the Company that could result in a Material
Adverse Change.
*
(p) Compliance with Registration Requirements. The
Registration Statement and the Prospectus comply, and on the Closing
Date (as hereinafter defined) and any later date on which Option
Stock is to be purchased, the Prospectus will comply, in all material
respects, with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder; on the Effective Date, the
Registration Statement did not contain any untrue statement of a
material fact and did not omit to state any material fact required to
be stated therein or necessary in order to make the statements
therein not misleading; and, on the Effective Date the Prospectus did
not and, on the Closing Date and any later date on which Option Stock
is to be purchased, will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that
none of the representations and warranties in this Section 2(p) shall
apply to statements in, or omissions from, the Registration Statement
or the Prospectus made in reliance upon and in conformity with
information herein or otherwise furnished in writing to the Company
by or on behalf of the Underwriters for use in the Registration
Statement or the Prospectus.
(q) Authorization of the Stock. The Stock, when issued and sold to the Underwriters as provided herein, will be duly and validly issued, fully paid and nonassessable and conforms to the description thereof
4.
in the Prospectus. No further approval or authority of the stockholders or the Board of Directors of the Company will be required for the issuance and sale of the Stock as contemplated herein.
(r) Stock Exchange Listing. Prior to the Closing Date the Stock to be issued and sold by the Company will be authorized for listing by the Nasdaq National Market upon official notice of issuance.
(s) Intellectual Property Rights. Except for matters which do not, singly or in the aggregate, have a Material Adverse Effect and except as disclosed in the Prospectus, the Company and its subsidiaries owns or possesses adequate rights to use all patents, patent rights or licenses, inventions, collaborative research agreements, trade secrets, know-how, trademarks, service marks, trade names and copyrights which are necessary to conduct its businesses as described in the Registration Statement and Prospectus; the expiration before 2005 of any patents, patent rights, trade secrets, trademarks, service marks, trade names or copyrights would not result in a Material Adverse Change that is not otherwise disclosed in the Prospectus; except for matters which do not, singly or in the aggregate, have a Material Adverse Effect and except as disclosed in the Prospectus, the Company and its subsidiaries have not received any notice of, and, has no knowledge of, any infringement of or conflict with asserted rights of the Company or its subsidiaries by others with respect to any patent, patent rights, inventions, trade secrets, know-how, trademarks, service marks, trade names or copyrights; and the Company and its subsidiaries have not received any notice of, and have no knowledge of, any infringement of or conflict with asserted rights of others with respect to any patent, patent rights, inventions, trade secrets, know-how, trademarks, service marks, trade names or copyrights which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, might have a Material Adverse Change. Except for matters which do not, singly or in the aggregate, have a Material Adverse Effect and except as disclosed in the Prospectus, there is no claim being made against the Company or its subsidiaries regarding patents, patent rights or licenses, inventions, collaborative research, trade secrets, know-how, trademarks, service marks, trade names or copyrights. The Company and its subsidiaries do not in the conduct of its business as now or proposed to be conducted as described in the Prospectus infringe or conflict with any right or patent of any third party, or any discovery, invention, product or process which is the subject of a patent application filed by any third party, known to the Company or its subsidiaries, which infringement or conflict is reasonably likely to result in a Material Adverse Change.
(t) No Transfer Taxes or Other Fees. There are no transfer taxes or other similar fees or charges under Federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance and sale by the Company of the Stock.
(u) Company Not an "Investment Company". The Company has been advised of the rules and requirements under the Investment Company Act of 1940, as amended (the "Investment Company Act"). The Company is not, and after receipt of payment for the Stock will not be, an "investment company" or an entity "controlled" by an "investment company" within the meaning of the Investment Company Act and will conduct its business in a manner so that it will not become subject to the Investment Company Act.
(v) Insurance. The Company is insured by recognized, financially sound and reputable institutions with policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for its business including, but not limited to, policies covering real and personal property owned or leased by the Company against theft, damage, destruction, acts of vandalism and earthquakes, general liability and Directors and Officers liability. The Company has no reason to believe that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change. The Company has not been denied any insurance coverage which it has sought or for which it has applied.
(w) Labor Matters. To the best of Company's knowledge, no labor disturbance by the employees of the Company exists or is imminent; and the Company is not aware of any existing or imminent labor
5.
disturbance by the employees of any of its principal suppliers that might be expected to result in a Material Adverse Change.
(x) No Price Stabilization or Manipulation. The Company has not taken and will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Stock.
(y) Lock-Up Agreements. Each officer and director of the
Company and each beneficial owner of one or more percent of the
outstanding issued share capital of the Company and each holder of
options to purchase more than one percent of the outstanding issued
share capital of the Company has agreed to sign an stockholders
agreements, in form reasonably satisfactory to Chase Securities Inc.,
stating that without the prior written consent of Chase Securities
Inc. on behalf of the Underwriters, such person or entity will not,
for a period of 180 days following the commencement of the public
offering of the Stock by the Underwriters, directly or indirectly,
(i) sell, offer, contract to sell, make any short sale, pledge, sell
any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for or any rights to
purchase or acquire Common Stock or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or
otherwise (the "Lock-up Agreement"). The Company has provided to
counsel for the Underwriters a complete and accurate list of all
securityholders of the Company and the number and type of securities
held by each securityholder. The Company has provided to counsel for
the Underwriters true, accurate and complete copies of all of the
Lock-up Agreements presently in effect or effected hereby. The
Company hereby represents and warrants that it will not purport to
release any of its officers, directors or other stockholders from any
Lock-up Agreements currently existing or hereafter effected without
the prior written consent of Chase Securities Inc.
(z) Environmental Laws. The Company and its subsidiaries are in compliance with all rules, laws and regulations relating to the use, generation, manufacture, refinement, transportation, handling, treatment, storage and disposal of toxic wastes, hazardous wastes, hazardous substances and medical wastes and protection of health or the environment ("Environmental Laws") which are applicable to its business, except where the failure to comply would not result in a Material Adverse Change. The Company and its subsidiaries have not received a notice from any governmental authority or third party of an asserted claim under Environmental Laws, which claim is required to be disclosed in the Registration Statement and the Prospectus. The Company and its subsidiaries are not currently aware that they will be required to make specific future material capital expenditures to comply with Environmental Laws. No property which is owned, leased or occupied by the Company or its subsidiaries has been designated as a Superfund site pursuant to the Comprehensive Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), or otherwise designated as a contaminated site under applicable local, state, federal and foreign laws or regulations. There has been no use, storage, disposal, generation, manufacture, refinement, transportation, handling or treatment of toxic wastes, medical wastes, hazardous wastes or hazardous substances by the Company or its subsidiaries (or, to the knowledge of the Company or its subsidiaries, any of its predecessors in interest) at, upon or from any of the property now or previously owned or leased by the Company or its subsidiaries in violation of any applicable law, ordinance, rule, regulation, order, judgment, decree or permit or which would require remedial action under any applicable law, ordinance, rule, regulation, order, judgment, decree or permit, except for any violation or remedial action which would not have, or could not be reasonably likely to have, singularly or in the aggregate with all such violations and remedial actions, a Material Adverse Effect; there has been no material spill, discharge, leak, emission, injection, escape, dumping or release of any kind onto such property or into the environment surrounding such property of any toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous substances due to or caused by the Company or its subsidiaries or with respect to which the Company or its subsidiaries has knowledge, except for any such spill, discharge, leak, emission, injection, escape, dumping or release which would not have or would not be reasonably likely to have, singularly or in the aggregate with all such spills, discharges, leaks, emissions, injections, escapes, dumpings and releases, a Material Adverse Effect; and the terms "hazardous wastes", "toxic
6.
wastes", "hazardous substances" and "medical wastes" shall have the meanings specified in any applicable local, state, federal and foreign laws or regulations with respect to environmental protection.
(aa) ERISA Compliance. The Company and any "employee
benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or
maintained by the Company or its "ERISA Affiliates" (as defined
below) are in compliance in all material respects with ERISA. "ERISA
Affiliate" means, with respect to the Company, any member of any
group of organizations described in Sections 414(b), (c), (m) or (o)
of the Internal Revenue Code of 1986, as amended, and the regulations
and published interpretations thereunder (the "Code") of which the
Company is a member. No "reportable event" (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company or
any of its ERISA Affiliates. No "employee benefit plan" established
or maintained by the Company or any of its ERISA Affiliates, if such
"employee benefit plan" were terminated, would have any "amount of
unfounded benefit liabilities" (as defined under ERISA). Neither the
Company nor any of its ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit
plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Company or
any of its ERISA Affiliates that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, which would cause the loss of
such qualification.
(bb) No Improper Influence in Connection with the Directed Share Program. The Company has not offered, or caused Chase Securities Inc. to offer, Stock to any person pursuant to the Directed Share Program with the specific intent to unlawfully influence (i) a customer or supplier of the Company to alter the customer's or supplier's level or type of business with the Company or (ii) a trade journalist or publication to write or publish favorable information about the Company or its products.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to the terms and conditions herein set forth, the Company agrees to issue and sell shares of the Underwritten Stock to the several Underwriters and each of the Underwriters agrees to purchase from the Company the respective aggregate number of shares of Underwritten Stock set forth opposite its name in Schedule I. The price at which such shares of Underwritten Stock shall be sold by the Company and purchased by the several Underwriters shall be $___ per share. In making this Agreement, each Underwriter is contracting severally and not jointly; except as provided in paragraphs (b) and (c) of this Section 3, the agreement of each Underwriter is to purchase only the respective number of shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or refuse (otherwise than for a reason sufficient to justify the termination of this Agreement under the provisions of Section 8 or 9 hereof) to purchase and pay for the number of shares of the Stock agreed to be purchased by such Underwriter or Underwriters, the Company shall immediately give notice thereof to you, and the non-defaulting Underwriters shall have the right within 24 hours after the receipt by you of such notice to purchase, or procure one or more other Underwriters to purchase, in such proportions as may be agreed upon between you and such purchasing Underwriter or Underwriters and upon the terms herein set forth, all or any part of the shares of the Stock which such defaulting Underwriter or Underwriters agreed to purchase. If the non-defaulting Underwriters fail so to make such arrangements with respect to all such shares and portion, the number of shares of the Stock which each non-defaulting Underwriter is otherwise obligated to purchase under this Agreement shall be automatically increased on a pro rata basis to absorb the remaining shares and portion which the defaulting Underwriter or Underwriters agreed to purchase; provided, however, that the non-defaulting Underwriters shall not be obligated to purchase the shares and portion which the defaulting Underwriter or Underwriters agreed to purchase if the aggregate number of such shares of the Stock exceeds 10% of the total number of shares of the Stock which all Underwriters agreed to purchase hereunder. If the total number of shares of the Stock which the defaulting Underwriter or Underwriters agreed to purchase shall not be purchased or absorbed in accordance with the two preceding sentences, the Company shall have the right, within 24 hours next succeeding the 24-hour period above referred to, to make arrangements with other underwriters or purchasers reasonably satisfactory to you for purchase of such shares and portion on the terms herein set forth. In
7.
any such case, either you or the Company shall have the right to postpone the Closing Date determined as provided in Section 5 hereof for not more than seven business days after the date originally fixed as the Closing Date pursuant to said Section 5 in order that any necessary changes in the Registration Statement, the Prospectus or any other documents or arrangements may be made. If (in the over 10% scenario) neither the non-defaulting Underwriters nor the Company shall make arrangements within the 24-hour periods stated above for the purchase of all the shares of the Stock which the defaulting Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall be terminated without further act or deed and without any liability on the part of the Company to any non-defaulting Underwriter and without any liability on the part of any non-defaulting Underwriter to the Company. Nothing in this paragraph (b), and no action taken hereunder, shall relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein contained, and subject to the terms and conditions herein set forth, the Company grants an option to the several Underwriters to purchase, severally and not jointly, up to shares in the aggregate of the Option Stock from the Company at the same price per share as the Underwriters shall pay for the Underwritten Stock. Said option may be exercised only to cover over-allotments in the sale of the Underwritten Stock by the Underwriters and may be exercised in whole or in part at any time (but not more than once) on or before the thirtieth day after the date of this Agreement upon written notice by you to the Company setting forth the aggregate number of shares of the Option Stock as to which the several Underwriters are exercising the option. Delivery of certificates for the shares of Option Stock, and payment therefor, shall be made as provided in Section 5 hereof. The number of shares of the Option Stock to be purchased by each Underwriter shall be the same percentage of the total number of shares of the Option Stock to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Stock, as adjusted by you in such manner as you deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of the Stock to be purchased by them shall be as set forth in the Prospectus. The Underwriters may from time to time change the public offering price after the closing of the initial public offering and increase or decrease the concessions and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front cover page and under "Underwriting" in the Registration Statement, any Preliminary Prospectus and the Prospectus relating to the Stock filed by the Company (insofar as such information relates to the Underwriters) constitutes the only information furnished by the Underwriters to the Company for inclusion in the Registration Statement, any Preliminary Prospectus, and the Prospectus, and you on behalf of the respective Underwriters represent and warrant to the Company that the statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock and the Option Stock (if the option granted by Section 3(c) hereof shall have been exercised not later than 7:00 a.m., California time, on the date two business days preceding the Closing Date), and payment therefor, shall be made at the office of Cooley Godward LLP, San Diego, CA 92121, at 7:00 a.m., California time, on the fourth business day after the date of this Agreement, or at such time on such other day, not later than seven full business days after such fourth business day, as shall be agreed upon in writing by the Company and you. The date and hour of such delivery and payment (which may be postponed as provided in Section 3(b) hereof) are herein called the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be exercised after 7:00 a.m., California time, on the date two business days preceding the Closing Date, delivery of certificates for the shares of Option Stock, and payment therefor, shall be made at the office of Cooley Godward LLP, San Diego, CA 92121, at 7:00 a.m., California time, on the third business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made to the Company or its order by one or more official bank check or checks in same day funds. Such payment shall be made upon delivery of certificates for the Stock to you for the respective accounts of the several Underwriters against receipt therefor
8.
signed by you. Certificates for the Stock to be delivered to you shall be registered in such name or names and shall be in such denominations as you may request at least one business day before the Closing Date, in the case of Underwritten Stock, and at least one business day prior to the purchase thereof, in the case of the Option Stock.
It is understood that you, individually and not on behalf of the Underwriters, may (but shall not be obligated to) make payment to the Company for shares to be purchased by any Underwriter whose check shall not have been received by you on the Closing Date or any later date on which Option Stock is purchased for the account of such Underwriter. Any such payment by you shall not relieve such Underwriter from any of its obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees as follows:
(a) The Company will (i) prepare and timely file with the Commission under Rule 424(b) a Prospectus containing information previously omitted at the time of effectiveness of the Registration Statement in reliance on Rule 430A and (ii) not file any amendment to the Registration Statement or supplement to the Prospectus of which you shall not previously have been advised and furnished with a copy or to which you shall have reasonably objected in writing or which is not in compliance with the Securities Act or the rules and regulations of the Commission.
(b) The Company will promptly notify you on behalf of all the Underwriters in the event of (i) the request by the Commission for amendment of the Registration Statement or for supplement to the Prospectus or for any additional information, (ii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, (iii) the institution or notice of intended institution of any action or proceeding for that purpose, (iv) the receipt by the Company of any notification with respect to the suspension of the qualification of the Stock for sale in any jurisdiction, or (v) the receipt by it of notice of the initiation or threatening of any proceeding for such purpose. The Company will make every reasonable effort to prevent the issuance of such a stop order and, if such an order shall at any time be issued, to obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you a signed copy of the Registration Statement as originally filed and of each amendment thereto filed prior to the time the Registration Statement becomes effective and, promptly upon the filing thereof, a signed copy of each post-effective amendment, if any, to the Registration Statement (together with, in each case, all exhibits thereto unless previously furnished to you) and will also deliver to you, for distribution to the Underwriters, a sufficient number of additional conformed copies of each of the foregoing (but without exhibits) so that one copy of each may be distributed to each Underwriter, (ii) as promptly as possible deliver to you and send to the several Underwriters, at such office or offices as you may designate, as many copies of the Prospectus as you may reasonably request, and (iii) thereafter from time to time during the period in which a prospectus is required by law to be delivered by an Underwriter or dealer, likewise send to the Underwriters as many additional copies of the Prospectus and as many copies of any supplement to the Prospectus and of any amended prospectus, filed by the Company with the Commission, as you may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required by law to be delivered by an Underwriter or dealer any event relating to or affecting the Company, or of which the Company shall be advised in writing by you, shall occur as a result of which it is necessary, in the opinion of counsel for the Company or of counsel for the Underwriters, to supplement or amend the Prospectus in order to make the Prospectus not misleading in the light of the circumstances existing at the time it is delivered to a purchaser of the Stock, the Company will forthwith prepare and file with the Commission a supplement to the Prospectus or an amended prospectus so that the Prospectus as so supplemented or amended will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time such Prospectus is delivered to such purchaser, not misleading. If, after the initial public offering of the Stock by the Underwriters and during such period, the Underwriters shall propose to vary the terms of offering thereof by reason of changes in general market conditions or otherwise, you will advise the Company in writing of the proposed variation, and, if in the opinion either of counsel for the Company or of counsel for the Underwriters such
9.
proposed variation requires that the Prospectus be supplemented or amended, the Company will forthwith prepare and file with the Commission a supplement to the Prospectus or an amended prospectus setting forth such variation. Until such filing, such variation shall not be implemented. The Company authorizes the Underwriters and all dealers to whom any of the Stock may be sold by the several Underwriters to use the Prospectus, as from time to time amended or supplemented, in connection with the sale of the Stock in accordance with the applicable provisions of the Securities Act and the applicable rules and regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will submit to you, for your information, a copy of any post-effective amendment to the Registration Statement and any supplement to the Prospectus or any amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the qualification of the Stock for offer and sale under the securities or blue sky laws of such jurisdictions as you may designate and, during the period in which a prospectus is required by law to be delivered by an Underwriter or dealer, in keeping such qualifications in good standing under said securities or blue sky laws; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. The Company will, from time to time, prepare and file such statements, reports, and other documents as are or may be required to continue such qualifications in effect for so long a period as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the Company will furnish to each Underwriter who may so request in writing, copies of all periodic and special reports furnished to stockholders of the Company and of all information, documents and reports filed with the Commission.
(h) Not later than the 45th day following the end of the fiscal quarter first occurring after the first anniversary of the Effective Date, the Company will make generally available to its security holders an earnings statement in accordance with Section 11(a) of the Securities Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to the performance of its obligations under this Agreement, including without limitation all costs and expenses incident to (i) the preparation, printing and filing with the Commission and the National Association of Securities Dealers, Inc. of the Registration Statement, any Preliminary Prospectus and the Prospectus, (ii) the furnishing to the Underwriters of copies of any Preliminary Prospectus and of the several documents required by paragraph (c) of this Section 6 to be so furnished, (iii) the printing of this Agreement and related documents delivered to the Underwriters, (iv) all costs and expenses incurred by Underwriters counsel in connection with the Directed Share Program, (v) the preparation, printing and filing of all supplements and amendments to the Prospectus referred to in paragraph (d) of this Section 6, (vi) the furnishing to you and the Underwriters of the reports and information referred to in paragraph (g) of this Section 6, (vii) the printing and issuance of stock certificates, including the transfer agent's fees; (viii) the fees and expenses associated with listing the Common Stock on the Nasdaq National Market, (ix) all costs and expenses incident to the travel and accommodation of the Company's employees on the "roadshow", and (x) all other fees, costs and expenses referred to in Item 13 of Part II of the Registration Statement.
(j) The Company agrees to reimburse you, for the account of the several Underwriters, for blue sky fees and related disbursements (including counsel fees and disbursements and cost of printing memoranda for the Underwriters) paid by or for the account of the Underwriters or their counsel in qualifying the Stock under state securities or blue sky laws and in the review of the offering by the NASD.
(k) The Company hereby agrees that, without the prior written consent of Chase Securities Inc. on behalf of the Underwriters, the Company will not, for a period of 180 days following the commencement of the public offering of the Stock by the Underwriters, directly or indirectly, (i) sell, offer, contract to sell, make any short sale, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any shares of Common Stock or any securities convertible into or exchangeable or exercisable for or any rights to
10.
purchase or acquire Common Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences or ownership of Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the Stock to be sold to the Underwriters pursuant to this Agreement, (B) shares of Common Stock issued by the Company upon the exercise of options granted under the stock option plans of the Company (the "Option Plans") or upon the exercise of warrants outstanding as of the date hereof, all as described in the bullet points under the table under the caption "Capitalization in the Preliminary Prospectus, and (C) options to purchase Common Stock granted under the Option Plans.
(l) If at any time during the 25-day period after the Registration Statement becomes effective any rumor, publication or event relating to or affecting the Company shall occur as a result of which in your opinion the market price for the Stock has been or is likely to be materially affected (regardless of whether such rumor, publication or event necessitates a supplement to or amendment of the Prospectus), the Company will, after written notice from you advising the Company to the effect set forth above, forthwith prepare, consult with you concerning the substance of, and disseminate a press release or other public statement, reasonably satisfactory to you, responding to or commenting on such rumor, publication or event or stating that the policy of the Company is not to comment on rumors.
(m) Directed Share Program. The Company will (i) will
comply with all applicable securities and other applicable laws,
rules and regulations in each jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program and
(ii) will pay all reasonable fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share
Program and any stamp duties, similar taxes or duties or other taxes,
if any, incurred by the underwriters in connection with the Directed
Share Program.
(n) The Company shall obtain Directors and Officers liability insurance in the minimum amount of $10 million which shall apply to the offering contemplated hereby.
(o) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Stock sold by it in the manner described under the caption "Use of Proceeds" in the Prospectus.
(p) Transfer Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Company's Common Stock.
(q) The Company is familiar with the Investment Company Act of 1940, as amended, and has in the past conducted its affairs, and will in the future conduct its affairs, in such a manner to ensure that the Company was not and will not be an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations thereunder.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter and each person (including each partner or officer thereof) who controls any Underwriter within the meaning of Section 15 of the Securities Act from and against any and all losses, claims, damages or liabilities, joint or several, to which such indemnified parties or any of them may become subject under the Securities Act, and the Securities Exchange Act of 1934, as amended (herein called the Exchange Act), or the common law or otherwise, and the Company agrees to reimburse each such Underwriter and controlling person for any legal or other expenses (including, except as otherwise hereinafter provided, reasonable fees and disbursements of counsel) incurred by the respective indemnified parties in connection with defending against any such losses, claims, damages or liabilities or in connection with any investigation or inquiry of, or other proceeding which may be brought against, the respective indemnified parties, in each case arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (including the Prospectus as part thereof and any Rule 462(b) registration statement) or any post-effective amendment thereto (including any Rule 462(b) registration statement), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the
11.
statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus or the Prospectus (as amended or as supplemented if the Company shall have filed with the Commission any amendment thereof or supplement thereto) or the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that (1) the indemnity agreements of the Company contained in this paragraph (a) shall not apply to any such losses, claims, damages, liabilities or expenses if such statement or omission was made in reliance upon and in conformity with information furnished as herein stated or otherwise furnished in writing to the Company by or on behalf of any Underwriter for use in any Preliminary Prospectus or the Registration Statement or the Prospectus or any such amendment thereof or supplement thereto and (2) the indemnity agreement contained in this paragraph (a) with respect to any Preliminary Prospectus shall not inure to the benefit of any Underwriter from whom the person asserting any such losses, claims, damages, liabilities or expenses purchased the Stock which is the subject thereof (or to the benefit of any person controlling such Underwriter) if at or prior to the written confirmation of the sale of such Stock a copy of the Prospectus (or the Prospectus as amended or supplemented) was not sent or delivered to such person and the untrue statement or omission of a material fact contained in such Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as amended or supplemented) unless the failure is the result of noncompliance by the Company with paragraph (c) of Section 6 hereof. The indemnity agreements of the Company contained in this paragraph (a) and the representations and warranties of the Company contained in Section 2 hereof shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any indemnified party and shall survive the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless the Company, each of its officers who signs the Registration Statement on his own behalf or pursuant to a power of attorney, each of its directors, each other Underwriter and each person (including each partner or officer thereof) who controls the Company or any such other Underwriter within the meaning of Section 15 of the Securities Act, from and against any and all losses, claims, damages or liabilities, joint or several, to which such indemnified parties or any of them may become subject under the Securities Act, the Exchange Act, or the common law or otherwise and to reimburse each of them for any legal or other expenses (including, except as otherwise hereinafter provided, reasonable fees and disbursements of counsel) incurred by the respective indemnified parties in connection with defending against any such losses, claims, damages or liabilities or in connection with any investigation or inquiry of, or other proceeding which may be brought against, the respective indemnified parties, in each case arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (including the Prospectus as part thereof and any Rule 462(b) registration statement) or any post-effective amendment thereto (including any Rule 462(b) registration statement) or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (as amended or as supplemented if the Company shall have filed with the Commission any amendment thereof or supplement thereto) or the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished as herein stated or otherwise furnished in writing to the Company by or on behalf of such indemnifying Underwriter for use in the Registration Statement or the Prospectus or any such amendment thereof or supplement thereto. The indemnity agreement of each Underwriter contained in this paragraph (b) shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any indemnified party and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the Notice) of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
12.
may have to the indemnified party for contribution or otherwise than on account of such indemnity agreement. Any indemnifying party shall be entitled at its own expense to participate in the defense of any action, suit or proceeding against, or investigation or inquiry of, an indemnified party. Any indemnifying party shall be entitled, if it so elects within a reasonable time after receipt of the Notice by giving written notice (herein called the Notice of Defense) to the indemnified party, to assume (alone or in conjunction with any other indemnifying party or parties) the entire defense of such action, suit, investigation, inquiry or proceeding, in which event such defense shall be conducted, at the expense of the indemnifying party or parties, by counsel chosen by such indemnifying party or parties and reasonably satisfactory to the indemnified party or parties; provided, however, that (i) if the indemnified party or parties reasonably determine that there may be a conflict between the positions of the indemnifying party or parties and of the indemnified party or parties in conducting the defense of such action, suit, investigation, inquiry or proceeding or that there may be legal defenses available to such indemnified party or parties different from or in addition to those available to the indemnifying party or parties, then counsel for the indemnified party or parties shall be entitled to conduct the defense to the extent reasonably determined by such counsel to be necessary to protect the interests of the indemnified party or parties and (ii) in any event, the indemnified party or parties shall be entitled to have counsel chosen by such indemnified party or parties participate in, but not conduct, the defense. If, within a reasonable time after receipt of the Notice, an indemnifying party gives a Notice of Defense and the counsel chosen by the indemnifying party or parties is reasonably satisfactory to the indemnified party or parties, the indemnifying party or parties will not be liable under paragraphs (a) through (c) of this Section 7 for any legal or other expenses subsequently incurred by the indemnified party or parties in connection with the defense of the action, suit, investigation, inquiry or proceeding, except that (A) the indemnifying party or parties shall bear the legal and other expenses incurred in connection with the conduct of the defense as referred to in clause (i) of the proviso to the preceding sentence and (B) the indemnifying party or parties shall bear such other expenses as it or they have authorized to be incurred by the indemnified party or parties. If, within a reasonable time after receipt of the Notice, no Notice of Defense has been given, the indemnifying party or parties shall be responsible for any legal or other expenses incurred by the indemnified party or parties in connection with the defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under paragraph (a) or (b) of this Section 7, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such proportion as is appropriate to reflect the relative benefits received by each indemnifying party from the offering of the Stock or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of each indemnifying party in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, or actions in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Underwriters shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Stock received by the Company and the total underwriting discount received by the Underwriters, as set forth in the table on the cover page of the Prospectus, bear to the aggregate public offering price of the Stock. Relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by each indemnifying party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters'
13.
obligations in this paragraph (d) to contribute are several in proportion to their respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of a summons or other initial legal process upon it in any action instituted against it in respect of which contribution may be sought, it will promptly give written notice of such service to the party or parties from whom contribution may be sought, but the omission so to notify such party or parties of any such service shall not relieve the party from whom contribution may be sought from any obligation it may have hereunder or otherwise (except as specifically provided in paragraph (c) of this Section 7).
(e) The Company will not, without the prior written consent of each Underwriter, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not such Underwriter or any person who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act is a party to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release of such Underwriter and each such controlling person from all liability arising out of such claim, action, suit or proceeding.
8. TERMINATION. This Agreement may be terminated by you at any time prior to the Closing Date by giving written notice to the Company if after the date of this Agreement trading in the Common Stock shall have been suspended, or if there shall have occurred after the date of this Agreement (i) the engagement in major hostilities or an escalation of major hostilities by the United States or the declaration of war or a national emergency by the United States on or after the date hereof, (ii) any outbreak of major hostilities or other national or international calamity or crisis or change in economic or political conditions if the effect of such outbreak, calamity, crisis or change in economic or political conditions in the financial markets of the United States would, in the Underwriters' reasonable judgment, make the offering or delivery of the Stock impracticable, (iii) suspension of trading in securities generally (other than in accordance with pre-established "circuit breakers") or a material adverse decline in value of securities generally on the New York Stock Exchange, the American Stock Exchange, The Nasdaq Stock Market, or limitations on prices (other than limitations on hours or numbers of days of trading) for securities on either such exchange or system, (iv) the enactment, publication, decree or other promulgation of any federal or state statute, regulation, rule or order of, or commencement of any proceeding or investigation by, any court, legislative body, agency or other governmental authority which in the Underwriters' reasonable opinion materially and adversely affects or will materially or adversely affect the business or operations of the Company, (v) declaration of a banking moratorium by either federal or New York State authorities or (vi) the taking of any action by any federal, state or local government or agency in respect of its monetary or fiscal affairs which in the Underwriters' reasonable opinion has a material adverse effect on the securities markets in the United States. If this Agreement shall be terminated pursuant to this Section 8, there shall be no liability of the Company to the Underwriters and no liability of the Underwriters to the Company; provided, however, that in the event of any such termination the Company agrees to indemnify and hold harmless the Underwriters from all costs or expenses incident to the performance of the obligations of the Company under this Agreement, including all costs and expenses referred to in paragraphs (i) and (j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the several Underwriters to purchase and pay for the Stock shall be subject to the performance by the Company of all its obligations to be performed hereunder at or prior to the Closing Date or any later date on which Option Stock is to be purchased, as the case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective; and no stop order suspending the effectiveness thereof shall have been issued and no proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder and the validity and form of the certificates representing the Stock, all corporate proceedings and other legal matters incident to the foregoing, and the form of the Registration Statement and of the Prospectus (except as to the financial statements contained therein), shall have been approved at or prior to the Closing Date by Cooley Godward LLP, counsel for the Underwriters, unless the withholding of such approval is unreasonable.
14.
(c) You shall have received from Brobeck, Phleger & Harrison LLP, counsel for the Company, and from Brown, Martin, Haller & McClain, patent counsel for the Company, opinions, addressed to the Underwriters and dated the Closing Date, covering the matters set forth in Annex A and Annex B hereto, respectively, and if Option Stock is purchased at any date after the Closing Date, additional opinions from each such counsel, addressed to the Underwriters and dated such later date, confirming that the statements expressed as of the Closing Date in such opinions remain valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date, the statements made in the Registration Statement and the Prospectus were true and correct and neither the Registration Statement nor the Prospectus omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, respectively, not misleading, (ii) since the Effective Date, no event has occurred which should have been set forth in a supplement or amendment to the Prospectus which has not been set forth in such a supplement or amendment, (iii) since the respective dates as of which information is given in the Registration Statement in the form in which it originally became effective and the Prospectus contained therein, there has not been any material adverse change or any development involving a prospective material adverse change in or affecting the business, properties, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, and, since such dates, except in the ordinary course of business, neither the Company nor any of its subsidiaries has entered into any material transaction not referred to in the Registration Statement in the form in which it originally became effective and the Prospectus contained therein, (iv) neither the Company nor any of its subsidiaries has any material contingent obligations which are not disclosed in the Registration Statement and the Prospectus, (v) there are not any pending or known threatened legal proceedings to which the Company or any of its subsidiaries is a party or of which property of the Company or any of its subsidiaries is the subject which are material and which are not disclosed in the Registration Statement and the Prospectus, (vi) there are not any franchises, contracts, leases or other documents which are required to be filed as exhibits to the Registration Statement which have not been filed as required, (vii) the representations and warranties of the Company herein are true and correct in all material respects as of the Closing Date or any later date on which Option Stock is to be purchased, as the case may be, and (viii) there has not been any material change in the market for securities in general or in political, financial or economic conditions from those reasonably foreseeable as to render it impracticable in your reasonable judgment to make a public offering of the Stock, or a material adverse change in market levels for securities in general (or those of companies in particular) or financial or economic conditions which render it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any
later date on which Option Stock is purchased a certificate, dated
the Closing Date or such later date, as the case may be, and signed
by the President and the Chief Financial Officer of the Company,
stating that the respective signers of said certificate have
carefully examined the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein and
any supplements or amendments thereto, and that the statements
included in clauses (i) through (vii) of paragraph (d) of this
Section 9 are true and correct.
(f) You shall have received from Ernst & Young LLP, a letter or letters, addressed to the Underwriters and dated the Closing Date and any later date on which Option Stock is purchased, confirming that they are independent public accountants with respect to the Company within the meaning of the Securities Act and the applicable published rules and regulations thereunder and based upon the procedures described in their letter delivered to you concurrently with the execution of this Agreement (herein called the Original Letter), but carried out to a date not more than three business days prior to the Closing Date or such later date on which Option Stock is purchased (i) confirming, to the extent true, that the statements and conclusions set forth in the Original Letter are accurate as of the Closing Date or such later date, as the case may be, and (ii) setting forth any revisions and additions to the statements and conclusions set forth in the Original Letter which are necessary to reflect any changes in the facts described in the Original Letter since the date of the Original Letter or to reflect the availability of more recent financial statements, data or information. The letters shall not disclose any change, or any development involving a prospective change, in or affecting the business or properties of the Company or any of its
15.
subsidiaries which, in your sole judgment, makes it impractical or inadvisable to proceed with the public offering of the Stock or the purchase of the Option Stock as contemplated by the Prospectus.
(g) You shall have received from Ernst & Young LLP a letter stating that their review of the Company's system of internal accounting controls, to the extent they deemed necessary in establishing the scope of their examination of the Company's financial statements as at December 31, 1999, did not disclose any weakness in internal controls that they considered to be material weaknesses.
(h) You shall have been furnished evidence in usual written or telegraphic form from the appropriate authorities of the several jurisdictions, or other evidence satisfactory to you, of the qualification referred to in paragraph (f) of Section 6 hereof in the seeking of which you and your counsel have provided reasonable cooperation.
(i) Prior to the Closing Date, the Stock to be issued and sold by the Company shall have been duly authorized for listing by the Nasdaq National Market upon official notice of issuance.
(j) On or prior to the Closing Date, you shall have received from all directors, officers, and each beneficial owner of one or more percent of the outstanding issued share capital of the Company and each holder of options to purchase more than one percent of the outstanding issued share capital of the Company, photocopies of signed Lock-up Agreements.
All the agreements, opinions, certificates and letters mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if Cooley Godward LLP, counsel for the Underwriters, shall be reasonably satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not
be fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein, to fulfill any of the conditions herein, or to comply with any
provision hereof other than by reason of a default by any of the Underwriters,
the Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the transactions
contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the Company to deliver the Stock shall be subject to the conditions that (a) the Registration Statement shall have become effective and (b) no stop order suspending the effectiveness thereof shall be in effect and no proceedings therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall
not be fulfilled, this Agreement may be terminated by the Company by giving
notice to you. Any such termination shall be without liability of the Company to
the Underwriters and without liability of the Underwriters to the Company;
provided, however, that in the event of any such termination the Company agrees
to indemnify and hold harmless the Underwriters from all costs or expenses
incident to the performance of the obligations of the Company under this
Agreement, including all costs and expenses referred to in paragraphs (i) and
(j) of Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other obligations under Section 7 and subject to Section 7 of this Agreement, if the indemnifying party is not directly paying the costs related to such indemnification, the Company hereby agrees to reimburse on a quarterly basis the Underwriters for all reasonable legal and other expenses incurred in connection with investigating or defending any claim, action, investigation, inquiry or other proceeding arising out of or based upon any statement or omission, or any alleged statement or omission, described in paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a judicial determination as to the propriety and enforceability of the obligations under this Section 11 and the possibility that
16.
such payments might later be held to be improper; provided, however, that (i) the persons receiving such payments undertake in writing that to the extent any such payment is ultimately held to be improper, the persons receiving such payments shall promptly refund them and (ii) such persons shall provide to the Company, upon request, reasonable assurances of their ability to effect any refund, when and if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to the benefit of the Company and the several Underwriters and, with respect to the provisions of Section 7 hereof, the several parties (in addition to the Company and the several Underwriters) indemnified under the provisions of said Section 7, and their respective personal representatives, successors and assigns. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy or claim under or in respect of this Agreement or any provision herein contained. The term "successors and assigns" as herein used shall not include any purchaser, as such purchaser, of any of the Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications hereunder shall be in writing and, if to the Underwriters, shall be mailed or delivered to Chase Securities Inc., One Bush Street, San Francisco, California 94104; and if to the Company, shall be mailed, telegraphed or delivered to it at its office, 9640 Towne Centre Drive, San Diego, CA 92121, Attention: Chief Executive Officer.
14. MISCELLANEOUS. The reimbursement, indemnification and contribution agreements contained in this Agreement and the representations, warranties and covenants (to the extent such covenants are on their face intended to survive the Closing Date) in this Agreement shall remain in full force and effect regardless of (a) any termination of this Agreement, (b) any investigation made by or on behalf of any Underwriter or controlling person thereof, or by or on behalf of the Company or their respective directors or officers, and (c) delivery and payment for the Stock under this Agreement; provided, however, that if this Agreement is terminated prior to the Closing Date, the provisions of paragraph (k) of Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of California.
Please sign and return to the Company the enclosed duplicates of this letter, whereupon this letter will become a binding agreement between the Company and the several Underwriters in accordance with its terms.
Very truly yours,
DISCOVERY PARTNERS INTERNATIONAL, INC.
By _____________________________________
Riccardo Pigliucci
Chief Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first above written.
CHASE SECURITIES INC.
Co-Manager
By Chase Securities Inc.
17.
By __________________________
Managing Director
Acting on behalf of the several Underwriters, including themselves, named in Schedule I hereto.
18.
SCHEDULE I
UNDERWRITERS
UNDERWRITERS NUMBER OF SHARES TO BE PURCHASED
------------ --------------------------------
Chase Securities Inc. ......................
Lehman Brothers ............................
UBS Warburg LLC ............................
------------
Total ........................... *
============
|
19.
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF BROBECK, PHLEGER & HARRISON LLP
COUNSEL FOR THE COMPANY
(i) Each of the Company and its subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, is duly qualified as a foreign corporation and in good standing in each state of the United States of America in which its ownership or leasing of property requires such qualification (except where the failure to be so qualified would not have a material adverse effect on the business, properties, financial condition or results of operations of the Company and its subsidiaries, taken as a whole), and has full corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement; all the issued and outstanding capital stock of each of the subsidiaries of the Company has been duly authorized and validly issued and is fully paid and nonassessable, and is owned by the Company (except that not all of the capital stock of Structural Proteomics, Inc. is so owned), and to the best of such counsel's knowledge, no options, warrants or other rights to purchase, agreements or other obligations to issue or other rights to convert any obligations into shares of capital stock or ownership interests in such subsidiaries are outstanding;
(ii) the authorized capital stock of the Company consists of 1,000,000 shares of Preferred Stock, $.001 par value, of which there are outstanding no shares, and 100,000,000 shares of Common Stock, $.001 par value, of which there are outstanding __________ shares (including the Underwritten Stock plus the number of shares of Option Stock issued on the date hereof) and such additional number of shares, if any, as may have been issued after _________ and prior to the Closing Date, pursuant to _______; proper corporate proceedings have been taken validly to authorize such authorized capital stock; all of the outstanding shares of such capital stock (including the Underwritten Stock, if previously issued, and the shares of Option Stock previously issued, if any) have been duly and validly issued and are nonassessable and (to such counsel's knowledge) fully paid;
(iii) the Underwritten Stock or the Option Stock, as the case may be, to be issued by the Company pursuant to the terms of this Agreement has been duly authorized and, upon issuance and delivery against payment therefor in accordance with the terms hereof, will be duly and validly issued and fully paid and nonassessable, and will not have been issued in violation of or subject to any preemptive right or (to such counsel's knowledge) any co-sale right, right of first refusal or other similar right, other than any registration rights described in Opinion (xii) hereof.
(iv) the Company has the corporate power and authority to enter into this Agreement and to issue, sell and deliver to the Underwriters the Stock to be issued and sold by it hereunder;
(v) this Agreement has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by the Company;
(vi) the 8-A Registration Statement complied as to form in all material respects with the requirements of the Exchange Act; the 8-A Registration Statement has become effective under the Exchange Act;
(vii) the Registration Statement has become effective under the Securities Act and, to such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus is in effect and no proceedings for that purpose have been instituted or are pending or contemplated by the Commission;
20.
(viii) the Registration Statement and the Prospectus (except as to the financial statements and schedules and other financial and statistical data contained therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Securities Act and with the rules and regulations of the Commission thereunder;
(ix) the information required to be set forth in the Registration Statement in answer to Items 9, 10 (insofar as it relates to such counsel) and 11(c) of Form S-1 is to such counsel's knowledge accurately and adequately set forth therein in all material respects or no response is required with respect to such Items, and, to such counsel's knowledge, insofar as the Prospectus' description of the Company's stock option plans and employee stock purchase plan and the options granted and which may be granted thereunder and the options granted otherwise than under such plans set forth in the Prospectus and the common stock to be sold under the employee stock purchase plan constitutes a summary of such legal matters, documents or proceedings, it provides a fair summary of such legal matters, documents or proceedings in all material respects to the extent required by the Securities Act and the rules and regulations of the Commission thereunder;
(x) such counsel do not know of any contracts, leases, documents or legal proceedings, pending or threatened, which in the opinion of such counsel are of a character required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement, which are not described and filed as required;
(xi) the issue and sale by the Company of the shares of Stock sold by the Company as contemplated by the Underwriting Agreement will not conflict with, or result in a breach of, the Certificate of Incorporation or Bylaws of the Company or any of its subsidiaries or any agreement or instrument that is filed as an Exhibit to the Registration Statement to which the Company or any of its subsidiaries is a party or any applicable federal, Delaware corporate or California state law or regulation (other than applicable state securities or blue sky laws, as to which such counsel need express no opinion), or so far as is known to such counsel, any order, writ, injunction or decree, of any jurisdiction, court or governmental instrumentality;
(xii) all holders of securities of the Company having rights to the registration of shares of Common Stock, or other securities, because of the filing of the Registration Statement by the Company have waived such rights or such rights have expired by reason of lapse of time following notification of the Company's intent to file the Registration Statement;
(xiii) no consent, approval, authorization or order of any United States federal, Delaware corporate or California state court or United States federal, Delaware corporate or California state governmental agency or body is required on the part of the Company for the consummation of the transactions contemplated in the Underwriting Agreement, except such as have been obtained under the Securities and the Exchange Act and such as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Stock by the Underwriters; and
(xiv) the Stock issued and sold by the Company will been duly authorized for listing by the Nasdaq National Market upon official notice of issuance.
In addition to the matters set forth above, counsel rendering the foregoing opinion shall also include a statement to the effect that nothing has come to the attention of such counsel that leads them to believe that the Registration Statement (except as to the financial statements and schedules and other financial and statistical data contained or incorporated by reference therein, as to which such counsel need not express any opinion or belief) at the Effective Date contained any untrue statement of a material fact or omitted to state a material fact required to be
21.
stated therein or necessary to make the statements therein not misleading, or that the Prospectus (except as to the financial statements and schedules and other financial and statistical data contained or incorporated by reference therein, as to which such counsel need not express any opinion or belief) as of its date or at the Closing Date (or any later date on which Option Stock is purchased), contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading
22.
ANNEX B
MATTERS TO BE COVERED IN THE OPINION OF BROWN, MARTIN, HALLER & MCCLAIN
PATENT COUNSEL FOR THE COMPANY
Such counsel are familiar with the technology used by the Company in its business and the manner of its use thereof and have read the Registration Statement and the Prospectus, including particularly the portions of the Registration Statement and the Prospectus referring to patents, trade secrets, trademarks, service marks or other proprietary information or materials and:
(i) The statements in the Registration Statement and the Prospectus under the captions "Risk Factors - The intellectual property rights we rely on to protect the technology underlying our products and techniques may not be adequate, which could enable third parties to use our technology or very similar technology and could reduce our ability to compete in the market," "Risk Factors - The drug discovery industry has a history of intellectual property litigation and we may be involved in intellectual property lawsuits, which may be expensive" and "Business - Intellectual Property" to the best of such counsel's knowledge and belief, are accurate and complete statements or summaries of the matters therein set forth and nothing has come to such counsel's attention that causes such counsel to believe that the above-described portions of the Registration Statement and the Prospectus contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;
(ii) to the best of such counsel's knowledge, there are no legal or governmental proceedings pending relating to any material patent rights, trade secrets, trademarks, service marks or other proprietary information or materials of the Company, and to the best of such counsel's knowledge no such proceedings are threatened or contemplated by governmental authorities or others;
(iii) such counsel do not know of any contracts or other documents, relating to governmental regulation affecting the Company or the Company's patents, trade secrets, trademarks, service marks or other proprietary information or materials, of a character required to be filed as an exhibit to the Registration Statement or required to be described in the Registration Statement or the Prospectus that are not filed or described as required;
(iv) to the best of such counsel's knowledge, the Company is not infringing or otherwise violating any patents, trade secrets, trademarks, service marks or other proprietary information or materials, of others, and to the best of such counsel's knowledge there are no infringements by others of any of the Company's patents, trade secrets, trademarks, service marks or other proprietary information or materials which in the judgment of such counsel could affect materially the use thereof by the Company; and
(v) to the best of such counsel's knowledge, the Company owns or possesses sufficient licenses or other rights to use all patents, trade secrets, trademarks, service marks or other proprietary information or materials necessary to conduct the business now being or proposed to be conducted by the Company as described in the Prospectus.
1.
EXHIBIT 5.1
[BROBECK PHLEGER & HARRISON LLP
LETTERHEAD]
12390 EL CAMINO REAL
SAN DIEGO
TELEPHONE: (858) 720-2500 CA 92130
FACSIMILE: (858) 720-2555 www.brobeck.com
|
July 21, 2000
Discovery Partners International, Inc.
9640 Towne Centre Drive
San Diego, CA 92121
Re: Discovery Partners International, Inc. Registration Statement on Form S-1 for 5,750,000 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Discovery Partners International, Inc., a Delaware corporation (the "Company"), in connection with the proposed issuance and sale by the Company of up to 5,750,000 shares of the Company's Common Stock (the "Shares"), including 750,000 Shares which the underwriters have the option to purchase from the Company to cover overallotments, if any, pursuant to the Company's Registration Statement on Form S-1 (the "Registration Statement") filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act").
This opinion is being furnished in accordance with the requirements of Item 16(a) of Form S-1 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate proceedings taken by the Company in connection with the issuance and sale of the Shares. Based on such review, we are of the opinion that the Shares have been duly authorized, and if, as and when issued in accordance with the Registration Statement and the related prospectus (as amended and supplemented through the date of issuance) will be legally issued, fully paid and nonassessable.
We consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement and to the reference to this firm under the caption "Legal Matters" in the prospectus which is part of the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act, the rules and regulations of the Securities and Exchange Commission promulgated thereunder, or Item 509 of Regulation S-K.
Discovery Partners International, Inc.
This opinion letter is rendered as of the date first written above and we disclaim any obligation to advise you of facts, circumstances, events or developments which hereafter may be brought to our attention and which may alter, affect or modify the opinion expressed herein. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company or the Shares.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
/s/ Brobeck, Phleger & Harrison LLP |
EXHIBIT 10.6
TECHNOLOGY ASSIGNMENT AND LICENSE AGREEMENT
THIS TECHNOLOGY ASSIGNMENT AND LICENSE AGREEMENT (the "AGREEMENT") is made and entered into effective as of April 28, 2000 (the "EFFECTIVE DATE") by and between AXYS PHARMACEUTICALS, INC., a Delaware corporation with offices at 180 Kimball Way, South San Francisco, CA 94080 ("AXYS"), and AXYS ADVANCED TECHNOLOGIES, INC., a Delaware corporation with offices at 180 Kimball Way, South San Francisco, CA 94080 ("AAT"). Each of Axys and AAT may be referred to herein individually as a "Party" and jointly as the "Parties."
RECITALS
WHEREAS, AAT is a wholly-owned subsidiary of Axys, and Axys is willing to assign to AAT all its right, title and interest in and to certain Axys proprietary technology, intellectual property and other business assets useful for the practice of combinatorial chemistry, and AAT is willing to grant to Axys a limited license under such technology and intellectual property solely for Axys' internal drug discovery, development and commercialization business activities, all on the terms set forth below; and
WHEREAS, Axys intends, forthwith after entering into this Agreement, to sell AAT to Discovery Partners International, Inc. ("DPII") via a reverse triangular merger;
NOW, THEREFORE, in consideration of the foregoing and the covenants and promises contained herein, the Parties hereby agree as follows:
1. DEFINITIONS
1.1 "AAT CONTRACTS" means the agreements set forth on Schedule 1.1 hereto.
1.2 "ADDITIONAL CHEMISTRY ASSETS" means the tangible assets owned by Axys that are being used by AAT as of the Effective Date and/or had heretofore been used in Axys' or AAT's combinatorial chemistry business and that were not previously assigned or otherwise transferred to AAT, all of which are rlisted in Schedule 1.2 attached hereto.
1.3 "AFFILIATE" means, with respect to a particular Party, another corporation, partnership or similar entity that controls, is controlled by or is under common control with such Party, but in any case, only for the duration of the period that such other corporation, partnership or similar entity controls, is controlled by or is under common control with such Party. For the purposes of the definition in this Section 1.3, the word "control" (including, with correlative meaning, the terms "controlled by" or "under the common control with") means the ownership of at least fifty percent (50%) of the voting stock (or voting or membership interest, if not a corporation) of such entity. For the purposes of clarification, it is the parties' intent that if a corporation, partnership or similar entity ceases to control, be controlled by or be under common control with a particular Party, such entity shall, at the time such control relationship ceases, cease to have any rights under this Agreement, including, without limitation, any license rights
1.
granted pursuant to this Agreement. Notwithstanding the foregoing, Axys and AAT shall be deemed not to be Affiliates of each other.
1.4 "ASSIGNED CONTRACTS" means the agreements set forth on Schedule 1.4 hereto, which are assigned to AAT by Axys pursuant to Section 2.1(c).
1.5 "ASSIGNED KNOW-HOW" means the Information that is Controlled by Axys as of the Effective Date, including, without limitation, the Information identified generally in Schedule 1.5 attached hereto, which is necessary to or used by AAT in its current combinatorial chemistry business, but excluding the Assigned Protocols and Licensed Technology.
1.6 "ASSIGNED PATENTS" means those patents and patent applications set forth in Schedule 1.6 hereto, and including any and all rights that are Controlled by Axys as of the Effective Date with respect to such patents and patent applications, including without limitation the rights to enforce and file divisional, continuation, continuation-in-part, substitution, reissue, reexamination, and extension and foreign equivalent applications thereof.
1.7 "ASSIGNED PROTOCOLS" means the Protocols Controlled by Axys that are set forth in Schedule 1.7 hereto, and all trade secret and other intellectual property rights in such Protocols that are Controlled by Axys as of the Effective Date.
1.8 "ASSIGNED SOFTWARE" means the computer software programs, in object code and, to the extent Controlled by Axys, source code forms, that are either owned by Axys or licensed to Axys and are described generally in Schedule 1.8 hereto, and all documentation for such programs in Axys' possession as of the Effective Date, and all copyright and other intellectual property rights in any of the foregoing that are Controlled by Axys as of the Effective Date. In addition, for purposes of Section 2.2 and Article 6, "Assigned Software" (and therefore also "Assigned Technology" and "Confidential Information") shall include the Post-Effective-Date computer software programs, in object code form, and all documentation for such programs (other than source code), and all copyright and other intellectual property rights, pertaining to the improved user interface which AAT currently proposes to develop between the Effective Date and December 31, 2000 for free delivery to counterparties under the AAT Contracts.
1.9 "ASSIGNED TECHNOLOGY" means the Assigned Patents, the Assigned Know-How, the Assigned Protocols, and the Assigned Software.
1.10 "COLLABORATION" means a collaboration agreement or similar agreement establishing a strategic alliance between Axys (or its Affiliate) and a third party corporate (or other business) entity, where the primary goal of such agreement is the collaborative discovery and/or development of drug candidates based on research directed at one or more particular targets or disease areas and where it is anticipated that the role of Axys (or its Affiliate):
(a) will not involve only the provision of compounds and/or Protocols received under this Agreement or the Compound Purchase Agreement; and
2.
(b) will involve a significant application of other Axys (or its Affiliate's) technology or drug discovery expertise and/or significant efforts by Axys (or its Affiliate's) employees.
1.11 "COLLABORATION EXCEPTION" means use of combinatorial chemistry technology to design and synthesize compounds as part of a Collaboration and use of such compounds within the scope of such Collaboration.
1.12 "CONTROLLED" means, with respect to any material, Information or intellectual property right, that Axys owns or has a license to such material, Information or intellectual property right with the right to assign or license (as applicable) such material, Information or intellectual property right as provided herein without violating any agreement with a third party.
1.13 "INFORMATION" means information and data of any type and in any tangible or intangible form, including without limitation inventions, works of authorship, plans, designs, practices, methods, techniques, specifications, production technical operating procedures, standard operating procedures, protocols under development, formulations, software, formulae, knowledge, know-how, skill, experience, test data, analytical and quality control data, stability data, results of studies and patent and other legal information or descriptions.
1.14 "LICENSED GENERAL KNOW-HOW" means Information that is Controlled by Axys as of the Effective Date which is now being used by Axys in areas other than combinatorial chemistry, as well as being used in AAT's combinatorial chemistry business.
1.15 "LICENSED PATENTS" means those patents and patent applications (if any) that are Controlled by Axys as of the Effective Date (including divisional, continuation, continuation-in-part, substitution, reissue, reexamination, and extension and foreign equivalent applications thereof) and are now being used by Axys in areas other than combinatorial chemistry, as well as being used in AAT's combinatorial chemistry business.
1.16 "LICENSED SOFTWARE" means the computer software programs (if any), in object code and, to the extent Controlled by Axys, source code forms, that are Controlled by Axys (and including all documentation for such programs in Axys' possession as of the Effective Date, and all copyright and other intellectual property rights in any of the foregoing that are Controlled by Axys as of the Effective Date), and are now being used by Axys in areas other than combinatorial chemistry, as well as being used in AAT's combinatorial chemistry business.
1.17 "LICENSED TECHNOLOGY" means the Licensed Patents, the Licensed General Know-How and the Licensed Software. It is intended that the difference between items identified as Assigned Technology and the items assigned as Licensed Technology is that the patents, software, and Information within the Licensed Technology are those now being used by Axys in areas other than combinatorial chemistry, as well as being used in AAT's combinatorial chemistry business.
1.18 "LIMITATION" means that Axys (and its Affiliates and permitted sublicensees) shall be entitled to use the Assigned Technology and (within the combinatorial chemistry field of use) the Licensed Technology for, but only for, work performed by Axys and
3.
its Affiliates within their respective facilities (or, in the case of a
permitted sublicense under Section 2.2, by the permitted sublicensee within the
permitted sublicensee's facilities) as part of Axys' (or its Affiliates')
internal research and/or development work in the area of drug discovery,
development and commercialization or by Axys or its Affiliates and/or one of
their Collaboration partners within the scope of the Collaboration Exception. It
is understood and agreed the scope of the Limitation does not permit Axys (or
its Affiliate or sublicensee) to transfer to any third party any library or
collection of compounds created in connection with Axys' or a permitted
sublicensee's use of the Assigned Technology or the Licensed Technology, except
to a Collaboration partner in connection with the Collaboration Exception, or to
the successor in interest of Axys pursuant to assignment of this Agreement under
Section 7.4. Included within the Limitation are the restrictions on sublicensing
included in Section 2.2 and the restrictions on use included in Section 2.3(b).
It is understood that any drug or pharmaceutical or diagnostic compound
developed based on the foregoing use may be commercialized for any and all
prophylactic, therapeutic and diagnostic uses, with the further understanding
that such commercial use is not as part of a library or collection of compounds
sold or otherwise transferred to a third party for screening or other similar
discovery uses.
1.19 "PROTOCOL" means a detailed set of combinatorial chemistry synthetic methods and standard operating procedures designed to be used for synthesizing a set of related compounds using combinatorial chemistry techniques.
2. TECHNOLOGY LICENSES AND ASSET TRANSFER
2.1 ASSIGNMENT OF ASSETS.
(a) Axys hereby assigns to AAT all its right, title and interest in and to the Assigned Technology and the Additional Chemistry Assets. Axys assigns the Assigned Technology and the Additional Chemistry Assets to AAT, and AAT hereby accepts such assets as of the Effective Date, "AS IS" and "WHERE IS" and without any warranty and expressly subject to Sections 4.2 and 4.3.
(b) The assignment of assets under subsection (a) is pursuant to an executed Bill of Sale, Assignment of Patents and Patent Applications, Assignment of Trademark Applications and Assignment of Copyrights, each in the form attached hereto as Schedule 2.1(b) and delivered by Axys to AAT simultaneously with the execution and delivery of this Agreement. Axys further agrees to undertake all additional actions and execute and deliver all additional documents and instruments reasonably requested by AAT from time to time to perfect AAT's title in and to the Assigned Technology and the Additional Chemistry Assets.
(c) Effective as of and after the Effective Date, Axys hereby assigns to AAT all of Axys' rights, claims and benefits (except as otherwise provided in subsection (d)), and delegates all its obligations, responsibilities and liabilities under the Assigned Contracts, and AAT hereby assumes and agrees to perform all Axys' obligations, responsibilities and liabilities and agrees to accept all Axys' rights, claims and benefits (except as otherwise provided in subsection (d)), under the Assigned Contracts. If the counterparty's consent is required but not obtained, Axys shall enforce and receive all rights, claims and benefits in trust for AAT, and deliver over any cash or assets arising therefrom to AAT upon request.
4.
(d) The rights in the Assigned Technology assigned to AAT under Section 2.1(a) are expressly subject to any and all license rights that Axys has previously granted to third parties identified on Schedule 2.1(d), under the contracts specified on Schedule 2.1(d), with respect to such technology and intellectual property rights, to the extent and so long as such license rights remain in force.
(e) All notebooks, documents, memoranda, reports, files, books, correspondence, lists and other written and graphic records relating to the combinatorial chemistry business, which Axys or its employees, agents or consultants prepared, used or constructed directly in the course of and pursuant to the conduct of Axys' combinatorial chemistry business prior to the Effective Date (collectively, "Business Materials") shall be AAT's exclusive property, and Axys hereby agrees to deliver all Business Materials promptly to AAT at AAT's request.
2.2 LICENSE GRANT TO AXYS.
(a) AAT hereby grants to Axys and Axys' Affiliates the non-exclusive, world-wide, fully paid-up, irrevocable, perpetual, royalty-free license, with the limited right to grant sublicenses as provided below, to use, practice and commercially exploit the Assigned Technology within the scope of the Limitation and not otherwise.
(b) Neither Axys nor its Affiliates may sublicense to third parties the rights licensed under this Section 2.2, except (i) to third party contractors for the performance of work, within the scope of the Limitation and not otherwise, paid for by Axys (or its Affiliate) and on Axys' (or its Affiliate's) behalf or (ii) to one or more Collaboration partners of Axys (or its Affiliate) for the performance of work pursuant to the applicable Collaboration within the Collaboration Exception, and not otherwise, in either case pursuant to appropriate written non-disclosure and limitation-of-use agreements.
(c) The license rights under this Section 2.2 may be assigned to a successor in interest of Axys pursuant to assignment of this Agreement by Axys as permitted under Section 7.4, but may not otherwise be assigned. Axys and its Affiliates and permitted sublicensees shall not transfer to any third party any library or collection of compounds made by practicing the Assigned Technology as permitted hereunder except in connection with a Collaboration Exception or to the successor in interest of Axys pursuant to assignment of this Agreement under Section 7.4.
2.3 LICENSE GRANT TO AAT.
(a) Axys hereby grants to AAT the non-exclusive (subject to subsection 2.3(b)), world-wide, fully-paid-up, irrevocable, perpetual, royalty-free, assignable, sublicensable license to use, practice and commercially exploit the Licensed Technology solely in the field of combinatorial chemistry and not otherwise. It is understood that Axys and its Affiliates retain the non-exclusive rights under the Licensed Technology within the field of combinatorial chemistry solely for use within the scope of the Limitation, and retain exclusively all rights to the Licensed Technology outside the field of combinatorial chemistry.
5.
(b) During the "Term," as such term is defined in that certain Non-Competition and Non-Disclosure Agreement of even date herewith between Axys and DPII, Axys agrees not to use, practice or commercially exploit the Licensed Technology in the field of combinatorial chemistry except within the scope of the Limitation. AAT agrees not to use, practice or commercially exploit the Licensed Technology except within the field of combinatorial chemistry.
2.4 USER INTERFACE TECHNOLOGY TRANSFER. At the same time as AAT delivers to the counterparties under the AAT Contracts the improved user interface program (and documentation) described in the last sentence of Section 1.8, it shall also deliver the items described in such last sentence of Section 1.8 to Axys (subject to Section 2.2 and Article 6).
2.5 COMPOUND TRANSFER. AAT covenants that it shall provide to Axys, promptly after its request, at least six micromoles of each compound produced by AAT prior to the Effective Date, without further charge, but excluding any compounds for which Axys has already received at least six micromoles prior to the Effective Date. Such compounds shall be included within the scope of the license rights granted to Axys under Section 2.2 hereof. The Parties agree that in the event that any such requested compounds are not available in the inventory of AAT, AAT will supply to Axys at least six micromoles of other compounds produced by AAT, such compounds to be selected by the good faith discussion of the Parties, such that AAT is not obligated to resynthesize any of the earlier-created compounds.
3. INTELLECTUAL PROPERTY MATTERS
3.1 INFRINGEMENT BY THIRD PARTIES. AAT shall have the sole and exclusive right to bring and control any action or proceeding with respect to infringement of any patents owned by AAT, including without limitation the Assigned Patents, at its own expense and by counsel of its own choice.
3.2 ALLEGATION OF INFRINGEMENT BY THIRD PARTIES. Each Party shall be solely responsible for responding to any claim or allegation of infringement made by a third party against such Party based on its post-Effective-Date actions or activities.
4. REPRESENTATIONS AND WARRANTIES
4.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each Party hereby represents and warrants to the other Party that, as of the Effective Date:
(a) such Party is duly organized and validly existing under the laws of the state of its incorporation and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;
(b) such Party has taken all corporate action necessary to authorize the execution and delivery of this Agreement and the performance of its obligations under this Agreement; and such execution, delivery and/or performance does not violate any law, regulation, permit held by such Party, or contract to which such Party is a party;
6.
(c) this Agreement is a legal and valid obligation of such Party, binding upon such Party and enforceable against such Party in accordance with the terms of this Agreement, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting creditors' rights, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance; and
(d) it has the right to enter into this Agreement and to grant the rights granted herein.
4.2 DISCLAIMER. AAT hereby accepts and assumes title to all the Assigned Technology and the Additional Chemistry Assets, and a license to the Licensed Technology, "AS IS" and "WHERE IS" without any warranties of any kind, either express or implied. AXYS HEREBY DISCLAIMS ANY AND ALL WARRANTIES, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE ADDITIONAL CHEMISTRY ASSETS, THE ASSIGNED TECHNOLOGY AND THE LICENSED TECHNOLOGY, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.
4.3 EXPLANATION. It is understood that, in connection with the sale of AAT by Axys to DPII, Axys will make, in certain other agreements relating to such sale, certain representations, warranties and covenants for the benefit of DPII with respect to (among other things) the Assigned Contracts, the Assigned Technology, the Additional Chemistry Assets and the Licensed Technology, and grant DPII certain indemnification and other rights and remedies with respect to such representations, warranties and covenants. This Agreement's disclaimers, limitations, quitclaim provisions and "AS IS, WHERE IS" provisions are not intended to affect or diminish such representations, warranties, covenants, rights and remedies set forth in such other agreements, but merely to ensure that any liability of Axys to DPII after such sale shall arise primarily under and to the extent defined in such agreements between Axys and DPII instead of under this Agreement. Nonetheless, any liability of Axys to AAT under the express terms of this Agreement may also be enforced by AAT after a sale to DPII.
5. TERM AND TERMINATION
5.1 TERM. The Agreement shall commence on the Effective Date and continue in force thereafter indefinitely.
6. CONFIDENTIALITY
6.1 LIMITATIONS ON CONFIDENTIAL INFORMATION. As used herein, "Confidential Information" means (a) confidential and proprietary Information within the Assigned Technology that is or has been transferred or disclosed by Axys to AAT plus any confidential and proprietary Information that AAT may subsequently disclose to Axys hereunder and (b) the Compound Information as such term is defined in the Compound Purchase Agreement between the Parties of even date herewith. Axys understands that maintenance of the confidential nature of the Confidential Information may be important to AAT's future use, practice and commercial exploitation of the rights granted to AAT under this Agreement, and thus Axys agrees that it
7.
shall use reasonable efforts to preserve the confidentiality of such Confidential Information and not to publish it, or otherwise disclose it to third parties except under appropriate written confidentiality and limitation-of-use agreements for the purposes of exercising its limited sublicense rights under Section 2.2 of this Agreement or Sections 2.2, 2.3 and 4.1 of the Compound Purchase Agreement.
6.2 EXCEPTIONS. The obligations set forth in Section 6.1 shall not apply to any Information that Axys can demonstrate by competent written evidence:
(a) is or becomes generally available to the public or otherwise part of the public domain other than through any act or omission of Axys in breach of this Agreement;
(b) is independently developed by Axys or its Affiliate without using any of the Confidential Information or any other Information previously transferred by Axys to AAT; or
(c) is disclosed to Axys by a third party that has no obligation not to disclose such Information to Axys.
6.3 PERMITTED DISCLOSURE. Notwithstanding the limitations in this Article 6, Axys may disclose Confidential Information to the extent such disclosure is reasonably necessary in the following instances, but solely for the limited purpose of such necessity:
(a) filing or prosecuting patent applications which Axys is allowed to file or prosecute;
(b) regulatory and tax filings;
(c) defending litigation or (subject to AAT's prior written consent) prosecuting litigation; and
(d) complying with applicable governmental laws or regulations or valid court orders.
Notwithstanding the foregoing, in the event Axys is required to
make a disclosure of the Confidential Information pursuant to subsections 6.3(a)
- (d), it will give reasonable advance notice to AAT of such disclosure and
endeavor in good faith to secure confidential treatment of such information. In
any event, the Parties agree to take all reasonable action to limit or avoid
disclosure of Confidential Information hereunder. Further, the Parties agree to
consult with one another on the provisions of this Agreement to be redacted in
any filings made by a Party with the United States Securities and Exchange
Commission or as otherwise required by law.
7. MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement shall be governed by the laws of the State of California that apply to contracts negotiated, executed and performed within the State of California.
8.
7.2 ENTIRE AGREEMENT. This Agreement constitutes the entire, final and complete agreement and understanding between the Parties with respect to the subject matter hereof, and replaces and supersedes all prior discussions and agreements between the Parties with respect to such subject matter. In particular, but without limiting the foregoing, the Parties hereby agree that the Limited Technology and License Agreement, dated as of June, 1999, between the Parties is hereby terminated. No amendment, modification or waiver of any terms or conditions hereof shall be effective unless made in writing and signed by a duly authorized officer of each Party.
7.3 FURTHER AGREEMENTS. 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.
7.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
each of the Parties, their successors and assigns. Axys shall not be entitled to
assign the benefits of this Agreement to any Party without the prior
post-Effective-Date written consent of AAT, which consent shall not be
unreasonably withheld; provided, however, such consent shall not be required for
an assignment to the successor in interest of Axys in connection with the
merger, acquisition, or consolidation of Axys or the sale of all or
substantially all of the assets of Axys. Any assignment in contravention of this
Section 7.4 shall be null, void and of no effect.
7.5 HEADINGS. The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
7.6 NOTICE. All notices required or permitted to be given under this Agreement shall be in writing and shall be mailed by registered or certified mail, or delivered by a nationally recognized overnight courier, or delivered by hand to the address set forth in the first paragraph of this Agreement, to the attention of the party's President. All notices shall be deemed to have been given two (2) business days after such notice is mailed, as evidenced by the postmark at the point of mailing, or on the date of personal delivery, if not mailed.
7.7 COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute together the same document.
7.8 SEVERABILITY. If a court of competent jurisdiction declares any provision of this Agreement invalid or unenforceable, or if any government or other agency having jurisdiction over either AAT or Axys deems any provision to be contrary to any laws, then that provision shall be severed and the remainder of the Agreement shall continue in full force and effect. The Parties further agree to negotiate in good faith with the intention of agreeing to and implementing an amendment to replace such void, invalid, unenforceable, or unlawful provision with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void, invalid, unenforceable or unlawful provision.
7.9 FURTHER AGREEMENT. Neither Party is obligated by this Agreement to enter into any further agreement of any kind with the other Party.
9.
7.10 INDEPENDENT CONTRACTORS. Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give either Party the power or authority to act for, bind or commit the other Party in any way. Nothing herein shall be construed to create the relationship of partnership, principal and agent or joint venture between the Parties.
IN WITNESS WHEREOF, the Parties have executed and delivered this Technology Assignment and License Agreement on the Effective Date.
AXYS PHARMACEUTICALS, INC.
By: /s/ William J. Newell
-----------------------------
Name: William J. Newell
-----------------------------
Title: Senior Vice President
-----------------------------
|
AXYS ADVANCED TECHNOLOGIES, INC.
By: /s/ William J. Newell
-----------------------------
Name: William J. Newell
-----------------------------
Title: Vice President and Secretary
-----------------------------
|
[SIGNATURE PAGE TO TECHNOLOGY ASSIGNMENT AND LICENSE AGREEMENT]
10.
SCHEDULE 1.1
AAT CONTRACTS
Combinatorial Chemistry Agreement with Daiichi Pharmaceutical Co., Ltd. dated June 30, 1999.
Combinatorial Chemistry Agreement with Allergan, Inc. dated September 27, 1999
Combinatorial Chemistry Agreement with Elitra Pharmaceuticals Inc., dated September 30, 1999
Combinatorial Chemistry Agreement with Novartis Institute for Functional Genomics, Inc., dated December 8, 1999
Combinatorial Chemistry Agreement with L'Oreal Group, dated December 20, 1999
Combinatorial Chemistry Agreement with Monsanto, dated December 21, 1999
Combinatorial Chemistry Agreement with Cephalon, Inc., dated December 21, 1999
Combinatorial Chemistry Agreement with Bristol-Myers Squibb Company, dated December 31, 1999
1.
SCHEDULE 1.2
ADDITIONAL CHEMISTRY ASSETS
(see attached)
1.
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
IN SERVICE SYSTEM LTD DEPR
DATE ASSET # TAG # DESCRIPTION 3/31/00
COMPUTER 2/28/93 112 Tag: A2077 1 Indigo 16 27,000.00
10/31/93 120 Tag: A1641 INDIGO 2 19,157.50
10/31/93 123 Tag: A1470 INDIGO 15,010.00
1/31/94 172 Tag: A1654 1 CPU Mac Q 4,290.00
12/31/94 197 Tag: Al747 1 HPLaserj 2,159.59
1/31/95 198 Tag: Al754 Computer - A 3,342.20
5/31/95 203 Tag: A4994 Computer - P 4,883.15
12/31/95 220 Tag: A4826 1 COMPUTER 1,052.12
6/30/96 241 Tag: A4075 2 computer 3,692.14
6/30/96 248 Tag: A2248 2 Powermac 10,630.55
6/30/96 251 Tag: A2349 3 Powermac 11,590.13
9/30/96 266 Tag: A5443 Monitor 2,110.64
12/1/96 728 Tag: A8067 POWERMAC 76 3,214.48
1/1/97 765 Tag: A2352 PDWERMAC 72 3,145.64
1/1/97 766 Tag: A9070 POWERMAC 76 13,548.05
2/1/97 794 Tag: A2712 DELLDIMENS 2,134.69
2/1/97 804 Tag: A2231 MONITOR SM 936.27
3/1/97 859 Tag: A4996 4PCS spare 26,785.79
3/1/97 860 Tag: A2452 APPLE POWER 7,794.36
3/1/97 880 Tag: A2709 2 PCS DELL 8,963.14
5/1/97 922 Tag: A2852 DELL 6200-O 3,841.38
9/1/97 1011 Tag: A2313 5 PCS POWER 13,848.60
4/1/98 1192 Tag: A6162 POWERMAC G3 1,977.93
4/1/98 1193 Tag: A6163 MONITOR SON 833.35
4/1/98 1194 Tag: A6161 HP DESKJET 1,425.01
4/1/98 1195 Tag: A6296 POWERBOOK G 3,935.18
7/1/98 1295 Tag A7027 HP LASERJET 895.57
9/1/98 1383 Tag: A6814 DELLXPS 26 885.54
9/1/98 1405 Tag: A7059 4000N PRINT 645.60
9/1/98 1406 Tag: A7060 4000N PRINT 645.59
10/1/98 1438 Tag: A7080 POWERBOOK G 3,219.66
3/1/97 2434 Tag: 1769 Server U2-2 12,212.52
7/1/96 3259 Tag: 1501 Computer -
3/31/98 4587 Tag: 3756 Server Sun 21,310.71
11/30/98 4772 Tag: 2929 Unipack B 560.48
11/30/98 4773 Tag: 2928 Unipack B 560.48
1/22/99 4979 Tag: A6978 CompEq Son 183.12
1/22/99 4980 Tag: A6975 CompEq Pow 1,007.39
8/27/99 5286 Tag: A8028 Computer PI 547.89
|
ADDT'L
DEPR FR
IN SERVIC GL BALANCE ACCUM DEPR GL BALANCE 10/31/99
DATE 3/31/00 10/31/99 10/31/99 TO 3/31/2000
COMPUTER 2/28/93 27,000.00
10/31/93 19,157.50 -
10/31/93 15,010.00 -
1/31/94 4,290.00 -
12/31/94 2,159.59 -
1/31/95 3,342.20 -
5/31/95 4,883.15 -
12/31/95 1,052.12 -
6/30/96 3,290.82 401.32
6/30/96 9,475.06 1,155.49
6/30/96 10,330.34 1,259.79
9/30/96 2,110.64 -
12/1/96 3,125.19 89.29
1/1/97 2,970.89 174.75
1/1/97 12,785.38 752.67
2/1/97 1,956.80 177.69
2/1/97 858.25 78.02
3/1/97 23,809.00 2,976.79
3/1/97 6,928.32 866.04
3/1/97 7,967.24 995.90
5/1/97 3,292.61 548.77
9/1/97 11,614.96 2,233.64
4/1/98 1,565.86 412.07
4/1/98 659.74 173.61
4/1/98 1,128.13 286.88
4/1/98 3,115.35 819.83
7/1/98 682.33 213.24
9/1/98 726.18 259.36
9/1/98 475.71 169.89
9/1/98 475.70 169.89
10/1/98 2,325.31 894.35
3/1/97 10,582.18 1,650.34 [text illegible]
7/1/96 4,958.00 (4,958.00) NOT TRANSFERRED TO
[AXY]
3/31/98 16,870.97 4,439.74 [text illegible]
11/30/98 385.33 175.15 [text illegible]
11/30/98 385.33 175.15 [text illegible]
1/22/99 102.77 80.35
1/22/99 566.36 442.03
8/27/99 156.54 391.35
|
2.
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
IN SERVICE SYSTEM LTD DEPR
DATE ASSET # TAG # DESCRIPTION 3/31/00
8/27/99 5287 Tag: A8029 Computer PI 547.89
8/27/99 5288 Tag: A8028 Computer 17 92.39
8/27/99 5289 Tag: A8029 Computer 17 92.39
9/14/99 5299 Tag: A6811 Computer De 1,884.26
10/20/99 5331 Tag: A8044 SSF Compute 211.65
3/10/00 5764 Tag: A6111 Comp Eq21" monitor
3/10/00 5765 Tag: A8100 Comp Eq Powermac G4
3/10/00 5766 Tag: A8110 Comp Eq Powermac G4
3/21/00 5768 Tag: A8112 Comp Eq Monitor TMX 412
3/21/00 5769 Tag: A8113 Comp Eq Monitor TMX 412
LAB EQUIPMENT 1/31/91 305 Tag: A2052 1Sola Power 3,900.00
9/30/92 308 Tag: A2380 1Pelicon Ca 4,454.85
9/30/93 313 Tag: A3939 1Portion No 4,000.00
6/30/95 323 Tag: A4874 TOMTEC DILU 21,222.41
6/30/95 325 Tag: A2341 Vacuum Pump 1,299.00
3/31/95 326 Tag: A2206 Freezer not 1,928.82
10/31/95 331 Tag: A2841 Vacuum pump 1,407.25
3/31/96 335 Tag: A1239 Turbo Pump 6,000.00
3/31/96 340 Tag: A3941 GeneAmp-Oth 113.00
11/30/95 343 Tag: A3940 1Fumehoods 31,216.52
11/30/95 349 Tag: A1920 Rotary evap 3,254.89
11/30/95 354 Tag: A2757 Balance el 1,175.72
11/30/95 358 Tag: A3252 2 HTS lab r 171,765.70
1/31/94 376 Tag: A2585 Conoentralo 1,950.00
1/31/94 380 Tag: SF592 HPLCSystem 9,280.00
1/31/94 389 Tag: A4764 Balance BA 945.10
1/31/94 394 Tag: A1610 Parbal Bea 28,316.00
1/31/94 398 Tag: A4988 Shaker- env 5,722.25
1/31/94 400 Tag: A4903 Adapter gl 170.00
5/31/92 416 Tag: SF631 1HPLC Semi 54,745.51
5/31/92 417 Tag: A2228 1Fenups un 16,602.56
8/31/92 422 Tag: A3286 Vertishear 1,076.75
8/31/92 433 Tag: A2489 Chromatogre 776.00
2/28/93 437 Tag: A2515 2Roller Rac 7,002.00
12/31/93 454 Tag: A2705 Environment 5,727.00
12/31/93 463 Tag: A2603 Pipeltor - 8 704.95
1/31/95 477 Tag: Al184 Pump - Vacuum 1,840.00
6/30/95 483 Tag: A2005 Vacuum Oven 2,730.00
6/30/95 497 Tag: A1991 SAMPLER DIL 14,522.80
6/30/95 499 Tag: SF717 HP1090 HPLC 62,002.77
|
ADDT'L
DEPR FR
IN SERVICE GL BALANCE ACCUM DEPR GL BALANCE 10/31/99
DATE 3/31/00 10/31/99 10/31/9 TO 3/31/2000
8/27/99 156.54 391.35
8/27/99 26.40 65.89
8/27/99 26.40 65.99
9/14/99 314.04 1,570.22
10/20/99 211.65
3/10/00 -
3/10/00 -
3/10/00 -
3/21/00 -
3/21/00 242,905.02 223,084.2
LAB EQUIPMENT 1/31/91 3,900.00 -
9/30/92 4,454.85 -
9/30/93 4,000.00 -
6/30/95 21,222.41 -
6/30/95 1,299.00 -
3/31/95 1,928.82 -
10/31/95 1,407.25 -
3/31/96 5,500.00 500.00
3/31/96 103.58 9.42
11/30/95 31,216.52 -
11/30/95 3,254.89 -
11/30/95 1,175.72 -
11/30/95 171,765.70 -
1/31/94 1,950.00 -
1/31/94 9,230.00 -
1/31/94 945.10 -
1/31/94 28,316.00 -
1/31/94 5,722.25 -
1/31/94 170.00 -
5/31/92 54,745.51 -
5/31/92 16,602.56 -
8/31/92 1,076.75 -
8/31/92 776.00 -
2/28/93 7,002.00 -
12/31/93 5,727.00 -
12/31/93 704.95 -
1/31/95 1,840.00 -
6/30/95 2,730.00 -
6/30/95 14,522.80 -
6/30/95 62,002.77 -
|
3.
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
IN SERVICE SYSTEM LTD DEPR DATE ASSET # TAG # DESCRIPTION 3/31/00 4/30/94 517 Tag: Al137 Freezer Rel 6,099.00 4/30/94 521 Tag: A2722 Freezer Exp 1,500.00 4/30/94 537 Tag: A4881 Racks for C 5,450.00 3/31/96 539 Tag: A4883 Composite R 9,300.00 6/30/96 502 Tag: A8942 BioSafety 7,658.00 6/30/96 564 Tag: A4754 4 306 pump 46,381.38 6/30/96 565 Tag: A4879 4 306 pump 45,203.17 6/30/96 567 Tag: A3948 215Sampler 12,373.88 6/30/96 569 Tag: A3923 Environment 5,525.80 6/30/96 584 Tag: A3238 Fluoslar re 22,583.59 6/30/96 586 Tag: A3243 Column The 3,263.52 6/30/96 591 Tag: A3943 Analytical 4,662.49 8/31/96 595 Tag: A3251 Saw-Isomer 2,782.79 8/31/96 599 Tag: A1708 Computer - C 2,667.61 8/31/96 601 Tag: A2389 NECGNC 4MB 1,218.69 8/31/96 604 Tag: A2016 Powetmac 75 2,517.21 8/31/96 606 Tag: A2038 Powermac 76 14,775.06 8/31/96 609 Tag: A2222 Powermac 76 10,612.73 8/31/96 632 Tag: A2200 Rotary Evap 2,750.63 8/31/96 637 Tag: A2484 Oven-Vacuum 1,429.60 9/30/95 644 Tag: A1173 Fraction Co 3,150.74 10/31/93 646 Tag: A4901 Temperature 1,034.14 10/31/93 656 Tag: A3983 Vacuum Pump 6,442.00 10/31/93 658 Tag: A4765 Mettler Bal 3,030.00 7/31/93 665 Tag: A4068 Vacuum Pump 1,030.40 7/31/93 668 Tag: A2706 Shekel- env 1,022.58 9/30/96 676 Tag: A4880 Pumphead 1,084.49 12/1/96 734 Tag: A4753 PUMPHEAD M 1,008.83 12/1/96 738 Tag: A2612 BALANCE ANA 1,810.68 12/1/96 739 Tag: A2613 ANALYTICAL 1,810.68 12/1/96 742 Tag: A2610 EVAPORATOR 2,185.94 12/1/96 743 Tag: A2621 EVAPORATOR 2,185.94 12/1/96 746 Tag: A3982 PUMP22 I-W 1,671.87 12/1/96 747 Tag: A3231 HYDRA 96 MI 13,350.83 12/1/96 753 Tag: A2635 ANALYTICAL 1,809.94 12/1/96 754 Tag: A2636 ROTARY EVAP 2,332.18 12/1/96 755 Tag: A2637 ROTARY EVAP 2,332.18 12/1/96 756 Tag: A2676 ISOGRATI C P 3,680.49 1/1/97 774 Tag: 42719 SHAKER- REC 2,602.72 1/1/97 778 Tag: Al829 BUCHI ROTAR 2,618.18 |
ADDT'L
DEPR FR
IN SERVICE GL BALANCE ACCUM DEPR GL BALANCE 10/31/99
DATE 3/31/00 10/31/99 10/31/99 TO 3/31/2000
4/30/94 6,099.00 -
4/30/94 1,500.00 -
4/30/94 5,450.00 -
3/31/96 8,525.00 775.00
6/30/96 6,626.15 832.46
6/30/96 41,339.92 5,041.46
6/30/96 40,289.78 4,913.39
6/30/96 11,028.88 1,344.99
6/30/96 4,925.16 600.64
6/30/96 20,128.85 2,454.74
6/30/96 2,908.78 854.74
6/30/96 4,155.70 508.79
8/31/96 2,466.56 316.23
8/31/96 2,364.47 303.14
8/31/96 1,080.20 138.49
8/31/96 2,231.17 286.04
8/31/96 13,096.07 1,678.99
8/31/96 9,406.74 1,205.99
8/31/96 2,438.05 312.58
8/31/96 1,267.14 162.46
9/30/95 3,150.74 -
10/31/93 1,034.14 -
10/31/93 6,442.00 -
10/31/93 3,030.00 -
7/31/93 1,030.40 -
7/31/93 1,022.58 -
9/30/96 958.38 126.11
12/1/96 882.72 126.11
12/1/96 1,584.34 226.34
12/1/96 1,584.34 226.34
12/1/96 1,912.70 273.24
12/1/96 1,912.70 273.24
12/1/96 1,462.88 208.99
12/1/96 11,681.97 1,668.86
12/1/96 1,583.70 226.24
12/1/96 2,040.65 291.53
12/1/96 2,040.65 291.53
12/1/96 3,220.43 460.06
1/1/97 2,269.03 338.69
1/1/97 2,282.52 335.86
|
4.
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
IN SERVICE SYSTEM LTD DEPR DATE ASSET # TAG # DESCRIPTION 3/31/00 1/1/97 779 Tag: A2749 METTLER TOL 1,116.65 2/1/97 806 Tag: A2717 GILSON 215 9,115.35 2/1/97 808 Tag: A2746 BALANCE ANA 4,640.57 2/1/97 810 Tag: A2755 BALANCE ANA 1,038.98 2/1/97 817 Tag: A4884 2 HPLC 1100 70,746.73 2/1/97 818 Tag: A2776 FREEZER EXP 1,224.45 2/1/97 819 Tag: A2782 DISPENSER W 1,736.48 2/1/97 822 Tag: A2804 PUMPVACUUM 3,009.22 2/1/97 823 Tag: A2803 PUMPVACUUM 1,504.62 2/1/97 827 Tag: A2718 SYRINGE PUM 982.43 2/1/97 839 Tag: A3924 SHAKER RECI 959.91 2/1/97 841 Tag: A2821 433A-01 PE 46,348.88 3/1/97 844 Tag: A2774 UPRIGHT F RE 4,154.45 3/1/97 845 Tag: A2775 UPRIGHT F RE 4,154.45 3/1/97 846 Tag: A2810 UPRIGHT FRE 4,154.45 3/1/97 849 Tag: A2747 MODULINE 12 2,556.28 3/1/97 852 Tag: A4991 GILSON PREP 39,743.64 3/1/97 881 Tag: A2901 SPEEDVAC EV 7,322.27 5/1/97 901 Tag: A2999 SHIMADZU HP 14,000.75 5/1/97 908 Tag: A3004 COMPLETE 11 30,809.28 6/1/97 933 Tag: A3083 PS API150 M 91,119.23 6/1/97 939 Tag: A3081 HYDRA-96 RB 13,801.88 6/1/97 944 Tag: A3090 BALANCE MET 2,600.79 6/1/97 945 Tag: A4733 VACUUM DONT 766.77 7/1/97 952 Tag: A3088 CONTROLLER 1,182.42 7/1/97 954 Tag: A2907 HP 8453 UV 7,275.54 8/1/97 977 Tag: A8131 VACUUM PUMP 1,267.57 9/1/97 997 Tag: A4890 4 SETS SURG 4,650.05 10/l/97 1036 Tag: A4824 ROLIFT WALK 3,867.49 11/l/97 1049 Tag: A3204 HYDRA-96 FL 10,870.01 12/1/97 1081 Tag: A3229 2 PCS VAGUU 2,097.00 12/1/97 1083 Tag: A3201 215GILSON 8,299.56 12/1/97 1086 Tag: A3240 REFRIGERATO 785.54 12/1/97 1087 Tag: A3227 2 PCS ROTAR 3,798.84 12/1/97 1088 Tag: A3223 4 PCS MODIF 2,061.08 12/1/97 1089 Tag: A3218 4 PCS CUXTO 5,770.56 12/1/97 1090 Tag: A3232 2 PCS DIAPH 1,082.08 12/1/97 1094 Tag: A3235 MASTERPRO B 1,060.86 12/1/97 1096 Tag: A3944 ANALYTICAL 1,433.66 1/1/98 1103 Tag: A3236 PUMPRV 5 T 635.23 |
ADDT'L
DEPR FR
ADDT'L DEPR
GL BALANCE ACCUM DEPR GL BALANCE FR 10/31/99
3/31/00 10/31/99 10/31/99 TO 3/31/2000
973.49 143.18
7,915.98 1,199.38
4,203.66 636.97
902.27 136.71
61,437.94 9,308.79
1,063.34 161.11
1,507.99 228.49
2,613.27 395.95
1,306.64 197.98
853.17 129.26
833.60 126.31
40,250.35 6,088.54
3,593.04 561.41
3,593.04 561.41
3,593.04 561.41
2,210.82 345.44
34,372.88 5,370.76
6,332.78 989.49
12,000.64 2,000.11
26,407.95 4,401.33
77,714.22 13,399.01
11,712.19 2,029.69
2,218.32 382.47
654.01 112.76
1,003.26 179.16
6,173.18 1,102.36
1,069.51 198.05
3,900.04 750.01
3,222.90 644.59
8,995.87 1,874.14
1,722.54 374.46
6,817.50 1,482.06
645.27 140.27
3,120.48 678.86
1,693.03 368.05
4,740.10 1,030.46
838.84 193.24
871.42 189.44
1,177.65 256.01
517.59 117.64
|
5.
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
IN SERVICE SYSTEM LTD DEPR DATE ASSET # TAG # DESCRIPTION 3/31/00 1/1/98 1109 Tag: OT137 TREEZEMOBIL 6,409.45 1/1/98 1118 Tag: N/A GENEVAC HT 30,133.64 2/1/98 1122 Tag: A3251 FLEXCHEM RO 4,174.84 2/1/98 1123 Tag: A3249 FLEXCHEM RO 5,863.54 2/1/98 1124 Tag: A3252 TECAN GENES 43,137.58 2/1/98 1129 Tag: A3253 DELLOPTIFL 1,486.06 3/1/98 1150 Tag: A3272 HYDRA - 96 R 9,336.56 4/1/98 1159 Tag: A6018 RECIPROCAL 487.99 4/1/98 1160 Tag: A6019 RECIPROCAL 487.99 4/1/98 1183 Tag: A6160 RECIPROCAL 487.99 2/6/97 1196 Tag: SF146 Robol for c 31,48l.24 5/1/98 1200 Tag: A7055 API150 MAS 55,391.72 5/1/98 1201 Tag: A6297 215LIQUID 7,265.17 5/1/98 1203 Tag: A6307 HYDRA-96R 8,589.63 5/1/98 1206 Tag: A6732 ENHANCED DA 886.77 5/1/98 1207 Tag: A6731 SYSTEM CONT 4,082.23 5/1/98 1212 Tag: A6450 SEDEX 55 E. 6,390.75 5/1/98 1213 Tag: A6595 SEDEX 55 E. 6,390.75 5/1/98 1214 Tag: A6584 HP BINARY P 4,926.73 5/1/98 1215 Tag: A6585 HP BINARY P 4,926.72 5/1/98 1216 Tag: A6586 HP 1100 VAC 966.02 5/1/98 1217 Tag: A6585 HP 1100 VAC 966.02 5/1/98 1218 Tag: A6588 HP 1100 THE 1,616.07 5/1/98 1219 Tag: A6589 HP 1100 THE 1,616.07 5/1/98 1220 Tag: A6590 HP 1100 DIOD 4,926.72 5/1/98 1221 Tag: A6591 HP 1100 DIOD 4,926.72 5/1/98 1222 Tag: A6440 HP 1100 BINA 4,926.72 5/1/98 1223 Tag: A6441 HP 1100 VAC 966.02 5/1/98 1224 Tag: A6442 HP 1100 AUT 3,703.09 5/1/98 1225 Tag: A6444 HP 110 DIOD 5,423 83 5/1/98 1226 Tag: A6443 HP 1100 THE 972.05 5/1/98 1227 Tag: A6445 SINGLE lNST 5,960.38 8/1/98 1375 Tag: A7032 RAININ GRAD 19,562.29 9/1/98 1381 Tag: A7011 SERIAL TEAC 382.23 10/1/98 1414 Tag: A7067 Pump corrosion resistant 813.43 10/1/98 1431 Tag: A7074 HYDRA 96 FL 6,941.53 10/1/98 1432 Tag: A7069 RECIPROCAL 353.16 10/1/98 1433 Tag: A7070 RECIPROCAL 353.16 10/1/98 1434 Tag: A7071 RECIPROCAL 353.17 10/1/98 1440 Tag: N/A IMPACRT 2-8 704.32 |
ADDT'L
DEPR FR
ADDT'L DEPR
GL BALANCE ACCUM DEPR GL BALANCE FR 10/31/99
3/31/00 10/31/99 10/31/99 TO 3/31/2000
5,211.41 1,196.04
24,553.33 5,580.31
3,371.98 802.86
4,735.93 1,127.61
34,841.89 8,295.69
1,200.27 285.79
7,469.25 1,867.31
386.33 101.66
386.33 101.66
386.33 101.66
27,338.98 4,142.26
43,350.03 12,041.69
5,685.78 1,579.39
6,722.32 1,867.31
693.99 192.78
3,194.79 887.44
5,001.46 1,389.29
5,001.46 1,389.29
3,855.69 1,071.04
3,855.69 1,071.03
756.01 210.01
756.01 210.01
1,264.75 351.32
1,264.75 351.32
3,855.69 1,071.03
3,855.69 1,071.03
3,855.69 1,071.03
756.01 210.01
2,898.07 805.02
4,244.74 1,179.09
760.74 211.31
4,664.64 1,295.74
14,871.71 4,890.58
281.64 100.59
587.47 225.96
5,013.32 1,928.21
255.06 98.10
255.06 98.10
255.06 98.11
508.68 195.64
|
6.
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
IN SERVICE SYSTEM LTD DEPR DATE ASSET # TAG # DESCRIPTION 3/31/00 0 10/1/98 1441 Tag: N/A IMPACT 2-12 773.11 10/1/98 1442 Tag: A7078 TOWDOOR RE 534.26 10/1/98 1443 Tag: A7081 HYDRA 96 DI 6,941.53 11/1/98 1449 Tag: A7066 HP 35900E A 857.59 11/1/98 1459 Tag: A7087 Reciprocal 336.45 12/1/98 1488 Tag: A7099 BUCHI MODEL 879.71 12/1/98 1489 Tag: A7100 BUCHI MODEL 879.71 12/1/98 1490 Tag: A7101 BUCHI MODEL 879.71 12/1/98 1491 Tag: A7102 BUCHI MODEL 879.71 12/1/98 1493 Tag: A7103 BALANCE-S 732.67 12/1/98 1496 Tag: A7094 HT 12EVAPOR 28,292.51 12/1/98 1497 Tag: A7470 DIGITAL VAC 327.26 12/1/98 1498 Tag: A7108 DIGITAL VAC 327.25 1/1/99 1508 Tag: A7109 WORKSTATION 592.08 1/1/99 1511 Tag: A7114 MODULINE 12 446.28 12/7/98 4902 Tag. A7117 LabEq Ove 546.07 11/18/98 4905 Tag: A7110 Reciprocal 294.80 2/5/99 4908 Tag: A7155 LabEq-Frz 1,289.09 2/5/99 4909 Tag: A7156 LabEq Frz 1,289.09 2/23/99 5024 Tag: A7160 LabEq Free 3,230.79 2/23/99 5025 Tag: A7161 LabEq Unit 4,970.32 2/23/99 5026 Tag: LabEq Gene 2,680.22 2/24/99 5027 Tag: LabEq Fume 4,233.18 3/9/99 5039 Tag: A7162 LabEq Auto 4,421.39 3/24/99 5054 Tag: A7168 LabEq Acqu 2,844.78 3/24/99 5055 Tag: A7168 LabEq SGI 2,938.66 3/24/99 5056 Tag: A7168 LabEq Jus 283.54 3/15/99 5079 Tag: LabEq HPLC 16,428.58 6/11/99 5088 Tag: A7202 LabEq Flex 7,250.05 5/28/99 5095 Tag: A7198 LabEq Lang 264.87 1/19/99 5204 Tag: 7163 LabEq HPLC 13,471.66 7/19/99 5227 Tag: A8020 LabEq HPLC 7,403.76 5/18/99 5229 Tag: A7170 LabEq Rel 289.59 7/21/99 5239 Tag: LabEq Auto 6,902.01 12/15/98 5252 Tag: A7110 LabEq Shak 577.22 1/7/99 5254 Tag: A7128 LabEq Vacu 593.17 1/7/99 5255 Tag: A7124 LabEq Auto 2,264.11 1/7/99 5256 Tag: A7125 LabEq Ther 596.84 1/7/99 5257 Tag: A7126 LabEq Vari 1,379.65 8/25/99 5297 Tag: A2026 LabEq Bala 412.59 |
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
ADDT'L
DEPR FR
ADDT'L DEPR
GL BALANCE ACCUM DEPR GL BALANCE FR 10/31/99
3/31/00 10/31/99 10/31/99 TO 3/31/2000
558.35 214.76
385.85 148.41
5,013.32 1,928.21
605.35 252.24
237.49 98.96
604.80 274.91
604.80 274.91
604.80 274.91
604.80 274.91
503.71 228.96
16,013.60 7278.91
224.99 102 27
224.98 102.27
394.72 197.36
297.52 148.76
318.05 228.02
171.70 123.10
708.30 580.79
708.30 580.79
1,775.16 1,455.63
2,730.95 2,239.37
1,472.65 1,207.57
2,325 92 1,907.26
2,368 60 2,052.79
1,524.00 1,320.78
1,574.28 1,364.38
151.80 131.64
8801.02 7,627.56
3,222.24 4,027.81
132.43 132.44
7,031.33 6,440.53
2,776.41 4,627.35
135.41 154.45
2,588.25 4,313.76
284.31 292.91
279.63 313.54
1,067.37 1,196.74
281.37 315.47
650.40 729.25
117.88 294.71
|
7.
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
IN SERVICE SYSTEM LTD DEPR
DATE ASSET # TAG # DESCRIPTION 3/31/00
10/4/99 5322 Tag: A8033 Impact Exp 112.32
10/4/99 5323 Tag: A8034 Impact Exp 112.32
10/4/99 5324 Tag A8035 Impact 2-12 111.15
10/4/99 5325 Tag: A8036 Impact 2-12 111.15
10/4/99 5326 Tag: A8037 Impact 2-12 111.15
10/5/99 5327 Tag: A8038 Impact 2 8 101.65
10/5/99 5328 Tag: A8039 Impact 2 8 101.65
10/5/99 5329 Tag: A8040 Impact 2 8 101.65
9/29/99 5338 Tag: A8032 LabEq Isop 4,877.46
9/21/99 5339 Tag: LabEq Isop 4,877.81
12/1/99 5349 Tag: RECV LabEq Fume 7,943.94
11/29/99 5355 Tag: A8057 LabEq Serf 130.47
12/6/99 5356 Tag: A8059 LabEq Chro 301.20
12/10/99 5637 Tag: A8063 Lab Funn 95.22
12/17/99 5638 Tag: A8064 LabEq RS23 100.29
12/30/99 5639 Tag: A8073 LabEq Save 1,147.17
12/30/99 5640 Tag: A8074 LabEq Save 1,147.17
1/13/00 5642 Tag: A8077 LabEq Save 770.70
1/13/00 5643 Tag: A8078 LabEq Save 770.70
12/2/99 5645 Tag: A8060 LabEq Pon 165.57
12/7/99 5647 Tag: A8061 LabEq Oxyg 132.84
1/11/00 5648 Tag: A8079 LabEq Save 752.96
1/10/00 5649 Tag: A8065 LabEq Free 65.14
12/1/99 5650 Tag: A8057 LabEq Recip 62.27
12/1/99 5651 Tag: A8058 LabEq Recl 62.27
2/2/00 5692 Tag: A3238 LabEq Fast Stack 130.00
Microlrlre
1/4/00 5693 Tag: A8066 LabEq H B 1,290.78
11/16/99 5694 Tag: A8042 2000 Lab Eq HP B 1,139.80
1/26/00 5695 Tag: A2228 2000 Lab Eq Optx 578.82
2/5/00 5713 A8064 Lab Eq RS232 Interface 40.83
1/17/00 5719 Tag: A8082 2000 Speedvac sy 413.21
2/22/00 5720 A8097 Lab Eq Oven frg micro 94.57
vacuum
3/17/00 5767 A8115 Lab Eq Advanced Video
Microsoft
Furniture 9/30/93 32 Tag: A3912 6 Flexion I 2,321.00
5/30/94 35 Tag A2853 1 Modular F 9,905.61
6/30/96 55 Tag SEE C 40 Concert 13,776.61
7/31/96 58 Tag: A3973 6 Superior 2,221.50
9/1/97 1013 Tag: SEE C 4 PCS TASK 536.92
|
ADDT'L
DEPR FR
ADDT'L DEPR
GL BALANCE ACCUM DEPR GL BALANCE FR 10/31/99
3/31/00 10/31/99 10/31/99 TO 3/31/2000
112.32
112.32
111.15
111.15
111.15
101.65
101.65
101.65
812.91 4,064.55
812.91 4,064.90
7,943.94
130.47
301.20
95.22
100.29
1,147.17
1,147.17
770.70
770.70
165.57
132.84
752.96
65.14
62.27
62.27
130.00
1,290.76
1,139.80
413.21
40.83
413.21
94.57
1,597,063.05 1,368,647.24 -
Furniture 2,321.00 -
9,905.61 -
12,279.15 1,497.45
1,974.66 246.84
450.32 86.60
|
8.
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
IN SERVICE SYSTEM LTD DEPR
DATE ASSET # TAG # DESCRIPTION 3/31/00
9/1/97 1027 Tag: A3150 6 PCS CHAIR 593.97
11/1/97 1047 Tag: SEE C 20 PCS OFFI 2,320.96
11/1/97 1048 Tag: SEE C 10 GUEST CH 636.75
7/1/98 1051 Tag: SEE C 10 pcs office chair 1,160.49
burgundy
10/1/98 1271 Tag: N/A BOBREED's 3,809.54
4/1/99 1428 Tag: N/A FURNITURE F 1,460.30
12/1/99 5057 Tag: Fn Glassware 679.80
Fixture 4/12/99 5350 Tag: Retrofit Ex 447.66
7/1/96 5096 Tag: Fx Frames I 396.44
5/31/93 3258 Tag: 1501 Storage Ser 67,312.50
5/31/93 1581 Tag: A1035 800Per Mon 155.00
6/30/93 1592 Tag: A4078 Chromatogra 2,441.00
6/30/93 1630 Tag: A5408 6 Tables 221.39
6/30/93 1631 Tag: A5000 6 Tables 221.39
6/30/93 1632 Tag: A3867 6 Tables 221.39
6/30/93 1633 Tag: A3871 5 Tables 202.67
6/30/93 1640 Tag: A2995 LaserWriter 2,597.99
7/31/93 1652 Tag: A2080 Rotary Cull 430.10
7/31/93 1661 Tag: A4777 Tekmar Spee 298.00
7/31/93 1662 Tag: A4778 Electrophor 785.00
7/31/93 1675 Tag: A4779 604U-R Auto 3,137.00
7/31/93 1677 Tag: A4780 Rotor Horiz 561.00
7/31/93 1678 Tag: A2229 VacGage w- 273.27
7/31/93 1679 Tag: A4781 Rotor- Hori 329.00
7/31/93 1680 Tag: A4782 Trunnion Ri 52.00
7/31/93 1681 Tag: A4783 Trunnion Ri 52.00
7/31/93 1682 Tag: A4784 Shield - Sea 289.76
7/31/93 1691 Tag: A2243 AirSensor 1,013.60
7/31/93 1701 Tag: A1174 Retriever 5 950.00
7/31/93 1713 Tag: A4872 Omnigene Th 5,290.00
7/31/93 1716 Tag: A4787 GenePulser 920.00
7/31/93 1734 Tag: A4882 Pre-Filter 211.20
7/31/93 1736 Tag: A4752 HR Flow Cel 1,352.00
9/30/93 1763 Tag: A3284 Diluter 799 2,771.00
9/30/93 1770 Tag: A5479 Sony CB-0008 2,310.00
12/31/93 1796 Tag: A1748 Water Aspir 1,618.76
12/31/93 1802 Tag: A2753 110gBalanc 1,420.00
4/30/94 1852 Tag: A2724 Bio Pilot 55,128.22
4/30/94 1856 Tag: A3979 LaserWriter 4,371.00
4/30/94 1862 Tag: A3945 Computers 2,780.00
|
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
ADDT'L
DEPR FR
ADDT'L DEPR
GL BALANCE ACCUM DEPR GL BALANCE FR 10/31/99
3/31/00 10/31/99 10/31/99 TO 3/31/2000
498.16 95.81
1,920.80 400.16
526.96 109.79
960.40 200.09
2,802.50 907.04
1,054.66 405.64
353.15 326.65
Fixture 39,930.51 35,208.77 447.66
396.44 205.44 205.44 191.00
67,312.50 59,833.33 59,833.33 7,479.17 Transfer GLI
155.00 -
2,441.00 -
221.39 -
221.39 -
221.39 -
202.67 -
2,597.99 -
430.10 -
298.00 -
785.00 -
3,137.00 -
561.00 -
273.27 -
329.00 -
52.00 -
52.00 -
289.76 -
1,013.60 -
950.00 -
5,290.00 -
920.00 -
211.20 -
1,352.00 -
2,771.00 -
2,310.00 -
1,618.76 -
1,420.00 -
55,128.22 -
4,371.00 -
2,780.00 -
|
9.
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
IN SERVICE SYSTEM LTD DEPR
DATE ASSET # TAG # DESCRIPTION 3/31/00
4/30/94 1870 Tag: A3933 Laminar Flo 11,952.44
4/30/94 1871 Tag: A3937 PD pumps 3,309.25
4/30/94 1873 Tag: A1825 Ultraliter 13,898.50
4/30/94 1876 Tag: A3931 Nalgene Tan 11,444.50
4/30/94 1877 Tag: A3946 Flowmeters 11,313.00
8/31/94 1883 Tag: A3913 Osmometer 4,236.00
7/31/95 1902 Tag: KH558 NMR-270 195,000.00
Leased Furniture 4/30/93 1545 Tag: A5442 Corner Tabl 59.00
5/31/93 1550 Tag: A5568 Holga 5 Dra 3,935.65
5/31/93 1557 Tag: A4080 8 Brever Ch 1,776.00
6/30/93 1558 Tag: A1351 Desk Chair- 458.25
6/30/93 1561 Tag: A4082 Desk Chair- 458.25
6/30/93 1562 Tag: A4083 Desk Chair- 458.25
8/31/93 1570 Tag: A3865 5-5 Table 1,013.35
8/31/93 1573 Tag: A1705 36562WorksI 424.68
Leasehold Impr Bd 3/31/94 279 Tag: A3934 Vacuum For 2,918.00
1/31/95 284 Tag: A4073 Hood-Peptide Lab 7,462.00
2/28/95 285 Tag: A3938 Exhaust Hoo 2,320.00
4/30/94 70 Tag: A1951 42 Round ch 982.55
8/31/91 71 Tag: SEE C 12 Ergon Mg 2,971.80
8/31/91 74 Tag: A5343 12 Ergon Mg 2,971.80
8/31/91 75 Tag: SEE C 12 Ergon St 2,670.00
9/30/91 81 Tag: A5431 2 30x60 Sin 1,074.00
7/1/97 967 Tag: A4873 KODAK EKTAG 620.24
9/1/97 1024 Tag: A4072 4 PCS OVERH 713.65
9/1/97 1025 Tag: A3400 3 PCS EKTAG 1,122.50
10/1/97 1031 Tag: A3145 2 PCS XEROX 2,261.36
Leasehold Impr Bd 10/31/99 various various Oyster Point LI (55% of 2,198,350.41
54114
3/31/00 Oyster Point LI (55% of
5415877.38)
SOFTWARE 9/30/95 9 Tag: A4786 1 BIOSYM 43,253.56
3/5/99 5099 Tag: Software Mi 1,203.57
--------------
4,570,643.82
==============
|
AXYS ADVANCED TECHNOLOGY
FIXED ASSET DEPRECIATION ADDITIONS
FROM 10/31/99 TO 3/31/2000
ADDT'L
DEPR FR
ADDT'L DEPR
GL BALANCE ACCUM DEPR GL BALANCE FR 10/31/99
3/31/00 10/31/99 10/31/99 TO 3/31/2000
11,952.44 -
3,309.25 -
13,898.50 -
11,444.50 -
11,313.00 -
4,236.00 -
343,557.43 195,000.00 343,557.43 -
Leased Furniture 59.00 -
3,935.65 -
1,776.00 -
458.25 -
458.25 -
458.25 -
1,013.35 -
8,583.43 424.68 8,583.43 -
Leasehold Impr Bd 2,918.00 -
7,462.00
12,700.00 2,320.00 12,700.0 -
982.55 -
2,971.80 -
2,971.80 -
2,670.00 -
1,074.00 -
526.26 93.98
598.54 115.11
941.46 181.04
15,387.90 1,884.47 14,620.88 376.89
Leasehold Impr Bd 2,198,350.41 2,050,748.85 2,050,748.85 147,601.55
SOFTWARE 43,253.56 -
44,457.13 644.76 43,898.32 558.81
----------------------------------------------------------------------
4,570,643.82 4,161,085.92 4,161,085.92 409,557.90
======================================================================
|
10.
----------------------------------------------------------------------------------------------------------------------------------
IN ADDITIONS FR
SERVICE SYSTEM GL BALANCE COST GL BALANCE 10/31/99
DATE ASSET # TAG # DESCRIPTION 10/31/00 10/31/99 3/31/2000 3/31/00 TO 3/31/00
----------------------------------------------------------------------------------------------------------------------------------
COMPUTER 2/28/93 112 Tag: A2077 1 Indigo 16 27,000.00 27,000.00
----------------------------------------------------------------------------------------------------------------------------------
10/31/93 120 Tag: A1641 INDIGO 2 19,157.50 19,157.50
----------------------------------------------------------------------------------------------------------------------------------
10/31/93 123 Tag: A1470 INDIGO 15,010.00 15,010.00
----------------------------------------------------------------------------------------------------------------------------------
1/31/94 172 Tag: A1654 1 CPU Mac O 4,290.00 4,290.00
----------------------------------------------------------------------------------------------------------------------------------
12/31/94 197 Tag: A1747 1 HPLaserj 2,159.59 2,159.59
----------------------------------------------------------------------------------------------------------------------------------
1/31/95 198 Tag: A1754 Computer - A 3,342.20 3,342.20
----------------------------------------------------------------------------------------------------------------------------------
5/31/95 203 Tag: A4994 Computer - P 4,883.15 4,883.15
----------------------------------------------------------------------------------------------------------------------------------
12/31/95 229 Tag: A4826 1 COMPUTER 1052.12 1052.12
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 241 Tag: A4075 2 computer 3,852.67 3,852.67
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 248 Tag: A2248 2 Powermac 11,092.74 11,092.74
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 251 Tag: A2349 3 Powermac 12,094.05 12,094.05
----------------------------------------------------------------------------------------------------------------------------------
9/30/96 266 Tag: A5443 Monitor 2,110.64 2,110.64
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 728 Tag: A3067 POWERMAC 76 3,214.48 3,214.48
----------------------------------------------------------------------------------------------------------------------------------
1/1/97 765 Tag: A2352 POWERMAC 72 3,145.64 3,145.64
----------------------------------------------------------------------------------------------------------------------------------
1/1/97 766 Tag: A3070 POWERMAC 76 13,548.05 13,548.05
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 794 Tag: A2712 DELLDIMENS 2,134.69 2,134.69
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 804 Tag: A2231 MONITOR SM 936.27 936.27
----------------------------------------------------------------------------------------------------------------------------------
3/1/97 859 Tag: A4996 4PCS sparc 26,785.79 26,785.79
----------------------------------------------------------------------------------------------------------------------------------
3/1/97 860 Tag: A2452 APPLE POWER 7,794.36 7,794.36
----------------------------------------------------------------------------------------------------------------------------------
3/1/97 880 Tag: A2709 2 PCS DELL 8,963.14 8,963.14
----------------------------------------------------------------------------------------------------------------------------------
5/1/97 922 Tag: A2852 DELL6200-O 3,951.13 3,951.13
----------------------------------------------------------------------------------------------------------------------------------
9/1/97 1011 Tag: A2313 5 PCS POWER 16,082.24 16,082.24
----------------------------------------------------------------------------------------------------------------------------------
4/1/98 1192 Tag: A6162 POWERMAC G3 2,966.90 2,966.90
----------------------------------------------------------------------------------------------------------------------------------
4/1/98 1193 Tag: A6163 MONITOR SON 1,250.04 1,250.04
----------------------------------------------------------------------------------------------------------------------------------
4/1/98 1194 Tag: A6161 HP DESKJET 2,137.50 2,137.50
----------------------------------------------------------------------------------------------------------------------------------
4/1/98 1195 Tag: A6296 POWERBOOK G 5,902.76 5,902.76
----------------------------------------------------------------------------------------------------------------------------------
7/1/98 1295 Tag: A7027 HP LASERJET 1,535.24 1,535.24
----------------------------------------------------------------------------------------------------------------------------------
9/1/98 1383 Tag: A6814 DELLXPS 26 1,867.34 1,867.34
----------------------------------------------------------------------------------------------------------------------------------
9/1/98 1405 Tag: A7059 4000N PRINT 1,223.23 1,223.23
----------------------------------------------------------------------------------------------------------------------------------
9/1/98 1406 Tag: A7060 4000N PRINT 1,223.22 1,223.22
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1438 Tag: A7080 POWERBOOK G 6,439.33 6,439.33
----------------------------------------------------------------------------------------------------------------------------------
3/1/97 2434 Tag: 1769 Server U2-2 19,804.08 19,804.08
----------------------------------------------------------------------------------------------------------------------------------
7/1/96 3259 Tag: 1501 Computer 5,914.50 (5,914.50)
----------------------------------------------------------------------------------------------------------------------------------
3/31/98 4587 Tag: 3736 Server Sun 53,276.74 53,276.74
----------------------------------------------------------------------------------------------------------------------------------
11/30/98 4772 Tag: 2929 Unipack B 1,261.09 1,261.09
----------------------------------------------------------------------------------------------------------------------------------
11/30/98 4773 Tag: 2928 Unipack 9 1,281.09 1,281.09
----------------------------------------------------------------------------------------------------------------------------------
1/22/99 4979 Tag: A6978 CompEq Son 470.89 470.89
----------------------------------------------------------------------------------------------------------------------------------
1/22/99 4980 Tag: A6975 CompEq Pow 2,590.42 2,590.42
----------------------------------------------------------------------------------------------------------------------------------
|
11.
----------------------------------------------------------------------------------------------------------------------------------
IN ADDITIONS FR
SERVICE SYSTEM GL BALANCE COST GL BALANCE 10/31/99
DATE ASSET # TAG # DESCRIPTION 10/31/00 10/31/99 3/31/2000 3/31/00 TO 3/31/00
----------------------------------------------------------------------------------------------------------------------------------
8/27/99 5286 Tag. A8028 Computer PI 2,817.75 2,817.75
----------------------------------------------------------------------------------------------------------------------------------
8/27/99 5287 Tag: A8029 Computer PI 2,817.75 2,817.75
----------------------------------------------------------------------------------------------------------------------------------
8/27/99 5288 Tag: A8028 Computer 17 475.11 475.11
----------------------------------------------------------------------------------------------------------------------------------
8/27/99 5289 Tag: A8029 Computer 17 475.12 475.12
----------------------------------------------------------------------------------------------------------------------------------
9/14/99 5299 Tag: A6811 Computer De 11,305.58 11,305.58
----------------------------------------------------------------------------------------------------------------------------------
10/20/99 5331 Tag: A8044 SSFCompute 1,523.82 1,523.82
----------------------------------------------------------------------------------------------------------------------------------
3/10/00 5764 Tag: A8111 Comp Eq 21" monitor 768.58 768.58
----------------------------------------------------------------------------------------------------------------------------------
3/10/00 5765 Tag: A8109 Comp Eq Powermac G4 2,676.98 2,676.98
----------------------------------------------------------------------------------------------------------------------------------
3/10/00 5766 Tag: A8110 Comp Eq Powermac G4 2,676.98 2,676.98
----------------------------------------------------------------------------------------------------------------------------------
3/21/00 5768 Tag: A8112 Comp Eq Monitor TMX 412 1,980.32 1,980.32
----------------------------------------------------------------------------------------------------------------------------------
3/21/00 5769 Tag: A8113 Comp Eq Monitor TMX 412 321,139.95 1,980.32 325,308.63 1,980.32
----------------------------------------------------------------------------------------------------------------------------------
LAB EQUIPMENT 1/31/91 305 Tag: A2052 1 Sola Power 3,900.00 3,900.00
----------------------------------------------------------------------------------------------------------------------------------
9/30/92 306 Tag: A2380 1 Pelicon Ca 4,454.85 4,454.85
----------------------------------------------------------------------------------------------------------------------------------
8/30/93 313 Tag: A3939 1 Portion No 4,000.00 4,000.00
----------------------------------------------------------------------------------------------------------------------------------
6/30/95 323 Tag: A4874 TOMTEC DILU 21,222.41 21,222.41
----------------------------------------------------------------------------------------------------------------------------------
6/30/95 325 Tag: A2341 Vacuum Pump 1,299.00 1,299.00
----------------------------------------------------------------------------------------------------------------------------------
3/31/95 326 Tag: A2206 Freezer not 1,928.82 1,928.82
----------------------------------------------------------------------------------------------------------------------------------
10/31/95 331 Tag: A2841 Vacuum pump 1,407.25 1,407.25
----------------------------------------------------------------------------------------------------------------------------------
3/31/96 335 Tag: A1239 Turbo Pump 6,000.00 6,000.00
----------------------------------------------------------------------------------------------------------------------------------
3/31/96 340 Tag: A3941 GeneAmp-Oth 113.00 113.00
----------------------------------------------------------------------------------------------------------------------------------
11/30/95 343 Tag: A3940 1 Fumehoods 31,216.52 31,216.52
----------------------------------------------------------------------------------------------------------------------------------
11/30/95 349 Tag: A1920 Rotary evap 3,254.89 3,254.89
----------------------------------------------------------------------------------------------------------------------------------
11/30/95 354 Tag: A2757 Balance el 1,175.72 1,175.72
----------------------------------------------------------------------------------------------------------------------------------
11/30/95 358 Tag: A3252 2 HTS lab r 171,765.70 171,765.70
----------------------------------------------------------------------------------------------------------------------------------
1/31/94 376 Tag: A2585 Concentralo 1,950.00 1,950.00
----------------------------------------------------------------------------------------------------------------------------------
1/31/94 380 Tag: SF592 HPLCSystem 9,280.00 9,280.00
----------------------------------------------------------------------------------------------------------------------------------
1/31/94 389 Tag: A4764 Balance BA 945.10 945.10
----------------------------------------------------------------------------------------------------------------------------------
1/31/94 394 Tag: A1610 Parbal Bea 28,316.00 28,316.00
----------------------------------------------------------------------------------------------------------------------------------
1/31/94 398 Tag: A4988 Shaker- env 5,722.25 5,722.25
----------------------------------------------------------------------------------------------------------------------------------
1/31/94 400 Tag: A4903 Adapter gl 170.00 170.00
----------------------------------------------------------------------------------------------------------------------------------
5/31/92 416 Tag: SF631 1HPLC Semi 54,745.51 54,745.51
----------------------------------------------------------------------------------------------------------------------------------
5/31/92 417 Tag: A2228 1Fenups un 16,602.56 16,602.56
----------------------------------------------------------------------------------------------------------------------------------
8/31/92 422 Tag: A3286 Vertishear 1,076.75 1,076.75
----------------------------------------------------------------------------------------------------------------------------------
8/31/92 433 Tag: A2489 Chromatogre 776.00 776.00
----------------------------------------------------------------------------------------------------------------------------------
2/28/93 437 Tag: A2515 2Roller Rac 7,002.00 7,002.00
----------------------------------------------------------------------------------------------------------------------------------
12/31/93 454 Tag: A2705 Environment 5,727.00 5,727.00
----------------------------------------------------------------------------------------------------------------------------------
12/31/93 463 Tag: A2603 Pipeltor e 704.95 704.95
----------------------------------------------------------------------------------------------------------------------------------
1/31/95 477 Tag: A1184 Pump - Vacuum 1,840.00 1,840.00
----------------------------------------------------------------------------------------------------------------------------------
6/30/95 483 Tag: A2005 Vacuum Oven 2,730.00 2,730.00
----------------------------------------------------------------------------------------------------------------------------------
6/30/95 497 Tag: A1991 SAMPLER DIL 14,522.80 14,522.80
----------------------------------------------------------------------------------------------------------------------------------
|
12.
----------------------------------------------------------------------------------------------------------------------------------
IN ADDITIONS FR
SERVICE SYSTEM GL BALANCE COST GL BALANCE 10/31/99
DATE ASSET # TAG # DESCRIPTION 10/31/00 10/31/99 3/31/2000 3/31/00 TO 3/31/00
----------------------------------------------------------------------------------------------------------------------------------
6/30/95 499 Tag: SF717 HP1090 HPLC 62,002.77 62,002.77
----------------------------------------------------------------------------------------------------------------------------------
4/30/94 517 Tag: A1137 Freezer Rel 6,099.00 6,099.00
----------------------------------------------------------------------------------------------------------------------------------
4/30/94 521 Tag: A2722 Freezer Exp 1,500.00 1,500.00
----------------------------------------------------------------------------------------------------------------------------------
4/30/94 537 Tag: A4881 Racks for C 5,450.00 5,450.00
----------------------------------------------------------------------------------------------------------------------------------
3/31/96 539 Tag: A4883 Composite R 9,300.00 9,300.00
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 562 Tag: A3942 BioSafety 9,989.51 9,989.51
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 564 Tag: A4754 4 306 pump 60,497.45 60,497.45
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 565 Tag: A4879 4 306 pump 58,960.65 58,960.65
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 567 Tag: A3948 215Sampler 16,139.83 16,139.83
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 569 Tag: A3923 Environment 7,207.56 7,207.56
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 584 Tag: A3238 Fluoslar re 29,456.84 29,456.84
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 586 Tag: A3243 Column The 4,256.75 4,256.75
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 591 Tag: A3943 Analytical 6,081.49 6,081.49
----------------------------------------------------------------------------------------------------------------------------------
8/31/96 595 Tag: A3251 Saw-Isomer 3,794.71 3,794.71
----------------------------------------------------------------------------------------------------------------------------------
8/31/96 599 Tag: A1708 Computer - C 3,637.63 3,637.63
----------------------------------------------------------------------------------------------------------------------------------
8/31/96 601 Tag: A2389 NECGNC 4MB 1,661.83 1,661.83
----------------------------------------------------------------------------------------------------------------------------------
8/31/96 604 Tag: A2016 Powermac 75 3,432.56 3,432.56
----------------------------------------------------------------------------------------------------------------------------------
8/31/96 606 Tag: A2039 Powermac 76 20,147.80 20,147.80
----------------------------------------------------------------------------------------------------------------------------------
8/31/96 609 Tag: A2222 Powermac 76 14,471.89 14,471.89
----------------------------------------------------------------------------------------------------------------------------------
8/31/96 632 Tag: A2200 Rotary Evap 3,750.86 3,750.86
----------------------------------------------------------------------------------------------------------------------------------
8/31/96 637 Tag: A2484 Oven-Vacuum 1,949.46 1,949.46
----------------------------------------------------------------------------------------------------------------------------------
9/30/95 644 Tag: A1173 Fraction Co 3,150.74 3,150.74
----------------------------------------------------------------------------------------------------------------------------------
10/31/93 646 Tag: A4901 Temperature 1,034.14 1,034.14
----------------------------------------------------------------------------------------------------------------------------------
10/31/93 656 Tag: A3983 Vacuum Pump 6,442.00 6,442.00
----------------------------------------------------------------------------------------------------------------------------------
10/31/93 658 Tag: A4765 Mettler Bat 3,030.00 3,030.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 665 Tag: A4068 Vacuunm Pump 1,030.40 1,030.40
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 668 Tag: A2706 Sheker- env 1,022.58 1,022.58
----------------------------------------------------------------------------------------------------------------------------------
9/30/96 676 Tag: A4880 Pumphead 1,513.24 1,513.24
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 734 Tag: A4753 PUMPHEAD M 1,513.24 1,513.24
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 738 Tag: A2612 BALANCE ANA 2,715.99 2,715.99
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 739 Tag: A2613 ANALYTICAL 2,716.00 2,716.00
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 742 Tag: A2610 EVAPORATOR 3,278.89 3,278.89
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 743 Tag: A2621 EVAPORATOR 3,278.89 3,278.89
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 746 Tag: A3982 PUMP22 I-W 2,507.78 2,507.78
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 747 Tag: A3231 HYDRA 96 MI 20,026.25 20,026.25
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 753 Tag: A2635 ANALYTICAL 2,714.91 2,714.91
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 754 Tag: A2636 ROTARY EVAP 3,498.27 3,498.27
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 755 Tag: A2637 ROTARY EVAP 3,498.27 3,498.27
----------------------------------------------------------------------------------------------------------------------------------
12/1/96 756 Tag: A2676 ISOCRATIC P 5,520.75 5,520.75
----------------------------------------------------------------------------------------------------------------------------------
1/1/97 774 Tag: A2719 SHAKER- REC 4,004.17 4,004.17
----------------------------------------------------------------------------------------------------------------------------------
|
13.
----------------------------------------------------------------------------------------------------------------------------------
IN ADDITIONS FR
SERVICE SYSTEM GL BALANCE COST GL BALANCE 10/31/99
DATE ASSET # TAG # DESCRIPTION 10/31/00 10/31/99 3/31/2000 3/31/00 TO 3/31/00
----------------------------------------------------------------------------------------------------------------------------------
1/1/97 778 Tag: A1829 BUCHI ROTAR 4,027.98 4,027.98
----------------------------------------------------------------------------------------------------------------------------------
1/1/97 779 Tag: A2749 METTLER TOL 1,717.93 1,717.93
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 806 Tag: A2717 GILSON 215 14,392.65 14,392.65
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 808 Tag: A2748 BALANCE ANA 7,643.02 7,643.02
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 810 Tag: A2755 BALANCE ANA 1,640.51 1,640.51
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 817 Tag: A4884 2 HPLC 1100 111,705.35 111,705.35
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 818 Tag A2776 FREEZER EXP 1,933.35 1,933.35
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 819 Tag: A2782 DISPENSER W 2,741.80 2,741.80
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 822 Tag: A2804 PUMPVACUUM 4,751.40 4,751.40
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 823 Tag: A2803 PUMPVACUUM 2,375.70 2,375.70
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 827 Tag: A2718 SYRINGE PUM 1,551.22 1,551.22
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 839 Tag: A3924 SHAKER RECI 1,515.66 1,515.66
----------------------------------------------------------------------------------------------------------------------------------
2/1/97 841 Tag: A2821 433A-01 PE 73,182.45 73,182.45
----------------------------------------------------------------------------------------------------------------------------------
3/1/97 844 Tag: A2774 UPRIGHT FRE 6,736.95 6,736.95
----------------------------------------------------------------------------------------------------------------------------------
3/1/97 845 Tag: A2775 UPRIGHT FRE 6,736.95 6,736.95
----------------------------------------------------------------------------------------------------------------------------------
3/1/97 846 Tag: A2810 UPRIGHT FRE 6,736.95 6,736.95
----------------------------------------------------------------------------------------------------------------------------------
3/1/97 849 Tag: A2747 MODULINE 12 4,145.28 4,145.28
----------------------------------------------------------------------------------------------------------------------------------
3/1/97 852 Tag: A4991 GILSON PREP 54,449.17 54,449.17
----------------------------------------------------------------------------------------------------------------------------------
3/1/97 881 Tag: A2901 SPEEDVAC EV 11,873.94 11,873.94
----------------------------------------------------------------------------------------------------------------------------------
5/1/97 901 Tag: A2999 SHIMADZU HP 24,001.30 24,001.30
----------------------------------------------------------------------------------------------------------------------------------
5/1/97 908 Tag: A3004 COMPLETE 11 52,815.89 52,815.89
----------------------------------------------------------------------------------------------------------------------------------
6/1/97 933 Tag: A3083 PS API150 M 160,788.07 160,788.07
----------------------------------------------------------------------------------------------------------------------------------
6/1/97 939 Tag: A3081 HYDRA-96 RB 24,356.25 24,356.25
----------------------------------------------------------------------------------------------------------------------------------
6/1/97 944 Tag: A3090 BALANCE MET 4,589.63 4,589.63
----------------------------------------------------------------------------------------------------------------------------------
6/1/97 945 Tag: A4733 VACUUM CONT 1,353.13 1,353.13
----------------------------------------------------------------------------------------------------------------------------------
7/1/97 952 Tag: A3088 CONTROLLER 2,149.86 2,149.86
----------------------------------------------------------------------------------------------------------------------------------
7/1/97 954 Tag: A2907 HP 8453 UV 13,228.25 13,228.25
----------------------------------------------------------------------------------------------------------------------------------
8/1/97 977 Tag: A3131 VACUUM PUMP 2,376.70 2,376.70
----------------------------------------------------------------------------------------------------------------------------------
9/1/97 997 Tag: A4890 4 SETS SURG 9,000.11 9,000.11
----------------------------------------------------------------------------------------------------------------------------------
10/1/97 1036 Tag: A4824 ROLIFT WALK 7,734.95 7,734.95
----------------------------------------------------------------------------------------------------------------------------------
11/1/97 1049 Tag: A3204 HYDRA-96 FL 22,489.65 22,489.65
----------------------------------------------------------------------------------------------------------------------------------
12/1/97 1081 Tag: A3229 2 PCS VACUU 4,493.60 4,493.60
----------------------------------------------------------------------------------------------------------------------------------
12/1/97 1083 Tag: A3201 215GILSON 17,784.80 17,784.80
----------------------------------------------------------------------------------------------------------------------------------
12/1/97 1086 Tag: A3240 REFRIGERATO 1,683.29 1,683.29
----------------------------------------------------------------------------------------------------------------------------------
12/1/97 1087 Tag: A3227 2 PCS ROTAR 8,140.40 8,140.40
----------------------------------------------------------------------------------------------------------------------------------
12/1/97 1088 Tag: A3223 4 PCS MODIF 4,416.60 4,416.60
----------------------------------------------------------------------------------------------------------------------------------
12/1/97 1089 Tag: A3219 4 PCS CUXTO 12,365.50 12,365.50
----------------------------------------------------------------------------------------------------------------------------------
12/1/97 1090 Tag: A3232 2 PCS DIAPH 2,318.72 2,318.72
----------------------------------------------------------------------------------------------------------------------------------
12/1/97 1094 Tag: A3235 MASTERPRO B 2,273.25 2,273.25
----------------------------------------------------------------------------------------------------------------------------------
12/1/97 1096 Tag: A3944 ANALYTICAL 3,072.14 3,072.14
----------------------------------------------------------------------------------------------------------------------------------
|
14.
----------------------------------------------------------------------------------------------------------------------------------
IN ADDITIONS FR
SERVICE SYSTEM GL BALANCE COST GL BALANCE 10/31/99
DATE ASSET # TAG # DESCRIPTION 10/31/00 10/31/99 3/31/2000 3/31/00 TO 3/31/00
----------------------------------------------------------------------------------------------------------------------------------
1/1/98 1103 Tag: A3236 PUMPRV 5 T 1,411.58 1,411.58
----------------------------------------------------------------------------------------------------------------------------------
1/1/98 1109 Tag: SF137 FREEZEMOBIL 14,376.56 14,376.56
----------------------------------------------------------------------------------------------------------------------------------
1/1/98 1118 Tag: N/A GENEVAC HT 66,963.63 66,963.63
----------------------------------------------------------------------------------------------------------------------------------
2/1/98 1122 Tag: A3251 FLEXCHEM RO 9,634.25 9,634.25
----------------------------------------------------------------------------------------------------------------------------------
2/1/98 1123 Tag: A3249 FLEXCHEM RO 13,531.25 13,531.25
----------------------------------------------------------------------------------------------------------------------------------
2/1/98 1124 Tag: A3252 TECAN GENES 99,548.25 99,548.25
----------------------------------------------------------------------------------------------------------------------------------
2/1/98 1129 Tag: A3253 DELLOPTIFL 3,429.35 3,429.35
----------------------------------------------------------------------------------------------------------------------------------
3/1/98 1150 Tag: A3272 HYDRA-96 R 22,407.75 22,407.75
----------------------------------------------------------------------------------------------------------------------------------
4/1/98 1159 Tag: A6018 RECIPROCAL 1,219.98 1,219.98
----------------------------------------------------------------------------------------------------------------------------------
4/1/98 1160 Tag: A6019 RECIPROCAL 1,219.98 1,219.98
----------------------------------------------------------------------------------------------------------------------------------
4/1/98 1183 Tag: A6160 RECIPROCAL 1,219.98 1,219.98
----------------------------------------------------------------------------------------------------------------------------------
2/6/97 1196 Tag: SF146 Robol for C 49,707.23 49,707.23
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1200 Tag: A7055 API150 MAS 144,500.12 144,500.12
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1201 Tag: A6297 215LIQUID 18,952.58 18,952.58
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1203 Tag: A6307 HYDRA 96R 22,407.75 22,407.75
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1206 Tag: A6732 ENHANCED DA 2,313.30 2,313.30
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1207 Tag: A6731 SYSTEM CONT 10,649.28 10,649.28
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1212 Tag: A6450 SEDEX 55 E. 16,671.50 16,671.50
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1213 Tag: A6595 SEDEX 55 E. 16,671.50 16,671.50
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1214 Tag: A6584 HP BINARY P 12,852.32 12,852.32
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1215 Tag: A6585 HP BINARY P 12,852.31 12,852.31
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1216 Tag: A6586 HP 1100 VAC 2,520.06 2,520.06
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1217 Tag: A6585 HP 1100 VAC 2,520.06 2,520.06
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1218 Tag: A6688 HP 1100 THE 4,215.85 4,215.85
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1219 Tag: A6589 HP 1100 THE 4,215.85 4,215.85
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1220 Tag: A6590 HP 1100 DIOD 12,852.31 12,852.31
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1221 Tag: A6591 HP 1100 DIOD 12,852.31 12,852.31
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1222 Tag: A6440 HP 1100 BINA 12,852.31 12,852.31
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1223 Tag: A6441 HP 1100 VAC 2,520.06 2,520.06
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1224 Tag: A6442 HP 1100 AUT 9,660.23 9,660.23
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1225 Tag: A6444 HP 110 DIOD 14,149.09 14,149.09
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1226 Tag: A6443 HP 1100 THE 2,535.80 2,535.80
----------------------------------------------------------------------------------------------------------------------------------
5/1/98 1227 Tag: A6445 SINGLE lNST 15,548.78 15,548.78
----------------------------------------------------------------------------------------------------------------------------------
8/1/98 1375 Tag: A7032 RAININ GRAD 58,686.87 58,686.87
----------------------------------------------------------------------------------------------------------------------------------
9/1/98 1381 Tag: A7011 SERIAL TEAC 1,206.99 1,206.99
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1414 Tag: A7067 Pump corrosion resistant 2,711.47 2,711.47
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1431 Tag: A7074 HYDRA 96 FL 23,138.44 23,138.44
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1432 Tag: A7069 RECIPROCAL 1,177.22 1,177.22
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1433 Tag: A7070 RECIPROCAL 1,177.22 1,177.22
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1434 Tag: A7071 RECIPROCAL 1,177.23 1,177.23
----------------------------------------------------------------------------------------------------------------------------------
|
15.
----------------------------------------------------------------------------------------------------------------------------------
IN ADDITIONS FR
SERVICE SYSTEM GL BALANCE COST GL BALANCE 10/31/99
DATE ASSET # TAG # DESCRIPTION 10/31/00 10/31/99 3/31/2000 3/31/00 TO 3/31/00
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1440 Tag: N/A IMPACT 2-8 2,347.72 2,347.72
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1441 Tag: N/A IMPACT 2-12 2,577.03 2,577.03
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1442 Tag: A7078 TOWDOOR RE 1,780.88 1,780.88
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1443 Tag: A7081 HYDRA 96 DI 23,138.44 23,138.44
----------------------------------------------------------------------------------------------------------------------------------
11/1/98 1449 Tag: A7066 HP 3590E A 3,026.77 3,026.77
----------------------------------------------------------------------------------------------------------------------------------
11/1/98 1459 Tag: A7087 Reciprocal 1,187.52 1,187.52
----------------------------------------------------------------------------------------------------------------------------------
12/1/98 1488 Tag. A7099 BUCHI MODEL 3,298.95 3,298.95
----------------------------------------------------------------------------------------------------------------------------------
12/1/98 1489 Tag: A7100 BUCHI MODEL 3,298.95 3,298.95
----------------------------------------------------------------------------------------------------------------------------------
12/1/98 1490 Tag: A7101 BUCHI MODEL 3,298.95 3,298.95
----------------------------------------------------------------------------------------------------------------------------------
12/1/98 1491 Tag: A7102 BUCHI MODEL 3,298.96 3,298.96
----------------------------------------------------------------------------------------------------------------------------------
12/1/98 1493 Tag: A7103 BALANCE-S 2,747.54 2,747.54
----------------------------------------------------------------------------------------------------------------------------------
12/1/98 1496 Tag: A7094 HT 12EVAPOR 87,346.93 87,346.93
----------------------------------------------------------------------------------------------------------------------------------
12/1/98 1497 Tag: A7470 DIGITAL VAC 1,227.23 1,227.23
----------------------------------------------------------------------------------------------------------------------------------
12/1/98 1498 Tag: A7108 DIGITAL VAC 1,227.22 1,227.22
----------------------------------------------------------------------------------------------------------------------------------
1/1/99 1508 Tag: A7109 WORKSTATION 2,368.34 2,368.34
----------------------------------------------------------------------------------------------------------------------------------
1/1/99 1511 Tag: A7114 MODULINE 12 1,785.15 1,785.15
----------------------------------------------------------------------------------------------------------------------------------
12/7/98 4902 Tag: A7117 LabEq Ove 2,226.28 2,226.28
----------------------------------------------------------------------------------------------------------------------------------
11/18/98 4905 Tag: A7110 Reciprocal 1,201.92 1,201.92
----------------------------------------------------------------------------------------------------------------------------------
2/5/99 4908 Tag: A7155 LabEq-Frz 5,949.67 5,949.67
----------------------------------------------------------------------------------------------------------------------------------
2/5/99 4909 Tag: A7156 LabEq Frz 5,949.67 5,949.67
----------------------------------------------------------------------------------------------------------------------------------
2/23/99 5024 Tag: A7160 LabEq Free 14,911.39 14,911.39
----------------------------------------------------------------------------------------------------------------------------------
2/23/99 5025 Tag: A7161 LabEq Unit 22,940.00 22,940.00
----------------------------------------------------------------------------------------------------------------------------------
2/23/99 5026 Tag LabEq Gene 12,370.23 12,370.23
----------------------------------------------------------------------------------------------------------------------------------
2/24/99 5027 Tag LabEq Fume 19,537.74 19,537.74
----------------------------------------------------------------------------------------------------------------------------------
3/9/99 5039 Tag: A7162 LabEq Auto 22,106.92 22,106.92
----------------------------------------------------------------------------------------------------------------------------------
3/24/99 5054 Tag: A7168 LabEq Acqu 14,223.88 14,223.88
----------------------------------------------------------------------------------------------------------------------------------
3/24/99 5055 Tag: A7168 LabEq SGI 14,693.27 14,693.27
----------------------------------------------------------------------------------------------------------------------------------
3/24/99 5056 Tag: A7168 LabEq Jus 1,417.65 1,417.65
----------------------------------------------------------------------------------------------------------------------------------
3/15/99 5079 Tag: LabEq HPLC 82,142.85 82,142.85
----------------------------------------------------------------------------------------------------------------------------------
6/11/99 5088 Tag: A7202 LabEq Flex 48,333.63 48,333.63
----------------------------------------------------------------------------------------------------------------------------------
5/28/99 5095 Tag: A7198 LabEq Larg 1,589.17 1,589.17
----------------------------------------------------------------------------------------------------------------------------------
1/19/99 5204 Tag: 7163 LabEq HPLC 57,736.51 57,736.51
----------------------------------------------------------------------------------------------------------------------------------
7/19/99 5227 Tag: A8020 LabEq HPLC 55,528.19 55,528.19
----------------------------------------------------------------------------------------------------------------------------------
5/18/99 5229 Tag: A7170 LabEq Ref/ 1,737.56 1,737.56
----------------------------------------------------------------------------------------------------------------------------------
7/21/99 5239 Tag: LabEq Auto 51,765.15 51,765.15
----------------------------------------------------------------------------------------------------------------------------------
12/15/98 5252 Tag: A7110 LabEq Shak 2,369.21 2,369.21
----------------------------------------------------------------------------------------------------------------------------------
1/7/99 5254 Tag A7123 LabEq Vacu 2,542.13 2,542.13
----------------------------------------------------------------------------------------------------------------------------------
1/7/99 5255 Tag: A7124 LabEq Auto 9,703.34 9,703.34
----------------------------------------------------------------------------------------------------------------------------------
1/7/99 5256 Tag: A7125 LabEq Ther 2,557.89 2,557.89
----------------------------------------------------------------------------------------------------------------------------------
1/7/99 5257 Tag: A7126 LabEq Vari 5,912.74 5,912.74
----------------------------------------------------------------------------------------------------------------------------------
|
16.
----------------------------------------------------------------------------------------------------------------------------------
IN ADDITIONS FR
SERVICE SYSTEM GL BALANCE COST GL BALANCE 10/31/99
DATE ASSET # TAG # DESCRIPTION 10/31/00 10/31/99 3/31/2000 3/31/00 TO 3/31/00
----------------------------------------------------------------------------------------------------------------------------------
8/25/99 5297 Tag: A2026 LabEq Bala 3,536.53 3,536.53
----------------------------------------------------------------------------------------------------------------------------------
10/4/99 5322 Tag: A8033 Impact Exp 1,347.85 1,347.85
----------------------------------------------------------------------------------------------------------------------------------
10/4/99 5323 Tag: A8034 Impact Exp 1,347.85 1,347.85
----------------------------------------------------------------------------------------------------------------------------------
10/4/99 5324 Tag: A8035 Impact 2-12 1,333.64 1,333.64
----------------------------------------------------------------------------------------------------------------------------------
10/4/99 5325 Tag: A8036 lmpact 2-12 1,333.63 1,333.63
----------------------------------------------------------------------------------------------------------------------------------
10/4/99 5326 Tag: A8037 lmpact 2-12 1,333.63 1,333.63
----------------------------------------------------------------------------------------------------------------------------------
10/5/99 5327 Tag: A8038 lmpact 2 B 1,219.76 1,219.76
----------------------------------------------------------------------------------------------------------------------------------
10/5/99 5328 Tag: A8039 Impact 2 B 1,219.77 1,219.77
----------------------------------------------------------------------------------------------------------------------------------
10/5/99 5329 Tag: A8040 Impact 2 B 1,219.77 1,219.77
----------------------------------------------------------------------------------------------------------------------------------
9/29/99 5338 Tag: A8032 LabEq Isop 48,774.65 48,774.65
----------------------------------------------------------------------------------------------------------------------------------
9/21/99 5339 Tag LabEq Isop 48,778.00 48,778.00
----------------------------------------------------------------------------------------------------------------------------------
12/1/99 5349 Tag: REC V LabEq Fume 158,878.80 158,878.80
----------------------------------------------------------------------------------------------------------------------------------
11/29/99 5355 Tag: A8057 LabEq Seri 2,609.34 2,609.34
----------------------------------------------------------------------------------------------------------------------------------
12/6/99 5356 Tag: A8059 LabEq Chro 6,023.79 6,023.79
----------------------------------------------------------------------------------------------------------------------------------
12/10/99 5637 Tag: A8063 LabEq Funn 1,904.43 1,904.43
----------------------------------------------------------------------------------------------------------------------------------
12/17/99 5638 Tag: A8064 LabEq RS23 2,005.89 2,005.89
----------------------------------------------------------------------------------------------------------------------------------
12/30/99 5639 Tag: A8073 LabEq Sava 22,943.56 22,943.56
----------------------------------------------------------------------------------------------------------------------------------
12/30/99 5640 Tag: A8074 LabEq Sava 22,943.56 22,943.56
----------------------------------------------------------------------------------------------------------------------------------
1/13/00 5642 Tag: A8077 LabEq Sava 23,120.95 23,120.95
----------------------------------------------------------------------------------------------------------------------------------
1/13/00 5643 Tag: A8078 LabEq Sava 23,120.95 23,120.95
----------------------------------------------------------------------------------------------------------------------------------
12/2/99 5645 Tag: A8060 LabEq Port 3,311.37 3,311.37
----------------------------------------------------------------------------------------------------------------------------------
12/7/99 5647 Tag: A8061 LabEq Oxyg 2,656.91 2,656.91
----------------------------------------------------------------------------------------------------------------------------------
1/11/00 5648 Tag: A8079 LabEq Save 22,588.80 22,588.80
----------------------------------------------------------------------------------------------------------------------------------
1/10/00 5649 Tag: A8065 LabEq Free 1,953.91 1,953.91
----------------------------------------------------------------------------------------------------------------------------------
12/1/99 5650 Tag: A8057 LabEqRecip 1,245.32 1,245.32
----------------------------------------------------------------------------------------------------------------------------------
12/1/99 5651 Tag: A8058 LabEq Reci 1,245.31 1,245.31
----------------------------------------------------------------------------------------------------------------------------------
2/2/00 5692 Tag: A3238 Lab Eq Fast Stack Microlitre 7,820.00 7,820.00
----------------------------------------------------------------------------------------------------------------------------------
1/4/00 5693 Tag: A8066 2000 LabEq HPB 38,723.33 38,723.33
----------------------------------------------------------------------------------------------------------------------------------
11/16/99 5694 Tag: A8042 2000 LabEq HP B 31,344.47 31,344.47
----------------------------------------------------------------------------------------------------------------------------------
1/26/00 5695 Tag: A2228 2000 LabEq Optx 17,364.72 17,364.72
----------------------------------------------------------------------------------------------------------------------------------
2/5/00 5713 Tag: A8064 Lab Eq RS232 Interface 2,450.00 2,450.00
----------------------------------------------------------------------------------------------------------------------------------
1/17/00 5719 Tag: A8082 2000 Speedvac sy 22,538.80 22,538.80
----------------------------------------------------------------------------------------------------------------------------------
2/22/00 5720 Tag: A8097 Lab Eq Oven lrg micro vacu 5,674.03 5,674.03
----------------------------------------------------------------------------------------------------------------------------------
3/17/00 5767 Tag: A8115 Lab Eq Advaned Video Microsco 3,119,410.60 2,330.50 3,385,330.54 2,330.50
----------------------------------------------------------------------------------------------------------------------------------
FURNITURE 9/30/93 32 Tag: A3912 6 Felxion I 2,321.00 2,321.00
----------------------------------------------------------------------------------------------------------------------------------
6/30/94 36 Tag: A1962 1 Modules F 9,965.01 9,965.01
----------------------------------------------------------------------------------------------------------------------------------
6/30/96 55 Tag: SEE C 40 Concert 14,375.60 14,375.60
----------------------------------------------------------------------------------------------------------------------------------
7/31/96 58 Tag: A3973 6 Superior 2,369.59 2,369.59
----------------------------------------------------------------------------------------------------------------------------------
9/1/97 1013 Tag: SEE C 4 PCS TASK 1,039.20 1,039.20
----------------------------------------------------------------------------------------------------------------------------------
9/1/97 1027 Tag: A3150 6 PCS CHAIR 1,149.62 1,149.62
----------------------------------------------------------------------------------------------------------------------------------
|
17.
----------------------------------------------------------------------------------------------------------------------------------
IN ADDITIONS FR
SERVICE SYSTEM GL BALANCE COST GL BALANCE 10/31/99
DATE ASSET # TAG # DESCRIPTION 10/31/00 10/31/99 3/31/2000 3/31/00 TO 3/31/00
----------------------------------------------------------------------------------------------------------------------------------
11/1/97 1047 Tag: SEE C 20 PCS OFFI 4,801.99 4,801.99
----------------------------------------------------------------------------------------------------------------------------------
11/1/97 1048 Tag: SEE C 10 GUEST CH 1,317.41 1,317.41
----------------------------------------------------------------------------------------------------------------------------------
11/1/97 1051 Tag: SEE C 10 pcs office chair burgundy 2,401.00 2,401.00
----------------------------------------------------------------------------------------------------------------------------------
7/1/98 1271 Tag: N/A BOBREED'S 10,884.34 10,884.34
----------------------------------------------------------------------------------------------------------------------------------
10/1/98 1428 Tag: N/A FURNlTURE F 4,857.65 4,867.65
----------------------------------------------------------------------------------------------------------------------------------
4/1/99 5057 Tag: Fn Glasswar 3,708.00 3,708.00
----------------------------------------------------------------------------------------------------------------------------------
12/1/89 5350 Tag. Retrohr Ex 8,953.06 68,153.47 8,953.06 68,153.47
----------------------------------------------------------------------------------------------------------------------------------
FIXTURE 4/12/99 5096 Tag: Fx Frames I 2,162.38 2,162.38 2,162.38 2,162.38
----------------------------------------------------------------------------------------------------------------------------------
Leased CP 7/1/96 3258 Tag: 1501 Storage Ser 71,800.00 71,800.00 71,800.00 71,800.00
----------------------------------------------------------------------------------------------------------------------------------
Leased Lab Eq 5/31/93 1581 Tag: A1036 800per Mon 155.00 155.00
----------------------------------------------------------------------------------------------------------------------------------
5/31/93 1592 Tag: A4078 Chromatogra 2,441.00 2,441.00
----------------------------------------------------------------------------------------------------------------------------------
6/30/93 1630 Tag: A5408 6 Tables 221.39 221.39
----------------------------------------------------------------------------------------------------------------------------------
6/30/93 1631 Tag: A5000 6 Tables 221.39 221.39
----------------------------------------------------------------------------------------------------------------------------------
6/30/93 1632 Tag: A3867 6 Tables 221.39 221.39
----------------------------------------------------------------------------------------------------------------------------------
6/30/93 1633 Tag: A3871 5 Table 202.67 202.67
----------------------------------------------------------------------------------------------------------------------------------
6/30/93 1640 Tag. A2995 LaserWriter 2,597.99 2,597.99
----------------------------------------------------------------------------------------------------------------------------------
6/30/93 1652 Tag: A2080 Rotary Cull 430.10 430.10
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1661 Tag: A4777 Tekmar Spee 298.00 298.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1662 Tag: A4778 Electrophor 785.00 785.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1675 Tag: A4779 604U-R Auto 3,137.00 3,137.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1677 Tag: A4780 Rotor Horiz 561.00 561.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1678 Tag: A2229 VacGage w 273.27 273.27
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1679 Tag: A4781 Rotor-Hon 329.00 329.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1680 Tag: A4782 Trunnion Ri 52.00 52.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1681 Tag: A4783 Trunnion Ri 52.00 52.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1682 Tag: A4784 Shield Sea 289.76 289.76
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1691 Tag: A2243 AirSensor 1,013.60 1,013.60
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1701 Tag: A1174 Retriever 5 950.00 950.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1713 Tag: A4872 Omnigene Th 5,290.00 5,290.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1716 Tag: A4787 GenePulser 920.00 920.00
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1734 Tag: A4882 Pre-Filter 211.20 211.20
----------------------------------------------------------------------------------------------------------------------------------
7/31/93 1736 Tag: A4752 HR Flow Cel 1,352.00 1,352.00
----------------------------------------------------------------------------------------------------------------------------------
9/30/93 1763 Tag: A3284 Diluter 799 2,771.00 2,771.00
----------------------------------------------------------------------------------------------------------------------------------
9/30/93 1770 Tag: A5479 Sony CB 0003 2,310.00 2,310.00
----------------------------------------------------------------------------------------------------------------------------------
12/31/93 1796 Tag: A1748 Waler Aspir 1,616.76 1,616.76
----------------------------------------------------------------------------------------------------------------------------------
12/31/93 1802 Tag: A2753 110gBalanc 1,420.00 1,420.00
----------------------------------------------------------------------------------------------------------------------------------
4/30/94 1852 Tag: A2724 BioPilot 55,128.22 55,128.22
----------------------------------------------------------------------------------------------------------------------------------
4/30/94 1856 Tag: A3579 Laserwriter 4,371.00 4,371.00
----------------------------------------------------------------------------------------------------------------------------------
4/30/94 1862 Tag: A3945 Computers 2,780.00 2,780.00
----------------------------------------------------------------------------------------------------------------------------------
4/30/94 1870 Tag: A3933 Laminat Flo 11,952.44 11,952.44
----------------------------------------------------------------------------------------------------------------------------------
|
18.
------------------------------------------------------------------------------------------------------------------------------------
IN ADDITIONS FR
SERVICE SYSTEM GL BALANCE COST GL BALANCE 10/31/99
DATE ASSET # TAG # DESCRIPTION 10/31/00 10/31/99 3/31/2000 3/31/00 TO 3/31/00
------------------------------------------------------------------------------------------------------------------------------------
4/30/94 1871 Tag: A3937 PD pumps 3,309.25 3,309.25
------------------------------------------------------------------------------------------------------------------------------------
4/30/94 1873 Tag: A1825 Ultrafilter 13,898.50 13,898.50
------------------------------------------------------------------------------------------------------------------------------------
4/30/94 1876 Tag: A3931 Nalgene Tan 11,444.50 11,444.50
------------------------------------------------------------------------------------------------------------------------------------
4/30/94 1877 Tag: A3946 Flowmeters 11,313.00 11,313.00
------------------------------------------------------------------------------------------------------------------------------------
8/31/94 1883 Tag: A3913 Osmometer 4,236.00 4,236.00
------------------------------------------------------------------------------------------------------------------------------------
7/31/95 1902 Tag: KH558 NMR-270 195,000.00 343,557.43 195,000.00 343,557.43
------------------------------------------------------------------------------------------------------------------------------------
leased 4/30/93 1545 Tag: A5442 Corner Tabl 59.00 59.00
Furniture
------------------------------------------------------------------------------------------------------------------------------------
5/31/93 1550 Tag: A5568 Holga 5 Dra 3,935.65 3,935.65
------------------------------------------------------------------------------------------------------------------------------------
5/31/93 1557 Tag: A4080 8 Brevel Ch 1,776.00 1,776.00
------------------------------------------------------------------------------------------------------------------------------------
6/30/93 1558 Tag: A1351 DeskChair 458.25 458.25
------------------------------------------------------------------------------------------------------------------------------------
6/30/93 1561 Tag: A4082 DeskChair 458.25 458.25
------------------------------------------------------------------------------------------------------------------------------------
6/30/93 1562 Tag: A4083 DeskChair 458.25 458.25
------------------------------------------------------------------------------------------------------------------------------------
8/31/93 1570 Tag: A3865 5-5 Table 1,013.35 1,013.35
------------------------------------------------------------------------------------------------------------------------------------
8/31/93 1573 Tag: A1705 36562Worksl 424.68 8,583.43 424.68 8,583.43
------------------------------------------------------------------------------------------------------------------------------------
Leasehold 3/31/94 279 Tag: A3934 Vacuum For 2,918.00 2,918.00
Impr Bd
------------------------------------------------------------------------------------------------------------------------------------
1/31/95 284 Tag: A4073 Hood-Peptide Lab 7,462.00 7,462.00
------------------------------------------------------------------------------------------------------------------------------------
2/28/95 285 Tag: A3938 ExHaust hpp 2,320.00 12,700.00 2,320.00 12,700.00
------------------------------------------------------------------------------------------------------------------------------------
Ofc 4/30/94 70 Tag: A1951 42 Round ch 982.55 982.55
Equipment
------------------------------------------------------------------------------------------------------------------------------------
8/31/91 71 Tag: SEE C 12 Ergon Mg 2,971.80 2,971.80
------------------------------------------------------------------------------------------------------------------------------------
8/31/91 74 Tag: A5343 12 Ergon Mg 2,971.80 2,971.80
------------------------------------------------------------------------------------------------------------------------------------
8/31/91 75 Tag: SEE C 12 Ergon Si 2,670.00 2,670.00
------------------------------------------------------------------------------------------------------------------------------------
9/30/91 81 Tag: A5431 2 30x60 Sin 1,074.00 1,074.00
------------------------------------------------------------------------------------------------------------------------------------
7/1/97 967 Tag: A4873 KODAK EKTAG 1,127.71 1,127.71
------------------------------------------------------------------------------------------------------------------------------------
9/1/97 1024 Tag: A4072 4 PCS OVERH 1,381.27 1,381.27
------------------------------------------------------------------------------------------------------------------------------------
9/1/97 1025 Tag: A3400 3 PCS EKTAG 2,172.58 2,172.58
------------------------------------------------------------------------------------------------------------------------------------
1-/1/97 1031 Tag: A3145 2 PCS XEROX 4,522.69 19,874.40 4,522.69 19,874.40
------------------------------------------------------------------------------------------------------------------------------------
Leasehold various various 10/31/99 Oysler Point LI 2,976,277.36 2,976,277.36 2,978,732.56 2,978,732.56 2,455.20
Impr Bd. (55% of 54114
------------------------------------------------------------------------------------------------------------------------------------
3/31/00 Oysler Poinl Ll(55%
of 5415B77.38)
------------------------------------------------------------------------------------------------------------------------------------
SOFTWARE 9/30/95 9 Tag: A4786 1 BIOSYM 43,253.56 43,253.56
------------------------------------------------------------------------------------------------------------------------------------
3/5/99 5099 Tag: SOFTWARE Mi 3,610.69 46,864.25 3,610.69 46,864.25
------------------------------------------------------------------------------------------------------------------------------------
6,990,523.27 6,990,523.27 7,263,067.09 7,263,067.09 272,543.82
-------------------------------------------------------------=======================================================================
|
19.
SCHEDULE 1.4
ASSIGNED CONTRACTS
Research Agreement with Pharmacia & Upjohn dated February 29, 1996, as amended.
Combinatorial Chemistry Agreement with Warner-Lambert Company dated May 15, 1998.
Combinatorial Chemistry Agreement with Signal Pharmaceuticals, Inc. dated July 6, 1998.
Combinatorial Chemistry Agreement with Rhone-Poulenc Rorer dated December 22, 1998.
Combinatorial Chemistry Agreement with Protein Design Labs, Inc. dated December 28, 1998.
Combinatorial Chemistry Agreement with Novalon Pharmaceutical Corporation dated June 28, 1999.
1.
SCHEDULE 1.5
GENERAL DESCRIPTION OF ASSIGNED KNOW-HOW
All know-how pertaining to the protocols set forth in Schedule 1.7
1.
SCHEDULE 1.6
ASSIGNED PATENTS
(see attached)
1.
PATENTS AND PATENT APPLICATIONS:
1. U.S. Patent No. 5,703,792
THREE DIMENSIONAL MEASUREMENT OF MOLECULAR DIVERSITY
Issued 12/30/97
2. U.S. Patent No. 5,526,281 MACHINE LEARNING APPROACH TO MODELING BIOLOGICAL ACTIVITY FOR MOLECULAR DESIGN AND TO MODELING OTHER CHARACTERISTICS Issued 6/11/96
3. US. Patent No. 5,576,220
THIN FILM HPMP MATRIX SYSTEMS AND METHODS FOR CONSTRUCTION AND
DISPLAYING LIGANDS
Issued 11/19/96
4. U.S. Patent No. 5,585,275
PILOT APPARATUS FOR PEPTIDE SYNTHESIS AND SCREENING
Issued 12/17/96
5. U.S. Patent No. 5,591,646
METHOD AND APPARATUS FOR PEPTIDE SYNTHESIS AND SCREENING
Issued 1/7/97
6. U.S. Patent Application Serial No. 08/989,204
NOVEL SOLID-PHASE SYNTHESIS TECHNIQUES FOR PREPARING MULTIPLE ANALOGOUS
COMPOUNDS
Filed 12/11/97
7. U.S. Patent Application Serial No. 09/353,158
PROCESS FOR SYNTHESIS OF BENZOPYRAN DERIVATIVES
Filed 7/14/99
8. U.S. Patent Application Serial No. 09/375,803
PROCESS FOR THE SYNTHESIS OF TRIAZOLOPYRIDIZINE COMPOUNDS
Filed 8/17/99
9 . U.S. Patent Application Serial No. 09/435,517
PROCESS FOR THE SYNTHESIS OF QUINAZOLINONES
Filed 11/8/99
10. U.S. Patent Application Serial No. 09/519,944
PROCESS FOR THE SYNTHESIS OF DIHYDROPYRIDONES
Filed 3/7/00
11. U.S. Patent Application Serial No. 09/527,626
SOLID PHASE SYNTHESIS OF BENZODIAZEPINES DIONES
Filed 3/16/00
12. U.S. Patent Application Serial No. 09/520,500
PROLINE DERIVATIVES AND SYNTHESIS THEREOF
Filed 3/10/00
1.
13. U.S. Patent Application Serial No. 60/142,202
PROCESS FOR SYNTHESIZING OXADIAZOLES
Filed 7/1/99
14. U.S. Patent Application Serial No. 60/142,163
INDOLE SYNTHESIS
Filed 7/1/99
15. US. Patent Application Serial No. 60/147,451
SOLID PHASE SYNTHESIS OF HETEROCYCLES
Filed 8/4/99
16. U.S. Patent Application Serial No. 60/148,169
SYNTHESIS OF PROTEASE SUBSTRATES
Filed 8/10/99
17. U.S. Patent Application Serial No. 60/152,005
PROCESS FOR SYNTHESIZING ISOXAZOLIDINES
Filed 9/1/99
18. U.S. Patent Application Serial No. 60/151,962
PROCESS FOR SYNTHESIZING ISOXAZOLINES AND ISOXAZOLES
Filed 9/1/99
19. U.S. Patent Application Serial No. 60/168,836
PROCESS FOR THE SYNTHESIS OF PYRAZOLINES
Filed 12/3/99
20. U.S. Patent Application Serial No. 60/189,067
QUINAZOLINE SYNTHESIS
Filed 3/13/00
21. U.S. Patent Application Serial No. 60/191,886
PROCESS FOR THE SYNTHESIS OF PYRAZOLE DIONES
Filed 3/23/00
22. U.S. Patent Application Serial No. 60/192,024
SYNTHESIS OF SOLID SUPPORTED DIHYROPRIDINES
Filed 3/24/00
23. U.S. Patent Application Serial No. 60/196,061
PROCESS FOR SYNTHESIZING ISOQUINOLONE INTERMEDIATES
Filed 4/10/00
2.
SCHEDULE 1.7
ASSIGNED PROTOCOLS
(see attached)
1.
AAT Library Protocols
1996-Present -------------------------------- Library Group -------------------------------- AMB001 Combi -------------------------------- AMB002 Combi -------------------------------- AMB003 Combi -------------------------------- AMB004 Combi -------------------------------- AMB006 Combi -------------------------------- AMB101 Combi -------------------------------- AMB102 Combi -------------------------------- AMB103 Combi -------------------------------- BAB003 Combi -------------------------------- BAB005 Combi -------------------------------- BAB006 Combi -------------------------------- BAB007 Combi -------------------------------- BAB009 Combi -------------------------------- BAB011 Combi -------------------------------- BAB106 Combi -------------------------------- BAB206 Combi -------------------------------- BRZ015-018 Combi -------------------------------- BR2019 Combi -------------------------------- BR2020 Combi -------------------------------- BRZ021 Combi -------------------------------- BRZ022 Combi -------------------------------- BRZ023 Combi -------------------------------- BRZ024 Combi -------------------------------- BRZ122 Combi -------------------------------- BRZ123 Combi -------------------------------- BRZ124 Combi -------------------------------- BRZ223 Combi -------------------------------- CP3 Combi -------------------------------- CP4 Combi -------------------------------- CP5 Combi -------------------------------- CP6 Combi -------------------------------- CP7 Combi -------------------------------- CQL001 Combi -------------------------------- CQL002 Combi -------------------------------- CQL003 Combi -------------------------------- CQL004 Combi -------------------------------- CQL005 Combi -------------------------------- CQL006 Combi -------------------------------- CQL101 Combi -------------------------------- CQL104 Combi -------------------------------- CQL105 Combi -------------------------------- CQL201 Combi -------------------------------- CQL204 Combi -------------------------------- CQL006 Combi -------------------------------- DC7 Combi -------------------------------- DC2 Combi -------------------------------- DR1 Combi -------------------------------- DR2 Combi -------------------------------- DR3 Combi -------------------------------- DR5 Combi -------------------------------- |
AAT Library Protocols
1996-Present -------------------------------- DR6 Combi -------------------------------- DR7 Combi -------------------------------- DSC001 Combi -------------------------------- DSC002 Combi -------------------------------- DSC003 Combi -------------------------------- DSC007 Combi -------------------------------- DSC008 Combi -------------------------------- DSC108 Combi -------------------------------- EBK001 Combi -------------------------------- FXW001 Combi -------------------------------- FXW101 Combi -------------------------------- HCH001 Combi -------------------------------- HOE101 Combi -------------------------------- UCP3 Combi -------------------------------- UCP4 Combi -------------------------------- UCP5 Combi -------------------------------- UCP6 Combi -------------------------------- UCP7 Combi -------------------------------- UCP008 Combi -------------------------------- UGB002 Combi -------------------------------- UGB003 Combi -------------------------------- UGB102 Combi -------------------------------- UMD001 Combi -------------------------------- UMD002 Combi -------------------------------- KSY001 Combi -------------------------------- KY1 Combi -------------------------------- KY2 Combi -------------------------------- KY3 Combi -------------------------------- KY4 Combi -------------------------------- KY5 Combi -------------------------------- MDH1 Combi -------------------------------- MDH2 Combi -------------------------------- MDH003 Combi -------------------------------- MDH019 Combi -------------------------------- MDH020 Combi -------------------------------- MDH021 Combi -------------------------------- MDH11-14 Combi -------------------------------- MDH11-15 Combi -------------------------------- MDH24-10 Combi -------------------------------- MJH002 Combi -------------------------------- MJH101 Combi -------------------------------- MJH201 Combi -------------------------------- MJP001 Combi -------------------------------- MJP002 Combi -------------------------------- MJP004 Combi -------------------------------- MJP104 Combi -------------------------------- MJP204 Combi -------------------------------- NAC001 Combi -------------------------------- NAP001 Combi -------------------------------- NAP101 Combi -------------------------------- PPF001 Combi -------------------------------- |
AAT Library Protocols
1996-Present -------------------------------- PPF002 Combi -------------------------------- PPF003 Combi -------------------------------- PPF004 Combi -------------------------------- PPF005 Combi -------------------------------- PPF006 Combi -------------------------------- PPF009 Combi -------------------------------- PPF010 Combi -------------------------------- PPF019 Combi -------------------------------- PPF020 Combi -------------------------------- PPF11-18 Combi -------------------------------- PPF120 Combi -------------------------------- P21 Combi -------------------------------- P22 Combi -------------------------------- P25 Combi -------------------------------- P26 Combi -------------------------------- SPT001 Combi -------------------------------- SPT002 Combi -------------------------------- SPT003 Combi -------------------------------- SPT004 Combi -------------------------------- SPT102 Combi -------------------------------- SPT103 Combi -------------------------------- SPT104 Combi -------------------------------- SPT105 Combi -------------------------------- SPT201 Combi -------------------------------- SXL1 Combi -------------------------------- SXL2 Combi -------------------------------- SXL3 Combi -------------------------------- SXL4 Combi -------------------------------- SXL5 Combi -------------------------------- SXL6 Combi -------------------------------- SXL7 Combi -------------------------------- SXL9 Combi -------------------------------- SXL010 Combi -------------------------------- SXL011 Combi -------------------------------- SXL012 Combi -------------------------------- SXL013 Combi -------------------------------- SXL101 Combi -------------------------------- TAK001 Combi -------------------------------- TAK101 Combi -------------------------------- TGL001 Combi -------------------------------- TGL101 Combi -------------------------------- TPH001 Combi -------------------------------- TPH002 Combi -------------------------------- TPH003 Combi -------------------------------- TPH101 Combi -------------------------------- TPH102 Combi -------------------------------- TPH201 Combi -------------------------------- TPH202 Combi -------------------------------- TRK001 Combi -------------------------------- ARG501 DISCO -------------------------------- ARG502 DISCO -------------------------------- |
AAT Library Protocols
1996-Present -------------------------------- ARG503 DISCO -------------------------------- ARG504 DISCO -------------------------------- JES501 DISCO -------------------------------- JIL401 DISCO -------------------------------- JIL502 DISCO -------------------------------- LIG-A01 DISCO -------------------------------- |
Production Technical Operating Procedures
Rev. Code 8 Apr 1999 JMP
-----------------------------------------------------------------------------------------------------------
TITLE DESCRIPTION REV CODE SUB-FILE
-----------------------------------------------------------------------------------------------------------
100 SERIES: INSTRUMENTATION
-----------------------------------------------------------------------------------------------------------
CS Validation Validation of Computerized Systems 27 Jan 99 JMP
-----------------------------------------------------------------------------------------------------------
Sebastian Requirement Requirements Definition Doc. for Computer 1 Feb 99 JMP
Systems Validate
-----------------------------------------------------------------------------------------------------------
Sebastian I.Q. Sebastian Installation Qualification 27 Jan 99 ASL
-----------------------------------------------------------------------------------------------------------
Sebastian O.Q. Sebastian Operational Qualification 1 Feb 99 ASL
-----------------------------------------------------------------------------------------------------------
Sebastian P.Q. Sebastian Performance Qualification 7 Mar 99 ASL
-----------------------------------------------------------------------------------------------------------
Hydra Calibration Calibration of the Robbins Hydra 96 3 Feb 99 JMP
-----------------------------------------------------------------------------------------------------------
Hydra Operating the Robbins Hydra 96 6 March 1998 DG
-----------------------------------------------------------------------------------------------------------
Lyo/Condenser __ating the VirTis Unitop Iyophilizer and 5 May 1997 ZTN
FreezeMobile cond___
-----------------------------------------------------------------------------------------------------------
Matrix Operating the Matrix IMPACT multichannel 5 May 1997 ZTN
Pipettor
-----------------------------------------------------------------------------------------------------------
Moduline Washing with the Moduline Model A Dispenser 7 March 1998 DG
-----------------------------------------------------------------------------------------------------------
Savant ___rating the Savant Speedvac for concentrating 5 May 1997 ZTN
liquid san___
-----------------------------------------------------------------------------------------------------------
Tomtec vac box Operating the Tomtec vacuum box 10 April 1998 DGR
-----------------------------------------------------------------------------------------------------------
|
-----------------------------------------------------------------------------------------------------------
Moduline Carousel ___od for washing plates with the Moduline 4 March 1998 DGR
Automatic Car___
-----------------------------------------------------------------------------------------------------------
Supelco Visprep Operating the Supelco Visiprep vacuum manifold 11 Dec 1996 SPT
-----------------------------------------------------------------------------------------------------------
Tecan Genesis Operating the Tecan Genesis robot 12 Dec 1996 DR
-----------------------------------------------------------------------------------------------------------
Genevac I.Q/O.Q Genevac Installation/Operation Qualification 26 Nov 97 BAW
-----------------------------------------------------------------------------------------------------------
Genevac P.Q. Genevac Performance Qualification 3 Dec 97 BAW
-----------------------------------------------------------------------------------------------------------
Genevac Operating the Genevac 9 Dec 97 BAW
-----------------------------------------------------------------------------------------------------------
|
-----------------------------------------------------------------------------------------------------------
200 SERIES: LIBRARY TECHNIQUES
-----------------------------------------------------------------------------------------------------------
Clamping Clamping production plates 1 April 1998 DGP
-----------------------------------------------------------------------------------------------------------
N2 Drainage Product recovery via positive pressure 6 May 1997 ZTN
-----------------------------------------------------------------------------------------------------------
Cleaving from resins Method for cleaving compounds from resin in 27 May 1997 ZTN
PolyFil plate
-----------------------------------------------------------------------------------------------------------
Swirl and plate Transferring resin to Polyfilltronics plates 7 May 1997 ZTN
from tritted cartridge to ___
-----------------------------------------------------------------------------------------------------------
Protocol Handling Production Protocol handling procedure 2 March 1998 DG
-----------------------------------------------------------------------------------------------------------
Standard Replacement Returning products from QC Standard Analysis 6 March 1998 NGR
to wells
-----------------------------------------------------------------------------------------------------------
TITLE DESCRIPTION REV CODE SUB-FILE
-----------------------------------------------------------------------------------------------------------
300 SERIES: PLATING
-----------------------------------------------------------------------------------------------------------
Plating prep Preparation for plating using the Robbins 15 May 1997 ZTN
Hydra 96
-----------------------------------------------------------------------------------------------------------
Resin prep using LAMPS Separation of 9 samples of bulk resin using 5 May 1997 EHL
LAMPS monitor
-----------------------------------------------------------------------------------------------------------
Resin transfer w/ Transfer via fritted Falcon Places to 88 wells 20 April 1998 DGR
Falco_ of a deepwell
-----------------------------------------------------------------------------------------------------------
Kenner Resin Prep Preparation of Kenner Linker on Resin 13 Jan 1998 MRD
-----------------------------------------------------------------------------------------------------------
Kenner Resin Validation of Kenner resin 20 Jan 1998 MRD
Validation
-----------------------------------------------------------------------------------------------------------
Thiophenol Prep Preparation of Thiophenol Resin 13 Jan 1998 MRD
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
|
-----------------------------------------------------------------------------------------------------------
800 SERIES: SLE
-----------------------------------------------------------------------------------------------------------
SLE Packing Packing Hydromatrix material into 26 Feb 1998 DGP
Polyfilltronics places
-----------------------------------------------------------------------------------------------------------
PE/silica Polyfi. SPE in 96 well format using Hydromatrix 5 May 1997 SPT
hydrom__ material and Silica Gel 60 A in
Polyfilltronics plates
-----------------------------------------------------------------------------------------------------------
|
SCHEDULE 1.8
ASSIGNED SOFTWARE
NAMES OF SOFTWARE PROGRAMS
1. ICE PICK
2. COMPASS
3. HAMMERHAD
4. SIDEWINDER
5. MOLECULAR DOCKER
6. BAR CODING
7. COMBIGEN
DESCRIPTIONS OF SELECTED SOFTWARE PROGRAMS
ICEPICK is a system for computationally selecting diverse sets of molecules. It computes the dissimilarity of the surface-accessible features of two molecules, taking into account conformational flexibility. Then, the intrinsic diversity of an entire set of molecules is calculated from spanning tree over the pairwise dissimilarities. IcePick's dissimilarity measure is compared against traditional 2D topological approaches, and the spanning tree diversity measure is compared against commonly used variance techniques.
COMPASS allows for the building of predictive models for interactive drug design in the absence of a known target protein structure, by removing major obstacles to accurate prediction and automatically selecting conformations and alignments of molecules without benefit of a characterized active site. The technique combines explicit representation of molecular shape and neural network learning methods to produce highly predictive models, even across chemically distinct classes of molecules.
HAMMERHEAD can be successfully applied to dock a variety of ligands into their cognate proteins, and is used for screening large databases of flexible molecules for binding to a protein of known structure. It correctly docks flexible ligands, spending an average of a few seconds on each compound during a screen. Hammerhead is completely automated, including the elucidation of protein building sites, through the docking of molecules, to the final selection of compounds for assay.
SIDEWINDER performs directed sidechain selection given a protein structure, ligand and binding hypothesis, and an array of potential sidechains. Sidewinder computes predicted sets of the best sidechains at each specified site. The software accurately generates sidechain conformations, attaches sidechains at the designated scaffold point, refines and prunes the sidechains, and finally refines and scores the entire ligand.
1.
MOLECULAR DOCKER aligns small molecules to a protein structure and estimates their binding affinity. The algorithm represents a protein's binding site in a way that is specifically sited to molecular docking applications. Initially, the protein's surface is coated with a collection of molecular fragments that potentially interact with the protein. Each probe, serves as a potential alignment point for atoms in a ligand, and is scored to represent that probe's affinity for the protein. Probes are then clustered by accumulating their affinities. High affinity clusters are identified as being the "stickiest" portions of the protein surface. The stickiest cluster is used as a computation binding pocket for docking.
COMBIGEN is Axys' proprietary in-house program for the enumeration of library compound databases using a virtual chemistry approach. Presently Axys is in the process of converting from this software to Afferent Structure(TM) software from Afferent Systems, Inc.
BARCODING SOFTWARE
Axys' in-house intranet-based barcoding combines a straightforward error checking interface with a chemical tracking database. The interface minimizes the chances for operator error by taking barcoded input directly from the barcoding scanner, and further reduces the chances for error by requiring mutually corroborating input of catalog information and molecular weight, which is checked for consistency from a database.
2.
SCHEDULE 2.1(b)
FORMS OF ASSIGNMENT
1.
BILL OF SALE
This Bill of Sale dated as of April ___, 2000 is being made pursuant to that certain Technology Assignment and License Agreement (THE "TECHNOLOGY ASSIGNMENT AND LICENSE AGREEMENT") dated April ___, 2000 by and between Axys Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY") and Axys Advanced Technologies, Inc., a Delaware corporation ("AAT").
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company hereby agree as follows:
1. Capitalized terms used herein but not defined herein shall have the meanings assigned such terms in the Technology Assignment and License Agreement.
2. Subject to the terms and conditions set forth in the Technology Assignment and License Agreement, the Company does hereby sell, transfer, assign and deliver to AAT, free and clear of all liens, claims, charges and other encumbrances of any nature whatsoever, for AAT and AAT's assigns to have and to hold forever, all of the Company's right, title and interest in and to the assets, properties, rights and contracts set forth below, as the same shall exist today, AS IS and WHERE IS (collectively, the "PURCHASED ASSETS"):
(a) the tangible assets listed in Schedule 1.2 hereto;
(b) any and all Information that is Controlled by the Company as of today, including, without limitation, the Information identified generally in Schedule 1.5 attached hereto, which is necessary to or used by AAT in its current combinatorial chemistry business, but excluding the Assigned Protocols and Licensed Technology;
(c) the patents and patent applications set forth in Schedule 1.6 hereto, and including any and all rights that are Controlled by the Company as of today with respect to such patents and patent applications, including without limitation the rights to enforce and/or file any non-provisionals, divisionals, continuations, continuations-in-part, substitutions, reissues, reexaminations, extensions and foreign equivalents thereof.
(d) all of the Protocols Controlled by the Company that are set forth in Schedule 1.7 hereto, and all trade secret and other intellectual property rights in such Protocols that are Controlled by the Company as of today;
(e) all of the computer software programs, in object code and, to the extent Controlled by the Company, source code forms, that are either owned by the Company or licensed to the Company and are described generally in Schedule 1.8 hereto, and all documentation for such programs in the Company's possession as of today, and all copyright and other intellectual property rights in any of the foregoing that are Controlled by the Company as of today;
(f) notwithstanding the foregoing, all of the rights granted under subsections (b), (c), (d) and (e) above are expressly subject to any and all license rights that the Company has previously granted to third parties identified on Schedule 2.1(d) to the Technology Assignment and License Agreement, under the contracts specified in Schedule 2.1(d) to the Technology Assignment and License Agreement, with respect to such technology and intellectual property rights, to the extent and so long as such license rights remain in force; and
(g) all of the Company's rights, claims and benefits (except as otherwise provided in subsection (h)) under the Assigned Contracts.
3. AAT hereby waives compliance by the Company with the provisions of the bulk transfer laws of any state. The Company covenants and agrees to pay and discharge when due all claims of creditors which could be asserted against AAT by reason of such noncompliance.
4. Notwithstanding any other provisions of this Bill of Sale to the contrary, nothing contained in this Bill of Sale shall in any way supersede, modify, replace, amend, change, rescind, waive, exceed, expand, enlarge or in any way affect the provisions, including warranties, covenants, agreements, conditions, representations or, in general any of rights and remedies, and any of the obligations and indemnifications of the Company or AAT set forth in the Technology Assignment and License Agreement nor shall this Bill of Sale expand or enlarge any remedies under the Technology Assignment and License Agreement including without limitation any limits on indemnification specified therein. This Bill of Sale is intended only to effect the transfer of certain property to be transferred pursuant to the Technology Assignment and License Agreement and shall be governed entirely in accordance with the terms and conditions of the Technology Assignment and License Agreement.
5. This Bill of Sale shall in all respects be construed in accordance with and governed by the laws of the State of California without giving effect to its conflicts-of-laws principles.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Bill of Sale to be executed and delivered on the date and year first written above.
AXYS PHARMACEUTICALS, INC.,
a Delaware corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
[SIGNATURE PAGE TO BILL OF SALE]
SCHEDULE 1.2
ADDITIONAL CHEMISTRY ASSETS
(see attached)
See Schedule 1.2 to Technology Assignment and License Agreement.
SCHEDULE 1.5
GENERAL DESCRIPTION OF ASSIGNED KNOW-HOW
All know-how pertaining to the protocols set forth in Schedule 1.7
SCHEDULE 1.6
ASSIGNED PATENTS
(see attached)
See Schedule 1.6 to Technology Assignment and License Agreement.
SCHEDULE 1.7
ASSIGNED PROTOCOLS
(see attached)
See Schedule 1.7 to Technology Assignment and License Agreement.
SCHEDULE 1.8
ASSIGNED SOFTWARE
See Schedule 1.8 to Technology Assignment and License Agreement.
ASSIGNMENT OF PATENTS AND PATENT APPLICATIONS
This Assignment of Patents and Patent Applications Agreement (the "ASSIGNMENT") dated as of April ___, 2000 (the "EFFECTIVE DATE"), is being made pursuant to that certain Technology Assignment and License Agreement (the "TECHNOLOGY ASSIGNMENT AND LICENSE AGREEMENT") dated April ___, 2000 by and between Axys Pharmaceuticals, Inc., a Delaware corporation with offices at 180 Kimball Way, South San Francisco, CA 94080 (the "b") and Axys Advanced Technologies, Inc., a Delaware corporation with offices at 180 Kimball Way, South San Francisco, CA 94080 (the "ASSIGNEE").
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Assignor makes the following assignment:
1. Assignment of Patent Rights to Assignee.
a. Under and in accordance with the Technology Assignment and License Agreement, Assignor hereby assigns, transfers and conveys to the Assignee all of the Assignor's right, title and interest throughout the world in and to the patents and patent applications set forth in Schedule 1.6, which is attached to and made a part of this Assignment, and in and to any and all U.S., or foreign equivalents thereof, including without limitation any extensions, non-provisionals, continuations-in-part, divisionals, reissues and renewals thereof, and in and to any and all U.S. or foreign patents that are granted from such patent applications (collectively, the "ASSIGNED PATENTS"), and further, all rights and privileges pertaining to the Assigned Patents including, without limitation the right, if any, to sue or bring other actions (including, but not limited to, collection of damages) for past, present and future infringement thereof. The assignments described in this Section 1 may be hereinafter referred to as the "ASSIGNMENTS").
b. The Assignor agrees to assist the Assignee in every proper way, at the Assignee's expense, to evidence and perfect the Assignments and to apply for and obtain and from time to time enforce, maintain and defend the Assigned Patents in any and all countries that the Assignee may designate from time to time. The Assignor will execute all documents that the Assignee may request for such purposes. If the Assignee is unable for any reason whatsoever to secure the signature of a duly authorized officer of the Assignor to any document that the Assignor is required to execute pursuant to the foregoing, the Assignor hereby irrevocably designates and appoints the Assignee and its duly authorized officers and agents, with full power of substitution, as its agents and attorneys-in-fact to act for and in its behalf and instead of the Assignor, to execute and file any such document and to do all other lawfully permitted acts to further the purposes of the foregoing with the same legal force and effect as if executed by the Assignor.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Assignor has signed this Agreement effective as of the date first above written.
AXYS PHARMACEUTICALS, INC.,
By: _____________________________
Name: _____________________________
Title: _____________________________
STATE OF CALIFORNIA )
) ss
COUNTY OF __________________)
On ___________________, before me, ______________________, Notary Public, personally appeared ________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL]
SCHEDULE 1.6
See Schedule 1.6 to Technology Assignment and License Agreement.
ASSIGNMENT OF TRADEMARKS AND SERVICEMARKS
This Trademark and Servicemark Assignment (the "ASSIGNMENT") dated as of April ___, 2000 (the "EFFECTIVE DATE") is being made pursuant to that certain Technology Assignment and License Agreement (the "TECHNOLOGY ASSIGNMENT AND LICENSE AGREEMENT") dated April ___, 2000 by and between Axys Pharmaceuticals, Inc., a Delaware corporation with offices at 180 Kimball Way, South San Francisco, CA 94080 (the "ASSIGNOR") and Axys Advanced Technologies, Inc., a Delaware corporation with offices at 180 Kimball Way, South San Francisco, CA 94080 (the "ASSIGNEE").
WHEREAS, Assignor has adopted, used, is using and is the owner of all trademarks and servicemarks and trademark and servicemark registrations and applications for trademarks and servicemarks set forth in Exhibit A attached hereto, and all other rights appurtenant thereto, including, but not limited to, all common law rights, trade name rights and the right to recover for past infringement throughout the world (the "TRADEMARKS");
WHEREAS, Assignor has acquired goodwill associated with and symbolized by said Trademarks and has not abandoned the same;
WHEREAS, Assignee is desirous of acquiring all rights, title and interest in and to the Trademarks throughout the world; and
WHEREAS, Assignor is willing to assign to Assignee all rights, title and interest as Assignor may possess in and to the Trademarks throughout the world.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor makes the following assignment:
1. ASSIGNMENT.
a. Assignor hereby assigns to Assignee all of Assignor's rights, title and interest in and to the Trademarks throughout the world, together with the goodwill symbolized by said Trademarks; said rights, title and interest include, without limitation, any and all causes of action heretofore accrued in Assignor's favor for infringement of the aforesaid rights, to have and to hold the same unto Assignee, its successors and assigns, for and during the existence of the rights and all renewals thereof.
b. At any time, and from time to time hereafter, Assignor shall forthwith, upon Assignee's written request and at the Assignee's expense, take any and all steps to execute, acknowledge and deliver to Assignee any and all further instruments and assurances necessary or expedient in order to vest the aforesaid rights in Assignee and to facilitate Assignee's enjoyment and enforcement of said rights and causes of action.
c. Assignor hereby constitutes and appoints Assignee as Assignor's true and lawful attorney in fact, with full power of substitution in Assignor's name and stead, to take any and all steps, including proceedings at law, in equity or otherwise, to execute,
acknowledge and deliver any and all instruments and assurances necessary or expedient in order to vest or perfect the aforesaid rights and causes of action more effectively in Assignee or to protect the same or to enforce any claim or right of any kind with respect thereto. This includes, but is not limited to, any rights with respect to the Trademarks that may have accrued in Assignor's favor from the respective date of first use of the Trademarks to the Effective Date of this Assignment. Assignor hereby declares that the foregoing power is coupled with an interest and as such is irrevocable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Assignor has executed this Assignment as of the Effective Date first set forth above.
AXYS PHARMACEUTICALS, INC.
By: ___________________________
Name: ___________________________
Title: ___________________________
STATE OF CALIFORNIA )
) ss
COUNTY OF __________________)
On ___________________, before me, ______________________, Notary Public, personally appeared ________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL]
EXHIBIT A
CONFIDENTIAL AND PROPRIETARY AXYS ADVANCE TECHNOLOGIES, INC INFORMATION
PENDING SERVICE MARK APPLICATIONS
COMBIMED:
S.N.: 75/737109: Filed 6/23/99
COMBIMED CHEM:
S.N.: 75/737111: Filed 6/23/99
COMBIPHARM:
S.N.: 75/737116: Filed 6/23/99
Ref: CombiChemDockets\1_AAT.ddfoc2.doc
ASSIGNMENT OF COPYRIGHTS
This Assignment of Copyrights (the "ASSIGNMENT") dated as of April __, 2000 (the "EFFECTIVE Date") is being made pursuant to that certain Technology Assignment and License Agreement (the "TECHNOLOGY ASSIGNMENT AND LICENSE AGREEMENT") dated April __, 2000 by and between Axys Pharmaceuticals, Inc., a Delaware corporation with offices at 180 Kimball Way, South San Francisco, CA 94080 (the "ASSIGNOR") and Axys Advanced Technologies, Inc., a Delaware corporation with offices at 180 Kimball Way, South San Francisco, CA 94080 (the "ASSIGNEE").
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor makes the following assignment:
1. Under and in accordance with the Technology Assignment and License Agreement, Assignor hereby assigns to Assignee all of Assignor's rights, title and interest in and to the works described in Schedules 1.7 and 1.8 attached hereto and incorporated herein by this reference (the "WORKS"); said rights, title and interest including, but not limited to, all copyrights, copyright applications, copyright registrations, copyrightable subject matter in the Works, rights of reproduction, distribution, performance and display, the right to prepare derivative works and any and all causes of action heretofore accrued in Assignor's favor for infringement of the aforesaid rights, to have and to hold the same unto Assignee, its successors and assigns, for and during the existence of the rights and all renewals and extensions thereof.
2. Assignor hereby assigns to Assignee and waives any and all moral or other rights Assignor may have in and to the Works or any portion thereof.
3. Assignor hereby constitutes and appoints Assignee as Assignor's true and lawful attorney-in-fact, with full power of substitution in Assignor's name and stead, to take any and all steps, including proceedings at law, in equity or otherwise, to execute, acknowledge and deliver any and all instruments and assurances necessary or expedient in order to vest or perfect the aforesaid rights and causes of action more effectively in Assignee or to protect the same or to enforce any claim or right of any kind with respect thereto. This includes, but is not limited to, any rights with respect to the Works that may have accrued in Assignor's favor from the respective date of creation of the Works to the date of this Assignment. Assignor hereby declares that the foregoing power is coupled with an interest and as such is irrevocable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Assignor has signed this Assignment effective as of the date first above written.
AXYS PHARMACEUTICALS, INC.
By: _____________________________
Name: _____________________________
Title: _____________________________
STATE OF CALIFORNIA )
) ss
COUNTY OF __________________)
On ___________________, before me, ______________________, Notary Public, personally appeared ________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL]
SCHEDULE 1.7
ASSIGNED PROTOCOLS
(see attached)
See Schedule 1.7 to Technology Assignment and License Agreement.
SCHEDULE 1.8
ASSIGNED SOFTWARE
See Schedule 1.8 to Technology Assignment and License Agreement.
SCHEDULE 2.1(d)
LICENSES-OUT
THIRD PARTY AGREEMENT
----------- ---------
1. Akkadix, Inc. License Agreement between Axys and Xyris
Corporation (the predecessor of Akkadix)
dated January 29, 1999, as amended.
2.
3.
|
Document Number: 310957
EXHIBIT 10.34
LEASE MANAGEMENT SERVICES, INC.
EQUIPMENT FINANCING AGREEMENT
(Number 10787)
THIS EQUIPMENT FINANCING AGREEMENT NUMBER 10787 ("Agreement") is dated as of the date set forth at the foot hereof and is between LEASE MANAGEMENT SERVICES, INC. ("Secured Party") and IRORI INCORPORATED, ("Debtor").
1. EQUIPMENT; SECURITY INTEREST. The terms and conditions of this Agreement cover each item of machinery, equipment and other property (individually an "Item" or "Item of Equipment" and collectively the "Equipment") described in a schedule now or hereafter executed by the parties hereto and made a part hereof (individually a "Schedule" and collectively the "Schedules"). Debtor hereby grants Secured Party a security interest in and to all Debtor's right, title and interest in and to the Equipment under the Uniform Commercial Code, such grant with respect to an Item of Equipment to be as of Debtor's execution of a related Equipment Financing Commitment referencing this Agreement or, if Debtor then has no interest in such Item, as of such subsequent time as Debtor acquires an interest in the Item. Such security interest is granted by Debtor to secure performance by Debtor of Debtor's obligations to Secured Party hereunder and under any other agreements under which Debtor has or may hereafter have obligations to Secured Party. Debtor will ensure that such security interest will be and remain a sole and valid first lien security interest subject only to the lien of current taxes and assessment not in default but only if such taxes are entitled to priority as a matter of law.
2. DEBTOR'S OBLIGATIONS. The obligations of Debtor under this Agreement respecting an Item of Equipment, except the obligation to pay installment payments with respect thereto which will commence as set forth in Paragraph 3 below, commence upon the grant to Secured Party of a security interest in the Item. Debtor's obligations hereunder with respect to an Item of Equipment and Secured Party's security interest therein will continue until payment of all amounts due, and performance of all terms and conditions required hereunder provided, however, that if this Agreement is in default said obligations and security interest will continue during the continuance of said default. Upon termination of Secured Party's security interest in an Item of Equipment, Secured Party will execute such release of interest with respect thereto as Debtor reasonably requests.
3. INSTALLMENT PAYMENTS AND OTHER PAYMENTS. Debtor will repay advances Secured Party makes on account of the Equipment in installment payments in the amounts and at the times set forth in the Schedules, whether or not Secured Party has rendered an invoice therefor, at the office of Secured Party set forth at the foot hereof, or to such person and/or at such other place as Secured Party may from time to time designate by notice to Debtor. Any other amounts required to be paid Secured Party by Debtor hereunder are due upon Debtor's receipt of Secured Party's invoice therefor and will be payable as directed in the invoice. Payments under this Agreement may be applied to Debtor's then accrued obligations to Secured Party in such order as Secured Party may choose.
IRORI INCORPORATED
EQUIPMENT FINANCING AGREEMENT 10787
4. NET AGREEMENT; NO OFFSET, SURVIVAL. This Agreement is a net agreement, and Debtor will not be entitled to any abatement of installment payments or other payments due hereunder or any reduction thereof under any circumstance or for any reason whatsoever. Debtor hereby waives any and all existing and future claims, as offsets, against any installment payments or other payments due hereunder and agrees to pay the installment payments and other amounts due hereunder as and when due regardless of any offset or claim which may be asserted by Debtor or on its behalf. The obligations and liabilities of Debtor hereunder will survive the termination of the Agreement.
5. FINANCING AGREEMENT. THIS AGREEMENT IS SOLELY A FINANCING AGREEMENT. DEBTOR ACKNOWLEDGES THAT THE EQUIPMENT HAS OR WILL HAVE BEEN SELECTED AND ACQUIRED SOLELY BY DEBTOR FOR DEBTOR'S PURPOSES, THAT SECURED PARTY IS NOT AND WILL NOT BE THE VENDOR OF ANY EQUIPMENT AND THAT SECURED PARTY HAS NOT MADE AND WILL NOT MAKE ANY AGREEMENT, REPRESENTATION OR WARRANTY WITH RESPECT TO THE MERCHANTABILITY, CONDITION, QUALIFICATION OR FITNESS FOR A PARTICULAR PURPOSE OR VALUE OF THE EQUIPMENT OR ANY OTHER MATTER WITH RESPECT THERETO IN ANY RESPECT WHATSOEVER.
6. NO AGENCY. DEBTOR ACKNOWLEDGES THAT NO AGENT OF THE MANUFACTURER OR OTHER SUPPLIER OF AN ITEM OF EQUIPMENT OR OF ANY FINANCIAL INTERMEDIARY IN CONNECTION WITH THIS AGREEMENT IS AN AGENT OF SECURED PARTY. SECURED PARTY IS NOT BOUND BY A REPRESENTATION OF ANY SUCH PARTY AND, AS CONTEMPLATED IN PARAGRAPH 27 BELOW, THE ENTIRE AGREEMENT OF SECURED PARTY AND DEBTOR CONCERNING THE FINANCING OF THE EQUIPMENT IS CONTAINED IN THIS AGREEMENT AS IT MAY BE AMENDED ONLY AS PROVIDED IN THAT PARAGRAPH.
7. ACCEPTANCE. Execution by Debtor and Secured Party of a Schedule covering the Equipment or any Items thereof will conclusively establish that such Equipment has been included under and will be subject to all the terms and conditions of this Agreement. If Debtor has not furnished Secured Party with an executed Schedule by the earlier of fourteen (14) days after receipt thereof or expiration of the commitment period set forth in the applicable Equipment Financing Agreement, Secured Party may terminate its obligation to advance funds as to the applicable Equipment.
8. LOCATION; INSPECTION; USE. Debtor will keep, or in the case of motor vehicles, permanently garage and not remove from the United States, as appropriate, each Item of Equipment in Debtor's possession and control at the Equipment Location designated in the applicable Schedule, or at such other location to which such Item may have been moved with the prior written consent of Secured Party. Whenever requested by Secured Party, Debtor will advise Secured Party as to the exact location of an Item of Equipment. Secured Party will have the right to inspect the Equipment and observe its use during normal business hours, subject to Debtor's security procedures and to enter into and upon the premises where the Equipment may be located for such purpose. The Equipment will at all times be used solely for commercial or
IRORI INCORPORATED
EQUIPMENT FINANCING AGREEMENT 10787
business purposes and operated in a careful and proper manner and in compliance with all applicable laws, ordinances, rules and regulations, all conditions and requirements of the policy or policies of insurance required to be carried by Debtor under the terms of this Agreement and all manufacturer's instructions and warranty requirements. Any modifications or additions to the Equipment required by any such governmental edict or insurance policy will be promptly made by Debtor.
9. ALTERATIONS; SECURITY INTEREST COVERAGE. Without the prior written consent of Secured Party, Debtor will not make any alterations, additions or improvements to any Item of Equipment which detract from its economic value or functional utility, except as may be required pursuant to Paragraph 8 above. Secured Party's security interest in the Equipment will include all modifications and additions thereto and replacements and substitutions therefor, in whole or in part. Such reference to replacements and substitutions will not grant Debtor greater rights to replace or substitute than are provided in Paragraph 11 below or as may be allowed upon the prior written consent of Secured Party.
10. MAINTENANCE. Debtor will maintain the Equipment in good repair, condition and working order. Debtor will also cause each Item of Equipment for which a service contract is generally available to be covered by such a contract which provides coverages typical to property of the type involved and is issued by a competent servicing entity.
11. LOSS AND DAMAGE; CASUALTY VALUE. In the event of the loss of, theft of, requisition of, damage to or destruction of an Item of Equipment ("Casualty Occurrence"), Debtor will give Secured Party prompt notice thereof and will thereafter place such Item in good repair, condition and working order, provided, however, that if such Item is determined by Secured Party to be lost, stolen, destroyed or damaged beyond repair, is requisitioned or suffers a constructive total loss as defined in any applicable insurance policy carried by Debtor in accordance with Paragraph 14 below, Debtor, at Secured Party's option, will (a) replace such Item with like Equipment in good repair, condition and working order whereupon such replacement equipment will be deemed such Item for all purposes hereof or (b) pay Secured Party the "Casualty Value" of such Item which will equal the total of (i) all installment payments and other amounts due from Debtor to Secured Party at the time of such payment and (ii) future installment payments due with respect to such Item with each such payment including any final uneven payment discounted at a rate equal to the discount rate of the Federal Reserve Bank of San Francisco from the date due to the date of such payment.
Upon such replacement or payment, as appropriate, this Agreement and Secured Party's security interest will terminate with, and only with, respect to the Item of Equipment so replaced or as to which such payment is made in accordance with Paragraph 2 above.
12. TITLING; REGISTRATION. Each item of Equipment subject to title registration laws will at all times be titled and/or registered by Debtor as Secured Party's agent and attorney-in-fact with full power and authority to register (but without power to affect title to) the Equipment in such manner and in such jurisdiction or jurisdictions as Secured Party directs. Debtor will promptly notify Secured Party of any necessary or advisable retitling and/or reregistration of an Item of Equipment in a jurisdiction other than the one in which such Item is then titled and/or
IRORI INCORPORATED
EQUIPMENT FINANCING AGREEMENT 10787
registered, Any and all documents of title will be furnished or caused to be furnished Secured Party by Debtor within sixty (60) days of the date any titling or registering or restating or reregistering, as appropriate, is directed by Secured Party.
13. TAXES. Debtor will make all filings as to and pay when due all personal property and other ad valorem taxes and all other taxes, fees, charges and assessments based on the ownership or use of the Equipment and will pay as directed by Secured Party or reimburse Secured Party for all other taxes, including, but not limited to, gross receipt taxes (exclusive of federal and state taxes based on Secured Party's net income, unless such net income taxes are in substitution for or relieve Debtor from any taxes which Debtor would otherwise be obligated to pay under the terms of this Paragraph 13), fees, charges and assessments whatsoever, however designated, whether based on the installment payments or other amounts due hereunder, levied, assessed or imposed upon the Equipment or otherwise related hereto or to the Equipment, now or hereafter levied, assessed or imposed under the authority of a federal, state, or local taxing jurisdiction, regardless of when and by whom payable. Filings with respect to such other amounts will, at Secured Party's option, be made by Secured Party or by Debtor as directed by Secured Party.
14. INSURANCE. Debtor will procure and continuously maintain all risk insurance against loss or damage to the Equipment from any cause whatsoever for not less than the full replacement value thereof naming Secured Party as Loss Payee. Such insurance must be in a form and with companies approved by Secured Party, must provide at least thirty (30) days advance written notice to Secured Party of cancellation, change or modification in any term, condition, or amount of protection provided therein, must provide full breach of warranty protection and must provide that the coverage is "primary coverage" (does not require contribution from any other applicable coverage). Debtor will provide Secured Party with an original policy or certificate evidencing such insurance. In the event of an assignment of this Agreement of which Debtor has notice, Debtor will cause such insurance to provide the same protection to the assignee as its interests may appear. The proceeds of such insurance, at the option of the Secured Party or such assignee, as appropriate, will be applied toward (a) repair or replacement of the appropriate Item or Items of Equipment, (b) payment of the Casualty Value thereof and/or (c) payment of, or as provision for, satisfaction of any other accrued obligations of Debtor hereunder. Debtor hereby appoints Secured Party as Debtor's attorney-in-fact with full power and authority to do all things, including, but not limited to, making claims, receiving payments and endorsing documents, checks or drafts, necessary to secure payments due under any policy contemplated hereby on account of a Casualty Occurrence. Debtor and Secured Party contemplate that the jurisdictions where the Equipment will be located will not impose any liability upon Secured Party for personal injury and/or property damage resulting out of the possession, use, operation or condition of the Equipment. In the event Secured Party determines that such is not or may not be the case with respect to a given jurisdiction, Debtor will provide Secured Party with public liability and property damage coverage applicable to the Equipment in such amounts and in such form as Secured party requires.
15. SECURED PARTY'S PAYMENT. If Debtor fails to pay any amounts due hereunder or to perform any of its other obligations under this Agreement, Secured Party may, at its option, but without any obligation to do so, pay such amounts or perform such obligations, and Debtor
IRORI INCORPORATED
EQUIPMENT FINANCING AGREEMENT 10787
will reimburse Secured Party the amount of such payment or cost of such performance, plus interest at 1.5% per month.
16. INDEMNITY. Debtor does hereby assume liability for and does agree to indemnify, defend, protect, save and keep harmless Secured Parry from and against any and all liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements, including court costs and legal expenses, of whatever kind and nature, imposed on, incurred by or asserted against Secured Party (whether or not also indemnified against by any other person) in any way relating to or arising out of this Agreement or the manufacture, financing, ownership, delivery, possession, use, operation, condition or disposition of the Equipment by Secured Party or Debtor, including, without limitation, any claim alleging latent and other defects, whether or not discoverable by Secured Party or Debtor, and any other claim arising out of strict liability in tort, whether or not in either instance relating to an event occurring while Debtor remains obligated under this Agreement, and any claim for patent, trademark or copyright infringement. Debtor agrees to give Secured Party and Secured Party agrees to give Debtor notice of any claim or liability hereby indemnified against promptly following learning thereof.
17. DEFAULT. Any of the following will constitute an event of default hereunder:
(a) Debtor's failure to pay when due any installment payment or other amount due
hereunder, which failure continues for ten (10) days after the due date thereof;
(b) Debtor's default in performing any other obligation, term or condition of
this Agreement or any other agreement between Debtor and Secured Party or
default under any further agreement providing security for the performance by
Debtor of its obligations hereunder provided such default has continued for more
than twenty (20) days, except as provided in (c) and (d) hereinbelow, or,
without limiting the generality of subparagraph (1) hereinbelow, default under
any lease or any mortgage or other instrument contemplating the provision of
financial accommodation applicable to the real property where an Item of
Equipment is located; (c) any writ or order of attachment or execution or other
legal process being levied on or charged against any Item of Equipment and not
being released or satisfied within ten (10) days; (d) Debtor's failure to comply
with its obligations under Paragraph 14 above or any transfer by Debtor in
violation of Paragraph 21 below; (e) a non-appealable judgment for the payment
of money in excess of $100,000 being rendered by a court of record against
Debtor which Debtor does not discharge or make provision for discharge in
accordance with the terms thereof within ninety (90) days from the date of entry
thereof; (f) death or judicial declaration of incompetency of Debtor, if an
individual; (g) the filing by Debtor of a petition under the Bankruptcy Code or
any amendment thereto or under any other insolvency law or law providing for the
relief of debtors, including, without limitation, a petition for reorganization,
arrangement or extension, or the commission by Debtor of an act of bankruptcy;
(h) the filing against Debtor of any such petition not dismissed or permanently
stayed within thirty (30) days, of the filing thereof; (i) the voluntary or
involuntary making of an assignment of substantial portion of its assets by
Debtor for the benefit of creditors, appointment of a receiver or trustee for
Debtor or for any of Debtor's assets, institution by or against Debtor or any
other type of insolvency proceeding (under the Bankruptcy Act or otherwise) or
of any formal or informal proceeding for dissolution, liquidation, settlement of
claims against or winding up of the affairs of Debtor, Debtor's cessation of
business activities or the making by Debtor of a transfer of all or a material
portion of Debtor's assets or inventory not in the ordinary
IRORI INCORPORATED
EQUIPMENT FINANCING AGREEMENT 10787
course of business; (j) the occurrence of any event described in parts (e), (f),
(g), (h) or (i) hereinabove with respect to any guarantor or other party liable
for payment or performance of this Agreement; (k) any certificate, statement,
representation, warranty or audit heretofore or hereafter furnished with respect
hereto by or on behalf of Debtor or any guarantor or other party liable for
payment or performance of this Agreement proving to have been false in any
material respect at the time as of which the facts therein set forth were stated
or certified or having omitted any substantial contingent or unliquidated
liability or claim against Debtor or any such guarantor or other party; (l)
breach by Debtor of any lease or other agreement providing financial
accommodation under which Debtor or its property is bound; or (m) a transfer of
effective control of Debtor, if an organization.
18. REMEDIES. Upon the occurrence of an event of default, Secured Party will have the rights, options, duties and remedies of a secured party, and Debtor will have the rights and duties of a debtor, under the Uniform Commercial Code (regardless of whether such Code or a law similar thereto has been enacted in a jurisdiction wherein the rights or remedies are asserted) and, without limiting the foregoing, Secured Party may exercise any one or more of the following remedies: (a) declare the Casualty Value or such lesser amount as may be set by law immediately due and payable with respect to any or all Items of Equipment without notice or demand to Debtor; (b) sue from time to time for and recover all installment payments and other payments then accrued and which accrue during the pendency of such action with respect to any or all Items of Equipment; (c) take possession of and, if deemed appropriate, render unusable any or all Items of Equipment, without demand or notice, wherever same may be located, without any court order or other process of law and without liability for any damages occasioned by such taking of possession and remove, keep and store the same or use and operate or lease the same until sold; (d) require Debtor to assemble any or all Items of Equipment at the Equipment Location therefor, or at such location to which such Equipment may have been moved with the written consent of Secured Party or such other location in reasonable proximity to either of the foregoing as Secured Party designates; (e) upon ten (10) days notice to Debtor or such other notice as may be required by law, sell or otherwise dispose of any Item of Equipment, whether or not in Secured Party's possession, in a commercially reasonable manner at public or private sale at any place deemed appropriate and apply the new proceeds of such sale, after deducting all costs of such sale, including, but not limited to, costs of transportation, repossession, storage, refurbishing, advertising and brokers' fees, to the obligations of Debtor to Secured Party hereunder or otherwise, with Debtor remaining liable for any deficiency and with any excess being returned to Debtor; (f) upon thirty (30) days notice to Debtor, retain any repossessed or assembled Items of Equipment as Secured Party's own property in full satisfaction of Debtors liability for the installment payments due hereunder with respect thereto, provided that Debtor will have the right to redeem such Items by payment in full of its obligations to Secured Party hereunder or otherwise or to require Secured Party to sell or otherwise dispose of such Items in the manner set forth in subparagraph (e) hereinabove upon notice to Secured Party within such thirty (30) day period; or (g) utilize any other remedy available to Secured Party under the Uniform Commercial Code or similar provision of law or otherwise at law or in equity.
No right or remedy conferred herein is exclusive of any other right or remedy conferred herein or by law; but all such remedies are cumulative of every other right or remedy conferred hereunder
IRORI INCORPORATED
EQUIPMENT FINANCING AGREEMENT 10787
or at law or in equity, by statute or otherwise, and may be exercised concurrently or separately from time to time. Any sale contemplated by subparagraph (e) of this Paragraph 18 may be adjourned from time to time by announcement at the time and place appointed for such sale, or for any such adjourned sale, without further published notice, Secured Party may bid and become the purchaser at any such sale. Any sale of an Item of Equipment, whether under said subparagraph or by virtue of judicial proceedings, will operate to divest all right, title, interest, claim and demand whatsoever; either at law or in equity, of Debtor in and to said item and will be a perpetual bar to any claim against such Item, both at law and in equity, against Debtor and all persons claiming by, through or under Debtor.
19. DISCONTINUANCE OF REMEDIES. If Secured Party proceeds to enforce any right under this Agreement and such proceedings are discontinued or abandoned for any reason or are determined adversely, then and in every such case Debtor and Secured Party will be restored to their former positions and rights hereunder.
20. SECURED PARTY'S EXPENSES. Debtor will pay Secured Party all costs and expenses, including attorney's fees and court costs and sales costs not offset against sales proceeds under Paragraph 18 above, incurred by Secured Party in exercising any of its rights or remedies hereunder or enforcing any of the terms, conditions or provisions hereof. This obligation includes the payment or reimbursement of all such amounts whether an action is ultimately filed and whether an action is ultimately dismissed.
21. ASSIGNMENT. Without the prior written consent of Secured Party, Debtor will not sell, lease, pledge or hypothecate, except as provided in this Agreement, any Item of Equipment or any interest therein or assign, transfer, pledge, or hypothecate this Agreement or any interest in this Agreement or permit the Equipment to be subject to any lien, charge or encumbrance of any nature except the security interest of Secured Party contemplated hereby. Debtor's interest herein is not assignable and will not be assigned or transferred by operation of law. Consent to any of the foregoing prohibited acts applies only in the given instance and is not a consent to any subsequent like act by Debtor or any other person.
All rights of Secured Party hereunder may be assigned, pledged, mortgaged, transferred or otherwise disposed of, either in whole or in part, without notice to Debtor but always, however, subject to the rights of Debtor under this Agreement. If Debtor is given notice of any such assignment, Debtor will acknowledge receipt thereof in writing. In the event Secured Party assigns this Agreement or the installment payments due or to become due hereunder or any other interest herein, whether as security for any of its indebtedness or otherwise, no breach or default by Secured Party hereunder or pursuant to any other agreement between Secured Party and Debtor, should there be one, will excuse performance by Debtor of any provision hereof, it being understood that in the event of such default or breach by Secured Party that Debtor will pursue any rights on account thereof solely against Secured Party. No such assignee, unless such assignee agrees in writing, will be obligated to perform any duty, covenant or condition required to be performed by Secured Party in connection with this Agreement.
Subject always to the foregoing, this Agreement inures to the benefit of, and is binding upon, the heirs, legatees, personal representative, successors and assigns of the parties hereto.
IRORI INCORPORATED
EQUIPMENT FINANCING AGREEMENT 10787
22. MARKINGS; PERSONAL PROPERTY. If Secured Party supplies Debtor with labels, plates, decals or other markings stating that Secured Party has an interest in the Equipment, Debtor will affix and keep the same prominently displayed on the Equipment or will otherwise mark the Equipment or its then location or locations, as appropriate, at Secured Party's request to indicate Secured Parry's security interest in the Equipment. The Equipment is, and at all times will remain, personal property notwithstanding that the Equipment or any Item thereof may now be, or hereafter become, in any manner affixed or attached to, or embedded in, or permanently resting upon real property or any improvement thereof or attached in any manner to what is permanent as by means of cement, plaster, nails, bolts, screws or otherwise. If requested by Secured Party, Debtor will obtain and deliver to Secured Party waivers of interest or liens in recordable form satisfactory to Secured Party from all persons claiming any interest in the real property on which an Item of Equipment is or is to be installed or located.
23. LATE CHARGES. Time is of the essence in this Agreement and if any
Installment Payment is not paid within ten (10) days after the due date thereof,
Secured Party shall have the right to add and collect, and Debtor agrees to pay:
a late charge on and in addition to, such Installment Payment equal to five
percent (5%) of such Installment Payment or a lesser amount if established by
any state or federal statute applicable thereto, and (b) interest on such
Installment Payment from thirty (30) days after the due date until paid at the
highest contract rate enforceable against Debtor under applicable law but never
to exceed eighteen percent (18%) per annum.
24. NON-WAIVER. No covenant or condition of this Agreement can be waived except by the written consent of Secured Party. Forbearance or indulgence by Secured Party in regard to any breach hereunder will not constitute a waiver of the related covenant or condition to be performed by Debtor.
25. ADDITIONAL DOCUMENTS. In connection with and in order to perfect and evidence the security interest in the Equipment granted Secured Party hereunder Debtor will execute and deliver to Secured Party such financing statements and similar documents as Secured Party requests. Debtor authorizes Secured Party where permitted by law to make filings of such financing statements without Debtor's signature. Debtor further will furnish Secured Party (a) on a timely basis, Debtor's future financial statements, including Debtor's most recent annual report, balance sheet and income statement, prepared in accordance with generally accepted accounting principles, which reports, Debtor warrants, shall fully and fairly represent the true financial condition of Debtor (b) any other information normally provided by Debtor to the public and (c) such other financial data or information relative to this Agreement and the Equipment, including, without limitation, copies of vendor proposals and purchase orders and agreements, listings of serial numbers or other identification data and confirmations of such information, as Secured Party may from time to time reasonably request. Debtor will procure and/or execute, have executed, acknowledge, have acknowledged, deliver to Secured Party, record and file such other documents and showings as Secured Party deems necessary or desirable to protect its interest in and rights under this Agreement and interest in the Equipment. Debtor will pay as directed by Secured Party or reimburse Secured Party for all filing, search, title report, legal and other fees incurred by Secured Party in connection with any documents to
IRORI INCORPORATED
EQUIPMENT FINANCING AGREEMENT 10787
be provided by Debtor pursuant to this Paragraph or Paragraph 22 and any further similar documents Secured Party may procure.
26. DEBTOR'S WARRANTIES. Debtor certifies and warrants that the financial data and other information which Debtor has submitted, or will submit, to Secured Party in connection with this Agreement is, or will be at time of delivery, as appropriate, a true and complete statement of the matters therein contained. Debtor further certifies and warrants: (a) this Agreement has been duly authorized by Debtor and when executed and delivered by the person signing on behalf of Debtor below will constitute the legal, valid and binding obligation, contract and agreement of Debtor enforceable against Debtor in accordance with its respective terms; (b) this Agreement and each and every showing provided by or on behalf of Debtor in connection herewith may be relied upon by Secured Party in accordance with the terms thereof notwithstanding the failure of Debtor or other applicable party to ensure proper attestation thereto, whether by absence of a seal or acknowledgment or otherwise; (c) Debtor has the right, power and authority to grant a security interest in the Equipment to Secured Party for the uses and purposes herein set forth and (d) each Item of Equipment will, at the time such Item becomes subject hereto, be in good repair, condition and working order.
27. ENTIRE AGREEMENT. This instrument with exhibits and related documentation constitutes the entire agreement between Secured Party and Debtor and will not be amended, altered or changed except by a written agreement signed by the parties.
28. NOTICES. Notices under this Agreement must be in writing and must be mailed by United States mail, certified mail with return receipt requested, duly addressed, with postage prepaid, to the party involved at its respective address set forth at the foot hereof or at such other address as each party may provide on notice to the other from time to time. Notices will be effective when deposited. Each party will promptly notify the other of any change in that party's address.
29. GENDER, NUMBER; JOINT AND SEVERAL LIABILITY. Whenever the context of this Agreement requires, the neuter gender includes the feminine or masculine and the singular number includes the plural; and whenever the words "Secured Party" are used herein, they include all assignees of Secured Party, it being understood that specific reference to "assignee" in Paragraph 14 above is for further emphasis. If there is more than one Debtor named in this Agreement, the liability of each will be joint and several.
30. TITLES. The titles to the paragraphs of this Agreement are solely for the convenience of the parties and are not an aid in the interpretation of the instrument.
31. GOVERNING LAW; VENUE. This Agreement will be governed by and construed in accordance with the laws of the State of California. Venue for any action related to the Agreement will be in an appropriate court in San Mateo County, California, to which Debtor consents, or in another court selected by Secured Party which has jurisdiction over the parties. In the event any provision hereof is declared invalid, such provision will be deemed severable from the remaining provisions of this Agreement, which will remain in full force and effect.
IRORI INCORPORATED
EQUIPMENT FINANCING AGREEMENT 10787
32. TIME. Time is of the essence of this Agreement and for each and all of its provisions.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of 10/27, 1995.
IRORI INCORPORATED
11025 North Torrey Pines Road, Suite 100
La Jolla, CA 92037
By: /s/ Michael P. Nova
--------------------------------
Title: President
-----------------------------
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SECURED PARTY:
LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
By: /s/ Barbara B. Kaiser
--------------------------------
Title: EVP/General Manager
-----------------------------
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FIRST ADDENDUM TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10786
BY AND BETWEEN
IRORI INCORPORATED, ("DEBTOR")
AND
LEASE MANAGEMENT SERVICES, INC., ("SECURED PARTY")
The printed form of Equipment Financing Agreement #10787 between the parties date 10/27, 1995 is amended as follows:
FIRST: In Section 8 line 7, after the word "hours," insert the words "upon prior notice,".
SECOND: In Section 14, line 3, after the word "as" insert the word "additional".
THIRD: In Section 14, line 4, after the word "companies" insert the word "reasonably".
FOURTH: In Section 15, line 2, after the word "due" insert the word "to any third party".
FIFTH: In Section 16, line 6, after the word "the" delete the word "manufacture,".
SIXTH: In Section 25, line 8, after the word "the" delete the word "true".
SEVENTH: In Section 25, line 9, after the word "condition" insert the phrase "prepared in accordance with generally accepted accounting principles".
EIGHTH: Section 25, line 15, delete the words "and showings".
NINTH: Section 26, line 3 after the word "a" delete the words "true and complete.".
TENTH: Section 26, line 4, after the word "contained" insert the phrase "prepared in accordance with generally accepted accounting principles.".
IN WITNESS WHEREOF the undersigned have executed this First Addendum the 27 day of October, 1995.
DEBTOR: SECURED PARTY:
IRORI INCORPORATED LEASE MANAGEMENT SERVICES, INC.
By: /s/ Michael P. Nova By: /s/ Barbara B. Kaiser
---------------------------------- ------------------------------------
Name: Michael P. Nova Name: Barbara B. Kaiser
-------------------------------- ----------------------------------
Title: President Title: EVP/General Manager
------------------------------- ---------------------------------
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LEASE MANAGEMENT SERVICES, INC.
SECURITY DEPOSIT PLEDGE AGREEMENT
PLEDGEE: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Memo Park, California 94025
PLEDGOR: IRORI INCORPORATED
11025 North Torrey Pines Road, Suite 100
La Jolla, CA 92037
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In consideration of, and as an inducement for Pledgee to enter unto Equipment Financing Agreement Number 10787 and all Schedules thereunder (hereinafter collectively referred to as the "Agreements") with Pledgor, and to secure the payment and performance of all Pledgor's obligations under the Agreements, Pledgor hereby grants and assigns to Pledgee, its successors and assigns, a security interest in, and hereby deposits and pledges with Pledgee a Security Deposit in an amount equivalent to 25% of aggregate Equipment cost (including any soft costs) and 30% for Leasehold Improvements leased or financed for each Schedule. As used herein, "Security Deposit" shall refer to the aggregate of all component deposits made under the applicable Schedules. Such pledge is to be upon the terms and conditions set forth below:
1. Pledgor delivers the Security Deposit to Pledgee to secure the due and punctual payment and performance of the obligations of Pledgor under the Agreements. Pledgee will pay 5.5% simple interest per annum on the Security Deposit, which interest will be accrued for each respective component of the Security Deposit from the commencement date of the applicable Schedule and paid when the Security Deposit is returned to Pledgor.
2. Upon any uncured default by Pledgor under the Agreements, interest accrual on the Collateral Pledge shall cease and Pledgee may, at its option, apply the Collateral Pledge and any interest accrued to that date toward the satisfaction of Pledgor's obligations under the Agreements, and the payment of all costs and expenses incurred by Pledgee as a result of such default, including reasonable attorney's fees. Pledgee is liable to Pledgor only for any surplus remaining from said Collateral Pledge after the full satisfaction of the foregoing obligations, costs and expenses.
3. Pledgor waives any rights to require Pledgee to (i) proceed against Pledgor or any other party; (ii) proceed against or exhaust any security held from Pledgor; or (iii) pursue any other remedy in Pledgee's power whatsoever before enforcing the provisions of, and proceeding under the provisions of, this Security Deposit Pledge Agreement. The obligations of Pledgor under this Security Deposit Pledge Agreement shall be absolute and unconditional, and shall remain in full force and effect without regard to, and shall not be released or discharged or in any way affected by (a) any amendment or modification of or supplement to the Agreements; (b) any exercise or non-exercise of
SECURITY DEPOSIT PLEDGE AGREEMENT
IRORI INCORPORATED
any right, remedy or privilege under or in respect to this Security Deposit Pledge Agreement, the Agreements, or any other instrument provided for in the Agreements, or any waiver, consent, explanation, indulgence or actions or inaction with respect to any such instrument; or (c) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or similar proceedings of Pledgor.
4. Pledgee shall have no obligation to segregate said Security Deposit and Pledgor hereby irrevocably authorizes Pledgee, at Pledgee's sole election, to commingle said Security Deposit with other assets and funds held by or belonging to Pledgee. Pledgor may not assign, pledge or transfer to any party its interest in the Security Deposit and any attempt to do so shall be null and void.
5. Without notice to Pledgor, Pledgee may freely assign its rights and obligations hereunder, only in connection with the assignment of the rights and obligations of this related Equipment Financing Agreement, in whole or in part, at any time and this Security Deposit Pledge Agreement shall inure to the successors and assignees of Pledgee. In the event Pledgee assigns or transfers this Security Deposit Pledge Agreement along with the Schedules under the Agreements, Pledgor agrees that it shall look solely to the assignee of Pledgee for the return of said Security Deposit and Pledgee shall have no further liability to Pledgor with respect thereto.
6. Provided that the Pledgor is not then in default of its obligations to the Pledgee under the Agreements or otherwise, Pledgee agrees to reduce the Security Deposit to 15% for Equipment and 25% for Leasehold Improvements financed, and make appropriate refunds, with Pledgor's receipt of additional equity, license fees or other non-refundable cash such that Pledgor's unrestricted cash balance is at least $6,000,000 or the equivalent of 12 months' cash needs, whichever is greater. ["12 months' cash needs" is defined as net cash use for the quarter just completed, multiplied by a factor of 4.]
7. Any remaining Security Deposit and accrued interest will be returned to Pledgor with Pledgor's achievement of the earlier of A) thru D) below:
A) At such time after 6/30/97 that Pledgor's unrestricted cash, less debt, is at least $5,000,000 or the equivalent of 12 months' cash needs, whichever is greater. OR,
B) In the event of an acquisition, if a creditworthy acquiror executes an assignment or guarantee acceptable to Pledgee; OR,
C) Completion of Pledgor's Initial Public Offering with net proceeds of at least $15,000,000; OR,
D) At such time as Pledgor enters into a subsequent equipment financing line with Pledgee and executes a Negative Covenant Pledge Agreement covering all obligations to Pledgee.
SECURITY DEPOSIT PLEDGE AGREEMENT
IRORI INCORPORATED
All accounting terms used herein shall be interpreted in accordance with generally accepted accounting principles.
8. Any reduction/return of the Security Deposit and any payment of interest prior to the Termination of the Agreements (as defined below) is contingent upon the following additional conditions: (a) verification of all benchmarks to be acceptable to Pledgee; (b) Pledgor has made all payments on a timely basis according to the terms of the Agreements; (c) Pledgor is not, nor ever has been in default of any financial obligation; (d) Pledgor, if privately held, has provided monthly financial statements to Pledgee within 45 days of each month-end or if Pledgor is publicly held, has provided quarterly statements as required to be filed by the Securities and Exchange Commission (the "SEC"); (e) Pledgor, if privately held, has provided annual audited financial statements to Pledgee within 90 days of Pledgor's fiscal year end or if Pledgor is publicly held, has provided Pledgee with annual statements as required to be filed by the SEC; and (f) Pledgor has not suffered any material adverse change.
The Termination of the Agreements shall be defined as the satisfaction of all Pledgor's obligations under the Agreements.
9. If the Security Deposit has not previously been returned, upon the Termination of the Agreements, Pledgee shall deliver the Security Deposit and accrued interest (less any portion of same cashed, sold, assigned or delivered pursuant to, and under the circumstances specified in, Paragraph 2 hereof) to Pledgor, and this Security Deposit Pledge Agreement shall thereupon be without further effect.
PLEDGOR: PLEDGEE:
IRORI INCORPORATED LEASE MANAGEMENT SERVICES, INC.
By: /s/ Michael P. Nova By: /s/ Barbara B. Kaiser
---------------------------------- ------------------------------------
Title: President Title: EVP/General Manager
------------------------------- ---------------------------------
Date: 10/27/95 Date: 10/27/95
-------------------------------- ----------------------------------
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LEASE MANAGEMENT SERVICES, INC.
SCHEDULE 01 TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10787
BETWEEN
IRORI INCORPORATED, AS DEBTOR
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY
ATTACHED TO AND MADE A PART OF EQUIPMENT FINANCING AGREEMENT NUMBER 10787, BY AND BETWEEN SECURED PARTY AND DEBTOR ("AGREEMENT") WHICH IS INCORPORATED HEREIN BY THIS REFERENCE. SECURED PARTY AND DEBTOR HEREBY ACKNOWLEDGE THAT THE ITEMS OF EQUIPMENT DESCRIBED IN THIS SCHEDULE ARE COVERED BY THE AGREEMENT AND THAT THE FOLLOWING IS A DESCRIPTION OF SAID ITEMS, THE ADVANCE AMOUNT ON ACCOUNT THEREOF, THE INSTALLMENT PAYMENTS APPLICABLE THERETO, THE EQUIPMENT LOCATION THEREOF, AND, IF SPECIFIED, CERTAIN FURTHER RELATED INFORMATION.
1. EQUIPMENT DESCRIPTION: See Attached Exhibit "A"
2. PROCEEDS AMOUNT: $47,191.91
3. INSTALLMENT PAYMENTS: Except as otherwise provided in the Agreement or in this Schedule, the undersigned Debtor promises to repay the Advance Amount, with interest as follows:
$1,297.00 per month due on the first day of each month for Forty-Two (42) consecutive months, beginning on October 1, 1995, followed by a payment of $7,079.00 on April 1, 1999.
4. EQUIPMENT LOCATION: 11025 North Torrey Pines Road, # 100
La Jolla, CA 92037
5. OTHER PROVISIONS: N/A
Dated: 10/27/95
-------------------------------
DEBTOR SECURED PARTY
IRORI INCORPORATED LEASE MANAGEMENT SERVICES, INC.
By: /s/ Michael P. Nova By: /s/ Barbara B. Kaiser
----------------------------------- -----------------------------------
Barbara B. Kaiser
Title: President Title: EVP/General Manager
-------------------------------- --------------------------------
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LEASE MANAGEMENT SERVICES, INC.
CREDIT MEMO
Irori Incorporated CREDIT MEMO # 10787-01 11025 North Torrey Pines Road, #100 DATE 11-Oct-95 La Jolla, CA 92037 ------------------------------------ |
QUANTITY DESCRIPTION PRICE AMOUNT
-------- ----------- ----------- ---------
RE: EQUIPMENT FINANCING AGREEMENT 10787-01
First Month's Rent: $ 1,297.00
Security Deposit: $11,798.00
Non-Financeable Items:
Freight/Install/Labor $ 893.00
Sales Tax $ 2,364.42
Softcost/Disposables $ 4,374.52
Reimbursement for payment made
to Gensia, Inc. - LMSI Ck. No. 024868
dated 10-10-95. $18,000.00
PLUS:
Vendor Prepayments $(41,350.80)
Prorata Commitment Fee $(208.00)
------------
TOTAL $(2,831.86)
$(2,831.86)
|
If you have any questions concerning this credit, CHECK PAYABLE TO:
call: (415) 854-9450. Irori Incorporated
THANK YOU FOR YOUR BUSINESS!
LEASE MANAGEMENT SERVICES, INC.
PAY PROCEEDS LETTER
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
IRORI INCORPORATED, as Debtor, hereby authorizes LEASE MANAGEMENT SERVICES, INC., as Secured Party, to distribute proceeds of Schedule 01 to the Equipment Financing Agreement Number 10787, totaling $47,191.91 against equipment purchases, as follows:
$47,191.91 Proceeds from Equipment Financing Agreement Number
10787-01.
LESS:
$1,297.00 Due to LEASE MANAGEMENT SERVICES, INC., to pay first
installment payment due October 1, 1995.
$11,798.00 Due to LEASE MANAGEMENT SERVICES, INC., to pay Security
Deposit.
$13,406.55 Due to pay vendors as more fully described on the
Exhibit A-2 attached hereto and made a part hereof.
$66.50 Due to State Board of Equalization for sales tax
adjustment on BioMedic Data Systems, Inc., Invoice
No. 9521848.
$18,000.00 Due to LEASE MANAGEMENT SERVICES, INC. for reimbursement
for Promissory Note Number IRO951 dated 10-10-95.
PLUS:
$208.00 Credit for Commitment fee refund.
$2,831.86 Credit due to IRORI INCORPORATED.
|
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
----------------------------------
Title: President
-------------------------------
Date: 10/27/95
--------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
EXHIBIT A
Attached to and forming a part of the following documents: Schedule Number 01 of Equipment Financing Agreement Number 10787, Certificate of Acceptance and the UCC Financing Statement(s) pertaining to the referenced Loan Schedule, and any addenda thereto by and between LEASE MANAGEMENT SERVICES, INC., as Secured Party, and IRORI INCORPORATED, as Debtor. The Loan Schedule referenced above is incorporated herein by this reference. All Terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement. Debtor is hereby directed to contact the Supplier of the Equipment for a description of any rights Debtor may have under the Supply Contract covering the Equipment.
COLLATERAL AS MORE FULLY DESCRIBED ON THE TWO (2) PAGE EXHIBIT A-1
ATTACHED HERETO AND MADE A PART HEREOF.
TOTAL PURCHASE PRICE $47,191.91
Debtor: /s/ MPN (Initials)
------------
Secured Party: /s/ BBK (Initials)
-----------
|
IRORI INCORPORATED
EXHIBIT A-2
10787-01
FREIGHT
EQ SALES SALES TAX VENDOR INSTALL TOTAL
VENDOR INVOICE DATE COST TAX RATE TO VENDOR REBATE LABOR INVOICE
------ -------- -------- -------- -------- --------- ------ ------- --------
Fisher Scientific 8548246 08/15/95 1,776.75 7.00% 124.37 0.00 0.00 1,901.12
Fisher Scientific 8668523 08/25/95 5,650.00 7.00% 395.50 0.00 0.00 6,045.50
Creative Integration, Inc. 3667 08/25/95 2,299.00 7.00% 160.93 (75.00) 240.00 2,624.93
BioMedic Data Systems Inc. 9521848 09/06/95 950.00 0.00% 0.00 0.00 0.00 950.00
VWR Scientific 35006540 08/24/95 1,745.33 7.00% 131.67 0.00 8.00 1,885.00
$13,406.55
|
LEASE MANAGEMENT SERVICES, INC.
CERTIFICATE OF ACCEPTANCE
Attached to and made an integral part of Schedule 01 to Equipment Financing Agreement Number 10787.
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
EQUIPMENT DESCRIPTION
SEE ATTACHED EXHIBIT "A"
We hereby acknowledge receipt, in good condition, of the Equipment described above or on the attached, Exhibit "A". The Equipment has been properly installed and is operating satisfactorily. We hereby accept said Equipment as satisfactory in all respects for the purposes of the above Equipment Financing Agreement. Said Equipment has not been delivered or accepted on a trial basis, and is free and clear of all liens and encumbrances and adverse claims, with the exception of the security interest created herein.
We will make all payments to Secured Party, as called for in the Equipment Financing Agreement. We agree that any rights we may have against the supplier or vendor of said Equipment will not be asserted as an abatement, defense, counterclaim, or deduction against Secured Party.
All capitalized terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement referenced above.
DO NOT SIGN OR DATE THIS FORM UNTIL THE EQUIPMENT IS RECEIVED,
PROPERLY INSTALLED AND IS OPERATING SATISFACTORILY.
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
--------------------------------
Title: President
-----------------------------
Date: 10/27/95
------------------------------
|
This STATEMENT is presented for filing pursuant to the California Uniform Commercial Code
-----------------------------------------------------------------------------------------------------------------------------------
1. FILE NO. OF ORIG. FINANCING 1A. DATE OF FILING OF ORIG. 1B. DATE OF ORIG. FINANCING 1C. PLACE OF FILING ORIG.
STATEMENT FINANCING STATEMENT STATEMENT FINANCING STATEMENT
9534560778 12-8-95
-----------------------------------------------------------------------------------------------------------------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.
IRORI INCORPORATED
-----------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
11025 N. TORREY PINES ROAD, Suite 100 LA JOLLA, CA 92037
-----------------------------------------------------------------------------------------------------------------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY OR
FEDERAL TAX NO.
-----------------------------------------------------------------------------------------------------------------------------------
3B. MAILING ADDRESS 3C. CITY, STATE 3D. ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.,
OR BANK TRANSIT AND
A.B.A. NO.
NAME LEASE MANAGEMENT SERVICES, INC.
MAILING ADDRESS 2500 SAND HILL ROAD, SUITE 101
CITY MENLO PARK STATE CA ZIP CODE 94025
-----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.,
NAME FEDERAL TAX NO., OR
MAILING ADDRESS BANK TRANSIT AND
A.B.A. NO.
CITY STATE ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
6A. [ ] CONTINUATION--The original Financing Statement between the foregoing Debtor and Secured Party bearing the file number
and date shown above is continued. If collateral is crops or timber, check here [ ] and insert description of real property
on which growing or to be grown in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
B [ ] RELEASE--From the collateral described in the Financing Statement bearing the file number shown above, the Secured Party
releases the collateral described in Item 7 below..
-----------------------------------------------------------------------------------------------------------------------------------
C [ ] ASSIGNMENT--The Secured Party certifies that the Secured Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file number shown above in the collateral described in Item 7
below.
-----------------------------------------------------------------------------------------------------------------------------------
D [ ] TERMINATION--The Secured Party certifies that the Secured Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
-----------------------------------------------------------------------------------------------------------------------------------
E [X] AMENDMENT--The Financing Statement bearing the file number shown above is amended as set forth in Item 7 below.
(Signature of Debtor required on all amendments.)
-----------------------------------------------------------------------------------------------------------------------------------
F [ ] OTHER
-----------------------------------------------------------------------------------------------------------------------------------
7.
AMEND ORIGINAL FILING TO MORE SPECIFICALLY DESCRIBE A PORTION OF THE EQUIPMENT AND PERSONAL PROPERTY SET FORTH IN THE
ORIGINAL FILING, NAMELY, THE EQUIPMENT AND PERSONAL PROPERTY FINANCED UNDER SCHEDULE NO. 01 OF EQUIPMENT FINANCING AGREEMENT
NO. 10787, WHICH EQUIPMENT AND PERSONAL PROPERTY IS DESCRIBED ON THE TWO (2) PAGE EXHIBIT A-1 ATTACHED HERETO AND MADE A
PART HEREOF. THIS AMENDMENT IS NOT IN LIMITATION OF THE ORIGINAL FILING, BUT SUPPLEMENTAL THERETO.
-----------------------------------------------------------------------------------------------------------------------------------
8. C 9. This Space for Use of Filing Officer
O (Date, Time, Filing Office)
D
(Date) 10/27 1995 E
--------------------------------------
IRORI INCORPORATED
-----------------------------------------------------------------------------
1
By: /s/ MICHAEL P. NOVA PRESIDENT, CEO
-----------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
2
LEASE MANAGEMENT SERVICES, INC.
-----------------------------------------------------------------------------
3
By: /s/ BARBARA B. KAISER EVP/GM
-----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
4
-----------------------------------------------------------------------------
RETURN COPY TO
5
P6-0000-141-6
ADDRESS LEASE MANAGEMENT SERVICES, INC.
2500 SAND HILL ROAD, SUITE 101 6
MENLO PARK, CA 94025
7
Filing Officer Debtors
STANDARD FORM -- FILING FEE UNIFORM COMMERCIAL CODE -- FORM UCC.2
8
Approved by the Secretary of State
9
-----------------------------------------------------------------------------------------------------------------------------------
|
This FINANCING STATEMENT is presented for filing and will remain effective with certain exceptions for a period of five years from the date of filing pursuant to section 9403 of the California Uniform Commercial Code.
-----------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR (LAST NAME FIRST) 1A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.
IRORI INCORPORATED
-----------------------------------------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS 1C. CITY, STATE 1D. ZIP CODE
11025 N. TORREY PINES ROAD, Suite 100 LA JOLLA, CA 92037
-----------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 2A. SOCIAL SECURITY OR
FEDERAL TAX NO.
-----------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER
-----------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.,
OR BANK TRANSIT AND
A.B.A. NO.
NAME LEASE MANAGEMENT SERVICES, INC.
MAILING ADDRESS 2500 SAND HILL ROAD, SUITE 101
CITY MENLO PARK STATE CA ZIP CODE 94025
-----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.,
NAME FEDERAL TAX NO., OR
MAILING ADDRESS BANK TRANSIT AND
A.B.A. NO.
CITY STATE ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
6. THIS FINANCING STATEMENT COVERS THE FOLLOWING TYPES OR ITEMS OF PROPERTY (INCLUDE DESCRIPTION OF REAL PROPERTY ON WHICH
LOCATED AND OWNER OF RECORD WHEN REQUIRED BY INSTRUCTION 4).
THIS IS A FIXTURE FILING TO BE FILED WITH THE COUNTY RECORDERS OFFICE AS A REAL ESTATE TRANSACTION.
PROPERTY LOCATION, RECORD OWNER OF PROPERTY, LEGAL PROPERTY DESCRIPTION AND FINANCING STATEMENT ARE MORE FULLY DESCRIBED ON
THE ONE PAGE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF.
-----------------------------------------------------------------------------------------------------------------------------------
7. CHECK [X] 7A. [ ] PRODUCTS OF COLLATERAL 7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH INSTRUCTION 5(a) ITEM:
IF APPLICABLE ARE ALSO COVERED [ ](1) [ ](2) [ ](3) [ ](4)
-----------------------------------------------------------------------------------------------------------------------------------
8. CHECK [X] [ ] DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC Section 9105(1)(n)
IF APPLICABLE
-----------------------------------------------------------------------------------------------------------------------------------
9. C 10. THIS SPACE FOR USE OF FILING OFFICER
O (DATE, TIME, FILE NUMBER AND FILING OFFICE)
D
Date: E
/s/ MICHAEL P. NOVA 10/27/95 1
SIGNATURE(S) OF DEBTOR(S)
----------------------------------------------------------------------------- 2
IRORI INCORPORATED 3
TYPE OR PRINT NAME(S) OF DEBTOR(S)
----------------------------------------------------------------------------- 4
/s/ BARBARA B. KAISER
SIGNATURE(S) OF SECURED PARTY(IES) 5
-----------------------------------------------------------------------------
6
LEASE MANAGEMENT SERVICES, INC. 7
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
============================================================================= 8
RETURN COPY TO
9
ADDRESS LEASE MANAGEMENT SERVICES, INC.
CITY 2500 SAND HILL ROAD, SUITE 101
STATE MENLO PARK, CA 94025
ZIP CODE
-----------------------------------------------------------------------------
FORM UCC.1--
Approved by the Secretary of State
-----------------------------------------------------------------------------------------------------------------------------------
|
EXHIBIT A
THIS IS A FIXTURE FILING TO BE FILED WITH THE COUNTY RECORDERS OFFICE AS A REAL ESTATE TRANSACTION:
PROPERTY LOCATION:
11025 N. TORREY PINES ROAD, SUITE 100
LA JOLLA, CA 92037
RECORD OWNER OF PROPERTY:
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
11025 N. TORREY PINES ROAD, SUITE 200
LA JOLLA, CA 92037
LEGAL DESCRIPTION OF PROPERTY:
PARCELS 1 AND 2 OF PARCEL MAP NO. 10901, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO JANUARY 21, 1981, BEING A DIVISION OF LOT 11 OF TORREYPINES SCIENCE PARK NO. 2, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA ACCORDING TO THE MAP 8434, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 10, 1976.
THIS FINANCING STATEMENT COVERS THE FOLLOWING TYPES (OR ITEMS) OF PROPERTY:
FIXTURE FILING TO COVER ALL EQUIPMENT AND OTHER PERSONAL PROPERTY (THE "EQUIPMENT"), NOW OWNED AND HEREAFTER ACQUIRED AND FINANCED UNDER EQUIPMENT FINANCING AGREEMENT NUMBER 10787 AND ALL SCHEDULES THEREUNDER, BETWEEN LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY OR LESSOR AND IRORI INCORPORATED, AS DEBTOR, INCLUDING, BUT NOT LIMITED TO, LABORATORY EQUIPMENT, LABORATORY FURNITURE, COMPUTER EQUIPMENT, OFFICE EQUIPMENT, OFFICE FURNITURE AND LEASEHOLD IMPROVEMENTS TOGETHER WITH ALL ACCESSORIES, PARTS, UPGRADES, RENEWALS AND REPLACEMENTS OF, AND REPAIRS, IMPROVEMENTS AND ACCESSIONS TO THE EQUIPMENT AND ANY INSURANCE PROCEEDS OR REVENUE DERIVED FROM THE SALE OR OTHER DISPOSITION OF THE EQUIPMENT.
This FINANCING STATEMENT is presented for filing and will remain effective with certain exceptions for a period of five years from the date of filing pursuant to section 9403 of the California LOAN Uniform Commercial Code.
----------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR (LAST NAME FIRST - IF AN INDIVIDUAL) 1A. SOCIAL SECURITY OR FEDERAL TAX NO.
IRORI INCORPORATED
----------------------------------------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS 1C. CITY, STATE 1D. ZIP CODE
11025 N. TORREY PINES ROAD, SUITE 100 LA JOLLA, CA 92037
----------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 2A. SOCIAL SECURITY OR FEDERAL TAX NO.
----------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
----------------------------------------------------------------------------------------------------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER
==================================================================================================================================
4. SECURED PARTY 4A. SOCIAL SECURITY NO., FEDERAL TAX NO., OR
NAME LEASE MANAGEMENT SERVICES, INC. BANK TRANSIT AND A.B.A. NO.
MAILING ADDRESS 2500 SAND HILL ROAD, SUITE 101
CITY MENLO PARK STATE CA ZIP CODE 94025
----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO., FEDERAL TAX NO. OR
NAME BANK TRANSIT AND A.B.A. NO.
MAILING ADDRESS
CITY STATE ZIP CODE
----------------------------------------------------------------------------------------------------------------------------------
6. This FINANCING STATEMENT covers the following types or items of property (INCLUDE DESCRIPTION OF REAL PROPERTY ON WHICH
LOCATED AND OWNER OF RECORD WHEN REQUIRED BY INSTRUCTION 4).
FINANCING STATEMENT AS MORE FULLY DESCRIBED ON THE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF.
----------------------------------------------------------------------------------------------------------------------------------
7. CHECK [X] 7A. PRODUCTS OF COLLATERAL 7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE
WITH INSTRUCTION 5(a) ITEM:
IF APPLICABLE [ ] ARE ALSO COVERED [ ] (1) [ ] (2) [ ] (3) [ ] (4)
----------------------------------------------------------------------------------------------------------------------------------
8. CHECK [X] [ ] DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC SECTION 9105(1)(n)
IF APPLICABLE
----------------------------------------------------------------------------------------------------------------------------------
9. DATE: C 10. THIS SPACE FOR USE OF FILING
O OFFICER (DATE, TIME, FILE
/s/ Michael P. Nova 10/27/95 D NUMBER AND FILING OFFICE)
SIGNATURE(S) OF DEBTOR(S) E
----------------------------------------------------------------------------------------------
1
IRORI INCORPORATED
TYPE OR PRINT NAME(S) OF DEBTOR(S) 2
----------------------------------------------------------------------------------------
/s/ BARBARA B. KAISER 3
SIGNATURE(S) OF SECURED PARTY(IES)
----------------------------------------------------------------------------------------
4
LEASE MANAGEMENT SERVICES, INC.
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
========================================================================================
Return Copy to 5
NAME 6
ADDRESS P6-0000-141-6 7
CITY LEASE MANAGEMENT SERVICES, INC. 8
STATE 2500 SAND HILL ROAD, SUITE 101 9
ZIP CODE MENLO PARK, CA 94025 0
========================================================================================
FORM UCC.1 --
APPROVED BY THE SECTARY OF STATE
==================================================================================================================================
|
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-01
LMSI
ROW TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
--- ------ ------------------------- ------------- --- --------------------- ------------- --------
1 22106 Gensia, Inc. 6 Chemical Fume Hood 8' 92060067
22104 Gensia, Inc. Chemical Fume Hood 8' 92060068
22102 Gensia, Inc. Chemical Fume Hood 8' 92050063
22100 Gensia, Inc. Chemical Fume Hood 8' 92050064
22098 Gensia, Inc. Chemical Fume Hood 8' 92060066
22097 Gensia, Inc. Chemical Fume Hood 8' 93070239
22105 Gensia, Inc. 6 48' Fume Hood Cabinet N/A
22103 Gensia, Inc. 48' Fume Hood Cabinet N/A
22101 Gensia, Inc. 48' Fume Hood Cabinet N/A
22099 Gensia, Inc. 48' Fume Hood Cabinet N/A
22096 Gensia, Inc. 48' Fume Hood Cabinet N/A
22095 Gensia, Inc. 48' Fume Hood Cabinet N/A 18,000.00
2 22135 Fisher Scientific 7577091 1 Balance 110/230 1879 1,031.25
3 22093 Fisher Scientific 7787450 1 Stir/Hot Plate 03033285 247.00
4 22092/ Fisher Scientific (22091) 7819795 1 RotVapor 24/40 10017814/10017727 3,108.00
5 22090 Fisher Scientific 7932314 1 Air Pump 115V AA617G 268.00
6 22138 Fisher Scientific 8490542 1 Air Pump 115V 192279 380.00
7 22117 Parallel Computing 0023812-IN 1 Apple Power Mac 6100 XB51307B41Y 2,500.00
22116 Parallel Computing 0023812-IN 1 NEC XE 15" Color Monitor 4903100HAK 600.00
22115 Parallel Computing 0023812-IN 1 Keyboard NN4306WY33G 80.00
22113 Parallel Computing 0023812-IN 1 Hewlett Packard Plus JPGL118331 1,980.00
8 22112 Parallel Computing 0023852-IN 1 8 MB Ram Module for HP4 312.00
22111 Parallel Computing 0023852-IN 1 20 MB SIMM Module for PB150 850.00
9 22114 Seal Furniture & Systems 17305 1 Executive "L" Unit Desk 605.95
of San Diego, Inc.
10 22119 Creative Integration, 003618 1 Packard Bell P/100 L155503940 2,872.00
Incorporated
22110 Creative Integration, 003618 1 1 MB Video Upgrade 100.00
Incorporated
22120 Creative Integration, 003618 1 15" Viewsonic Monitor D352121636 424.00
Incorporated
11 22126 Ficom Corporation 117892 4 KST3110 2 Line Phone 5ECTE006205
22125 Ficom Corporation 117892 4HAHE328466
22124 Ficom Corporation 117892 4FAHE323207
22123 Ficom Corporation 117892 4FAHE320506 376.00
12 22128 Office Depot, Inc. 0796732 1 4 Drawer Lateral File 902JW 399.99
13 22129 Office Depot, Inc. 011597656-001 1 4 Drawer Lateral File 925JV 399.99
14 22122 Office Depot, Inc. 0966063 1 4 Drawer Lateral File BZZ1B 379.99
15 22127 Office Depot, Inc. 6197938533 1 Kodak 35MM Projector A-615281 489.99
16 22136 Fisher Scientific 8548246 1 Refrigerator 53677244 1,776.75
17 22118 Fisher Scientific 8668523 1 Upright Freezer V09E214496VE 5,650.00
18 22121 Creative Integration, 3667 1 Power Mac 6100/56 XB5241X5PO 1,465.00
Incorporated
Debtor /s/ MPN (Initials) Secured Party /s/ BBK (Initials) 1 of 2
--------- ------------
|
LMSI
ROW TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
--- ------ ------------------------- ------------- --- --------------------- ------------- --------
22109 Creative Integration, 3667 1 15" Multiscan Monitor CJ5219PQ39X 487.00
Incorporated
22108 Creative Integration, 3667 1 Connectix Ram doubler 60.00
Incorporated
22107 Creative Integration, 3667 1 Local Talk Connector Kit 34.00
Incorporated
N/A Creative Integration, 3667 1 Vendor Credit (75.00)
Incorporated
19 22139 BioMedic Data 9521848 1 Implantable Programmable 515-0104 950.00
Systems Inc. Temperature
20 22094 VWR Scientific 35006540 1 Dataplate Hot Plate/Stir 4660 480.00
21 22137 VWR Scientific 35006540 1 PH Meter C0017339 960.00
22 GRAND TOTAL 47,191.91
Debtor /s/ MPN (Initials) Secured Party /s/ BBK (Initials) 2 of 2
--------- ------------
|
LEASE MANAGEMENT SERVICES, INC.
SCHEDULE 02 TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10787
BETWEEN
IRORI INCORPORATED, AS DEBTOR
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY
ATTACHED TO AND MADE A PART OF EQUIPMENT FINANCING AGREEMENT NUMBER 10787, BY AND BETWEEN SECURED PARTY AND DEBTOR ("AGREEMENT") WHICH IS INCORPORATED HEREIN BY THIS REFERENCE. SECURED PARTY AND DEBTOR HEREBY ACKNOWLEDGE THAT THE ITEMS OF EQUIPMENT DESCRIBED IN THIS SCHEDULE ARE COVERED BY THE AGREEMENT AND THAT THE FOLLOWING IS A DESCRIPTION OF SAID ITEMS, THE ADVANCE AMOUNT ON ACCOUNT THEREOF, THE INSTALLMENT PAYMENTS APPLICABLE THERETO, THE EQUIPMENT LOCATION THEREOF, AND, IF SPECIFIED, CERTAIN FURTHER RELATED INFORMATION.
1. EQUIPMENT DESCRIPTION: See Attached Exhibit "A"
2. PROCEEDS AMOUNT: $56,437.03
3. INSTALLMENT PAYMENTS: Except as otherwise provided in the Agreement
or in this Schedule, the undersigned Debtor
promises to repay the Advance Amount, with
|
interest as follows:
$1,551.00 per month due on the first day of each month for Forty-Two (42) consecutive months, beginning on December 1, 1995, followed by a payment of $8,466.00 on June 1, 1999.
4. EQUIPMENT LOCATION: 11025 North Torrey Pines Road, # 100
La Jolla, CA 92037
5. OTHER PROVISIONS: N/A
Dated: 11/30/95
----------------
DEBTOR: SECURED PARTY:
IRORI INCORPORATED LEASE MANAGEMENT SERVICES, INC.
By: /s/ Michael P. Nova By: /s/ Barbara B. Kaiser
--------------------------- ------------------------
Barbara B. Kaiser
Title: President, CEO Title: EVP/General Manager
------------------------- ---------------------
|
LEASE MANAGEMENT SERVICES, INC.
EXHIBIT A
Attached to and forming a part of the following documents: Schedule Number 02 of Equipment Financing Agreement Number 10787, Certificate of Acceptance and the UCC Financing Statement(s) pertaining to the referenced Loan Schedule, and any addenda thereto by and between LEASE MANAGEMENT SERVICES, INC., as Secured Party, and IRORI INCORPORATED, as Debtor. The Loan Schedule referenced above is incorporated herein by this reference. All Terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement. Debtor is hereby directed to contact the Supplier of the Equipment for a description of any rights Debtor may have under the Supply Contract covering the Equipment.
COLLATERAL AS MORE FULLY DESCRIBED ON THE TWO (2) PAGE EXHIBIT A-1
ATTACHED HERETO AND MADE A PART HEREOF.
TOTAL PURCHASE PRICE $56,437.03
Debtor: /s/ MPN (Initials)
---------------------
Secured Party: /s/ BBK (Initials)
---------------
|
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-02
LMSI
ROW TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
--- ------ ------------------------- ------------- --- --------------------- ------------- --------
1 33247 Ficom Corporation 119413 1 Vodavi 4896 System B0006229 4,856.00
1 33250 Ficom Corporation 119413 1 12 Port Digital Station 597.00
Board
1 33251 Ficom Corporation 119413 1 12 Port Single Line Station 688.00
Board
1 33248 Ficom Corporation 119413 1 Tri-output Power Supply B0007284 376.00
1 33249 Ficom Corporation 119413 1 Quad DTMF Receiver 194.00
1 33238 Ficom Corporation 119413 1 Executive Display/Speaker 41201415 259.00
Phone
1 33266 Ficom Corporation 119413 1 Executive Display/Speaker 41201372 259.00
Phone
1 33267 Ficom Corporation 119413 1 48 Button DSS Console 41200015 259.00
1 33246 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018288 206.52
1 33245 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018296 206.52
1 33253 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018713 206.52
1 33243 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500347 206.52
1 33244 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018708 206.52
1 33242 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500192 206.52
1 33241 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500188 206.52
1 33236 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018300 206.52
1 33268 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018282 206.52
1 33239 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500213 206.52
1 33237 Ficom Corporation 119413 1 Enhanced Speaker Telephones 40707926 206.52
1 33240 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500187 206.52
1 33265 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500290 206.47
2 33279 Chemglass 0017082-IN 1 5-Port R Vacuum Manifold N/A 304.45
3 33282 BioMedic Data Systems Inc. 9521826 1 Programmable Console System 51S-0104 4,795.00
3 33283 BioMedic Data Systems Inc. 9521826 1 Implantable Programmable 072595 950.00
Temperature Transponder
4 33269 Genie Corp. 2087 1 Flammable Cabinets N/A 850.00
4 33270 Genie Corp. 2087 1 Flammable Cabinets N/A 850.00
4 33271 Genie Corp. 2087 1 Flammable Cabinets N/A 850.00
4 33272 Genie Corp. 2087 1 Flammable Cabinets N/A 850.00
5 33252 Cousins IRORC00057 1 Refrigerator SM800847 370.00
6 33276 Black Box Corporation 522148 1 PC-Reader DA015919542 565.00
6 33279 Black Box Corporation 522148 1 PC-Reader DA025919557 565.00
7 33261 Fisher Scientific 8853230 1 Centrific Centrifuge 5N-50800322 798.92
120V 60HZ
7 33281 Fisher Scientific 8853230 1 Horizontal Rotor 4PL50ML 330.00
7 33260 Fisher Scientific 8853230 1 Orbital Shaker 115V 50/60HZ CA07952598 733.65
8 33274 Fisher Scientific 8897713 1 Flammable Material Storage 53677274 2,142.00
Refrigerator
8 33273 Fisher Scientific 8897713 1 Flammable Material Storage VH780666 1,994.00
Freezer
9 33275 Fisher Scientific 9163973 1 Centrifuge Model 5415C 541B67414 1,585.00
115V 60MZ
10 33278 Avid Marketing, Inc. 17259 1 AVID Mini Tracker Multi 040408 450.00
Tag Reader
Debtor /s/ MPN (Initials) Secured Party /s/ BBK (Initials) 1 of 2
------------ ---------------
|
LMSI
ROW TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
--- ------ ------------------------- ------------- --- --------------------- ------------- --------
11 33254 VWR Scientific 37138480 1 Air Pump 115V 60HZ AC8102178 1,081.13
12 33255 VWR Scientific 34604370 2 5-Leg Chair w/Foot Ring 52875-1 290.00
13 33280 VWR Scientific 34582390 1 Mixer, Rotomix Model 48215T 552950795027 192.60
14 33256 VWR Scientific 34300760 1 Dry Block Heater 1073 140.80
15 33264 Forma Scientific 2515960 1 Lab Incubator 2-Auto CO2 30781-8503 5,741.10
16 33262 The Baker Company 00076759 1 SG5, UV&Mag Hood 54734 6,413.50
17 33263 A.G. Heinze Incorporated 92437 1 TMS Body w/Trinocular 21024 3,443.35
17 33257 A.G. Heinze Incorporated 92437 1 Alphaphot 2 Binocular 176873 1,468.62
18 33258 A.G. Heinze Incorporated 92608 1 Objective Lense 176873 584.80
19 33259 E.I. Du Pont De Nemours A271011589 1 RT6000D Digital Centrifuge 9504046 7,925.40
GRAND TOTAL $56,437.03
Debtor /s/ MPN (Initials) Secured Party /s/ BBK (Initials) 2 of 2
------------ ---------------
|
Lease Management Services, Inc. 2500 Sand Hill Road, Suite 101, Menlo Park, CA 94025 Telephone (415) 854-9450 o Fax (415) 854-9457
November 21, 1995
Brenda Magill
IRORI INCORPORATED
11025 North Torrey Pines Road, Suite 100
La Jolla, CA 92037
Dear Brenda:
Enclosed are the documents for Equipment Financing Agreement Number 10787, Schedule Number 02. The Commencement date of this schedule is December 1, 1995. Please see that the documents are executed and returned.
Equipment identification labels (asset tags) are also enclosed. Please affix the asset tags to all of the equipment listed in the Exhibit A. Please acknowledge completion of labeling by listing the appropriate asset tag number in the space provided for each equipment description in Exhibit A, Sign where indicated below and return to me.
Should you have any questions, please call.
Sincerely, LABELING OF EQUIPMENT
Equipment Financing Agreement
/s/ K.C. Number: 10787-02
Label Number: 33236 to 33286
Kathy (Kasey) Christie
Contract Administrator IRORI INCORPORATED
By: /s/ Michael P. Nova
--------------------------
Title: President, CEO
-----------------------
Date: 11/29/95
-----------------------
|
Enclosures
A Subsidiary of Phoenixcor, Inc. o 65 Water Street, South Norwalk, CT 06854
LEASE MANAGEMENT SERVICES, INC.
CERTIFICATE OF ACCEPTANCE
Attached to and made an integral part of Schedule 02 to Equipment Financing Agreement Number 10787.
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
EQUIPMENT DESCRIPTION
SEE ATTACHED EXHIBIT "A"
We hereby acknowledge receipt, in good condition, of the Equipment described above or on the attached, Exhibit "A". The Equipment has been properly installed and is operating satisfactorily. We hereby accept said Equipment as satisfactory in all respects for the purposes of the above Equipment Financing Agreement. Said Equipment has not been delivered or accepted on a trial basis, and is free and clear of all liens and encumbrances and adverse claims, with the exception of the security interest created herein.
We will make all payments to Secured Party, as called for in the Equipment Financing Agreement. We agree that any rights we may have against the supplier or vendor of said Equipment will not be asserted as an abatement, defense, counterclaim, or deduction against Secured Party.
All capitalized terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement referenced above,
DO NOT SIGN OR DATE THIS FORM UNTIL THE EQUIPMENT IS RECEIVED,
PROPERLY INSTALLED AND IS OPERATING SATISFACTORILY.
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
---------------------------------
Title: President, CEO
------------------------------
Date: 11/27
------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
PAY PROCEEDS LETTER
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
IRORI INCORPORATED, as Debtor, hereby authorizes LEASE MANAGEMENT SERVICES, INC., as Secured Party, to distribute proceeds of Schedule 02 to the Equipment Financing Agreement Number 10787, totaling $56,437.03 against equipment purchases, as follows:
$56,437.03 Proceeds from Equipment Financing Agreement
Number 10787-02.
LESS:
$ 1,551.00 Due to LEASE MANAGEMENT SERVICES, INC., to pay
first installment payment due December 1, 1995.
$14,109.00 Due to LEASE MANAGEMENT SERVICES, INC., to
pay Security Deposit.
PLUS:
$ 248.00 Credit for Commitment fee refund.
$41,025.03 Credit due to IRORI INCORPORATED.
|
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
------------------------------
Title: President, CEO
---------------------------
Date: 11/27
---------------------------
|
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-02
LMSI
ROW TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
--- ------ ------------------------- ------------- --- ---------------------------- ------------- --------
1 33247 Ficom Corporation 119413 1 Vodavi 4896 System B0006229 4,856.00
1 33250 Ficom Corporation 119413 1 12 Port Digital Station 597.00
Board
1 33251 Ficom Corporation 119413 1 12 Port Single Line 688.00
Station Board
1 33248 Ficom Corporation 119413 1 Tri-output Power Supply B0007284 376.00
1 33249 Ficom Corporation 119413 1 Quad DTMF Receiver 194.00
1 33238 Ficom Corporation 119413 1 Executive Display/Speaker 41201415 259.00
Phone
1 33266 Ficom Corporation 119413 1 Executive Display/Speaker 41201372 259.00
Phone
1 33267 Ficom Corporation 119413 1 48 Button DSS Console 41200015 259.00
1 33246 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018288 206.52
1 33245 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018296 206.52
1 33253 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018713 206.52
1 33243 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500347 206.52
1 33244 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018708 206.52
1 33242 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500192 206.52
1 33241 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500188 206.52
1 33236 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018300 206.52
1 33268 Ficom Corporation 119413 1 Enhanced Speaker Telephones 41018282 206.52
1 33239 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500213 206.52
1 33237 Ficom Corporation 119413 1 Enhanced Speaker Telephones 40707926 206.52
1 33240 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500187 206.52
1 33265 Ficom Corporation 119413 1 Enhanced Speaker Telephones 50500290 206.47
2 33279 Chemglass 0017082-IN 1 5-Port R Vacuum Manifold N/A 304.45
3 33282 BioMedic Data Systems Inc. 9521826 1 Programmable Console System 51S-0104 4,795.00
3 33283 BioMedic Data Systems Inc. 9521826 1 Implantable Programmable 072595 950.00
Temperature Transponder
4 33269 Genie Corp. 2087 1 Flammable Cabinets N/A 850.00
4 33270 Genie Corp. 2087 1 Flammable Cabinets N/A 850.00
4 33271 Genie Corp. 2087 1 Flammable Cabinets N/A 850.00
4 33272 Genie Corp. 2087 1 Flammable Cabinets N/A 850.00
5 33252 Cousins IRORC00057 1 Refrigerator SM800847 370.00
6 33276 Black Box Corporation 522148 1 PC-Reader DA015919542 565.00
6 33279 Black Box Corporation 522148 1 PC-Reader DA025919557 565.00
7 33261 Fisher Scientific 8853230 1 Centrific Centrifuge 5N-50800322 798.92
120V 60HZ
7 33281 Fisher Scientific 8853230 1 Horizontal Rotor 4PL50ML 330.00
7 33260 Fisher Scientific 8853230 1 Orbital Shaker 115V 50/60HZ CA07952598 733.65
8 33274 Fisher Scientific 8897713 1 Flammable Material Storage 53677274 2,142.00
Refrigerator
8 33273 Fisher Scientific 8897713 1 Flammable Material Storage VH780666 1,994.00
Freezer
9 33275 Fisher Scientific 9163973 1 Centrifuge Model 5415C 541B67414 1,585.00
115V 60MZ
10 33278 Avid Marketing, Inc. 17259 1 AVID Mini Tracker Multi 040408 450.00
Tag Reader
Debtor /s/ MPN (Initials) Secured Party /s/ BBK (Initials) 1 of 1
------------- -----------
|
LMSI
ROW TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
--- ------ ------------------------- ------------- --- ---------------------------- ------------- ----------
11 33254 VWR Scientific 37138480 1 Air Pump 115V 60HZ AC8102178 1,081.13
12 33255 VWR Scientific 34604370 2 5-Leg Chair w/Foot Ring 52875-1 290.00
13 33280 VWR Scientific 34582390 1 Mixer, Rotomix Model 48215T 552950795027 192.60
14 33256 VWR Scientific 34300760 1 Dry Block Heater 1073 140.80
15 33264 Forma Scientific, Inc. 2515960 1 Lab Incubator 2-Auto CO2 30781-8503 5,741.10
16 33262 The Baker Company 00076759 1 SG5, UV&Mag Hood 54734 6,413.50
17 33263 A.G. Heinze Incorporated 92437 1 TMS Body w/Trinocular 21024 3,443.35
17 33257 A.G. Heinze Incorporated 92437 1 Alphaphot 2 Binocular 176873 1,468.62
18 33258 A.G. Heinze Incorporated 92608 1 Objective Lense 176873 584.80
19 33259 E.I. Du Pont De Nemours A271011589 1 RT6000D Digital Centrifuge 9504046 7,925.40
GRAND TOTAL $56,437.03
Debtor /s/ MPN (Initials) Secured Party /s/ BBK (Initials) 2 of 2
------------- -----------
|
10787-02 This STATEMENT is presented for filing pursuant to the California Uniform Commercial Code
-----------------------------------------------------------------------------------------------------------------------------------
1. FILE NO. OF ORIG. FINANCING 1A. DATE OF FILING OF ORIG. 1B. DATE OF ORIG. FINANCING 1C. PLACE OF FILING ORIG.
STATEMENT FINANCING STATEMENT STATEMENT FINANCING STATEMENT
9534560778 12-8-95 Sacramento, CA
-----------------------------------------------------------------------------------------------------------------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.
IRORI INCORPORATED
-----------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
11025 NORTH TORREY PINES ROAD, SUITE 100 LA JOLLA, CA 92037
-----------------------------------------------------------------------------------------------------------------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY OR
FEDERAL TAX NO.
-----------------------------------------------------------------------------------------------------------------------------------
3B. MAILING ADDRESS 3C. CITY, STATE 3D. ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.,
FEDERAL TAX NO,.
OR BANK TRANSIT AND
A.B.A. NO.
NAME LEASE MANAGEMENT SERVICES, INC.
MAILING ADDRESS 2500 SAND HILL ROAD, SUITE 101
CITY MENLO PARK STATE CA ZIP CODE 94025
-----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.,
NAME FEDERAL TAX NO. OR
MAILING ADDRESS BANK TRANSIT AND
A.B.A. NO.
CITY STATE ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
6A [ ] CONTINUATION--The original Financing Statement between the foregoing Debtor and Secured Party bearing the file number
and date shown above is continued. If collateral is crops or timber, check here [ ] and insert description of real property
on which growing or to be grown in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
B [ ] RELEASE--From the collateral described in the Financing Statement bearing the file number shown above, the Secured Party
releases the collateral described in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
C [ ] ASSIGNMENT--The Secured Party certifies that the Secured Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file number shown above in the collateral described in Item 7
below.
-----------------------------------------------------------------------------------------------------------------------------------
D [ ] TERMINATION--The Secured Party certifies that the Secured Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
-----------------------------------------------------------------------------------------------------------------------------------
E [X] AMENDMENT--The Financing Statement bearing the file number shown above is amended as set forth in Item 7 below.
(Signature of Debtor required on all amendments.)
-----------------------------------------------------------------------------------------------------------------------------------
F [ ] OTHER
-----------------------------------------------------------------------------------------------------------------------------------
7.
AMEND ORIGINAL FILING TO MORE SPECIFICALLY DESCRIBE A PORTION OF THE EQUIPMENT AND PERSONAL PROPERTY SET FORTH IN THE
ORIGINAL FILING, NAMELY, THE EQUIPMENT AND PERSONAL PROPERTY FINANCED UNDER SCHEDULE NO. 02 OF EQUIPMENT FINANCING AGREEMENT
NO. 10787, WHICH EQUIPMENT AND PERSONAL PROPERTY IS DESCRIBED ON THE TWO (2) PAGE EXHIBIT A-1 ATTACHED HERETO AND MADE A
PART HEREOF. THIS AMENDMENT IS NOT IN LIMITATION OF THE ORIGINAL FILING, BUT SUPPLEMENTAL THERETO.
-----------------------------------------------------------------------------------------------------------------------------------
8. C 9. This Space for Use of Filing Officer
O (Date, Time, Filing Office)
D
(Date) 11/30/95 E
--------------------------------------
IRORI INCORPORATED
-----------------------------------------------------------------------------
1
By: /s/ MICHAEL P. NOVA PRESIDENT, CEO
-----------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
2
LEASE MANAGEMENT SERVICES, INC.
-----------------------------------------------------------------------------
3
By: /s/ BARBARA B. KAISER
-----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
4
-----------------------------------------------------------------------------
RETURN COPY TO
5
P6-0000-141-6
ADDRESS LEASE MANAGEMENT SERVICES, INC.
2500 SAND HILL ROAD, SUITE 101 6
MENLO PARK, CA 94025
7
Filing Officer Debtors
STANDARD FORM -- FILING FEE UNIFORM COMMERCIAL CODE -- FORM UCC.2
8
Approved by the Secretary of State
9
-----------------------------------------------------------------------------------------------------------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
CERTIFICATE OF ACCEPTANCE
Attached to and made an integral part of Schedule 02 to Equipment Financing Agreement Number 10787.
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
EQUIPMENT DESCRIPTION
SEE ATTACHED EXHIBIT "A"
We hereby acknowledge receipt, in good condition, of the Equipment described above or on the attached, Exhibit "A". The Equipment has been properly installed and is operating satisfactorily. We hereby accept said Equipment as satisfactory in all respects for the purposes of the above Equipment Financing Agreement. Said Equipment has not been delivered or accepted on a trial basis, and is free and clear of all liens and encumbrances and adverse claims, with the exception of the security interest created herein.
We will make all payments to Secured Party, as called for in the Equipment Financing Agreement. We agree that any rights we may have against the supplier or vendor of said Equipment will not be assented as an abatement, defense, counterclaim, or deduction against Secured Party.
All capitalized terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement referenced above.
DO NOT SIGN OR DATE THIS FORM UNTIL THE EQUIPMENT IS RECEIVED,
PROPERLY INSTALLED AND IS OPERATING SATISFACTORILY.
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
-------------------------------
Title: President, CEO
-----------------------------
Date: 11/27
-----------------------------
|
LEASE MANAGEMENT SERVICES, INC.
PAY PROCEEDS LETTER
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
IRORI INCORPORATED, as Debtor, hereby authorizes LEASE MANAGEMENT SERVICES, INC., as Secured Party, to distribute proceeds of Schedule 02, to the Equipment Financing Agreement Number 10787, totaling $56,437.03 against equipment purchases, as follows:
$56,437.03 Proceeds from Equipment Financing
Agreement Number 10787-02.
LESS:
$ 1,551.00 Due to LEASE MANAGEMENT SERVICES, INC.,
to pay first installment payment due
December 1, 1995.
$14,109.00 Due to LEASE MANAGEMENT SERVICES, INC.,
to pay Security Deposit.
PLUS:
$ 248.00 Credit for Commitment fee refund.
$41,025.03 Credit due to IRORI INCORPORATED.
|
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
-------------------------------
Title: President, CEO
-----------------------------
Date: 11/27
-----------------------------
|
Lease Management Services, Inc. 2500 Sand Hill Road, Suite 101, Menlo Park, CA 94025 Telephone (415) 854-9450 o Fax (415) 854-9457
November 21, 1995
Brenda Magill
IRORI INCORPORATED
11025 North Torrey Pines Road, Suite 100
La Jolla, CA 92037
Dear Brenda:
Enclosed are the documents for Equipment Financing Agreement Number 10787, Schedule Number 02. The Commencement date of this schedule is December 1, 1995. Please see that the documents are executed and returned.
Equipment identification labels (asset tags) are also enclosed. Please affix the asset tags to all of the equipment listed in the Exhibit A. Please acknowledge completion of labeling by listing the appropriate asset tag number in the space provided for each equipment description in Exhibit A, Sign where indicated below and return to me.
Should you have any questions, please call.
Sincerely, LABELING OF EQUIPMENT
Equipment Financing Agreement
/s/ K.C. Number: 10787-02
Label Number: 33236 to 33286
Kathy (Kasey) Christie IRORI INCORPORATED
Contract Administrator
By: /s/ Michael P. Nova
------------------------------
Title: President, CEO
---------------------------
Date: 11/29/95
---------------------------
|
Enclosures
A Subsidiary of Phoenixcor, Inc. o 65 Water Street, South Norwalk, CT 06854
LEASE MANAGEMENT SERVICES, INC.
SCHEDULE 03 TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10787
BETWEEN
IRORI INCORPORATED, AS DEBTOR
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY
ATTACHED TO AND MADE A PART OF EQUIPMENT FINANCING AGREEMENT NUMBER 10787, BY AND BETWEEN SECURED PARTY AND DEBTOR ("AGREEMENT") WHICH IS INCORPORATED HEREIN BY THIS REFERENCE. SECURED PARTY AND DEBTOR HEREBY ACKNOWLEDGE THAT THE ITEMS OF EQUIPMENT DESCRIBED IN THIS SCHEDULE ARE COVERED BY THE AGREEMENT AND THAT THE FOLLOWING IS A DESCRIPTION OF SAID ITEMS, THE ADVANCE AMOUNT ON ACCOUNT THEREOF, THE INSTALLMENT PAYMENTS APPLICABLE THERETO, THE EQUIPMENT LOCATION THEREOF, AND, IF SPECIFIED, CERTAIN FURTHER RELATED INFORMATION.
1. EQUIPMENT DESCRIPTION: See Attached Exhibit "A"
2. PROCEEDS AMOUNT: $105,426.86
3. INSTALLMENT PAYMENTS: Except as otherwise provided in the Agreement
or in this Schedule, the undersigned Debtor
promises to repay the Advance Amount, with
|
interest as follows:
$2,880.00 per month due on the first day of each month for Forty-Two (42) consecutive months, beginning on January 1, 1996, followed by a payment of $15,814.00 on July 1, 1999.
4. EQUIPMENT LOCATION: 11025 North Torrey Pines Road, # 100
La Jolla, CA 92037
5. OTHER PROVISIONS: N/A
|
DEBTOR: SECURED PARTY:
IRORI INCORPORATED LEASE MANAGEMENT SERVICES, INC.
By: /s/ Michael P. Nova By: /s/ BARBARA B. KAISER
------------------------------- ------------------------------
Barbara B. Kaiser
|
LEASE MANAGEMENT SERVICES, INC.
CERTIFICATE OF ACCEPTANCE
Attached to and made an integral part of Schedule 03 to Equipment Financing Agreement Number 10787.
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Memo Park, CA 94025
EQUIPMENT DESCRIPTION
SEE ATTACHED EXHIBIT "A"
We hereby acknowledge receipt, in good condition, of the Equipment described above or on the attached Exhibit "A". The Equipment has been properly installed and is operating satisfactorily. We hereby accept said Equipment as satisfactory in all respects for the purposes of the above Equipment Financing Agreement. Said Equipment has not been delivered or accepted on a trial basis, and is free and clear of all liens and encumbrances and adverse claims, with the exception of the security interest created herein.
We will make all payments to Secured Party, as called for in the Equipment Financing Agreement. We agree that any rights we may have against the supplier or vendor of said Equipment will not be asserted as an abatement, defense, counterclaim, or deduction against Secured Party.
All capitalized terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement referenced above.
DO NOT SIGN OR DATE THIS FORM UNTIL THE EQUIPMENT IS RECEIVED,
PROPERLY INSTALLED AND IS OPERATING SATISFACTORILY.
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
-------------------------------
Title: CEO
-----------------------------
Date: 1/10/96
-----------------------------
|
LEASE MANAGEMENT SERVICES, INC.
PAY PROCEEDS LETTER
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
IRORI INCORPORATED, as Debtor, hereby authorizes LEASE MANAGEMENT SERVICES, INC., as Secured Party, to distribute proceeds of Schedule 03 to the Equipment Financing Agreement Number 10787, totaling $105,426.86 against equipment purchases, as follows:
$105,426.86 Proceeds from Equipment Financing
Agreement Number 10787-03.
LESS:
$ 2,880.00 Due to LEASE MANAGEMENT SERVICES, INC., to
pay first installment payment
due January 1, 1996.
$ 26,357.00 Due to LEASE MANAGEMENT SERVICES, INC.,
to pay Security Deposit.
$ 42,000.00 Due to LEASE MANAGEMENT SERVICES, INC., for
reimbursement on Interim Promissory Note
Number IRONINC953.
$ 170.80 Due to LEASE MANAGEMENT SERVICES, INC.,
for interest due on Interim Promissory Note
Number IRONINC953.
PLUS:
$ 464.00 Credit for Commitment fee refund.
$ 34,483.06 Credit due to IRORI INCORPORATED.
|
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
-------------------------------
Title: CEO
-----------------------------
Date: 1/10/96
-----------------------------
|
LEASE MANAGEMENT SERVICES, INC.
EXHIBIT A
Attached to and forming a part of the following documents: Schedule Number 03 of Equipment Financing Agreement Number 10787, Certificate of Acceptance and the UCC Financing Statement(s) pertaining to the referenced Loan Schedule, and any addenda thereto by and between LEASE MANAGEMENT SERVICES, INC., as Secured Party, and IRORI INCORPORATED, as Debtor. The Loan Schedule referenced above is incorporated herein by this reference. All Terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement. Debtor is hereby directed to contact the Supplier of the Equipment for a description of any rights Debtor may have under the Supply Contract covering the Equipment.
COLLATERAL AS MORE FULLY DESCRIBED ON THE ONE (1) PAGE EXHIBIT A-1
ATTACHED HERETO AND MADE A PART HEREOF.
TOTAL PURCHASE PRICE $105,426.86
Debtor: /s/ MPN (Initials)
-------------
Secured Party: /s/ BBK (Initials)
-----------
|
LEASE MANAGEMENT SERVICES, INC.
CREDIT MEMO
2500 Sand Hill Road, Suite 101, Menlo Park, CA. 94025
Irori Incorporated
11025 North Torrey Pines Road, #100
La Jolla, CA 92037
CREDIT MEMO # 10787-03
DATE 09-Jan-96
QUANTITY DESCRIPTION PRICE AMOUNT
----------------- ------------------------------------------------------------ -------------- ----------------------
RE: EQUIPMENT FINANCING AGREEMENT NO. 10787-03
-----------------------------------------------------------
First Month's Rent: $2,880.00
Security Deposit: $26,357.00
Advance made on IP Note IROINC953 $42,000.00
Interest due on Note IROINC953 $170.80
Non-Financeable Items:
Freight/Install/Labor $225.81
Sales Tax $2,748.25
Softcost/Disposables $306.78
PLUS:
Vendor Prepayments ($108,707.70)
Prorata Commitment Fee ($464.00)
TOTAL ($34,483.06)
----------------------
If you have any questions concerning this credit, CHECK PAYABLE TO: ($34,483.06)
call: (415) 854-9450. Irori Incorporated
----------------------
|
THANK YOU FOR YOUR BUSINESS!
Lease Management Services, Inc. 2500 Sand Hill Road, Suite 101, Menlo Park, CA 94025 Telephone (415) 854-9450 o Fax (415) 854-9457
January 9, 1996
Brenda Magill
Irori Incorporated
11025 North Torrey Pines Road, Suite 100
La Jolla, CA 92037
Dear Brenda:
Enclosed are the documents for Equipment Financing Agreement Number 10787 Schedule Number 03. The Commencement date of this schedule is January 1, 1996.
Equipment identification labels (asset tags) are also enclosed. Please affix the asset tags to all of the equipment listed in the Exhibit A. Please acknowledge completion of labeling by listing the appropriate asset tag number in the space provided for each equipment description in Exhibit A. Sign where indicated below and return to me.
Should you have any questions, please call.
Sincerely, LABELING OF EQUIPMENT
Equipment Financing Agreement
/s/ Wendy Ritz Number: 10787-03
Label Number:_________________
Wendy Ritz IRORI INCORPORATED
Sr. Contract Administrator
By: /s/ Michael P. Nova
-----------------------------
Title: CEO
--------------------------
Date: 1/10/96
--------------------------
|
Enclosures
A Subsidiary of Phoenixcor, Inc. o 65 Water Street, South Norwalk, CT 06854
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-03
LMSI
TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
22249 VWR Scientific 36511410 1 Ice Flaker with bin 846822-01M 2,463.63
22258 VWR Scientific 37897740 1 Buchi Rotovapor 1002641 2,899.00
22255 RAG Electronics, Inc. 070611 1 Tektronix Probe Oscilloscope B020613 7,390.00
22256 RAG Electronics, Inc. 070611 1 Fluke 87 DMM 64310091 315.00
22257 RAG Electronics, Inc. 070611 1 Topward 6306D Power Supply 977215 879.00
22260 DepoTech Corporation 001 1 Receptionist Desk & Work Area N/A 3,500.00
22253 E.I. DuPont DeNemours & Co. A271141679 1 Ultra Centrifuge 9501119 18,239.00
22254 Parsons Airgas 743705 1 Liquid Nitrogen Freezer System 566017L9 5,637.50
22250 McMaster-Carr 8346301 1 Combination Vise N/A 298.45
22261 McMaster-Carr 8382499 1 Work Bench 60" Wide x 30" Deep N/A 272.88
22262 McMaster-Carr 8382499 1 Work Bench 48" Wide x 30" Deep N/A 233.41
22259 Curtin Matheson Scientific, Inc. 6868342 1 Drying Rack N/A 312.00
22251 PBA Technology 0000002254 1 Robot/Basic PBA Flexys system
w/syringe pump pipette 10022 62,200.00
22252 PBA Technology 0000002280B 1 Parallel Card for Robot N/A 786.99
TOTAL 105,426.86
|
Debtor /s/ MPN (Initials) Secured Party /s/ BBK (Initials) 1 of 1
--------- ---------
|
STATE OF CALIFORNIA
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT CHANGE--FORM UCC-2
IMPORTANT--READ INSTRUCTIONS ON BACK BEFORE COMPLETING FORM
10787-03 This STATEMENT is presented for filing pursuant to the California Uniform Commercial Code
-----------------------------------------------------------------------------------------------------------------------------------
1. FILE NO. OF ORIG. FINANCING 1A. DATE OF FILING OF ORIG. 1B. DATE OF ORIG. FINANCING 1C. PLACE OF FILING ORIG.
STATEMENT FINANCING STATEMENT STATEMENT FINANCING STATEMENT
9534560078 12-8-95
-----------------------------------------------------------------------------------------------------------------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.
IRORI INCORPORATED
-----------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
11025 NORTH TORREY PINES ROAD, SUITE 100 LA JOLLA, CA 92037
-----------------------------------------------------------------------------------------------------------------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY OR
FEDERAL TAX NO.
-----------------------------------------------------------------------------------------------------------------------------------
3B. MAILING ADDRESS 3C. CITY, STATE 3D. ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.,
FEDERAL TAX NO,.
OR BANK TRANSIT AND
A.B.A. NO.
NAME LEASE MANAGEMENT SERVICES, INC.
MAILING ADDRESS 2500 SAND HILL ROAD, SUITE 101
CITY MENLO PARK STATE CA ZIP CODE 94025
-----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.,
NAME FEDERAL TAX NO. OR
MAILING ADDRESS BANK TRANSIT AND
A.B.A. NO.
CITY STATE ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
6A [ ] CONTINUATION--The original Financing Statement between the foregoing Debtor and Secured Party bearing the file number
and date shown above is continued. If collateral is crops or timber, check here [ ] and insert description of real property
on which growing or to be grown in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
B [ ] RELEASE--From the collateral described in the Financing Statement bearing the file number shown above, the Secured Party
releases the collateral described in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
C [ ] ASSIGNMENT--The Secured Party certifies that the Secured Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file number shown above in the collateral described in Item 7
below.
-----------------------------------------------------------------------------------------------------------------------------------
D [ ] TERMINATION--The Secured Party certifies that the Secured Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
-----------------------------------------------------------------------------------------------------------------------------------
E [X] AMENDMENT--The Financing Statement bearing the file number shown above is amended as set forth in Item 7 below.
(Signature of Debtor required on all amendments.)
-----------------------------------------------------------------------------------------------------------------------------------
F [ ] OTHER
-----------------------------------------------------------------------------------------------------------------------------------
7.
AMEND ORIGINAL FILING TO MORE SPECIFICALLY DESCRIBE A PORTION OF THE EQUIPMENT AND PERSONAL PROPERTY SET FORTH IN THE
ORIGINAL FILING, NAMELY, THE EQUIPMENT AND PERSONAL PROPERTY FINANCED UNDER SCHEDULE NO. 03 OF EQUIPMENT FINANCING AGREEMENT
NO. 10787, WHICH EQUIPMENT AND PERSONAL PROPERTY IS DESCRIBED ON THE ONE (1) PAGE EXHIBIT A-1 ATTACHED HERETO AND MADE A
PART HEREOF. THIS AMENDMENT IS NOT IN LIMITATION OF THE ORIGINAL FILING, BUT SUPPLEMENTAL THERETO.
-----------------------------------------------------------------------------------------------------------------------------------
8. C 9. This Space for Use of Filing Officer
O (Date, Time, Filing Office)
D
(Date) 1/10 1996 E
--------------------------------------
IRORI INCORPORATED
-----------------------------------------------------------------------------
1
By: /s/ MICHAEL P. NOVA 1/10/96
----------------------------------------------------------------- 2
SIGNATURE(S) OF DEBTOR(S) (TITLE)
3
LEASE MANAGEMENT SERVICES, INC.
----------------------------------------------------------------------------- 4
By: /s/ BARBARA B. KAISER EUP/GM 5
-----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE) 6
----------------------------------------------------------------------------- 7
RETURN COPY TO
8
P6-0000-141-6
ADDRESS LEASE MANAGEMENT SERVICES, INC. 9
2500 SAND HILL ROAD, SUITE 101
MENLO PARK, CA 94025
Filing Officer Debtors
STANDARD FORM -- FILING FEE UNIFORM COMMERCIAL CODE -- FORM UCC.2
Approved by the Secretary of State
-----------------------------------------------------------------------------------------------------------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
SCHEDULE 04 TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10787
BETWEEN
IRORI INCORPORATED, AS DEBTOR
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY
ATTACHED TO AND MADE A PART OF EQUIPMENT FINANCING AGREEMENT NUMBER 10787, BY AND BETWEEN SECURED PARTY AND DEBTOR ("AGREEMENT") WHICH IS INCORPORATED HEREIN BY THIS REFERENCE. SECURED PARTY AND DEBTOR HEREBY ACKNOWLEDGE THAT THE ITEMS OF EQUIPMENT DESCRIBED IN THIS SCHEDULE ARE COVERED BY THE AGREEMENT AND THAT THE FOLLOWING IS A DESCRIPTION OF SAID ITEMS, THE ADVANCE AMOUNT ON ACCOUNT THEREOF, THE INSTALLMENT PAYMENTS APPLICABLE THERETO, THE EQUIPMENT LOCATION THEREOF, AND, IF SPECIFIED, CERTAIN FURTHER RELATED INFORMATION.
1. EQUIPMENT DESCRIPTION: See Attached Exhibit "A"
2. PROCEEDS AMOUNT: $138,474.53
3. INSTALLMENT PAYMENTS: Except as otherwise provided in the Agreement or in
this Schedule, the undersigned Debtor promises to
|
repay the Advance Amount, with interest as follows:
$4,161.00 per month due on the first day of each month for Forty-Two (42) consecutive months, beginning on January 1, 1995, followed by a payment of $1.00 on July 1, 1999.
4. EQUIPMENT LOCATION: 11025 North Torrey Pines Road, # 100
La Jolla, CA 92037
5. OTHER PROVISIONS: N/A
Dated: 11/16/96
-----------------------------
DEBTOR SECURED PARTY
IRORI INCORPORATED LEASE MANAGEMENT SERVICES, INC.
By: /s/ Michael P. Nova By: /s/ BARBARA B. KAISER
-------------------------------- --------------------------------
Barbara B. Kaiser
Title: 11/16/96 Title: EVP/General Manager
----------------------------- --------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
PAY PROCEEDS LETTER
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
IRORI INCORPORATED, as Debtor, hereby authorizes LEASE MANAGEMENT SERVICES, INC., as Secured Party, to distribute proceeds of Schedule 04, to the Equipment Financing Agreement Number 10787, totaling $$138,474.53 against equipment purchases, as follows:
$138,474.53 Proceeds from Equipment Financing Agreement Number 10787-04.
LESS:
$4,161.00 Due to LEASE MANAGEMENT SERVICES, INC., to pay first
installment payment due January 1, 1995.
$41,542.00 Due to LEASE MANAGEMENT SERVICES, INC., to pay Security
Deposit.
$54,442.00 Due to Weather Engineering to pay the balance due on
Invoice 12462.
PLUS:
$609.00 Credit for Commitment fee refund.
$38,938.53 Credit due to IRORI INCORPORATED.
|
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
-------------------------------
Title: CEO
-------------------------------
Date: 11/16/96
-------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
EXHIBIT A
Attached to and forming a part of the following documents: Schedule Number 04 of Equipment Financing Agreement Number 10787, Certificate of Acceptance and the UCC Financing Statement(s) pertaining to the referenced Loan Schedule, and any addenda thereto by and between LEASE MANAGEMENT SERVICES, INC., as Secured Party, and IRORI INCORPORATED, as Debtor. The Loan Schedule referenced above is incorporated herein by this reference. All Terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement. Debtor is hereby directed to contact the Supplier of the Equipment for a description of any rights Debtor may have under the Supply Contract covering the Equipment.
LEASEHOLD, INCLUDING, BUT NOT LIMITED TO:
GENERAL REQUIREMENTS, HVAC, PLUMBING, ELECTRICAL, ENGINEERING, DESIGN WORK, ETC.
TOTAL PURCHASE PRICE $138,474.53
Debtor: s/ MPN (Initials)
-------------------
Secured Party: /s/ BBK (Initials)
----------------
|
LEASE MANAGEMENT SERVICES, INC.
CREDIT MEMO
2500 Sand Hill Road, Suite 101, Menlo Park, CA. 94025
Irori Incorporated
11025 North Torrey Pines Road, #100
La Jolla, CA 92037
CREDIT MEMO # 10787-04
DATE 12-Jan-96
QUANTITY DESCRIPTION PRICE AMOUNT
----------------- ------------------------------------------------------------ -------------- ----------------------
RE: EQUIPMENT FINANCING AGREEMENT NO. 10787-04
-----------------------------------------------------------
First Month's Rent: $4,161.00
Security Deposit: $41,542.00
Non-Financeable Items:
Freight/Install/Labor $0.00
Sales Tax $0.00
Softcost/Disposables $0.00
PLUS:
Vendor Prepayments ($84,032.53)
Prorata Commitment Fee ($609.00)
-----------
TOTAL ($38,938.53)
----------------------
If you have any questions concerning this credit, CHECK PAYABLE TO:
call: (415) 854-9450. Irori Incorporated ($38,938.53)
----------------------
|
THANK YOU FOR YOUR BUSINESS!
LEASE MANAGEMENT SERVICES, INC.
CERTIFICATE OF ACCEPTANCE
Attached to and made an integral part of Schedule 04 to Equipment Financing Agreement Number 10787.
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Memo Park, CA 94025
EQUIPMENT DESCRIPTION
SEE ATTACHED EXHIBIT "A"
We hereby acknowledge receipt, in good condition, of the Equipment described above or on the attached Exhibit "A". The Equipment has been properly installed and is operating satisfactorily. We hereby accept said Equipment as satisfactory in all respects for the purposes of the above Equipment Financing Agreement. Said Equipment has not been delivered or accepted on a trial basis, and is free and clear of all liens and encumbrances and adverse claims, with the exception of the security interest created herein.
We will make all payments to Secured Party, as called for in the Equipment Financing Agreement. We agree that any rights we may have against the supplier or vendor of said Equipment will not be assented as an abatement, defense, counterclaim, or deduction against Secured Party.
All capitalized terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement referenced above.
DO NOT SIGN OR DATE THIS FORM UNTIL THE EQUIPMENT IS RECEIVED,
PROPERLY INSTALLED AND IS OPERATING SATISFACTORILY.
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
---------------------------
Title: CEO
------------------------
Date: 1/6/96
-------------------------
|
INTERIM PROMISSORY NOTE
Interim Promissory Note Number IROINC953 Amount $42,000.00
For Value Received, the undersigned promises to pay, in lawful money of the United States of America, to Lease Management Services, Inc. the sum of Forty-Two Thousand & 00/100 on demand with interest at a rate equal to 14.64 % percent, commencing on the date of funding (the date Payee advanced the principle sum hereof.) Payment in full is due on or before January 31, 1996.
The principal amount of this Note shall cease to be due and payable on the date the undersigned executes all necessary Lease/Equipment Financing Schedule documents ("Agreements"), and the principal portion of this Note shall be deemed paid in full, however, interest shall accrue until the Rental Commencement Date of the Agreements and is due and payable monthly.
In the Event of commencement of suit to enforce payment of this Note, the undersigned agrees to pay such additional sums for attorney's fees and court costs as any court of competent jurisdiction may adjudge reasonable.
Irori Incorporated agrees that the proceeds of this Note shall be paid to Irori Incorporated for reimbursement for equipment purchase made from PBA Technology.
IRORI INCORPORATED
By: /s/ Michael P. Nova
---------------------------
Michael P. Nova, M.D.
Title: President and CEO
------------------------
Date: 12/21/95
------------------------
|
PBA
Unit 3, Forge Close, ----INVOICE----
Little End Road,
Eaten Socon., St. Neets,
Cambs, PE19 3TP
Telephone: 01480 474344
Facsimile 01480 471660
Reg No. 02315315
---------------------------------------------------- ----------------------------------------------
IRORI QUANTUM MICROCHEMISTRY Invoice No: 0000002280
11025 NORTH TORRWY PINES ROAD
SUITE 100 Date: 13-Dec-95
LA JOLLA
CA 92037, U.S.A. IRORI Due date:
Order No: 1133
Current Balance 12169.50
-------------------------------------------------------------------------------------------------------------------------
Qty Description Price each Total
-------------------------------------------------------------------------------------------------------------------------
1 PIC PARALLEL CARD (DESPATCH NOTE 573) 787.00 787.00
1 POSTAGE VIA DHL 30.96 30.96
Equipment = 787
1.566
--------
US$ = 1,232.44 leaseline
Postage = 30.96
1.566
--------
US$ = 48.48
--------
Deliver To:
---------------------------------------------------- ----------------------------------------------
GOODS TOTAL 817.96
VAT TOTAL 0.00
INVOICE TOTAL
---------------------------------------------------- ----------------------------------------------
|
Date: December 20, 1995 Pages: 5
To: Wendy
Lease Management
1-415-854-9457
From: Brenda Magill
IRORI
Subject: Robot purchase, promissory note
|
Following are copies of the invoices for our purchase of the robot. We are awaiting confirmation of the exact US dollar amount due and will wire transfer the balance on Friday. Additionally, I have included a copy of our money market statement where we transferred the initial deposit for the robot.
As you indicated we can not get all the paperwork done by December 31st, but can get a promissory note done to reimburse IRORI the balance. My estimate of the amount due is as follows:
Robotics system in 40,506.03
Conversion factor 1.566
----------
Price of robot in US $ $63,432.44
Advance rate for lease 75%
----------
Advance to IRORI $47,574,33
Less sales and use tax to be paid by Lease Management (4,440.27)
----------
Estimate of amount due to IRORI $43,134.06
----------
|
I expect only a small difference between the estimate above and our final payment. If we set up the promissory note for $42,000, we will ensure not to borrow in excess of the amount ultimately to be paid.
Please call with any questions.
PBA
Unit 3, Forge Close, ----INVOICE----
Little End Road,
Eaten Socon., St. Neets,
Cambs, PE19 3TP
Telephone: 01480 474344
Facsimile 01480 471660
Reg No. 02318315
----------------------------------------------
VAT Regd. No. 68 608 7004 55
---------------------------------------------------- ----------------------------------------------
IRORI QUANTUM MICROCHEMISTRY Invoice No: 0000002254
11025 NORTH TORRWY PINES ROAD
SUITE 100 Date: 24 Nov 95
LA JOLLA
CA 92037, U.S.A. IRORI Due date:
Order No: 1133
Current Balance -28785.60
-------------------------------------------------------------------------------------------------------------------------
Qty Description Price each Total
-------------------------------------------------------------------------------------------------------------------------
1 Basic PBA Flexys 29054.91 29054.91
1 Syringe Pump 5747.13 5747.13
1 Pipette Head 4916.99 4916.99
1 (Despatch Note 549 & Airway Bill No A1547002
One Pic Parallel Card to follow
Currency Rate of Exchange(pound)1.566 to $
Terms and Conditions 70% Paid 30% on Acceptance
=39,719.03
1.566
---------
US$ = 62,200 lease line
-------------------------------------------------------------------------------------------------------------------------
Deliver To:
---------------------------------------------------- ----------------------------------------------
GOODS TOTAL 39719.03
VAT TOTAL 0.00
INVOICE TOTAL 39719.03
---------------------------------------------------- -----------------------------------------------
|
----------------------------------------------
PBA
Unit 3, Forge Close, ----INVOICE----
Little End Road,
Eaten Socon., St. Neets,
Cambs, PE19 3TP
Telephone: 01480 474344
Facsimile 01480 471660
Reg No. 02318315
----------------------------------------------
VAT Regd. No. 68 608 7004 55
---------------------------------------------------- ----------------------------------------------
IRORI QUANTUM MICROCHEMISTRY Invoice No: 0000002255
11025 NORTH TORRWY PINES ROAD
SUITE 100 Date: 24 Nov 95
LA JOLLA
CA 92037, U.S.A. IRORI Due date:
Order No: 1133
----------------------- -----------------
Current Balance 10933.43
-------------------------------------------------------------------------------------------------------------------------
Qty Description Price each Total
-------------------------------------------------------------------------------------------------------------------------
1 Packing, Freight and Insurance Charges 1243.57 1243.57
(Despatch Note S49 &
Airway Bill No A1547002)
Currency Rate of Exchange (pound)1.566 to $
Terms and Conditions $1,000 paid Balance
on Acceptance.
= 1243.57
1.566
---------
US $ = 1,947.43
-------------------------------------------------------------------------------------------------------------------------
Deliver To:
---------------------------------------------------- ----------------------------------------------
GOODS TOTAL 1243.57
VAT TOTAL 0.00
INVOICE TOTAL 1243.57
---------------------------------------------------- ----------------------------------------------
|
BANK OF AMERICA
==========================================================================================================================
P.O. Box 3530
Rancho Cordova, CA 95741-3530 YOUR BANK OF AMERICA
0050 BUSINESS MONEY MARKET
EO-2 ACCOUNT STATEMENT
Statement Period:
October 24 through November 21, 1995
[BAR CODE ADDRESS]
IRORI Account Number: 00501-03718
11025 N. TORREY PINES RD
STE 100 At Your Service
LA JOLLA CA 92037-1030 Call: 619-452-8400, 24 hours,
7 days a week
Written Inquiries
Bank of America
San Diego Main Office
P.O. Box 60049
Los Angeles, CA 90060-0049
Customer since 1995
Bank of America appreciates your
business and we enjoy serving you.
==========================================================================================================================
[ ] SUMMARY OF YOUR BUSINESS MONEY MARKET ACCOUNT
---------------------------------------------------- -----------------------------------------------------------------
Beginning Balance on 10/24/95 $713,972.98 Annual Percentage Yield earned this period 3.89%
---------------------------------------------------- -----------------------------------------------------------------
Total Checks and Other Withdrawals - 425,120.00 Interest paid year-to-date $2,292.22
---------------------------------------------------- -----------------------------------------------------------------
Interest Paid + 1,323.04 Number of 24 Hour Customer Service Calls
==================================================== Self-Service 0
Ending Balance $290,176.02 Assisted 0
==========================================================================================================================
[ ] ACCOUNT ACTIVITY
Date Posted Description Reference Number Amount
Other Withdrawals
10/24 Debit Adjustment $200,000.00
11/03 Telephone/Telegraphic Transfers 50,000.00
11/14 Debit Adjustment 30.00
11/14 Intl Money Trans MTA 9531809209a Sndr Ref: BA Ref005797 Mw Bnf:
Pinkley Byatt Ltd., T/Z Pba Inf: Fc 50 45,090.00
11/14 Telephone/Telegraphic Transfers 100,000.00
11/17 Debit Adjustment 30,000.00
Total Other Withdrawals $425,120.00
Interest Paid
11/21 Interest Paid From 10/24/95 Through 11/21/95 $1,323.04
==========================================================================================================================
[ ] Daily Balance
Date Amount Date Amount Date Amount
10/24 $ 513,972.98 11/14 318,852.98 11/21 290,176.02
11/03 463,972.98 11/17 288,852.98
|
Continued on next page Page 1 of 2
Lease Management Services, Inc. 2500 Sand Hill Road, Suite 101, Menlo Park, CA 94025 |
Telephone (415) 854-9450 o Fax (415) 854-9457
January 12, 1996
Brenda Magill
Irori Incorporated
11025 North Torrey Pines Road, Suite 100
La Jolla, CA 92037
Dear Brenda:
Enclosed are the documents for Equipment Financing Agreement Number 10787 Schedule Number 04. The Commencement date of this schedule is January 1, 1996. Funding of this Schedule is contingent upon receipt of the executed Landlord Waiver. I trust from your voice mail message that the Landlord Waiver should be settled within the next week.
I am also enclosing the original bank deposit receipt in the amount of $34,483.06 for your records.
Should you have any questions, please call.
Sincerely,
/s/ Wendy Ritz Wendy Ritz Sr. Contract Administrator |
Enclosures
A Subsidiary of Phoenixcor, Inc. o 65 Water Street, South Norwalk, CT 06854
LEASE MANAGEMENT SERVICES, INC.
SCHEDULE 05 TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10787
BETWEEN
IRORI INCORPORATED, AS DEBTOR
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY
ATTACHED TO AND MADE A PART OF EQUIPMENT FINANCING AGREEMENT NUMBER 10787, BY AND BETWEEN SECURED PARTY AND DEBTOR ("AGREEMENT") WHICH IS INCORPORATED HEREIN BY THIS REFERENCE. SECURED PARTY AND DEBTOR HEREBY ACKNOWLEDGE THAT THE ITEMS OF EQUIPMENT DESCRIBED IN THIS SCHEDULE ARE COVERED BY THE AGREEMENT AND THAT THE FOLLOWING IS A DESCRIPTION OF SAID ITEMS, THE ADVANCE AMOUNT ON ACCOUNT THEREOF, THE INSTALLMENT PAYMENTS APPLICABLE THERETO, THE EQUIPMENT LOCATION THEREOF, AND, IF SPECIFIED, CERTAIN FURTHER RELATED INFORMATION.
1. EQUIPMENT DESCRIPTION: See Attached Exhibit "A"
2. PROCEEDS AMOUNT: $27,156.20
3. INSTALLMENT PAYMENTS: Except as otherwise provided in the Agreement or in
this Schedule, the undersigned Debtor promises to
|
repay the Advance Amount, with interest as follows:
$742.00 per month due on the first day of each month for Forty-Two (42) consecutive months, beginning on March 1, 1996, followed by $4,073.00 on September 1, 1999.
4. EQUIPMENT LOCATION: 11025 North Torrey Pines Road, # 100
La Jolla, CA 92037
5. OTHER PROVISIONS: N/A
Dated: 3/13/96
-----------------
DEBTOR: SECURED PARTY:
IRORI INCORPORATED LEASE MANAGEMENT SERVICES, INC.
By: /s/ Michael P. Nova By: /s/ Barbara B. Kaiser
--------------------- ------------------------
Michael P. Nova Barbara B. Kaiser
Title: President Title: EVP/General Manager
--------------------- ---------------------
|
LEASE MANAGEMENT SERVICES, INC.
EXHIBIT A
Attached to and forming a part of the following documents: Schedule Number 05 of Equipment Financing Agreement Number 10787, Certificate of Acceptance and the UCC Financing Statement(s) pertaining to the referenced Loan Schedule, and any addenda thereto by and between LEASE MANAGEMENT SERVICES, INC., as Secured Party, and IRORI INCORPORATED, as Debtor. The Loan Schedule referenced above is incorporated herein by this reference. All Terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement. Debtor is hereby directed to contact the Supplier of the Equipment for a description of any rights Debtor may have under the Supply Contract covering the Equipment.
COLLATERAL AS MORE FULLY DESCRIBED ON THE TWO (2) PAGE
EXHIBIT A-1 ATTACHED HERETO AND MADE A PART HEREOF.
TOTAL PURCHASE PRICE $27,156.20
-----------
Debtor: /s/ MPN (Initials)
-------------
Secured Party: /s/ BBK (Initials)
-------------
|
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-05
LMSI
TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
22349 APS Water Services Corporation 95800 1 NANOPure Bioresearch Grade
Wall Mount Polisher 851950920142 2,995.00
------------------------------------------------------------------------------------------------------------------------------------
22348 APS Water Services Corporation 95800 4 Cartridge Kit for Nanopure N/A 1,400.00
------------------------------------------------------------------------------------------------------------------------------------
22319 Fisher Scientific 9536323 1 55 Gallon Drum Cabinet N/A 644.40
------------------------------------------------------------------------------------------------------------------------------------
22347 J. & H, Berge, Inc. 944605 1 Auto Desiccator Cabinet N/A 640.50
------------------------------------------------------------------------------------------------------------------------------------
22343 National Business Furniture, Inc. L67684-7CTE 1 Ergo Nut Station w/Mouseboard N/A 194.00
------------------------------------------------------------------------------------------------------------------------------------
22346 Parsons Airgas 743705 1 Auto Fill Optio/Racks 414056B1 5,517.50
------------------------------------------------------------------------------------------------------------------------------------
22338 San Diego Office Interiors 121130 0950668-IN 1 36" Two Drawer Lateral File N/A 307.00
------------------------------------------------------------------------------------------------------------------------------------
22320 San Diego Office Interiors " 0950668-IN 1 Quantum Series Doable Pedestal Desk N/A 306.00
------------------------------------------------------------------------------------------------------------------------------------
22344 San Diego Office Interiors 950921 0950668-IN 1 42" Three Drawer Lateral File N/A 475.00
------------------------------------------------------------------------------------------------------------------------------------
22326 San Diego Office Interiors 103113 0950521-IN 1 Racetrack Conference Table N/A 1,0811.00
------------------------------------------------------------------------------------------------------------------------------------
22337 San Diego Office Interiors " 0950521-IN 1 Management Chair w/Arms N/A 328.00
------------------------------------------------------------------------------------------------------------------------------------
22333 San Diego Office Interiors " 0950521-IN 1 Management Chair w/Arms N/A 328.00
------------------------------------------------------------------------------------------------------------------------------------
22332 San Diego Office Interiors " 0950521-IN 1 Management Chair w/Arms N/A 328.00
------------------------------------------------------------------------------------------------------------------------------------
22331 San Diego Office Interiors " 0950521-IN 1 Management Chair w/Arms N/A 328.00
------------------------------------------------------------------------------------------------------------------------------------
22330 San Diego Office Interiors " 0950521-IN 1 Management Chair w/Arms N/A 328.00
------------------------------------------------------------------------------------------------------------------------------------
22329 San-Diego Office Interiors " 0950521-IN 1 Management Chair w/Arms N/A 328.00
------------------------------------------------------------------------------------------------------------------------------------
22328 San Diego Office Interiors " 0950521-IN 1 Management Chair w/Arms N/A 328.00
------------------------------------------------------------------------------------------------------------------------------------
22327 San Diego Office Interiors " 0950521-IN 1 Management Chair w/Arms N/A 328.00
------------------------------------------------------------------------------------------------------------------------------------
22325 San Diego Office Interiors 102315 0950521-IN 1 Lounge Chair N/A 765.00
------------------------------------------------------------------------------------------------------------------------------------
22324 San Diego Office Interiors " 0950521-IN 1 Lounge Chair N/A 765.00
------------------------------------------------------------------------------------------------------------------------------------
22323 San Diego Office Interiors 743705 0950521-IN 1 Cube Table for Lounge N/A 174.00
------------------------------------------------------------------------------------------------------------------------------------
22342 San Diego Office Interiors 0950521-IN 1 Guest Chair N/A 203.00
------------------------------------------------------------------------------------------------------------------------------------
22341 San Diego Office Interiors 0950521-IN 1 Guest Chair N/A 203.00
------------------------------------------------------------------------------------------------------------------------------------
22340 San Diego Office interiors 112029 0950521-IN 1 Guest Chair N/A 203.00
------------------------------------------------------------------------------------------------------------------------------------
22339 San Diego Office Interiors " 0950521-IN 1 Guest Chair N/A 203.00
------------------------------------------------------------------------------------------------------------------------------------
22336 San Diego Office Interiors 0950521-IN 1 36X60 Conference Table N/A 384.00
------------------------------------------------------------------------------------------------------------------------------------
22322 San Diego Office Interiors 0950521-IN 1 Single Pedestal Desk N/A 460.00
------------------------------------------------------------------------------------------------------------------------------------
22345 San Diego Office Interiors 0950521-IN 1 36X60 Bookcase N/A 110.00
------------------------------------------------------------------------------------------------------------------------------------
22321 San Diego Office Interiors 0950521-IN 1 30X66 Double Pedestal Desk N/A 288.00
------------------------------------------------------------------------------------------------------------------------------------
22358 San Diego Office Interiors 0950521-IN 1 Protocol Hutch 14X64 N/A 230.00
------------------------------------------------------------------------------------------------------------------------------------
22361 San Diego Office Interiors 0950521-IN 1 30X70 Single Pedestal Desk N/A 390.00
------------------------------------------------------------------------------------------------------------------------------------
22360 San Diego Office Interiors 0954521-IN 1 36X72 Double Pedestal Desk N/A 306.00
------------------------------------------------------------------------------------------------------------------------------------
22357 San Diego Office Interiors 0950521-IN 1 36X72 Double Pedestal Desk N/A 306.00
------------------------------------------------------------------------------------------------------------------------------------
22355 San Diego Office Interiors 0950321-IN 1 36X72 Double Pedestal Desk N/A 306.00
------------------------------------------------------------------------------------------------------------------------------------
|
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-05
LMSI
TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
22353 San Diego Office Interiors 0950521-IN 1 36X72 Double Pedestal Desk N/A 306.00
------------------------------------------------------------------------------------------------------------------------------------
22356 San Diego Office Interiors 0950521-IN 1 Protocol Hutch 14X72 N/A 246.00
------------------------------------------------------------------------------------------------------------------------------------
22354 San Diego Office Interiors 0950521-IN 1 Protocol Hutch 14X72 N/A 246.00
------------------------------------------------------------------------------------------------------------------------------------
22352 San Diego Office Interiors 0950521-IN l Protocol Hutch 14X72 N/A 246.00
------------------------------------------------------------------------------------------------------------------------------------
22350 San Diego Office Interiors 0950521-IN 1 Protocol Hutch 14X72 N/A 246.00
------------------------------------------------------------------------------------------------------------------------------------
22335 San Diego Office Interiors 0950521-IN 1 Bookcase 36X36 N/A 104.00
------------------------------------------------------------------------------------------------------------------------------------
22359 San Diego Office Interiors 0950521-IN 1 30X72 Double Pedestal Desk N/A 300.00
------------------------------------------------------------------------------------------------------------------------------------
22351 San Diego Office Interiors 0950521-IN 1 30X72 Double Pedestal Desk N/A 300.00
------------------------------------------------------------------------------------------------------------------------------------
22334 San Diego Office Interiors 0950521-IN 1 Management Chair w/Arms N/A 328.00
------------------------------------------------------------------------------------------------------------------------------------
22318 VWR Scientific 42556300 1 Hot Plate Stir PC420 6072722 230.00
------------------------------------------------------------------------------------------------------------------------------------
22317 VWR Scientific 41697320 1 Oven, Gravity, 45seg 9512-3101 1,005.30
------------------------------------------------------------------------------------------------------------------------------------
22316 VWR Scientific 41697320 1 Pump 115/230V 1603007402 828.00
------------------------------------------------------------------------------------------------------------------------------------
22315 VWR Scientific 41301730 1 Pump 115V 60HZ 4401007413 1,291.50
------------------------------------------------------------------------------------------------------------------------------------
TOTAL $27,156.20
|
LEASE MANAGEMENT SERVICES, INC.
PAY PROCEEDS LETTER
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
IRORI INCORPORATED, as Debtor, hereby authorizes LEASE MANAGEMENT SERVICES, INC., as Secured Party, to distribute proceeds of Schedule 05 to the Equipment Financing Agreement Number 10787, totaling $27,156.20 against equipment purchases, as follows:
$27,156.20 Proceeds from Equipment Financing Agreement Number
10787-05.
LESS:
$742.00 Due to LEASE MANAGEMENT SERVICES, INC., to
pay first installment payment due March 1, 1996.
$6,789.00 Due to LEASE MANAGEMENT SERVICES, INC., to
pay Security Deposit.
PLUS:
$119.00 Credit for Commitment fee refund.
$19,744.20 Credit due to IRORI INCORPORATED.
|
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
----------------------
Michael P. Nova
Title: President
-------------------
Date: 3/13/96
-------------------
|
LEASE MANAGEMENT SERVICES, INC.
CREDIT MEMO
2500 Sand Hill Road, Suite 101, Menlo Park, CA 94025
Irori Incorporated
11025 North Torrey Pines Road, #100
La Jolla, CA 92037
CREDIT MEMO # 10787-05
DATE 05-Mar-96
QUANTITY DESCRIPTION PRICE AMOUNT
----------------- ------------------------------------------------------------ -------------- ----------------------
RE: EQUIPMENT FINANCING AGREEMENT NO. 10787-05
-----------------------------------------------------------
First Month's Rent: $742.00
Security Deposit: $6,789.00
Non-Financeable Items:
Freight/Install/Labor $1,496.41
Sales Tax $1,926.71
Softcost/Disposables $1,008.56
PLUS
Vendor Prepayments $(31,587.88)
Prorata Commitment Fee $( 119.00)
-----------
TOTAL $(19,744.20)
-----------------------
If you have any questions concerning this credit, CHECK PAYABLE TO: $(19,744.20)
call: (415) 854-9450. Irori Incorporated
-----------------------
|
THANK YOU FOR YOUR BUSINESS!
LEASE MANAGEMENT SERVICES, INC.
CERTIFICATE OF ACCEPTANCE
Attached to and made an integral part of Schedule 05 to Equipment Financing Agreement Number 10787.
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
|
EQUIPMENT DESCRIPTION
SEE ATTACHED EXHIBIT "A"
We hereby acknowledge receipt, in good condition, of the Equipment described above or on the attached Exhibit "A". The Equipment has been properly installed and is operating satisfactorily. We hereby accept said Equipment as satisfactory in all respects for the purposes of the above Equipment Financing Agreement. Said Equipment has not been delivered or accepted on a trial basis, and is free and clear of all liens and encumbrances and adverse claims, with the exception of the security interest created herein.
We will make all payments to Secured Party, as called for in the Equipment Financing Agreement, We agree that any rights we may have against the supplier or vendor of said Equipment will not be asserted as an abatement, defense, counterclaim, or deduction against Secured Patty.
All capitalized terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement referenced above.
DO NOT SIGN OR DATE THIS FORM UNTIL THE EQUIPMENT IS RECEIVED,
PROPERLY INSTALLED AND IS OPERATING SATISFACTORILY.
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
------------------------------
Michael P. Nova
Title: President
---------------------------
Date: 3/13/96
---------------------------
|
Lease Management Services, Inc. 2500 Sand Hill Road, Suite 101, Menlo Park, CA 94025 Telephone (415) 854-9450 o Fax (415) 854-9457
March 6, 1996
Brenda Magill
Irori Incorporated
11025 North Torrey Pines Road, Suite 100
La Jolla, CA 92037
Dear Brenda:
Enclosed are the documents for Equipment Financing Agreement Number 10787 Schedule Number 05. The Commencement date of this schedule is March 1, 1996,
Equipment identification labels (asset tags) axe also enclosed. Please affix the asset tags to all of the equipment listed in the Exhibit A. Please acknowledge completion of labeling by listing the appropriate asset tag number in the space provided for each equipment description in Exhibit A. Sign where indicated below and return to me.
Should you have any questions, please call.
Sincerely, LABELING OF EQUIPMENT
Equipment Financing Agreement
/s/ Wendy Ritz Number: 10787-05
Label Number: 31606-31655
Wendy Ritz IRORI INCORPORATED
Sr. Contract Administrator
By: /s/ Michael P. Nova
---------------------------------------
Michael P. Nova
Title: President
------------------------------------
Date: 3/13/96
------------------------------------
|
Enclosures
A Subsidiary of Phoenixcor, Inc. o 65 Water Street, South Norwalk, CT 06854
LEASE MANAGEMENT SERVICES, INC.
SCHEDULE 06 TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10787
BETWEEN
IRORI INCORPORATED, AS DEBTOR
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY
ATTACHED TO AND MADE A PART OF EQUIPMENT FINANCING AGREEMENT NUMBER 10787, BY AND BETWEEN SECURED PARTY AND DEBTOR ("AGREEMENT") WHICH IS INCORPORATED HEREIN BY THIS REFERENCE. SECURED PARTY AND DEBTOR HEREBY ACKNOWLEDGE THAT THE ITEMS OF EQUIPMENT DESCRIBED IN THIS SCHEDULE ARE COVERED BY THE AGREEMENT AND THAT THE FOLLOWING IS A DESCRIPTION OF SAID ITEMS, THE ADVANCE AMOUNT ON ACCOUNT THEREOF, THE INSTALLMENT PAYMENTS APPLICABLE THERETO, THE EQUIPMENT LOCATION THEREOF, AND, IF SPECIFIED, CERTAIN FURTHER RELATED INFORMATION.
1. EQUIPMENT DESCRIPTION: See Attached Exhibit "A"
2. PROCEEDS AMOUNT: $84,264.82
3. INSTALLMENT PAYMENTS: Except as otherwise provided in the Agreement or in this Schedule, the undersigned Debtor promises to repay the Advance Amount, with interest as follows:
$2,327.00 per month due on the first day of each month for Forty-Two (42) consecutive months, beginning an August 1, 1996, followed by $12,640.00 on February 1, 2000.
4. EQUIPMENT LOCATION: 11025 North Torrey Pines Road, #100 La Jolla, CA 92037
5. OTHER PROVISIONS: N/A
DEBTOR: SECURED PARTY
IRORI LEASE MANAGEMENT SERVICES, INC.
By: /s/ Michael P. Nova By: /s/ Barbara B. Kaiser
------------------------------- ------------------------------------
Michael P. Nova Barbara B. Kaiser
Title: President Title: EVP/General Manager
------------------------------- ---------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
PAY PROCEEDS LETTER
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
IRORI INCORPORATED, as Debtor, hereby authorizes LEASE MANAGEMENT SERVICES, INC., as Secured Party, to distribute proceeds of Schedule 06 to the Equipment Financing Agreement Number 10787, totaling $84,264.82 against equipment purchases, as follows:
$84,264.82 Proceeds from Equipment Financing Agreement Number
10787-06.
LESS:
$2,327.00 Due to LEASE MANAGEMENT SERVICES, INC., to pay
first installment payment due August 1, 1996.
$21,066.00 Due to LEASE MANAGEMENT SERVICES, INC, to pay
Security Deposit.
PLUS:
$371.00 Credit for Commitment fee refund.
$61,242.82 Credit due to IRORI.
|
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
--------------------------------------
Title: President
--------------------------------------
Date: 8/21/96
--------------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
EXHIBIT A
Attached to and forming a part of the following documents: Schedule Number 06 of Equipment Financing Agreement Number 10787, Certificate of Acceptance and the UCC Financing Statement(s) pertaining to the referenced Loan Schedule, and any addenda thereto by and between LEASE MANAGEMENT SERVICES, INC., a Secured Parry, and IRORI, as Debtor. The Loan Schedule referenced above is incorporated herein by this reference. All Terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement. Debtor is hereby directed to contact the Supplier of the Equipment for a description of any right Debtor may have under the Supply Contract covering the Equipment.
AS MORE FULLY DESCRIBED ON THE THREE (3) PAGE EXHIBIT A-1
ATTACHED HERETO AND MADE A PART HEREOF.
TOTAL PURCHASE PRICE $84,264.80
Debtor: /s/ MPN (Initials)
--------
Secured Party: /s/ BBK (Initials)
--------
|
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-06
LMSI
TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
-----------------------------------------------------------------------------------------------------------------------------------
33775 Logic Network Solutions 21217 1 Intel Pentium 90 MHz 204889 1,895.00
-----------------------------------------------------------------------------------------------------------------------------------
35776 Logic Network Solutions 21909 1 SVGA 17" Monitor AHO-52700049 750.00
-----------------------------------------------------------------------------------------------------------------------------------
35767 Micron Electronics, Inc. 419348 1 Powerstation 100 (256K Syncburst
Computer) INTERNAL 2,699.00
-----------------------------------------------------------------------------------------------------------------------------------
35763 Micron Electronics, Inc. 419348 1 Powerstation 100 (256K Syncburst
Computer) INTERNAL 2,699.00
-----------------------------------------------------------------------------------------------------------------------------------
35762 Logic Network Solutions 31146 1 CTX 17" Monitor OL4-60200092 750.00
-----------------------------------------------------------------------------------------------------------------------------------
35766 Logic Network Solutions 31146 1 CTX 17" Monitor AHO-52601204 750.00
-----------------------------------------------------------------------------------------------------------------------------------
35752 USA Flex, Inc. 17068271 1 Versa Docking Station 4000 789.00
-----------------------------------------------------------------------------------------------------------------------------------
35768 USA Flex, Inc. 17029760 1 Versa 4080H PC w/CD-ROM 8MB Memory S63020299 5,327.00
-----------------------------------------------------------------------------------------------------------------------------------
35753 USA Flex, Inc. 17029760 1 Versa 4080H PC w/CD-ROM 16MB
Docking Station S63021580 5,327.00
-----------------------------------------------------------------------------------------------------------------------------------
35761 Technology Integration Group 314532 1 Energy 17" Monitor OL4-54500644 665.00
-----------------------------------------------------------------------------------------------------------------------------------
35745 Technology Integration Group 314532 1 US Robotics Courier 28.8 Modem 1000026127 359.00
-----------------------------------------------------------------------------------------------------------------------------------
35749 Tri-Star Memory Inc. 13616 1 Intel Pentium 100 MHz PC INTERNAL 1,698.00
-----------------------------------------------------------------------------------------------------------------------------------
35774 Technology Integration Group 323468 1 Energy 17" Monitor CR20819856 665.00
-----------------------------------------------------------------------------------------------------------------------------------
35777 Technology Integration Group 322343 1 1024 LE 15" Monitor KR55021303 485.00
-----------------------------------------------------------------------------------------------------------------------------------
35751 Technology Integration Group 322343 1 1024 LE 15" Monitor KR54919978 485.00
-----------------------------------------------------------------------------------------------------------------------------------
35750 Technology Integration Group 322343 1 Vectra VL4 1.2gb w/CD-Rom US62450484 2,279.00
-----------------------------------------------------------------------------------------------------------------------------------
35778 Technology Integration Group 322343 1 Vectra VL4 1.2gb w/CD-Rom US62450482 2,279.00
-----------------------------------------------------------------------------------------------------------------------------------
35764 Panelight Display Systems, Inc. 6694 1 nView Z210 LCD Panel 164939 2,995.00
-----------------------------------------------------------------------------------------------------------------------------------
35748 Tech Data Corporation 1-4395930 1 Versa 4000 Docking Station 65017325 755.00
-----------------------------------------------------------------------------------------------------------------------------------
35744 Tech Data Corporation 1-4512698 1 32MB Versa Memory Upgrade N/A 724.00
-----------------------------------------------------------------------------------------------------------------------------------
35769 PC-Club-SD 6611802 1 15" Digiview Monitor 2FUE6600675 320.00
-----------------------------------------------------------------------------------------------------------------------------------
35770 PC-Club-SD 66113571 1 Toshiba 8X CD-ROM N/A 129.00
-----------------------------------------------------------------------------------------------------------------------------------
35756 Fisher Scientific 0803854 1 Centrifuge Com 2 3500 460.92
-----------------------------------------------------------------------------------------------------------------------------------
35758 VWR Scientific Products 42556461 1 Dataplate HotPlate/Stirrer N/A 455.47
-----------------------------------------------------------------------------------------------------------------------------------
35759 VWR Scientific Products 42556291 1 Dataplate HotPlate/Stirrer N/A 455.47
-----------------------------------------------------------------------------------------------------------------------------------
35757 VWR Scientific Products 43704730 1 Cold Tray Condenser N/A 895.00
-----------------------------------------------------------------------------------------------------------------------------------
35703 Gensia, Inc. 41196 1 Table Top Autoclave 870034 500.00
-----------------------------------------------------------------------------------------------------------------------------------
35754 Fisher Scientific 1586200 1 Vacuum Pump Gerotor 2823 739.00
-----------------------------------------------------------------------------------------------------------------------------------
35755 Fisher Scientific 1586200 1 Vacuum Pump Gerotor 2887 739.00
-----------------------------------------------------------------------------------------------------------------------------------
35700 PerSpective Biosystems 107915 1 Cytofluor Series 4000 FXGHMT428P 25,750.00
-----------------------------------------------------------------------------------------------------------------------------------
35760 Persnickety Mfg. Inc. 960305 1 L Desk 66X72 N/A 450.00
-----------------------------------------------------------------------------------------------------------------------------------
35730 Persnickety Mfg. Inc. 960305 1 Double Pedestal Desk N/A 395.00
-----------------------------------------------------------------------------------------------------------------------------------
35738 Persnickety Mfg. Inc. 960305 1 Double Pedestal Desk N/A 395.00
-----------------------------------------------------------------------------------------------------------------------------------
35736 Persnickety Mfg. Inc. 960305 1 Desktop Protocol N/A 220.00
-----------------------------------------------------------------------------------------------------------------------------------
|
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-06
LMSI TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT ----------------------------------------------------------------------------------------------------------------------------------- 35737 Persnickety Mfg. Inc. 960305 1 Desktop Protocol N/A 220.00 ----------------------------------------------------------------------------------------------------------------------------------- 35765 Persnickety Mfg. Inc. 960306 1 # Executive U Desk N/A 1,070.00 ----------------------------------------------------------------------------------------------------------------------------------- 35733 Corporate Express 11264265 1 36" 3 Drawer Lateral File N/A 368.00 ----------------------------------------------------------------------------------------------------------------------------------- 35706 Corporate Express 11264525 1 36" 3 Drawer Lateral File N/A 368.00 ----------------------------------------------------------------------------------------------------------------------------------- 35705 Corporate Express 11264375 1 36" 2 Drawer Lateral File N/A 280.00 ----------------------------------------------------------------------------------------------------------------------------------- 35704 Corporate Express 11264375 1 36" 4 Drawer Lateral File N/A 399.00 ----------------------------------------------------------------------------------------------------------------------------------- 35734 Corporate Express 11264375 1 36" 4 Drawer Lateral File N/A 399.00 ----------------------------------------------------------------------------------------------------------------------------------- 35735 Corporate Express 11264375 1 36" 4 Drawer Lateral File N/A 399.00 ----------------------------------------------------------------------------------------------------------------------------------- 35742 USA Flex, Inc. 17045162 1 Versa 4000 Lithium Ion Battery Pack N/A 177.62 ----------------------------------------------------------------------------------------------------------------------------------- 35743 USA Flex, Inc. 17045162 1 Versa 4000 Lithium Ion Battery Pack N/A 177.62 ----------------------------------------------------------------------------------------------------------------------------------- 35771 USA Flex, Inc. 17045162 1 Credit Card Enet Modem 28.8 N/A 451.24 ----------------------------------------------------------------------------------------------------------------------------------- 35772 USA Flex, Inc. 17045162 1 Credit Card Enet Modem 28.8 N/A 451.24 ----------------------------------------------------------------------------------------------------------------------------------- 35773 USA Flex, Inc. 17045162 1 Credit Card Enet Modem 28.8 N/A 451.24 ----------------------------------------------------------------------------------------------------------------------------------- 35707 Persnickety Mfg. Inc. 960318 1 Conference Table 36x84 N/A 675.00 ----------------------------------------------------------------------------------------------------------------------------------- 35712 Persnickety Mfg. Inc. 960318 1 Coffee Credenza N/A 595.00 ----------------------------------------------------------------------------------------------------------------------------------- 35719 Persnickety Mfg. Inc. 960318 1 Executive U Desk N/A 950.00 ----------------------------------------------------------------------------------------------------------------------------------- 35720 Persnickety Mfg. Inc. 960318 1 2 Drawer Lateral File N/A 330.00 ----------------------------------------------------------------------------------------------------------------------------------- 35728 Persnickety Mfg. Inc. 960318 1 Executive U Desk N/A 925.00 ----------------------------------------------------------------------------------------------------------------------------------- 35729 Persnickety Mfg. Inc. 960318 1 2 Drawer Lateral File N/A 330.00 ----------------------------------------------------------------------------------------------------------------------------------- 35731 Persnickety Mfg. Inc. 960318 1 Corner Desk Unit N/A 675.00 ----------------------------------------------------------------------------------------------------------------------------------- 35732 Persnickety Mfg. Inc. 960318 1 Desktop Protocol N/A 220.00 ----------------------------------------------------------------------------------------------------------------------------------- 35739 Persnickety Mfg. Inc. 960402 1 Executive U Desk N/A 900.00 ----------------------------------------------------------------------------------------------------------------------------------- 35741 Persnickety Mfg. Inc. 960402 1 2 Drawer Lateral File N/A 320.00 ----------------------------------------------------------------------------------------------------------------------------------- 35718 Persnickety Mfg. Inc. 960508 1 Manager Chair Model MA1534RL N/A 274.50 ----------------------------------------------------------------------------------------------------------------------------------- 35723 Persnickety Mfg. Inc. 960508 1 Manager Chair Model MA1534RL N/A 274.50 ----------------------------------------------------------------------------------------------------------------------------------- 35724 Persnickety Mfg. Inc. 960508 1 Manager Chair Model MA1534RL N/A 274.50 ----------------------------------------------------------------------------------------------------------------------------------- 35725 Persnickety Mfg. Inc. 960508 1 Manager Chair Model MA1534RL N/A 274.50 ----------------------------------------------------------------------------------------------------------------------------------- 35713 Persnickety Mfg. Inc. 960508 1 Guest Chair Model MA4554CL N/A 244.00 ----------------------------------------------------------------------------------------------------------------------------------- 35714 Persnickety Mfg. Inc. 960508 1 Guest Chair Model MA4554CL N/A 244.00 ----------------------------------------------------------------------------------------------------------------------------------- 35721 Persnickety Mfg. Inc. 960508 1 Guest Chair Model MA4554CL N/A 244.00 ----------------------------------------------------------------------------------------------------------------------------------- 35722 Persnickety Mfg. Inc. 960508 1 Guest Chair Model MA4554CL N/A 244.00 ----------------------------------------------------------------------------------------------------------------------------------- 35726 Persnickety Mfg. Inc. 960508 1 Guest Chair Model MA4554CL N/A 244.00 ----------------------------------------------------------------------------------------------------------------------------------- 35727 Persnickety Mfg. Inc. 960508 1 Guest Chair Model MA4554CL N/A 244.00 ----------------------------------------------------------------------------------------------------------------------------------- 35708 Persnickety Mfg. Inc. 960515 1 Conference Room Chair Model HZ785 N/A 98.50 ----------------------------------------------------------------------------------------------------------------------------------- |
LMSI
TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
-----------------------------------------------------------------------------------------------------------------------------------
35709 Persnickety Mfg. Inc. 960515 1 Conference Room Chair Model HZ785 N/A 98.50
-----------------------------------------------------------------------------------------------------------------------------------
35710 Persnickety Mfg. Inc. 960515 1 Conference Room Chair Model HZ785 N/A 98.50
-----------------------------------------------------------------------------------------------------------------------------------
35711 Persnickety Mfg. Inc. 960515 1 Conference Room Chair Model HZ785 N/A 98.50
-----------------------------------------------------------------------------------------------------------------------------------
35715 Persnickety Mfg. Inc. 960515 1 Conference Room Chair Model HZ785 N/A 98.50
-----------------------------------------------------------------------------------------------------------------------------------
35716 Persnickety Mfg. Inc. 960515 1 Conference Room Chair Model HZ785 N/A 98.50
-----------------------------------------------------------------------------------------------------------------------------------
35717 Persnickety Mfg. Inc. 960515 1 Conference Room Chair Model HZ785 N/A 98.50
-----------------------------------------------------------------------------------------------------------------------------------
35740 Persnickety Mfg. Inc. 960515 1 Conference Room Chair Model HZ785 N/A 98.50
-----------------------------------------------------------------------------------------------------------------------------------
35701 Universal Communication
Solution 5207 1 Vodave Enhanced Speakerphone SBC612340 270.00
-----------------------------------------------------------------------------------------------------------------------------------
35702 Universal Communication
Solution 5207 1 Vodave Enhanced Speakerphone NOT POSTED 270.00
-----------------------------------------------------------------------------------------------------------------------------------
35746 Syex Express S1124884 1 Micronet 2gb Fast SCSI N/A 1,069.00
-----------------------------------------------------------------------------------------------------------------------------------
35747 Syex Express S1124884 1 Micronet 4X CD Recorder N/A 1,665.00
-----------------------------------------------------------------------------------------------------------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
CREDIT MEMO
2500 Sand Hill Road, Suite 101, Menlo Park, CA 94025
-------------------------------------- Irori Incorporated CREDIT MEMO # 10787-06 11025 North Torrey Pines Road, #100 DATE 12-Aug-96 La Jolla, CA 92037 -------------------------------------- |
-----------------------------------------------------------------------------------------------------
QUANTITY DESCRIPTION PRICE AMOUNT
-------------------------------------------------------------------------------
RE: EQUIPMENT FINANCING AGREEMENT NO. 10787-06
-------------------------------------------------------------------
First Month's Rent: $ 2,327.00
Security Deposit: $ 21,066.00
Non-Financable Items:
Freight/Install/Labor $ 1,348.54
Sales Tax $ 4,875.46
Softcost/Disposables $ 6,213.12
PLUS:
Vendor Prepayments $(96,701.94)
Prorata Commitment Fee $ (371.00)
-----------
TOTAL $(61,242.82)
-----------------------------------------------------------------------------------------------------
If you have any questions concerning CHECK PAYABLE TO: ($61,242.82)
this credit, call: (415) 854-9450. Irori Incorporated
|
THANK YOU FOR YOUR BUSINESS!
LEASE MANAGEMENT SERVICES, INC.
CERTIFICATE OF ACCEPTANCE
Attached to and made an integral part of Schedule 06 to Equipment Financing Agreement Number 10787.
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
EQUIPMENT DESCRIPTION
SEE ATTACHED EXHIBIT "A"
We hereby acknowledge receipt, in good condition, of the Equipment described above or on the attached Exhibit "A". The Equipment has been properly installed and is operating satisfactorily. We hereby accept said Equipment as satisfactory in all respects for the purposes of the above Equipment Financing Agreement. Said Equipment has not been delivered or accepted on a trial basis, and is free and clear of all liens and encumbrances and adverse claims, with the exception of the security interest created herein.
We will make all payments to Secured Party, as called for in the Equipment Financing Agreement. We agree that any rights we may have against the supplier or vendor of said Equipment will not be asserted as an abatement, defense, counterclaim, or deduction against Secured Party.
All capitalized terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement referenced above.
DO NOT SIGN OR DATE THIS FORM UNTIL
THE EQUIPMENT IS RECEIVED, PROPERLY INSTALLED AND IS OPERATING SATISFACTORILY.
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
------------------------------------
Title: President
------------------------------------
Date: 8/21/96
------------------------------------
|
Lease Management Services, Inc. 2500 Sand Hill Road, Suite 101, Menlo Park, CA 94025 Telephone (415) 854-9450 o Fax (415) 854-9457
August 13, 1996
Susan Sisk
IRORI INCORPORATED
11025 North Torrey Pines Rd. #100
La Jolla, CA 92037
Dear Ms. Sisk:
Enclosed are the documents for Equipment Financing Agreement Number 10787, Schedule Number 06. The Commencement date of this schedule is August 1, 1996. Please see that the documents are executed and returned.
Equipment identification labels (asset tags) are also enclosed. Please affix the asset tags to all of the equipment listed in the Exhibit A. Please acknowledge completion of labeling by listing the appropriate asset tag number in the space provided for each equipment description in Exhibit A. Sign where indicated below and return to me.
Should you have any questions, please call.
Sincerely, LABELING OF EQUIPMENT
Equipment Financing Agreement
/s/ K.C. Number: 10787-06
Label Number: 35706 to 35785
Kathy (Kasey) Christie IRORI
Sr. Contract Administrator
By: /s/ Michael P. Nova
------------------------------------
Title: President
------------------------------------
Date: 8/21/96
------------------------------------
|
Enclosures
A Subsidiary of Phoenixcor, Inc. o 65 Water Street, South Norwalk, CT 06854
10787-06 This STATEMENT is presented for filing pursuant to the California Uniform Commercial Code
-----------------------------------------------------------------------------------------------------------------------------------
1. FILE NO. OF ORIG. FINANCING 1A. DATE OF FILING OF ORIG. 1B. DATE OF ORIG. FINANCING 1C. PLACE OF FILING ORIG.
STATEMENT FINANCING STATEMENT STATEMENT FINANCING STATEMENT
9534560778 12/08/95 Sacramento
-----------------------------------------------------------------------------------------------------------------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.
IRORI INCORPORATED
-----------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
11025 NORTH TORREY PINES ROAD, #100 LA JOLLA, CA 92037
-----------------------------------------------------------------------------------------------------------------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY OR
FEDERAL TAX NO.
-----------------------------------------------------------------------------------------------------------------------------------
3B. MAILING ADDRESS 3C. CITY, STATE 3D. ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.,
FEDERAL TAX NO,.
OR BANK TRANSIT AND
A.B.A. NO.
NAME LEASE MANAGEMENT SERVICES, INC.
MAILING ADDRESS 2500 SAND HILL ROAD, SUITE 101
CITY MENLO PARK STATE CA ZIP CODE 94025 94-2221046
-----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.,
NAME FEDERAL TAX NO. OR
MAILING ADDRESS BANK TRANSIT AND
CITY STATE ZIP CODE A.B.A. NO.
-----------------------------------------------------------------------------------------------------------------------------------
6A [ ] CONTINUATION--The original Financing Statement between the foregoing Debtor and Secured Party bearing the file number
and date shown above is continued. If collateral is crops or timber, check here [ ] and insert description of real property
on which growing or to be grown in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
B [ ] RELEASE--From the collateral described in the Financing Statement bearing the file number shown above, the Secured Party
releases the collateral described in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
C [ ] ASSIGNMENT--The Secured Party certifies that the Secured Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file number shown above in the collateral described in Item 7
below.
-----------------------------------------------------------------------------------------------------------------------------------
D [ ] TERMINATION--The Secured Party certifies that the Secured Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
-----------------------------------------------------------------------------------------------------------------------------------
E [X] AMENDMENT--The Financing Statement bearing the file number shown above is amended as set forth in Item 7 below.
(Signature of Debtor required on all amendments.)
-----------------------------------------------------------------------------------------------------------------------------------
F [ ] OTHER
-----------------------------------------------------------------------------------------------------------------------------------
7.
AMEND ORIGINAL FILING TO MORE SPECIFICALLY DESCRIBE A PORTION OF THE EQUIPMENT AND PERSONAL PROPERTY SET FORTH IN THE
ORIGINAL FILING, NAMELY, THE EQUIPMENT AND PERSONAL PROPERTY FINANCED UNDER SCHEDULE NO. 06 OF EQUIPMENT FINANCING AGREEMENT
NO. 10787, WHICH EQUIPMENT AND PERSONAL PROPERTY IS DESCRIBED ON THE THREE (3) PAGE EXHIBIT A-1 ATTACHED HERETO AND MADE A
PART HEREOF. THIS AMENDMENT IS NOT IN LIMITATION OF THE ORIGINAL FILING, BUT SUPPLEMENTAL THERETO.
-----------------------------------------------------------------------------------------------------------------------------------
8. C 9. This Space for Use of Filing Officer
O (Date, Time, Filing Office)
D
(Date) 19 E
--------------------------------------
IRORI INCORPORATED
-----------------------------------------------------------------------------
1
By: /s/ MICHAEL P. NOVA
-----------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
2
LEASE MANAGEMENT SERVICES, INC.
-----------------------------------------------------------------------------
3
By:
-----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
4
-----------------------------------------------------------------------------
RETURN COPY TO
5
P6-0000-141-6
ADDRESS LEASE MANAGEMENT SERVICES, INC.
2500 SAND HILL ROAD, SUITE 101 6
MENLO PARK, CA 94025
7
Filing Officer Debtors
STANDARD FORM -- FILING FEE UNIFORM COMMERCIAL CODE -- FORM UCC.2
8
Approved by the Secretary of State
9
-----------------------------------------------------------------------------------------------------------------------------------
|
10787-06 This STATEMENT is presented for filing pursuant to the California Uniform Commercial Code
-----------------------------------------------------------------------------------------------------------------------------------
1. FILE NO. OF ORIG. FINANCING 1A. DATE OF FILING OF ORIG. 1B. DATE OF ORIG. FINANCING 1C. PLACE OF FILING ORIG.
STATEMENT FINANCING STATEMENT STATEMENT FINANCING STATEMENT
9534560778 12/08/95 Sacramento
-----------------------------------------------------------------------------------------------------------------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.
IRORI INCORPORATED
-----------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
11025 N. TORREY PINES ROAD, SUITE 100 LA JOLLA, CA 92037
-----------------------------------------------------------------------------------------------------------------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY OR
FEDERAL TAX NO.
-----------------------------------------------------------------------------------------------------------------------------------
3B. MAILING ADDRESS 3C. CITY, STATE 3D. ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.,
FEDERAL TAX NO,.
OR BANK TRANSIT AND
A.B.A. NO.
NAME LEASE MANAGEMENT SERVICES, INC.
MAILING ADDRESS 2500 SAND HILL ROAD, SUITE 101
CITY MENLO PARK STATE CA ZIP CODE 94025 94-2221046
-----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.,
NAME FEDERAL TAX NO. OR
MAILING ADDRESS BANK TRANSIT AND
CITY STATE ZIP CODE A.B.A. NO.
-----------------------------------------------------------------------------------------------------------------------------------
6A [ ] CONTINUATION--The original Financing Statement between the foregoing Debtor and Secured Party bearing the file number
and date shown above is continued. If collateral is crops or timber, check here [ ] and insert description of real property
on which growing or to be grown in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
B [ ] RELEASE--From the collateral described in the Financing Statement bearing the file number shown above, the Secured Party
releases the collateral described in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
C [ ] ASSIGNMENT--The Secured Party certifies that the Secured Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file number shown above in the collateral described in Item 7
below.
-----------------------------------------------------------------------------------------------------------------------------------
D [ ] TERMINATION--The Secured Party certifies that the Secured Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
-----------------------------------------------------------------------------------------------------------------------------------
E [X] AMENDMENT--The Financing Statement bearing the file number shown above is amended as set forth in Item 7 below.
(Signature of Debtor required on all amendments.)
-----------------------------------------------------------------------------------------------------------------------------------
F [ ] OTHER
-----------------------------------------------------------------------------------------------------------------------------------
7.
AMEND ORIGINAL FILING TO MORE SPECIFICALLY DESCRIBE A PORTION OF THE EQUIPMENT AND PERSONAL PROPERTY SET FORTH IN THE
ORIGINAL FILING, NAMELY, THE EQUIPMENT AND PERSONAL PROPERTY FINANCED UNDER SCHEDULE NO. 06 OF EQUIPMENT FINANCING AGREEMENT
NO. 10787, WHICH EQUIPMENT AND PERSONAL PROPERTY IS DESCRIBED ON THE THREE (3) PAGE EXHIBIT A-1 ATTACHED HERETO AND MADE A
PART HEREOF. THIS AMENDMENT IS NOT IN LIMITATION OF THE ORIGINAL FILING, BUT SUPPLEMENTAL THERETO.
-----------------------------------------------------------------------------------------------------------------------------------
8. C 9. This Space for Use of Filing Officer
O (Date, Time, Filing Office)
D
(Date) 8/21 1996 E
--------------------------------------
IRORI INCORPORATED
-----------------------------------------------------------------------------
1
By: /s/ MICHAEL P. NOVA PRESIDENT
-----------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
2
LEASE MANAGEMENT SERVICES, INC.
-----------------------------------------------------------------------------
3
By: /s/ BARBARA B. KAISER
-----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
4
-----------------------------------------------------------------------------
RETURN COPY TO
5
P6-0000-141-6
ADDRESS LEASE MANAGEMENT SERVICES, INC.
2500 SAND HILL ROAD, SUITE 101 6
MENLO PARK, CA 94025
7
Filing Officer Debtors
STANDARD FORM -- FILING FEE UNIFORM COMMERCIAL CODE -- FORM UCC.2
8
Approved by the Secretary of State
9
-----------------------------------------------------------------------------------------------------------------------------------
|
NEW BUSINESS SUMMARY
Irori Incorporated
10787-06
* * * * * * * * * * ACCOUNTING INFORMATION * * * * * * * * * *
EQ EQ SALES SALES TAX
VENDOR INVOICE DATE CLASS COST TAX RATE TO VENDOR
------------------------------------------------------------------------------------------------------------------------------------
Logic Network Solutions (1) 21217 02/12/96 CMP 3,373.00 7.00% 264.11
Logic Network Solutions (1) 21909 02/19/96 CMP 1,009.00 7.00% 70.63
Micron Electronics, Inc. (1) 419348 03/04/96 CMP 5,398.00 0.00% 0.00
Logic Network Solutions (1) 31146 03/11/96 CMP 1,800.00 7.00% 126.00
USA Flex, Inc. (1) 17068271 04/25/96 CMP 789.00 0.00% 0.00
USA Flex, Inc. (1) 17029760 04/23/96 CMP 10,884.00 0.00% 0.00
Technology Integration Group (1) 314532 04/10/96 CMP 1,484.00 7.75% 115.01
Tri-Star Memory Inc. (1) 13616 06/10/96 CMP 1,698.00 7.75% 131.60
Technology Integration Group (1) 323468 06/29/96 CMP 665.00 7.75% 51.54
Technology Integration Group (1) 322343 06/18/96 CMP 8,667.00 7.75% 671.69
Panelight Display Systems, Inc. (1) 6694 06/13/96 CMP 2,995.00 7.75% 232.12
Tech Data Corporation (1) 1-4395930 07/09/06 CMP 755.00 0.00% 0.00
Tech Data Corporation (1) 1-4512698 07/23/96 CMP 724.00 0.00% 0.00
PC-Club-SD (1) 66113571 07/14/96 CMP 556.00 7.75% 43.09
Fisher Scientific (1) 0803854 02/20/96 LFS 531.04 7.00% 37.16
VWR Scientific Products (1) 42556461 03/29/96 LFS 455.47 7.00% 31.88
VWR Scientific Products (1) 42556291 03/29/96 LFS 455.47 7.00% 31.88
VWR Scientific Products (1) 43704730 03/22/96 LFS 895.00 7.00% 62.66
Gensia, Inc. (1) 04/11/96 LFS 500.00 0.00% 0.00
Fisher Scientific (1) 1586200 05/07/96 LFS 1,478.00 7.75% 114.55
PerSeptive Biosystems (1) 107915 06/28/96 LFS 25,750.00 7.00% 1,802.50
Persnickety Mfg. Inc. (1) 960305 03/06/96 OFN 1,680.00 7.00% 117.60
Persnickety Mfg. Inc. (1) 960306 03/11/96 OFN 1,070.00 7.00% 74.90
Corporate Express (1) 11264265 04/09/96 OFN 368.00 7.75% 28.52
Corporate Express (1) 11264525 04/23/96 OFN 368.00 7.75% 28.52
Corporate Express (1) 11264375 04/09/96 OFN 1,477.00 7.75% 114.47
USA Flex, Inc. (1) 17045162 04/26/96 CMP 1,708.96 0.00% 0.00
Persnickety Mfg. Inc. (1) 960318 03/18/96 OFN 4,700.00 7.00% 329.00
Persnickety Mfg. Inc. (1) 960402 03/18/96 OFN 1,220.00 7.75% 94.55
Persnickety Mfg. Inc. (1) 960508 04/15/96 OFN 2,562.00 7.75% 198.56
Persnickety Mfg. Inc. (1) 960515 04/15/96 OFN 788.00 7.75% 61.07
Universal Communication Solution (1) 5207 06/21/96 PEQ 540.00 7.75% 41.85
Syex Express (1) S1124884 06/24/96 CMP 2,734.00 0.00% 0.00
--------- --------
TOTAL 90,477.94 4,875.4
------------------------------------------------------------------------------------------------------------------------------------
No of Invoices (33)
|
FREIGHT
VENDOR INSTALL TOTAL
VENDOR REBATE LABOR INVOICE PR
------------------------------------------------------------------------------------
Logic Network Solutions 0.00 0.00 4,037.11
Logic Network Solutions 0.00 0.00 1,079.63
Micron Electronics, Inc. 0.00 78.00 5,476.00
Logic Network Solutions 0.00 0.00 1,926.00
USA Flex, Inc. 0.00 31.30 820.30
USA Flex, Inc. 0.00 105.00 10,989.00
Technology Integration Group 0.00 0.00 1,599.01
Tri-Star Memory Inc. 0.00 0.00 1,829.60
Technology Integration Group 0.00 0.00 716.54
Technology Integration Group 0.00 0.00 9,338.69
Panelight Display Systems, Inc. 0.00 28.50 3,255.62
Tech Data Corporation 0.00 50.34 805.34
Tech Data Corporation 0.00 4.75 728.75
PC-Club-SD 0.00 0.00 599.09
Fisher Scientific 0.00 0.00 568.20
VWR Scientific Products 0.00 0.00 487.35
VWR Scientific Products 0.00 0.00 487.35
VWR Scientific Products 0.00 50.75 1,008.41
Gensia, Inc. 0.00 0.00 500.00
Fisher Scientific 0.00 0.00 1,592.00
PerSeptive Biosystems 0.00 49.00 27,601.50
Persnickety Mfg. Inc. 0.00 150.00 1,947.60
Persnickety Mfg. Inc. 0.00 75.00 1,219.90
Corporate Express 0.00 0.00 396.52
Corporate Express 0.00 0.00 396.52
Corporate Express 0.00 0.00 1,591.47
USA Flex, Inc. 0.00 28.40 1,737.36
Persnickety Mfg. Inc. 0.00 395.00 5,424.00
Persnickety Mfg. Inc. 0.00 75.00 1,389.55
Persnickety Mfg. Inc. 0.00 0.00 2,760.56
Persnickety Mfg. Inc. 0.00 0.00 849.07
Universal Communication Solution 0.00 227.50 809.35
Syex Express 0.00 0.00 2,734.00
---- -------- ---------
0.00 1,348.54 96,701.94
------------------------------------------------
No of Invoices
|
Prepared By: Kasey Christie Date 08/13/96
----------------- ---------
Approved By: /s/ illegible Date 08/13/96
----------------- ---------
|
LEASE MANAGEMENT SERVICES INC.
SCHEDULE 07 TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10787
BETWEEN
IRORI INCORPORATED, AS DEBTOR
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY
ATTACHED TO AND MADE A PART OF EQUIPMENT FINANCING AGREEMENT NUMBER 10787, BY AND BETWEEN SECURED PARTY AND DEBTOR ("AGREEMENT") WHICH IS INCORPORATED HEREIN BY THIS REFERENCE. SECURED PARTY AND DEBTOR HEREBY ACKNOWLEDGE THAT THE ITEMS OF EQUIPMENT DESCRIBED IN THIS SCHEDULE ARE COVERED BY THE AGREEMENT AND THAT THE FOLLOWING IS A DESCRIPTION OF SAID ITEMS, THE ADVANCE AMOUNT ON ACCOUNT THEREOF, THE INSTALLMENT PAYMENTS APPLICABLE THERETO, THE EQUIPMENT LOCATION THEREOF, AND, IF SPECIFIED, CERTAIN FURTHER RELATED INFORMATION.
1. EQUIPMENT DESCRIPTION: See Attached Exhibit "A"
2. PROCEEDS AMOUNT: $85,416.00
3. INSTALLMENT PAYMENTS: Except as otherwise provided in the Agreement or in this Schedule, the undersigned Debtor promises to repay the Advance Amount, with interest as follows:
$2,357.00 per month due on the first day of each month for Forty-Two (42) consecutive months, beginning on October 1, 1996, followed by $12,812.00 on April 1, 2000.
4. EQUIPMENT LOCATION: 11025 North Torrey Pines Road, #100 La Jolla, CA 92037
5. OTHER PROVISIONS: N/A
Dated: 10/11/96
------------------------------
DEBTOR: SECURED PARTY:
IRORI INCORPORATED LEASE MANAGEMENT SERVICES, INC.
By: /s/ Michael P. Nova By: /s/ Barbara B. Kaiser
--------------------------------- -------------------------------------
Michael P. Nova Barbara B. Kaiser
Title: CEO Title: EVP/General Manager
------------------------------ ---------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
PAY PROCEEDS LETTER
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
IRORI INCORPORATED, as Debtor, hereby authorizes LEASE MANAGEMENT SERVICES, INC., as Secured Party, to distribute proceeds of Schedule 07 to the Equipment Financing Agreement Number 10787, totaling $85,416.00 against equipment purchases, as follows:
$85,416.00 Proceeds from Equipment Financing Agreement Number
10787-07.
LESS:
$2,357.00 Due to LEASE MANAGEMENT SERVICES, INC., to pay
first installment payment due October 1, 1996.
$21,354.00 Due to LEASE MANAGEMENT SERVICES, INC., to pay
Security Deposit.
PLUS:
$376.00 Credit for Commitment fee refund.
$62,081.00 Credit due to IRORI INCORPORATED.
|
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
---------------------------------------
Title: CEO
---------------------------------------
Date: 10/11/96
---------------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
EXHIBIT A
Attached to and forming a part of the following documents: Schedule Number 07 of Equipment Financing Agreement Number 10787, Certificate of Acceptance and the UCC Financing Statement(s) pertaining to the referenced Loan Schedule, and any addenda thereto by and between LEASE MANAGEMENT SERVICES, INC., as Secured Party, and IRORI INCORPORATED, as Debtor. The Loan Schedule referenced above is incorporated herein, by this reference. All Terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement. Debtor is hereby directed to contact the Supplier of the Equipment for a description of any rights Debtor may have under the Supply Contract covering the Equipment.
AS MORE FULLY DESCRIBED ON THE TWO (2) PAGE EXHIBIT A-1
ATTACHED HERETO AND MADE A PART HEREOF.
TOTAL PURCHASE PRICE $85,416.00
Debtor: /s/ MPN (Initials)
-----------------------
Secured Party: /s/ BBK (Initials)
-----------------------
|
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-07
LMSI TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT ---------------------------------------------------------------------------------------------------------------------------------- 47213 Fisher Scientific 2444197 1 Vacuum Pump 5.6 Model M8C F1693 1,388.64 ---------------------------------------------------------------------------------------------------------------------------------- 22297 Fisher Scientific 2444198 1 PH Meter Portable 0003679 325.00 ---------------------------------------------------------------------------------------------------------------------------------- 47201 Fisher Scientific 2250920 1 Isotemp Incubator 506R0217 789.00 ---------------------------------------------------------------------------------------------------------------------------------- 47207 Fisher Scientific 2265511 1 Universal Platform Model G10 690750176 595.00 ---------------------------------------------------------------------------------------------------------------------------------- 47212 Fisher Scientific 2741155 1 Freeze Dryer w/Tray Model 12L 7498XX77540XX 15,398.00 ---------------------------------------------------------------------------------------------------------------------------------- 47202 Fisher Scientific 2852796 1 Flammables Floor Cabinet NO S/N 450.64 ---------------------------------------------------------------------------------------------------------------------------------- 47215 Fisher Scientific 2694849 1 Basic Level Balance 2115036580 816.00 ---------------------------------------------------------------------------------------------------------------------------------- 47203 Genta Incorporated Invoice 1 Isotemp Ref/Freezer 010-1473-000 1,500.00 ---------------------------------------------------------------------------------------------------------------------------------- 47204 Genta Incorporated Invoice 1 Drying Oven 90200057 300.00 ---------------------------------------------------------------------------------------------------------------------------------- 47205 Genta Incorporated Invoice 1 Glassware Dishwasher 18075235 2,300.00 ---------------------------------------------------------------------------------------------------------------------------------- 47208 Fisher Scientific 2540870 1 Shaker Gyrotry Model G10 690750176 3,020.00 ---------------------------------------------------------------------------------------------------------------------------------- 47209 Fisher Scientific 2521055 1 Sound Enclosure 10758 553.80 ---------------------------------------------------------------------------------------------------------------------------------- 47210 Fisher Scientific 2521055 1 Sieve Shaker 11098 1,373.42 ---------------------------------------------------------------------------------------------------------------------------------- 22272 Technology Integration Group 328309 1 Multiscan 15SF2 Monitor S0181242126 480.00 ---------------------------------------------------------------------------------------------------------------------------------- 22286 Technology Integration Group 333818 1 Energy 17" Monitor S0L455101661 665.00 ---------------------------------------------------------------------------------------------------------------------------------- 22273 Technology Integration Group 326378 1 SVGA Network Cards 1000045383 271.00 ---------------------------------------------------------------------------------------------------------------------------------- 22274 Technology Integration Group 330029 1 Armada 1120T P100 7630HYD31879 2,139.00 ---------------------------------------------------------------------------------------------------------------------------------- 22275 Technology Integration Group 330029 1 8MB Upgrade NO S/N 195.00 ---------------------------------------------------------------------------------------------------------------------------------- 22285 Technology Integration Group 330029 1 Ethernet Modem 28.8 9125681 390.00 ---------------------------------------------------------------------------------------------------------------------------------- 22280 Micron Electronics 643078 1 Micro Computer ATO Model BOM 841845-0001 2,899.00 ---------------------------------------------------------------------------------------------------------------------------------- 22281 Micron Electronics 643078 1 104 Enhanced Keyboard NO S/N incl. ---------------------------------------------------------------------------------------------------------------------------------- 22283 Technology Integration Group 328108 1 PCI LAN Adapter NO S/N 790.00 ---------------------------------------------------------------------------------------------------------------------------------- 22282 Technology Integration Group 328108 1 Energy 17" Monitor 0L4-54601820 665.00 ---------------------------------------------------------------------------------------------------------------------------------- 22263 Technology Integration Group 328108 1 Energy 17" Monitor 0L4-54601826 665.00 ---------------------------------------------------------------------------------------------------------------------------------- 22278 Micron Electronics 615788 1 Micro Computer ATO Model BOM 656901-0002 2,239.00 ---------------------------------------------------------------------------------------------------------------------------------- 22279 Micron Electronics 615788 1 104 Enhanced Keyboard NO S/N incl. ---------------------------------------------------------------------------------------------------------------------------------- 22264 Micron Electronics 669498 1 Micro Computer ATO Model BOM 656901-0001 2,299.00 ---------------------------------------------------------------------------------------------------------------------------------- 22265 Micron Electronics 669498 1 104 Enhanced Keyboard NO S/N incl. ---------------------------------------------------------------------------------------------------------------------------------- 22276 Micron Electronics 669498 1 Micro Computer ATO Model BOM 617665-0001 2,299.00 ---------------------------------------------------------------------------------------------------------------------------------- 22277 Micron Electronics 669498 1 104 Enhanced Keyboard NO S/N incl. ---------------------------------------------------------------------------------------------------------------------------------- 22284 National Instruments 230972 1 AT-OPIB Interface Card NO S/N 570.00 ---------------------------------------------------------------------------------------------------------------------------------- (3) Persnickety Mfg. Inc. 960823 6 Open Office Panels Walls NO S/N 12,383.00 ---------------------------------------------------------------------------------------------------------------------------------- 22295 Persnickety Mfg. Inc. 9608120-B 1 Mobile Pedestal NO S/N 327.00 ---------------------------------------------------------------------------------------------------------------------------------- 22294 Persnickety Mfg. Inc. 960813 1 Executive U Desk NO S/N 1,425.00 ---------------------------------------------------------------------------------------------------------------------------------- |
LMSI
TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
----------------------------------------------------------------------------------------------------------------------------------
(4) Persnickety Mfg. Inc. 960813 1 2-Drawer Lateral File NO S/N incl.
----------------------------------------------------------------------------------------------------------------------------------
(1) PC Saver 2290 4 32MB Upgrade NO S/N 880.00
----------------------------------------------------------------------------------------------------------------------------------
22267 PC Saver 2289 1 Pentium Pro System NO S/N 3,666.00
----------------------------------------------------------------------------------------------------------------------------------
22266 PC Saver 2289 1 15" SVGA Monitor 68TTB0477359 incl.
----------------------------------------------------------------------------------------------------------------------------------
47211 Savant Instruments 128629 1 Speedvac Component System SC210A-6H330453-1G 12,505.00
----------------------------------------------------------------------------------------------------------------------------------
(2) Tri-Star Memory Inc. 13834 6 32MB Memory Upgrade NO S/N 1,314.00
----------------------------------------------------------------------------------------------------------------------------------
47206 TriLink BioTechnologies 4 1 Gamma Center 3,000.00
----------------------------------------------------------------------------------------------------------------------------------
47217 Universal Communication Solution 5499 1 Executive Phone Display SBG611527 340.20
----------------------------------------------------------------------------------------------------------------------------------
47218 Universal Communication Solution 5499 1 Executive Phone Display SBG611350 340.20
----------------------------------------------------------------------------------------------------------------------------------
47222 Universal Communication Solution 5499 1 Executive Phone Display SBG611135 340.20
----------------------------------------------------------------------------------------------------------------------------------
47221 Universal Communication Solution 5499 1 Executive Phone Display SBG611504 340.20
----------------------------------------------------------------------------------------------------------------------------------
47220 Universal Communication Solution 5499 1 Executive Phone Display SBG611173 340.20
----------------------------------------------------------------------------------------------------------------------------------
47219 Universal Communication Solution 5499 1 Executive Phone Display SBG611371 340.20
----------------------------------------------------------------------------------------------------------------------------------
47223 Universal Communication Solution 5499 1 Executive Phone Display SBG611121 340.20
----------------------------------------------------------------------------------------------------------------------------------
47224 Universal Communication Solution 5499 1 Executive Phone Display SBG611325 340.20
----------------------------------------------------------------------------------------------------------------------------------
47216 Universal Communication Solution 5499 1 Executive Phone Display SBG611091 340.20
----------------------------------------------------------------------------------------------------------------------------------
47225 Universal Communication Solution 5499 1 Executive Phone Display SBG611468 340.20
----------------------------------------------------------------------------------------------------------------------------------
22287 Universal Communication Solution 5499 1 12 Port Station NO S/N 780.30
----------------------------------------------------------------------------------------------------------------------------------
47214 VWR Scientific Products 53481110 1 Rolomix Orb Mixer Model 51335T 553960799706 358.20
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 85,416.00
(1) 22268 22270 (3) 22288 22291
22269 22271 22289 22292
22290 22293
(2) 22309 (4) 22296
22310
22311
22312
22313
22314
|
LEASE MANAGEMENT SERVICES, INC.
CERTIFICATE OF ACCEPTANCE
Attached to and made an integral part of Schedule 07 to Equipment Financing Agreement Number 10787.
TO: LEASE MANAGEMENT SERVICES INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
EQUIPMENT DESCRIPTION
SEE ATTACHED EXHIBIT "A"
We hereby acknowledge receipt, in good condition, of the Equipment described above or on the attached Exhibit "A". The Equipment has been properly installed and is operating satisfactorily. We hereby accept said Equipment as satisfactory in all respects for the purposes of the above Equipment Financing Agreement. Said Equipment has not been delivered or accepted on a trial basis, and is free and clear of all liens and encumbrances and adverse claims, with the exception of the security interest created herein.
We will make all payments to Secured Party, as called for in the Equipment Financing Agreement. We agree that any rights we may have against the supplies or vendor of said Equipment will not be asserted as an abatement, defense, counterclaim, or deduction against Secured Party.
All capitalized terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement referenced above.
DO NOT SIGN OR DATE THIS FORM UNTIL THE EQUIPMENT IS RECEIVED,
PROPERLY INSTALLED AND IS OPERATING SATISFACTORILY.
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
---------------------------------
Title: CEO
---------------------------------
Date: 10/11/96
---------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
CREDIT MEMO
2500 Sand Hill Road, Suite 101, Menlo Park, CA. 94025
--------------------------------------- Irori Incorporated 11025 North Torrey Pines Road, #100 CREDIT MEMO # 10787-07 La Jolla, CA 92037 DATE 09-Oct-96 --------------------------------------- |
--------------------------------------------------------------------------------
QUANTITY DESCRIPTION PRICE AMOUNT
--------------------------------------------------------------------------------
RE: EQUIPMENT FINANCING AGREEMENT NO. 10787-07
-----------------------------------------------
First Month's Rent: $ 2,357.00
Security Deposit: $ 21,354.00
Non-Financable Items:
Freight/Install/Labor $ 2,638.47
Sales Tax $ 5,894.13
Softcost/Disposables $ 699.70
PLUS:
Vendor Prepayments $(94,648.30)
Prorata Commitment Fee $ (376.00)
-----------
TOTAL $(62,081.00)
--------------------------------------------------------------------------------
If you have any questions concerning CHECK PAYABLE TO: ($62,081.00)
this credit, call: (415) 854-9450. Irori Incorporated
|
THANK YOU FOR YOUR BUSINESS!
Lease Management Services, Inc. 2500 Sand Hill Road, Suite 101, Menlo Park, CA 94025 Telephone (415) 854-9450 o Fax (415) 854-9457
October 4, 1996
Susan Sisk
IRORI INCORPORATED
11025 North Torrey Pines Road
La Jolla, CA 92037
Dear Susan:
Enclosed are the documents for Equipment Financing Agreement Number 10787, Schedule Number 07. The Commencement date of this schedule is October 1, 1996. Please see that the documents are executed and returned
Equipment identification labels (asset tags) are also enclosed. Please affix the asset tags to all of the equipment listed in the Exhibit A. Please acknowledge completion of labeling by listing the appropriate asset tag number in the space provided for each equipment description in Exhibit A. Sign where indicated below and return to me.
Should you have any questions, please call.
Sincerely, LABELING OF EQUIPMENT
Equipment Financing Agreement
/s/ K.C. Number: 10787-07
Label Number: See Exhibit A-1
Kathy (Kasey) Christie IRORI INCORPORATED
Sr. Contract Administrator
By: /s/ Michael P. Nova
-----------------------------------
Title: CEO
-----------------------------------
Date: 10/11/96
-----------------------------------
|
Enclosures
A Subsidiary of Phoenixcor, Inc. o 65 Water Street, South Norwalk, CT 06854
10787-07 This STATEMENT is presented for filing pursuant to the California Uniform Commercial Code
-----------------------------------------------------------------------------------------------------------------------------------
1. FILE NO. OF ORIG. FINANCING 1A. DATE OF FILING OF ORIG. 1B. DATE OF ORIG. FINANCING 1C. PLACE OF FILING ORIG.
STATEMENT FINANCING STATEMENT STATEMENT FINANCING STATEMENT
9534560778 12/08/95 Sacramento
-----------------------------------------------------------------------------------------------------------------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.
IRORI INCORPORATED
-----------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
11025 NORTH TORREY PINES ROAD, #100 LA JOLLA, CA 92037
-----------------------------------------------------------------------------------------------------------------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY OR
FEDERAL TAX NO.
-----------------------------------------------------------------------------------------------------------------------------------
3B. MAILING ADDRESS 3C. CITY, STATE 3D. ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.,
FEDERAL TAX NO,.
OR BANK TRANSIT AND
A.B.A. NO.
NAME LEASE MANAGEMENT SERVICES, INC.
MAILING ADDRESS 2500 SAND HILL ROAD, SUITE 101
CITY MENLO PARK STATE CA ZIP CODE 94025 94-2221046
-----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.,
NAME FEDERAL TAX NO. OR
MAILING ADDRESS BANK TRANSIT AND
A.B.A. NO.
CITY STATE ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
6A [ ] CONTINUATION--The original Financing Statement between the foregoing Debtor and Secured Party bearing the file number
and date shown above is continued. If collateral is crops or timber, check here [ ] and insert description of real property
on which growing or to be grown in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
B [ ] RELEASE--From the collateral described in the Financing Statement bearing the file number shown above, the Secured Party
releases the collateral described in Item 7 below..
-----------------------------------------------------------------------------------------------------------------------------------
C [ ] ASSIGNMENT--The Secured Party certifies that the Secured Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file number shown above in the collateral described in Item 7
below.
-----------------------------------------------------------------------------------------------------------------------------------
D [ ] TERMINATION--The Secured Party certifies that the Secured Party no longer claims a security interest under the Financing
Statement bearing the file number shown above..
-----------------------------------------------------------------------------------------------------------------------------------
E [X] AMENDMENT--The Financing Statement bearing the file number shown above is amended as set forth in Item 7 below.
(Signature of Debtor required on all amendments.)
-----------------------------------------------------------------------------------------------------------------------------------
F [ ] OTHER
-----------------------------------------------------------------------------------------------------------------------------------
7.
AMEND ORIGINAL FILING TO MORE SPECIFICALLY DESCRIBE A PORTION OF THE EQUIPMENT AND PERSONAL PROPERTY SET FORTH IN THE
ORIGINAL FILING, NAMELY, THE EQUIPMENT AND PERSONAL PROPERTY FINANCED UNDER SCHEDULE NO. 07 OF EQUIPMENT FINANCING AGREEMENT
NO. 10787, WHICH EQUIPMENT AND PERSONAL PROPERTY IS DESCRIBED ON THE TWO (2) PAGE EXHIBIT A-1 ATTACHED HERETO AND MADE A
PART HEREOF. THIS AMENDMENT IS NOT IN LIMITATION OF THE ORIGINAL FILING, BUT SUPPLEMENTAL THERETO.
-----------------------------------------------------------------------------------------------------------------------------------
8. C 9. This Space for Use of Filing Officer
O (Date, Time, Filing Office)
D
(Date) 10/11 1996 E
--------------------------------------
IRORI INCORPORATED
-----------------------------------------------------------------------------
1
By: /s/ MICHAEL P. NOVA PRESIDENT
-----------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
2
LEASE MANAGEMENT SERVICES, INC.
-----------------------------------------------------------------------------
3
By: /s/ BARBARA B. KAISER
-----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
4
-----------------------------------------------------------------------------
RETURN COPY TO
5
P6-0000-141-6
ADDRESS LEASE MANAGEMENT SERVICES, INC.
2500 SAND HILL ROAD, SUITE 101 6
MENLO PARK, CA 94025
7
Filing Officer Debtors
STANDARD FORM--FILING FEE UNIFORM COMMERCIAL CODE--FORM UCC.2
8
Approved by the Secretary of State
9
-----------------------------------------------------------------------------------------------------------------------------------
|
LEASE MANAGEMENT SERVICES, INC.
SCHEDULE 08 TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10787
BETWEEN
IRORI INCORPORATED, AS DEBTOR
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY
ATTACHED TO AND MADE A PART OF EQUIPMENT FINANCING AGREEMENT NUMBER 10787, BY AND BETWEEN SECURED PARTY AND DEBTOR ("AGREEMENT") WHICH IS INCORPORATED HEREIN BY THIS REFERENCE. SECURED PARTY AND DEBTOR HEREBY. ACKNOWLEDGE THAT THE ITEMS OF EQUIPMENT DESCRIBED IN TIES SCHEDULE ARE COVERED BY THE AGREEMENT AND THAT THE FOLLOWING IS A DESCRIPTION OF SAID ITEMS, THE ADVANCE AMOUNT ON ACCOUNT THEREOF, THE INSTALLMENT PAYMENTS APPLICABLE THERETO, THE EQUIPMENT LOCATION THEREOF, AND, IF SPECIFIED, CERTAIN FURTHER RELATED INFORMATION.
1. EQUIPMENT DESCRIPTION: See Attached Exhibit "A"
2. PROCEEDS AMOUNT: $48,249.85
3. INSTALLMENT PAYMENTS: Except as otherwise provided in the Agreement or
in this Schedule, the undersigned Debtor
promises to repay the Advance Amount, with
|
interest as follows:
$1,326.00 per month due on the first day of each month for Forty-Two (42) consecutive months, beginning on, December 1, 1996, followed by $7,237.00 on June 1, 2000.
4. EQUIPMENT LOCATION: 11025 North Torrey Pines Road, # 100
La Jolla, CA 92037
5. OTHER PROVISIONS: N/A
Dated: 12/20/96
-------------------------------
DEBTOR: SECURED PARTY:
IRORI INCORPORATED LEASE MANAGEMENT SERVICES, INC.
By: /s/ Michael P. Nova By: /s/ Barbara B. Kaiser
------------------------------- --------------------------
Barbara B. Kaiser
Title: President Title: EVP/General Manager
------------------------------- --------------------------
|
LEASE MANAGEMENT SERVICES, INC.
EXHIBIT A
Attached to and forming a part of the following documents: Schedule Number 08 of Equipment Financing Agreement Number 10787, Certificate of Acceptance and the UCC Financing Statement(s) pertaining to the referenced Loan Schedule, and any addenda thereto by and between LEASE MANAGEMENT SERVICES, INC., as Secured Party, and IRORI INCORPORATED, as Debtor. The Loan Schedule referenced above is incorporated herein by this reference. All Terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement. Debtor is hereby directed to contact the Supplier of the Equipment for a description of any rights Debtor may have under the Supply Contract covering the Equipment.
AS MORE FULLY DESCRIBED ON THE ONE (1) PAGE EXHIBIT A-1 ATTACHED HERETO
AND MADE A PART HEREOF.
TOTAL PURCHASE PRICE $48,249.85
Debtor: /s/ MPN (Initials)
-----------------------
Secured Party: /s/ BBK (Initials)
-----------------------
|
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-08
LMSI
TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
----- ------ --------- --- ----------- ------------- ------
47230 Universal Communication Solution 5635 1 4 Port Voice Mailcard N/A 1,595.00
47227 Fisher Scientific 3366251 1 Balance Et Al 1115300705 4,815.55
47229 Fisher Scientific 2177573 1 Vacuum Pump Gerotor YKL270610 739.00
47249 VWR Scientific Products 57931660 1 Pump 115V 193904 1,291.50
47228 Perkin Elmer 0996944 1 Spectrum 1000 W/Software 45395 17,210.00
47240 Micron Electronics, Inc. 789892 1 Micron Computer ATO Model BOM 724035-0001 2,049.00
47231 Networks 2000 2148 1 HP Advancestack 100VG Hub 14-Port NONE 1,441.25
47233 Networks 2000 2148 1 HP SNMP Bridge Module SG63030296 936.55
47248 Networks 2000 2148 1 Digiboard 8 Port Card N/A 719.00
47237 Micron Electronics, Inc. 764346 1 Micron Computer ATO Model BOM 706164-0001 2,049.00
47247 Technology Integration Group 339235 1 17" Monitor AI0-52303272 650.00
47232 Andataco 157172 1 Desktop Cab 0000-0937 4,800.00
47234 Andataco 157172 1 DLT4000 Tape Unit 0000-0937 2,325.00
(1) Technology Integration Group 337325 6 PCI LAN Adapter (pkg of 6) N/A 790.00
47238 Technology Integration Group 337325 1 17" Monitor OP4-60201585 650.00
47239 Technology Integration Group 336491 1 17" Monitor OP4-54901751 650.00
47235 Technology Integration Group 335814 1 Laserjet 4MV SJPFH010307 2,745.00
47236 Micron Electronics 747144 1 Micron Computer ATO Model BOM 697828-0001 2,049.00
47226 Pharmacia Biotech 38715620 1 EPS 500 Power Supply 9603-1001 745.00
TOTAL $48,249.85
|
(1) 47241
47242
47243
47244
47245
47246
Debtor /s/ MPN (Initials) Secured Pary /s/ BBK (Initials)
--------- ---------
|
LEASE MANAGEMENT SERVICES, INC.
PAY PROCEEDS LETTER
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
IRORI INCORPORATED, as Debtor, hereby authorizes LEASE MANAGEMENT SERVICES, INC., as Secured Party, to distribute proceeds of Schedule 08 to the Equipment Financing Agreement Number 10787, totaling $48,249.85 against equipment purchases, as follows
$48,249.85 Proceeds from Equipment Financing Agreement
Number 10787-08.
LESS:
$1,326.00 Due to LEASE MANAGEMENT SERVICES, INC., to pay
first installment payment due December 1, 1996.
$12,062.00 Due to LEASE MANAGEMENT SERVICES, INC., to pay
Security Deposit.
PLUS:
$212.00 Credit for Commitment fee refund.
$35,073.85 Credit due to IRORI INCORPORATED.
|
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
---------------------------
Title: President
---------------------------
Date: 12/20/96
---------------------------
|
LEASE MANAGEMENT SERVICES, INC.
CREDIT MEMO
2500 Sand Hill Road, Suite 101, Menlo Park, CA 94025
Irori Incorporated
11025 North Torrey Pines Road, #100
La Jolla, CA 92037
CREDIT MEMO # 10787-08
DATE 09-Dec-96
QUANTITY DESCRIPTION PRICE AMOUNT
-------- ----------- ----- ------
RE: EQUIPMENT FINANCING AGREEMENT NO. 10787-08
--------------------------------------------------------------------
First Month's Rent: $1,326.00
Security Deposit: $12,062.00
Non-Financeable Items:
Freight/Install/Labor $458.77
Sales Tax $3,559.82
Softcost/Disposables $3,829.75
PLUS:
Vendor Prepayments $(56,098.19)
Prorata Commitment Fee $(212.00)
------------
TOTAL $(35,073.85)
If you have any questions concerning this credit, CHECK PAYABLE TO: $(35,073.85)
call: (415) 854-9450. Irori Incorporated
------------
|
THANK YOU FOR YOUR BUSINESS!
LEASE MANAGEMENT SERVICES, INC.
CERTIFICATE OF ACCEPTANCE
Attached to and made an integral part of Schedule 08 to Equipment Financing Agreement Number 10787.
TO: LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
EQUIPMENT DESCRIPTION
SEE ATTACHED EXHIBIT "A"
We hereby acknowledge receipt, in good condition, of the Equipment described above or on the attached Exhibit "A". The Equipment has been properly installed and is operating satisfactorily. We hereby accept said Equipment as satisfactory in all respects for the purposes of the above Equipment Financing Agreement. Said Equipment has not been delivered or accepted on a trial basis, and is free and clear of all liens and encumbrances and adverse claims, with the exception of the security deposit created herein.
We will make all payments to Secured Party, as called for in the Equipment Financing Agreement. We agree that any rights we may have against the supplier or vendor of said Equipment will not be asserted as an abatement, defense, counterclaim, or deduction against Secured Party.
All capitalized terms used herein shall have the same meaning as set forth in the Equipment Financing Agreement referenced above.
DO NOT SIGN OR DATE THIS FORM UNTIL THE EQUIPMENT IS RECEIVED,
PROPERLY INSTALLED AND IS OPERATING SATISFACTORILY.
DEBTOR:
IRORI INCORPORATED
By: /s/ Michael P. Nova
-----------------------------
Title: President
-----------------------
Date: 12/20/96
-------------------------
|
Lease Management Services, Inc.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
Telephone (415) 854-9450 o Fax (415) 854-9457
December 13, 1996
Susan Sisk
IRORI
11025 North Torrey Fine Road, #100
La Jolla, CA 92037
Dear Susan:
Enclosed are the documents for Equipment Financing Agreement Number 10787, Schedule Number 08. The Commencement date of this schedule is December 1, 1996. Please see that the documents are executed and returned.
Equipment identification labels (asset tags) are also enclosed. Please affix the asset tags to all of the equipment listed in the Exhibit A. Please acknowledge completion of labeling by listing the appropriate asset tag number in the space provided for each equipment description in Exhibit A. Sign where indicated below and return to me.
Should you have any questions, please call.
Sincerely, LABELING OF EQUIPMENT
Equipment Financing Agreement
/s/ K.C. Number: 10787-08
Label Number: See Exhibit A-1
Kathy (Kasey) Christie IRORI
Sr. Contract Administrator
By: /s/ Michael P. Nova
-------------------------------
Title: President
-------------------------------
Date: 12/20/96
-------------------------------
|
Enclosures
A Subsidiary of Phoenixcor, Inc. o 65 Water Street, South Norwalk, CT 06854
10787-08 This STATEMENT is presented for filing pursuant to the California Uniform Commercial Code
-----------------------------------------------------------------------------------------------------------------------------------
1. FILE NO. OF ORIG. FINANCING 1A. DATE OF FILING OF ORIG. 1B. DATE OF ORIG. FINANCING 1C. PLACE OF FILING ORIG.
STATEMENT FINANCING STATEMENT STATEMENT FINANCING STATEMENT
9534560778 12/08/95 SOS
-----------------------------------------------------------------------------------------------------------------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.
IRORI INCORPORATED
-----------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
11025 NORTH TORREY PINES ROAD, #100 LA JOLLA, CA 92037
-----------------------------------------------------------------------------------------------------------------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY OR
FEDERAL TAX NO.
-----------------------------------------------------------------------------------------------------------------------------------
3B. MAILING ADDRESS 3C. CITY, STATE 3D. ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.,
FEDERAL TAX NO,.
OR BANK TRANSIT AND
A.B.A. NO.
NAME LEASE MANAGEMENT SERVICES, INC.
MAILING ADDRESS 2500 SAND HILL ROAD, SUITE 101
CITY MENLO PARK STATE CA ZIP CODE 94025 9482221046
-----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.,
NAME FEDERAL TAX NO. OR
MAILING ADDRESS BANK TRANSIT AND
CITY STATE ZIP CODE A.B.A. NO.
-----------------------------------------------------------------------------------------------------------------------------------
6A [ ] CONTINUATION--The original Financing Statement between the foregoing Debtor and Secured Party bearing the file number
and date shown above is continued. If collateral is crops or timber, check here [ ] and insert description of real property
on which growing or to be grown in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
B [ ] RELEASE--From the collateral described in the Financing Statement bearing the file number shown above, the Secured Party
releases the collateral described in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
C [ ] ASSIGNMENT--The Secured Party certifies that the Secured Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file number shown above in the collateral described in Item 7
below.
-----------------------------------------------------------------------------------------------------------------------------------
D [ ] TERMINATION--The Secured Party certifies that the Secured Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
-----------------------------------------------------------------------------------------------------------------------------------
E [X] AMENDMENT--The Financing Statement bearing the file number shown above is amended as set forth in Item 7 below.
(Signature of Debtor required on all amendments.)
-----------------------------------------------------------------------------------------------------------------------------------
F [ ] OTHER
-----------------------------------------------------------------------------------------------------------------------------------
7.
AMEND ORIGINAL FILING TO MORE SPECIFICALLY DESCRIBE A PORTION OF THE EQUIPMENT AND PERSONAL PROPERTY SET FORTH IN THE
ORIGINAL FILING, NAMELY, THE EQUIPMENT AND PERSONAL PROPERTY FINANCED UNDER SCHEDULE NO. 08 OF EQUIPMENT FINANCING AGREEMENT
NO. 10787, WHICH EQUIPMENT AND PERSONAL PROPERTY IS DESCRIBED ON THE ONE (1) PAGE EXHIBIT A-1 ATTACHED HERETO AND MADE A
PART HEREOF. THIS AMENDMENT IS NOT IN LIMITATION OF THE ORIGINAL FILING, BUT SUPPLEMENTAL THERETO.
-----------------------------------------------------------------------------------------------------------------------------------
8. C 9. This Space for Use of Filing Officer
O (Date, Time, Filing Office)
D
(Date) 19 E
--------------------------------------
IRORI INCORPORATED
-----------------------------------------------------------------------------
1
By: /s/ MICHAEL P. NOVA PRESIDENT
-----------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
2
LEASE MANAGEMENT SERVICES, INC.
-----------------------------------------------------------------------------
3
By: /s/ BARBARA B. KAISER
-----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
4
-----------------------------------------------------------------------------
RETURN COPY TO
5
P6-0000-141-6
ADDRESS LEASE MANAGEMENT SERVICES, INC.
2500 SAND HILL ROAD, SUITE 101 6
MENLO PARK, CA 94025
7
Filing Officer Debtors
STANDARD FORM -- FILING FEE UNIFORM COMMERCIAL CODE -- FORM UCC.2 8
Approved by the Secretary of State
9
-----------------------------------------------------------------------------------------------------------------------------------
|
10787-08 This STATEMENT is presented for filing pursuant to the California Uniform Commercial Code
-----------------------------------------------------------------------------------------------------------------------------------
1. FILE NO. OF ORIG. FINANCING 1A. DATE OF FILING OF ORIG. 1B. DATE OF ORIG. FINANCING 1C. PLACE OF FILING ORIG.
STATEMENT FINANCING STATEMENT STATEMENT FINANCING STATEMENT
9534560778 12/08/95 SOS
-----------------------------------------------------------------------------------------------------------------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.,
FEDERAL TAX NO.
IRORI INCORPORATED
-----------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
11025 NORTH TORREY PINES ROAD, #100 LA JOLLA, CA 92037
-----------------------------------------------------------------------------------------------------------------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY OR
FEDERAL TAX NO.
-----------------------------------------------------------------------------------------------------------------------------------
3B. MAILING ADDRESS 3C. CITY, STATE 3D. ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.,
FEDERAL TAX NO,.
OR BANK TRANSIT AND
A.B.A. NO.
NAME LEASE MANAGEMENT SERVICES, INC.
MAILING ADDRESS 2500 SAND HILL ROAD, SUITE 101
CITY MENLO PARK STATE CA ZIP CODE 94025 94-2221046
-----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.,
NAME FEDERAL TAX NO. OR
MAILING ADDRESS BANK TRANSIT AND
CITY STATE ZIP CODE A.B.A. NO.
-----------------------------------------------------------------------------------------------------------------------------------
6A [ ] CONTINUATION--The original Financing Statement between the foregoing Debtor and Secured Party bearing the file number
and date shown above is continued. If collateral is crops or timber, check here [ ] and insert description of real property
on which growing or to be grown in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
B [ ] RELEASE--From the collateral described in the Financing Statement bearing the file number shown above, the Secured Party
releases the collateral described in Item 7 below.
-----------------------------------------------------------------------------------------------------------------------------------
C [ ] ASSIGNMENT--The Secured Party certifies that the Secured Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file number shown above in the collateral described in Item 7
below.
-----------------------------------------------------------------------------------------------------------------------------------
D [ ] TERMINATION--The Secured Party certifies that the Secured Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
-----------------------------------------------------------------------------------------------------------------------------------
E [X] AMENDMENT--The Financing Statement bearing the file number shown above is amended as set forth in Item 7 below.
(Signature of Debtor required on all amendments.)
-----------------------------------------------------------------------------------------------------------------------------------
F [ ] OTHER
-----------------------------------------------------------------------------------------------------------------------------------
7.
AMEND ORIGINAL FILING TO MORE SPECIFICALLY DESCRIBE A PORTION OF THE EQUIPMENT AND PERSONAL PROPERTY SET FORTH IN THE
ORIGINAL FILING, NAMELY, THE EQUIPMENT AND PERSONAL PROPERTY FINANCED UNDER SCHEDULE NO. 08 OF EQUIPMENT FINANCING AGREEMENT
NO. 10787, WHICH EQUIPMENT AND PERSONAL PROPERTY IS DESCRIBED ON THE ONE (1) PAGE EXHIBIT A-1 ATTACHED HERETO AND MADE A
PART HEREOF. THIS AMENDMENT IS NOT IN LIMITATION OF THE ORIGINAL FILING, BUT SUPPLEMENTAL THERETO.
-----------------------------------------------------------------------------------------------------------------------------------
8. C 9. This Space for Use of Filing Officer
O (Date, Time, Filing Office)
D
(Date) 12/20 1996 E
--------------------------------------
IRORI INCORPORATED
-----------------------------------------------------------------------------
1
By: /s/ MICHAEL P. NOVA PRESIDENT
-----------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
2
LEASE MANAGEMENT SERVICES, INC.
-----------------------------------------------------------------------------
3
By: /s/ BARBARA B. KAISER
-----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
4
-----------------------------------------------------------------------------
RETURN COPY TO
5
P6-0000-141-6
ADDRESS LEASE MANAGEMENT SERVICES, INC.
2500 SAND HILL ROAD, SUITE 101 6
MENLO PARK, CA 94025
7
Filing Officer Debtors
STANDARD FORM -- FILING FEE UNIFORM COMMERCIAL CODE -- FORM UCC.2
8
Approved by the Secretary of State
9
-----------------------------------------------------------------------------------------------------------------------------------
|
LEASE MANAGEMENT SERVICES, INC. PREPARED FOR: IRORI, INC. SCHEDULE 10787-08 COMMENCE DATE: 01-Dec-96 PV RENTAL $48,249.85 PRINCIPAL: $48,249.85 IMPLICIT INTEREST RATE: 8.65% AMORTIZATION FACTOR: 14.644813% TERM: 43 ADV or ARR: 2 (1=ARR, 2=ADV) |
APPLIED TO APPLIED TO REMAINING
PYMT # PRINCIPAL PAYMENT INTEREST PRINCIPAL PRINCIPAL
------ --------- ------- -------- --------- ---------
1 $48,249.85 $1,326.00 $0.00 $1,326.00 $46,923.85
2 46,923.85 1,326.00 572.66 753.34 46,170.51
3 46,170.51 1,326.00 563.47 762.53 45,407.97
4 45,407.97 1,326.00 554.16 771.84 44,636.13
5 44,636.13 1,326.00 544.74 781.26 43,854.87
6 43,854.87 1,326.00 535.21 790.79 43,064.08
7 43,064.08 1,326.00 525.55 800.45 42,263.63
8 42,263.63 1,326.00 515.79 810.21 41,453.42
9 41,453.42 1,326.00 505.90 820.10 40,633.32
10 40,633.32 1,326.00 495.89 830.11 39,803.21
11 39,803.21 1,326.00 485.76 840.24 38,962.97
12 38,962.87 1,326.00 475.50 850.50 38,112.47
13 38,112.47 1,326.00 465.13 860.87 37,251.60
14 37,251.60 1,326.00 454.62 871.38 36,380.21
15 36,380.21 1,326.00 443.98 882.02 35,498.20
16 35,498.20 1,326.00 433.22 892.78 34,605.42
17 34,605.42 1,326.00 422.32 903.68 33,701.74
18 33,701.74 1,326.00 411.30 914.70 32,787.04
19 32,787.04 1,326.00 400.13 925.87 31,861.17
20 31,861.17 1,326.00 388.83 937.17 30,924.01
21 30,924.01 1,326.00 377.40 948.50 29,975.40
22 29,975.40 1,326.00 365.82 960.18 29,015.23
23 29,015.23 1,326.00 354.10 971.90 28,043.33
24 28,043.33 1,326.00 342.24 983.76 27,059.57
25 27,059.57 1,326.00 330.24 995.76 26,063.80
26 26,063.80 1,326.00 318.08 1,007.92 25,055.89
27 25,055.89 1,326.00 305.78 1,020.22 24,035.67
28 24,035.67 1,326.00 293.33 1,032.67 23,003.00
29 23,003.00 1,326.00 280.73 1,045.27 21,957.73
30 21,957.73 1,326.00 267.97 1,058.03 20,899.70
31 20,899.70 1,326.00 255.06 1,070.94 19,828.76
32 19,828.76 1,326.00 241.99 1,084.01 18,744.75
33 18,744.75 1,326.00 228.76 1,097.24 17,647.51
34 17,647.51 1,326.00 215.37 1,110.63 16,536.88
35 16,536.88 1,326.00 201.82 1,124.18 15,412.70
36 15,412.70 1,326.00 188.10 1,137.90 14,274.80
37 14,274.60 1,326.00 174.21 1,151.79 13,123.01
38 13,123.01 1,326.00 160.15 1,165.85 11,957.16
39 11,957.16 1,326.00 145.93 1,180.07 10,777.09
40 10,777.09 1,326.00 131.52 1,194.48 9,582.61
41 9,582.61 1,326.00 116.95 1,209.05 8,373.56
42 8,373.56 1,326.00 102.19 1,223.81 7,149.75
43 7,149.75 7,237.00 87.26 7,149.74 0.00
44 0.00 0.00 0.00 (0.00) 0.00
45 0.00 0.00 0.00 (0.00) 0.00
46 0.00 0.00 0.00 (0.00) 0.00
47 0.00 0.00 0.00 (0.00) 0.00
48 0.00 0.00 0.00 (0.00) 0.00
49 0.00 0.00 0.00 (0.00) 0.00
TOTAL INTEREST 14,679.15
TOTAL PRINCIPAL 48,249.85
---------
TOTAL RENTAL RECEIVABLE 62,929.00 62,929.00
|
The above amortization schedule has been prepared using standard amortization software. You may want to submit a copy of this schedule, along with the Lease documents, to your CPA firm so they can verify that your accounting records comply with generally accepted accounting principles.
LEASE MANAGEMENT SERVICES, INC.
SCHEDULE 09 TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10787
BETWEEN
IRORI INCORPORATED, AS DEBTOR
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY
ATTACHED TO AND MADE A PART OF EQUIPMENT FINANCING AGREEMENT NUMBER 10787, BY AND BETWEEN SECURED PARTY AND DEBTOR ("AGREEMENT") WHICH IS INCORPORATED HEREIN BY THIS REFERENCE. SECURED PARTY AND DEBTOR HEREBY ACKNOWLEDGE THAT THE ITEMS OF EQUIPMENT DESCRIBED IN THIS SCHEDULE ARE COVERED BY THE AGREEMENT AND THAT THE FOLLOWING IS A DESCRIPTION OF SAID ITEMS, THE ADVANCE AMOUNT ON ACCOUNT THEREOF, THE INSTALLMENT PAYMENTS APPLICABLE THERETO, THE EQUIPMENT LOCATION THEREOF, AND, IF SPECIFIED, CERTAIN FURTHER RELATED INFORMATION.
1. EQUIPMENT DESCRIPTION: See Attached Exhibit "A"
2. PROCEEDS AMOUNT: $38,059.55
3. INSTALLMENT PAYMENTS: Except as otherwise provided in the Agreement or
in this Schedule, the undersigned Debtor
promises to repay the Advance Amount, with
|
interest as follows:
$1,047.00 per month due on the first day of each month for Forty-Two (42) consecutive months, beginning on March 1, 1997, followed by $5,709.00 on September 1, 2000.
4. EQUIPMENT LOCATION: 11025 North Torrey Pines Road, #100
La Jolla, CA 92037
5. OTHER PROVISIONS: N/A
Dated: 3-24-97
-----------------------------
DEBTOR: SECURED PARTY:
IRORI INCORPORATED LEASE MANAGEMENT SERVICES, INC.
By: /s/ MICHAEL NOVA By: /s/ BARBARA B. KAISER
----------------------------- -------------------------------
Barbara B. Kaiser
Title: President & CEO Title: EVP/General Manager
----------------------------- -----------------------------
|
IRORI INCORPORATED
EXHIBIT A-1 TO SCHEDULE 10787-09
LMSI
TAG # VENDOR INVOICE # QTY DESCRIPTION SERIAL NUMBER AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
31617 MicroImage?? 337327 1 500 Sheet Lower Tray for Laser Printer DE11586713 295.00
------------------------------------------------------------------------------------------------------------------------------------
31620 Technology Integration Group 329472 1 HP Vectra VL Series 4 5/100 SUS62455354 1,750.00
------------------------------------------------------------------------------------------------------------------------------------
31619 Technology Integration Group 329472 1 HP 1024 LE/MM 15" Monitor KR54213119 485.00
------------------------------------------------------------------------------------------------------------------------------------
Technology Integration Group 343198 1 10/100VG PCI Lan Adapter-6pk N/A 790.00
6pk - 31625,31626,31627,31628,31629,31630
------------------------------------------------------------------------------------------------------------------------------------
31616 Technology Integration Group 342913 1 Tektronix Phaser 350"B" Color Printer B6C2732 4,895.00
------------------------------------------------------------------------------------------------------------------------------------
31618 Technology Integration Group 325904 1 HP Vectra VL Series 4 5/100 SUS62556102 2,000.00
------------------------------------------------------------------------------------------------------------------------------------
31631 Technology Integration Group 325904 1 HP 1024 LE/MM 15" Monitor KR54920156 485.00
------------------------------------------------------------------------------------------------------------------------------------
31632 Technology Integration Group 343841 1 32MB Upgrade for NEC Versa 4000 Series N/A 325.00
------------------------------------------------------------------------------------------------------------------------------------
31622 Technology Integration Group 352164 1 17" SONY Multi Sync Monitor S011076380B 690.00
------------------------------------------------------------------------------------------------------------------------------------
31609 Networks 2000 2163 1 Compaq Prosignia 300 5/150 Server D641BHG20712 3,532.62
------------------------------------------------------------------------------------------------------------------------------------
31610 Networks 2000 2163 1 14" CTX Monitor 280-62107107 249.00
------------------------------------------------------------------------------------------------------------------------------------
31611 Networks 2000 2163 1 APC Backup 450 VA UPS WB9645112935 200.00
------------------------------------------------------------------------------------------------------------------------------------
31633 Networks 2000 2171 1 Digital Hinote Ultra II-Laptop Computer 8R64801030 5,494.93
------------------------------------------------------------------------------------------------------------------------------------
31621 Networks 2000 2167 1 APCC 700 VA UPS WS9642023559 390.00
------------------------------------------------------------------------------------------------------------------------------------
31624,31623 Networks 2000 2167 2 Compaq 4.3 Gig SCSI Hard Drive N/A 1,375.00
------------------------------------------------------------------------------------------------------------------------------------
31612 Micron Electronics, Inc. 817146 1 Micron Computer ATO Model BOM 738091-0001 4,450.00
31613 w/Monitor G6HDD5158
------------------------------------------------------------------------------------------------------------------------------------
31615 Micron Electronics, Inc. 836526 1 Micron Computer ATO Model BOM 807814-0001 3,300.00
------------------------------------------------------------------------------------------------------------------------------------
31614 Digital Dimensions, Inc. 7390 1 Viewsonic 21" Monitor 0200 1000 4949 6208 2,060.00
------------------------------------------------------------------------------------------------------------------------------------
31634 Networks 2000 2181 1 CD-ROM Multimedia Kit for Laptop N/A 665.00
------------------------------------------------------------------------------------------------------------------------------------
31607 Orion Research, Inc. I-377089 1 290A Portable PH/ISE Meter 6832 690.00
------------------------------------------------------------------------------------------------------------------------------------
31606 VWR Scientific Products 15474110 1 Dataplate, KG Hot Plate/Stirrer 992961142736 666.00
------------------------------------------------------------------------------------------------------------------------------------
31608 VWR Scientific Products 16097710 1 Dataplate, KG Hot Plate/Stirrer 992960258449 666.00
------------------------------------------------------------------------------------------------------------------------------------
22305 San Diego Office Interiors 962061-IN 1 Improv Management Chair-W/Arms N/A 338.00
------------------------------------------------------------------------------------------------------------------------------------
22302 San Diego Office Interiors 962061-IN 1 Improv Management Chair-W/Arms N/A 338.00
------------------------------------------------------------------------------------------------------------------------------------
22299 San Diego Office Interiors 962061-IN 1 Improv Management Chair-W/Arms N/A 338.00
------------------------------------------------------------------------------------------------------------------------------------
22298 San Diego Office Interiors 962061-IN 1 Improv Management Chair-W/Arms N/A 338.00
------------------------------------------------------------------------------------------------------------------------------------
22307 San Diego Office Interiors 962061-IN 1 Improv Guest Chair W/ Sled Base N/A 209.00
------------------------------------------------------------------------------------------------------------------------------------
22306 San Diego Office Interiors 962061-IN 1 Improv Guest Chair W/ Sled Base N/A 209.00
------------------------------------------------------------------------------------------------------------------------------------
22304 San Diego Office Interiors 962061-IN 1 Improv Guest Chair W/ Sled Base N/A 209.00
------------------------------------------------------------------------------------------------------------------------------------
22303 San Diego Office Interiors 962061-IN 1 Improv Guest Chair W/ Sled Base N/A 209.00
------------------------------------------------------------------------------------------------------------------------------------
22300 San Diego Office Interiors 962061-IN 1 Improv Guest Chair W/ Sled Base N/A 209.00
------------------------------------------------------------------------------------------------------------------------------------
22301 San Diego Office Interiors 962061-IN 1 Improv Guest Chair W/ Sled Base N/A 209.00
------------------------------------------------------------------------------------------------------------------------------------
Total for 10787-09 Lease Management 38,059.55
------------------------------------------------------------------------------------------------------------------------------------
|
Leasehold Management Services
Schedule 01 Monthly Interest Rate = 1.221%
Amortization schedule
INTEREST PRINCIPAL REMAINING REMAINING
PAYMENT # BORROWINGS DATE PAYMENT PAID PAID PRINCIPAL PAYMENTS
--------- ---------- ---- ------- ---- ---- --------- --------
47,191.91
1 $47,191.91 10/1/95 1,297.00 - 1,297.00 45,894.91 60,256.00
2 11/1/95 1,297.00 560.24 736.76 45,158.15 58,959.00
3 12/1/95 1,297.00 551.24 745.76 44,412.39 57,662.00
4 1/1/96 1,297.00 542.14 754.86 43,657.53 56,365.00
5 2/1/96 1,297.00 532.93 764.07 42,893.46 55,068.00
6 3/1/96 1,297.00 523.60 773.40 42,120.06 53,771.00
7 4/1/96 1,297.00 514.16 782.84 41,337.21 52,474.00
8 5/1/96 1,297.00 504.60 792.40 40,544.82 51,177.00
9 6/1/96 1,297.00 494.93 802.07 39,742.75 49,880.00
10 7/1/96 1,297.00 485.14 811.86 38,930.88 48,583.00
11 8/1/96 1,297.00 475.23 821.77 38,109.11 47,286.00
12 9/1/96 1,297.00 465.20 831.80 37,277.31 45,989.00
13 10/1/96 1,297.00 455.04 841.96 36,435.35 44,692.00
14 11/1/96 1,297.00 444.77 852.23 35,583.12 43,395.00
15 12/1/96 1,297.00 434.36 862.64 34,720.48 42,098.00
16 1/1/97 1,297.00 423.83 873.17 33,847.31 40,801.00
17 2/1/97 1,297.00 413.17 883.83 32,963.48 39,504.00
18 3/1/97 1,297.00 402.38 894.62 32,068.87 38,207.00
19 4/1/97 1,297.00 391.46 905.54 31,163.33 36,910.00
20 5/1/97 1,297.00 380.41 916.59 30,246.74 35,613.00
21 6/1/97 1,297.00 369.22 927.78 29,318.96 34,316.00
22 7/1/97 1,297.00 357.90 939.10 28,379.86 33,019.00
23 8/1/97 1,297.00 346.43 950.57 27,429.29 31,722.00
24 9/1/97 1,297.00 334.83 962.17 26,467.12 30,425.00
25 10/1/97 1,297.00 323.08 973.92 25,493.20 29,128.00
26 11/1/97 1,297.00 311.19 985.81 24,507.39 27,831.00
27 12/1/97 1,297.00 299.16 997.84 23,509.56 26,534.00
28 1/1/98 1,297.00 286.98 1,010.02 22,499.54 25,237.00
29 2/1/98 1,297.00 274.65 1,022.35 21,477.19 23,940.00
30 3/1/98 1,297.00 262.17 1,034.83 20,442.36 22,643.00
31 4/1/98 1,297.00 249.54 1,047.46 19,394.90 21,346.00
32 5/1/98 1,297.00 236.75 1,060.25 18,334.65 20,049.00
33 6/1/98 1,297.00 223.81 1,073.19 17,261.46 18,752.00
34 7/1/98 1,297.00 210.71 1,086.29 16,175.17 17,455.00
35 8/1/98 1,297.00 197.45 1,099.55 15,075.62 16,158.00
36 9/1/98 1,297.00 184.03 1,112.97 13,962.65 14,861.00
37 10/1/98 1,297.00 170.44 1,126.56 12,836.09 13,564.00
38 11/1/98 1,297.00 156.69 1,140.31 11,695.78 12,267.00
39 12/1/98 1,297.00 142.77 1,154.23 10,541.55 10,970.00
40 1/1/99 1,297.00 128.68 1,168.32 9,373.23 9,673.00
41 2/1/99 1,297.00 114.42 1,182.58 8,190.65 8,376.00
42 3/1/99 1,297.00 99.98 1,197.02 6,993.63 7,079.00
43 4/1/99 7,079.00 85.37 6,993.63 0.00 -
|
Leasehold Management Services
Schedule 02 Monthly Interest Rate = 1.220%
Amortization schedule
PRINCIPAL REMAINING REMAINING
PAYMENT # BORROWINGS DATE PAYMENT INTEREST PAID PAID PRINCIPAL PAYMENTS
--------- ---------- ---- ------- ------------- ---- --------- --------
56,437.03
1 $56,437.03 12/1/95 1,551.00 - 1,551.00 54,886.03 72,057.00
2 1/1/96 1,551.00 669.86 881.14 54,004.89 70,506.00
3 2/1/96 1,551.00 659.10 891.90 53,112.99 68,955.00
4 3/1/96 1,551.00 648.22 902.78 52,210.21 67,404.00
5 4/1/96 1,551.00 637.20 913.80 51,296.41 65,853.00
6 5/1/96 1,551.00 626.05 924.95 50,371.46 64,302.00
7 6/1/96 1,551.00 614.76 936.24 49,435.22 62,751.00
8 7/1/96 1,551.00 603.33 947.67 48,487.56 61,200.00
9 8/1/96 1,551.00 591.77 959.23 47,528.33 59,649.00
10 9/1/96 1,551.00 580.06 970.94 46,557.39 58,098.00
11 10/1/96 1,551.00 568.21 982.79 45,574.60 56,547.00
12 11/1/96 1,551.00 556.22 994.78 44,579.82 54,996.00
13 12/1/96 1,551.00 544.08 1,006.92 43,572.89 53,445.00
14 1/1/97 1,551.00 531.79 1,019.21 42,553.68 51,894.00
15 2/1/97 1,551.00 519.35 1,031.65 41,522.03 50,343.00
16 3/1/97 1,551.00 506.76 1,044.24 40,477.78 48,792.00
17 4/1/97 1,551.00 494.01 1,056.99 39,420.80 47,241.00
18 5/1/97 1,551.00 481.11 1,069.89 38,350.91 45,690.00
19 6/1/97 1,551.00 468.06 1,082.94 37,267.97 44,139.00
20 7/1/97 1,551.00 454.84 1,096.16 36,171.80 42,588.00
21 8/1/97 1,551.00 441.46 1,109.54 35,062.26 41,037.00
22 9/1/97 1,551.00 427.92 1,123.08 33,939.18 39,486.00
23 10/1/97 1,551.00 414.21 1,136.79 32,802.39 37,935.00
24 11/1/97 1,551.00 400.34 1,150.66 31,651.73 36,384.00
25 12/1/97 1,551.00 386.29 1,164.71 30,487.03 34,833.00
26 1/1/98 1,551.00 372.08 1,178.92 29,308.11 33,282.00
27 2/1/98 1,551.00 357.69 1,193.31 28,114.80 31,731.00
28 3/1/98 1,551.00 343.13 1,207.87 26,906.93 30,180.00
29 4/1/98 1,551.00 328.39 1,222.61 25,684.31 28,629.00
30 5/1/98 1,551.00 313.47 1,237.53 24,446.78 27,078.00
31 6/1/98 1,551.00 298.36 1,252.64 23,194.14 25,527.00
32 7/1/98 1,551.00 283.07 1,267.93 21,926.22 23,976.00
33 8/1/98 1,551.00 267.60 1,283.40 20,642.81 22,425.00
34 9/1/98 1,551.00 251.94 1,299.06 19,343.75 20,874.00
35 10/1/98 1,551.00 236.08 1,314.92 18,028.83 19,323.00
36 11/1/98 1,551.00 220.03 1,330.97 16,697.87 17,772.00
37 12/1/98 1,551.00 203.79 1,347.21 15,350.66 16,221.00
38 1/1/99 1,551.00 187.35 1,363.65 13,987.00 14,670.00
39 2/1/99 1,551.00 170.70 1,380.30 12,606.71 13,119.00
40 3/1/99 1,551.00 153.86 1,397.14 11,209.57 11,568.00
41 4/1/99 1,551.00 136.81 1,414.19 9,795.38 10,017.00
42 5/1/99 1,551.00 119.55 1,431.45 8,363.92 8,466.00
43 6/1/99 8,466.00 102.08 8,363.92 0.00 -
|
Leasehold Management Services
Schedule 03 Monthly Interest Rate = 1.194%
Amortization schedule
INTEREST PRINCIPAL REMAINING REMAINING
PAYMENT # BORROWINGS DATE PAYMENT PAID PAID PRINCIPAL PAYMENTS
--------- ---------- ---- ------- -------- --------- --------- ---------
105,426.86
1 $105,426.86 1/1/96 2,880.00 - 2,880.00 102,546.86 133,894.00
2 2/1/96 2,880.00 1,224.35 1,655.65 100,891.21 131,014.00
3 3/1/96 2,880.00 1,204.58 1,675.42 99,215.79 128,134.00
4 4/1/96 2,880.00 1,184.58 1,695.42 97,520.37 125,254.00
5 5/1/96 2,880.00 1,164.34 1,715.66 95,804.70 122,374.00
6 6/1/96 2,880.00 1,143.85 1,736.15 94,068.55 119,494.00
7 7/1/96 2,880.00 1,123.12 1,756.88 92,311.68 116,614.00
8 8/1/96 2,880.00 1,102.15 1,777.85 90,533.82 113,734.00
9 9/1/96 2,880.00 1,080.92 1,799.08 88,734.74 110,854.00
10 10/1/96 2,880.00 1,059.44 1,820.56 86,914.18 107,974.00
11 11/1/96 2,880.00 1,037.70 1,842.30 85,071.89 105,094.00
12 12/1/96 2,880.00 1,015.71 1,864.29 83,207.59 102,214.00
13 1/1/97 2,880.00 993.45 1,886.55 81,321.04 99,334.00
14 2/1/97 2,880.00 970.92 1,909.08 79,411.97 96,454.00
15 3/1/97 2,880.00 948.13 1,931.87 77,480.10 93,574.00
16 4/1/97 2,880.00 925.07 1,954.93 75,525.17 90,694.00
17 5/1/97 2,880.00 901.73 1,978.27 73,546.89 87,814.00
18 6/1/97 2,880.00 878.11 2,001.89 71,545.00 84,934.00
19 7/1/97 2,880.00 854.20 2,025.80 69,519.20 82,054.00
20 8/1/97 2,880.00 830.02 2,049.98 67,469.22 79,174.00
21 9/1/97 2,880.00 805.54 2,074.46 65,394.76 76,294.00
22 10/1/97 2,880.00 780.77 2,099.23 63,295.54 73,414.00
23 11/1/97 2,880.00 755.71 2,124.29 61,171.25 70,534.00
24 12/1/97 2,880.00 730.35 2,149.65 59,021.60 67,654.00
25 1/1/98 2,880.00 704.68 2,175.32 56,846.28 64,774.00
26 2/1/98 2,880.00 678.71 2,201.29 54,644.99 61,894.00
27 3/1/98 2,880.00 652.43 2,227.57 52,417.42 59,014.00
28 4/1/98 2,880.00 625.83 2,254.17 50,163.25 56,134.00
29 5/1/98 2,880.00 598.92 2,281.08 47,882.17 53,254.00
30 6/1/98 2,880.00 571.68 2,308.32 45,573.86 50,374.00
31 7/1/98 2,880.00 544.12 2,335.88 43,237.98 47,494.00
32 8/1/98 2,880.00 516.24 2,363.76 40,874.22 44,614.00
33 9/1/98 2,880.00 488.01 2,391.99 38,482.23 41,734.00
34 10/1/98 2,880.00 459.45 2,420.55 36,061.69 38,854.00
35 11/1/98 2,880.00 430.56 2,449.44 33,612.24 35,974.00
36 12/1/98 2,880.00 401.31 2,478.69 31,133.55 33,094.00
37 1/1/99 2,880.00 371.72 2,508.28 28,625.27 30,214.00
38 2/1/99 2,880.00 341.77 2,538.23 26,087.04 27,334.00
39 3/1/99 2,880.00 311.46 2,568.54 23,518.50 24,454.00
40 4/1/99 2,880.00 280.80 2,599.20 20,919.30 21,574.00
41 5/1/99 2,880.00 249.76 2,630.24 18,289.06 18,694.00
42 6/1/99 2,880.00 218.36 2,661.64 15,627.42 15,814.00
43 7/1/99 15,814.00 186.58 15,627.42 0.00 -
|
Leasehold Management Services
Schedule 04 Monthly Interest Rate = 1.193%
Amortization schedule
INTEREST PRINCIPAL REMAINING REMAINING
PAYMENT # BORROWINGS DATE PAYMENT PAID PAID PRINCIPAL PAYMENTS
--------- ---------- ---- ------- ---- ---- --------- --------
138,474.53
1 $138,474.53 1/1/96 4,161.00 - 4,161.00 134,313.53 170,602.00
2 2/1/96 4,161.00 1,601.89 2,559.11 131,754.42 166,441.00
3 3/1/96 4,161.00 1,571.37 2,589.63 129,164.80 162,280.00
4 4/1/96 4,161.00 1,540.49 2,620.51 126,544.29 158,119.00
5 5/1/96 4,161.00 1,509.23 2,651.77 123,892.52 153,958.00
6 6/1/96 4,161.00 1,477.61 2,683.39 121,209.13 149,797.00
7 7/1/96 4,161.00 1,445.60 2,715.40 118,493.73 145,636.00
8 8/1/96 4,161.00 1,413.22 2,747.78 115,745.95 141,475.00
9 9/1/96 4,161.00 1,380.45 2,780.55 112,965.40 137,314.00
10 10/1/96 4,161.00 1,347.29 2,813.71 110,151.68 133,153.00
11 11/1/96 4,161.00 1,313.73 2,847.27 107,304.41 128,992.00
12 12/1/96 4,161.00 1,279.77 2,881.23 104,423.18 124,831.00
13 1/1/97 4,161.00 1,245.41 2,915.59 101,507.59 120,670.00
14 2/1/97 4,161.00 1,210.63 2,950.37 98,557.22 116,509.00
15 3/1/97 4,161.00 1,175.45 2,985.55 95,571.67 112,348.00
16 4/1/97 4,161.00 1,139.84 3,021.16 92,550.50 108,187.00
17 5/1/97 4,161.00 1,103.81 3,057.19 89,493.31 104,026.00
18 6/1/97 4,161.00 1,067.34 3,093.66 86,399.65 99,865.00
19 7/1/97 4,161.00 1,030.45 3,130.55 83,269.10 95,704.00
20 8/1/97 4,161.00 993.11 3,167.89 80,101.21 91,543.00
21 9/1/97 4,161.00 955.33 3,205.67 76,895.54 87,382.00
22 10/1/97 4,161.00 917.10 3,243.90 73,651.64 83,221.00
23 11/1/97 4,161.00 878.41 3,282.59 70,369.05 79,060.00
24 12/1/97 4,161.00 839.26 3,321.74 67,047.31 74,899.00
25 1/1/98 4,161.00 799.64 3,361.36 63,685.95 70,738.00
26 2/1/98 4,161.00 759.55 3,401.45 60,284.50 66,577.00
27 3/1/98 4,161.00 718.98 3,442.02 56,842.49 62,416.00
28 4/1/98 4,161.00 677.93 3,483.07 53,359.42 58,255.00
29 5/1/98 4,161.00 636.39 3,524.61 49,834.81 54,094.00
30 6/1/98 4,161.00 594.36 3,566.64 46,268.17 49,933.00
31 7/1/98 4,161.00 551.82 3,609.18 42,658.99 45,772.00
32 8/1/98 4,161.00 508.77 3,652.23 39,006.76 41,611.00
33 9/1/98 4,161.00 465.22 3,695.78 35,310.98 37,450.00
34 10/1/98 4,161.00 421.14 3,739.86 31,571.11 33,289.00
35 11/1/98 4,161.00 376.53 3,784.47 27,786.65 29,128.00
36 12/1/98 4,161.00 331.40 3,829.60 23,957.05 24,967.00
37 1/1/99 4,161.00 285.72 3,875.28 20,081.77 20,806.00
38 2/1/99 4,161.00 239.51 3,921.49 16,160.28 16,645.00
39 3/1/99 4,161.00 192.74 3,968.26 12,192.01 12,484.00
40 4/1/99 4,161.00 145.41 4,015.59 8,176.42 8,323.00
41 5/1/99 4,161.00 97.52 4,063.48 4,112.94 4,162.00
42 6/1/99 4,161.00 49.05 4,111.95 0.99 1.00
43 7/1/99 1.00 0.01 0.99 0.00
|
Leasehold Management Services
Schedule 05 Monthly Interest Rate = 1.195%
Amortization schedule
INTEREST PRINCIPAL REMAINING REMAINING
PAYMENT # BORROWINGS DATE PAYMENT PAID PAID PRINCIPAL PAYMENTS
--------- ---------- ---- ------- ---- ---- --------- --------
27,156.20
1 $27,156.20 3/1/96 742.00 - 742.00 26,414.20 34,495.00
2 4/1/96 742.00 315.61 426.39 25,987.81 33,753.00
3 5/1/96 742.00 310.51 431.49 25,556.32 33,011.00
4 6/1/96 742.00 305.36 436.64 25,119.68 32,269.00
5 7/1/96 742.00 300.14 441.86 24,677.82 31,527.00
6 8/1/96 742.00 294.86 447.14 24,230.68 30,785.00
7 9/1/96 742.00 289.52 452.48 23,778.20 30,043.00
8 10/1/96 742.00 284.11 457.89 23,320.32 29,301.00
9 11/1/96 742.00 278.64 463.36 22,856.96 28,559.00
10 12/1/96 742.00 273.11 468.89 22,388.06 27,817.00
11 1/1/97 742.00 267.50 474.50 21,913.57 27,075.00
12 2/1/97 742.00 261.83 480.17 21,433.40 26,333.00
13 3/1/97 742.00 256.10 485.90 20,947.49 25,591.00
14 4/1/97 742.00 250.29 491.71 20,455.78 24,849.00
15 5/1/97 742.00 244.41 497.59 19,958.20 24,107.00
16 6/1/97 742.00 238.47 503.53 19,454.67 23,365.00
17 7/1/97 742.00 232.45 509.55 18,945.12 22,623.00
18 8/1/97 742.00 226.36 515.64 18,429.49 21,881.00
19 9/1/97 742.00 220.20 521.80 17,907.69 21,139.00
20 10/1/97 742.00 213.97 528.03 17,379.66 20,397.00
21 11/1/97 742.00 207.66 534.34 16,845.32 19,655.00
22 12/1/97 742.00 201.28 540.72 16,304.60 18,913.00
23 1/1/98 742.00 194.81 547.19 15,757.41 18,171.00
24 2/1/98 742.00 188.28 553.72 15,203.69 17,429.00
25 3/1/98 742.00 181.66 560.34 14,643.35 16,687.00
26 4/1/98 742.00 174.97 567.03 14,076.31 15,945.00
27 5/1/98 742.00 168.19 573.81 13,502.50 15,203.00
28 6/1/98 742.00 161.33 580.67 12,921.84 14,461.00
29 7/1/98 742.00 154.40 587.60 12,334.23 13,719.00
30 8/1/98 742.00 147.37 594.63 11,739.61 12,977.00
31 9/1/98 742.00 140.27 601.73 11,137.88 12,235.00
32 10/1/98 742.00 133.08 608.92 10,528.96 11,493.00
33 11/1/98 742.00 125.80 616.20 9,912.76 10,751.00
34 12/1/98 742.00 118.44 623.56 9,289.20 10,009.00
35 1/1/99 742.00 110.99 631.01 8,658.20 9,267.00
36 2/1/99 742.00 103.45 638.55 8,019.65 8,525.00
37 3/1/99 742.00 95.82 646.18 7,373.47 7,783.00
38 4/1/99 742.00 88.10 653.90 6,719.57 7,041.00
39 5/1/99 742.00 80.29 661.71 6,057.86 6,299.00
40 6/1/99 742.00 72.38 669.62 5,388.24 5,557.00
41 7/1/99 742.00 64.38 677.62 4,710.62 4,815.00
42 8/1/99 742.00 56.28 685.72 4,024.91 4,073.00
43 9/1/99 4,073.00 48.09 4,024.91 0.00
|
Leasehold Management Services
Schedule 06 Monthly Interest Rate = 1.242%
Amortization schedule
INTEREST PRINCIPAL REMAINING REMAINING
PAYMENT # BORROWINGS DATE PAYMENT PAID PAID PRINCIPAL PAYMENTS
--------- ---------- ---- --------- ---- ---- --------- --------
84,264.82
1 $84,264.82 8/1/96 2,327.00 - 2,327.00 81,937.82 108,047.00
2 9/1/96 2,327.00 1,017.58 1,309.42 80,628.40 105,720.00
3 10/1/96 2,327.00 1,001.31 1,325.69 79,302.71 103,393.00
4 11/1/96 2,327.00 984.85 1,342.15 77,960.56 101,066.00
5 12/1/96 2,327.00 968.18 1,358.82 76,601.74 98,739.00
6 1/1/97 2,327.00 951.31 1,375.69 75,226.05 96,412.00
7 2/1/97 2,327.00 934.22 1,392.78 73,833.27 94,085.00
8 3/1/97 2,327.00 916.93 1,410.07 72,423.20 91,758.00
9 4/1/97 2,327.00 899.41 1,427.59 70,995.61 89,431.00
10 5/1/97 2,327.00 881.69 1,445.31 69,550.30 87,104.00
11 6/1/97 2,327.00 863.74 1,463.26 68,087.04 84,777.00
12 7/1/97 2,327.00 845.56 1,481.44 66,605.60 82,450.00
13 8/1/97 2,327.00 827.17 1,499.83 65,105.77 80,123.00
14 9/1/97 2,327.00 808.54 1,518.46 63,587.31 77,796.00
15 10/1/97 2,327.00 789.68 1,537.32 62,049.99 75,469.00
16 11/1/97 2,327.00 770.59 1,556.41 60,493.58 73,142.00
17 12/1/97 2,327.00 751.26 1,575.74 58,917.84 70,815.00
18 1/1/98 2,327.00 731.69 1,595.31 57,322.54 68,488.00
19 2/1/98 2,327.00 711.88 1,615.12 55,707.42 66,161.00
20 3/1/98 2,327.00 691.82 1,635.18 54,072.24 63,834.00
21 4/1/98 2,327.00 671.52 1,655.48 52,416.76 61,507.00
22 5/1/98 2,327.00 650.96 1,676.04 50,740.72 59,180.00
23 6/1/98 2,327.00 630.14 1,696.86 49,043.86 56,853.00
24 7/1/98 2,327.00 609.07 1,717.93 47,325.93 54,526.00
25 8/1/98 2,327.00 587.73 1,739.27 45,586.66 52,199.00
26 9/1/98 2,327.00 566.14 1,760.86 43,825.80 49,872.00
27 10/1/98 2,327.00 544.27 1,782.73 42,043.06 47,545.00
28 11/1/98 2,327.00 522.13 1,804.87 40,238.19 45,218.00
29 12/1/98 2,327.00 499.71 1,827.29 38,410.90 42,891.00
30 1/1/99 2,327.00 477.02 1,849.98 36,560.92 40,564.00
31 2/1/99 2,327.00 454.05 1,872.95 34,687.97 38,237.00
32 3/1/99 2,327.00 430.79 1,896.21 32,791.76 35,910.00
33 4/1/99 2,327.00 407.24 1,919.76 30,871.99 33,583.00
34 5/1/99 2,327.00 383.40 1,943.60 28,928.39 31,256.00
35 6/1/99 2,327.00 359.26 1,967.74 26,960.65 28,929.00
36 7/1/99 2,327.00 334.82 1,992.18 24,968.47 26,602.00
37 8/1/99 2,327.00 310.08 2,016.92 22,951.55 24,275.00
38 9/1/99 2,327.00 285.03 2,041.97 20,909.58 21,948.00
39 10/1/99 2,327.00 259.67 2,067.33 18,842.25 19,621.00
40 11/1/99 2,327.00 234.00 2,093.00 16,749.25 17,294.00
41 12/1/99 2,327.00 208.01 2,118.99 14,630.26 14,967.00
42 1/1/00 2,327.00 181.69 2,145.31 12,484.95 12,640.00
43 2/1/00 12,640.00 155.05 12,484.95 0.00
|
Leasehold Management Services
Schedule 07 Monthly Interest Rate = 1.238%
Amortization schedule
INTEREST PRINCIPAL REMAINING REMAINING
PAYMENT # BORROWINGS DATE PAYMENT PAID PAID PRINCIPAL PAYMENTS
--------- ---------- ---- --------- ---- ---- --------- --------
85,416.00
1 $85,416.00 10/1/96 2,357.00 - 2,357.00 83,059.00 109,449.00
2 11/1/96 2,357.00 1,028.68 1,328.32 81,730.68 107,092.00
3 12/1/96 2,357.00 1,012.23 1,344.77 80,385.91 104,735.00
4 1/1/97 2,357.00 995.58 1,361.42 79,024.49 102,378.00
5 2/1/97 2,357.00 978.72 1,378.28 77,646.21 100,021.00
6 3/1/97 2,357.00 961.65 1,395.35 76,250.85 97,664.00
7 4/1/97 2,357.00 944.36 1,412.64 74,838.21 95,307.00
8 5/1/97 2,357.00 926.87 1,430.13 73,408.08 92,950.00
9 6/1/97 2,357.00 909.16 1,447.84 71,960.24 90,593.00
10 7/1/97 2,357.00 891.22 1,465.78 70,494.46 88,236.00
11 8/1/97 2,357.00 873.07 1,483.93 69,010.53 85,879.00
12 9/1/97 2,357.00 854.69 1,502.31 67,508.23 83,522.00
13 10/1/97 2,357.00 836.09 1,520.91 65,987.31 81,165.00
14 11/1/97 2,357.00 817.25 1,539.75 64,447.56 78,808.00
15 12/1/97 2,357.00 798.18 1,558.82 62,888.75 76,451.00
16 1/1/98 2,357.00 778.87 1,578.13 61,310.62 74,094.00
17 2/1/98 2,357.00 759.33 1,597.67 59,712.95 71,737.00
18 3/1/98 2,357.00 739.54 1,617.46 58,095.49 69,380.00
19 4/1/98 2,357.00 719.51 1,637.49 56,458.00 67,023.00
20 5/1/98 2,357.00 699.23 1,657.77 54,800.23 64,666.00
21 6/1/98 2,357.00 678.70 1,678.30 53,121.93 62,309.00
22 7/1/98 2,357.00 657.91 1,699.09 51,422.84 59,952.00
23 8/1/98 2,357.00 636.87 1,720.13 49,702.71 57,595.00
24 9/1/98 2,357.00 615.57 1,741.43 47,961.28 55,238.00
25 10/1/98 2,357.00 594.00 1,763.00 46,198.28 52,881.00
26 11/1/98 2,357.00 572.16 1,784.84 44,413.44 50,524.00
27 12/1/98 2,357.00 550.06 1,806.94 42,606.50 48,167.00
28 1/1/99 2,357.00 527.68 1,829.32 40,777.18 45,810.00
29 2/1/99 2,357.00 505.02 1,851.98 38,925.21 43,453.00
30 3/1/99 2,357.00 482.09 1,874.91 37,050.29 41,096.00
31 4/1/99 2,357.00 458.87 1,898.13 35,152.16 38,739.00
32 5/1/99 2,357.00 435.36 1,921.64 33,230.52 36,382.00
33 6/1/99 2,357.00 411.56 1,945.44 31,285.08 34,025.00
34 7/1/99 2,357.00 387.46 1,969.54 29,315.54 31,668.00
35 8/1/99 2,357.00 363.07 1,993.93 27,321.61 29,311.00
36 9/1/99 2,357.00 338.38 2,018.62 25,302.99 26,954.00
37 10/1/99 2,357.00 313.38 2,043.62 23,259.37 24,597.00
38 11/1/99 2,357.00 288.07 2,068.93 21,190.43 22,240.00
39 12/1/99 2,357.00 262.44 2,094.56 19,095.87 19,883.00
40 1/1/00 2,357.00 236.50 2,120.50 16,975.38 17,526.00
41 2/1/00 2,357.00 210.24 2,146.76 14,828.62 15,169.00
42 3/1/00 2,357.00 183.65 2,173.35 12,655.27 12,812.00
43 4/1/00 12,812.00 156.73 12,655.27 0.00
|
Leasehold Management Services
Schedule 08 Monthly Interest Rate = 1.220%
Amortization schedule
INTEREST PRINCIPAL REMAINING REMAINING
PAYMENT # BORROWINGS DATE PAYMENT PAID PAID PRINCIPAL PAYMENTS
--------- ---------- ---- ------- ---- ---- --------- --------
48,249.85
1 $48,249.85 12/1/96 1,326.00 - 1,326.00 46,923.85 61,603.00
2 1/1/97 1,326.00 572.66 753.34 46,170.51 60,277.00
3 2/1/97 1,326.00 563.47 762.53 45,407.97 58,951.00
4 3/1/97 1,326.00 554.16 771.84 44,636.13 57,625.00
5 4/1/97 1,326.00 544.74 781.26 43,854.87 56,299.00
6 5/1/97 1,326.00 535.21 790.79 43,064.08 54,973.00
7 6/1/97 1,326.00 525.55 800.45 42,263.63 53,647.00
8 7/1/97 1,326.00 515.79 810.21 41,453.42 52,321.00
9 8/1/97 1,326.00 505.90 820.10 40,633.32 50,995.00
10 9/1/97 1,326.00 495.89 830.11 39,803.21 49,669.00
11 10/1/97 1,326.00 485.76 840.24 38,962.97 48,343.00
12 11/1/97 1,326.00 475.50 850.50 38,112.47 47,017.00
13 12/1/97 1,326.00 465.13 860.87 37,251.60 45,691.00
14 1/1/98 1,326.00 454.62 871.38 36,380.21 44,365.00
15 2/1/98 1,326.00 443.98 882.02 35,498.20 43,039.00
16 3/1/98 1,326.00 433.22 892.78 34,605.42 41,713.00
17 4/1/98 1,326.00 422.32 903.68 33,701.74 40,387.00
18 5/1/98 1,326.00 411.30 914.70 32,787.04 39,061.00
19 6/1/98 1,326.00 400.13 925.87 31,861.17 37,735.00
20 7/1/98 1,326.00 388.83 937.17 30,924.01 36,409.00
21 8/1/98 1,326.00 377.40 948.60 29,975.41 35,083.00
22 9/1/98 1,326.00 365.82 960.18 29,015.23 33,757.00
23 10/1/98 1,326.00 354.10 971.90 28,043.33 32,431.00
24 11/1/98 1,326.00 342.24 983.76 27,059.57 31,105.00
25 12/1/98 1,326.00 330.24 995.76 26,063.80 29,779.00
26 1/1/99 1,326.00 318.08 1,007.92 25,055.89 28,453.00
27 2/1/99 1,326.00 305.78 1,020.22 24,035.67 27,127.00
28 3/1/99 1,326.00 293.33 1,032.67 23,003.00 25,801.00
29 4/1/99 1,326.00 280.73 1,045.27 21,957.73 24,475.00
30 5/1/99 1,326.00 267.97 1,058.03 20,899.70 23,149.00
31 6/1/99 1,326.00 255.06 1,070.94 19,828.76 21,823.00
32 7/1/99 1,326.00 241.99 1,084.01 18,744.75 20,497.00
33 8/1/99 1,326.00 228.76 1,097.24 17,647.51 19,171.00
34 9/1/99 1,326.00 215.37 1,110.63 16,536.88 17,845.00
35 10/1/99 1,326.00 201.82 1,124.18 15,412.70 16,519.00
36 11/1/99 1,326.00 188.10 1,137.90 14,274.80 15,193.00
37 12/1/99 1,326.00 174.21 1,151.79 13,123.01 13,867.00
38 1/1/00 1,326.00 160.15 1,165.85 11,957.16 12,541.00
39 2/1/00 1,326.00 145.93 1,180.07 10,777.09 11,215.00
40 3/1/00 1,326.00 131.52 1,194.48 9,582.61 9889.00
41 4/1/00 1,326.00 116.95 1,209.05 8,373.56 8,563.00
42 5/1/00 1,326.00 102.19 1,223.81 7,149.75 7,237.00
43 6/1/00 7,237.00 87.26 7,149.74 0.00 -
|
Leasehold Management Services
Schedule 09 Monthly Interest Rate = 1.225%
Amortization schedule
INTEREST PRINCIPAL REMAINING REMAINING
PAYMENT # BORROWINGS DATE PAYMENT PAID PAID PRINCIPAL PAYMENTS
--------- ---------- ---- ------- ---- ---- --------- --------
38,059.55
1 $38,059.55 3/1/97 1,047.00 - 1,047.00 37,012.55 48,636.00
2 4/1/97 1,047.00 453.36 593.64 36,418.91 47,589.00
3 5/1/97 1,047.00 446.08 600.92 35,817.99 46,542.00
4 6/1/97 1,047.00 438.72 608.28 35,209.72 45,495.00
5 7/1/97 1,047.00 431.27 615.73 34,593.99 44,448.00
6 8/1/97 1,047.00 423.73 623.27 33,970.72 43,401.00
7 9/1/97 1,047.00 416.10 630.90 33,339.82 42,354.00
8 10/1/97 1,047.00 408.37 638.63 32,701.19 41,307.00
9 11/1/97 1,047.00 400.55 646.45 32,054.74 40,260.00
10 12/1/97 1,047.00 392.63 654.37 31,400.37 39,213.00
11 1/1/98 1,047.00 384.61 662.39 30,737.98 38,166.00
12 2/1/98 1,047.00 376.50 670.50 30,067.48 37,119.00
13 3/1/98 1,047.00 368.29 678.71 29,388.77 36,072.00
14 4/1/98 1,047.00 359.97 687.03 28,701.74 35,025.00
15 5/1/98 1,047.00 351.56 695.44 28,006.30 33,978.00
16 6/1/98 1,047.00 343.04 703.96 27,302.34 32,931.00
17 7/1/98 1,047.00 334.42 712.58 26,589.76 31,884.00
18 8/1/98 1,047.00 325.69 721.31 25,868.45 30,837.00
19 9/1/98 1,047.00 316.86 730.14 25,138.31 29,790.00
20 10/1/98 1,047.00 307.91 739.09 24,399.22 28,743.00
21 11/1/98 1,047.00 298.86 748.14 23,651.08 27,696.00
22 12/1/98 1,047.00 289.70 757.30 22,893.78 26,649.00
23 1/1/99 1,047.00 280.42 766.58 22,127.20 25,602.00
24 2/1/99 1,047.00 271.03 775.97 21,351.22 24,555.00
25 3/1/99 1,047.00 261.53 785.47 20,565.75 23,508.00
26 4/1/99 1,047.00 251.90 795.10 19,770.65 22,461.00
27 5/1/99 1,047.00 242.17 804.83 18,965.82 21,414.00
28 6/1/99 1,047.00 232.31 814.69 18,151.13 20,367.00
29 7/1/99 1,047.00 222.33 824.67 17,326.45 19,320.00
30 8/1/99 1,047.00 212.23 834.77 16,491.68 18,273.00
31 9/1/99 1,047.00 202.00 845.00 15,646.68 17,226.00
32 10/1/99 1,047.00 191.65 855.35 14,791.33 16,179.00
33 11/1/99 1,047.00 181.17 865.83 13,925.51 15,132.00
34 12/1/99 1,047.00 170.57 876.43 13,049.08 14,085.00
35 1/1/00 1,047.00 159.83 887.17 12,161.91 13,038.00
36 2/1/00 1,047.00 148.97 898.03 11,263.88 11,991.00
37 3/1/00 1,047.00 137.97 909.03 10,354.85 10,944.00
38 4/1/00 1,047.00 126.83 920.17 9,434.68 9,897.00
39 5/1/00 1,047.00 115.56 931.44 8,503.25 8,850.00
40 6/1/00 1,047.00 104.15 942.85 7,560.40 7,803.00
41 7/1/00 1,047.00 92.61 954.39 6,606.00 6,756.00
42 8/1/00 1,047.00 80.92 966.08 5,639.92 5,709.00
43 9/1/00 5,709.00 69.08 5,639.92 0.00
|
EXHIBIT 10.50
DISCOVERY PARTNERS
INTERNATIONAL
9640 TOWNE CENTRE DRIVE
SAN DIEGO, CA 92121
TEL: (858) 455-8600
FAX: (858) 455-8088
WEB WWW.DISCOVERYPARTNERS.COM
The Directorship Agreement dated December 16, 1996 by and between Mr. Dieter Hoehn and Discovery Partners International, Inc. (f/k/a IRORI) (the "Company") is hereby terminated as of this 8th day of May, 2000. Termination of this Directorship Agreement shall in no way interfere with Mr. Hoehn's continued service on the Company's Board of Directors.
Discovery Partners International, Inc.
By: /s/ Jack Fitzpatrick
--------------------------------
Its: CFO
--------------------------------
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Dieter Hoehn
/s/ Dieter Hoehn
--------------------------------
|
EXHIBIT 10.59
DISCOVERY PARTNERS INTERNATIONAL, INC.
2000 STOCK INCENTIVE PLAN
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 2000 Stock Incentive Plan is intended to promote the interests of Discovery Partners International, Inc., a Delaware corporation, by providing eligible persons in the Corporation's service with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to remain in such service.
Capitalized terms shall have the meanings assigned to such terms in the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into five separate equity incentives programs:
- the Discretionary Option Grant Program under which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase shares of Common Stock,
- the Salary Investment Option Grant Program under which eligible employees may elect to have a portion of their base salary invested each year in special option grants,
- the Stock Issuance Program under which eligible persons may, at the discretion of the Plan Administrator, be issued shares of Common Stock directly, either through the immediate purchase of such shares or as a bonus for services rendered the Corporation (or any Parent or Subsidiary),
- the Automatic Option Grant Program under which eligible non-employee Board members shall automatically receive option grants at designated intervals over their period of continued Board service, and
- the Director Fee Option Grant Program under which non-employee Board members may elect to have all or any portion of their annual retainer fee otherwise payable in cash applied to a special stock option grant.
B. The provisions of Articles One and Seven shall apply to all equity programs under the Plan and shall govern the interests of all persons under the Plan.
III. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and exclusive authority to administer the Discretionary Option Grant and Stock Issuance Programs with respect to Section 16 Insiders. Administration of the Discretionary Option Grant and Stock Issuance Programs with respect to all other persons eligible to participate in those programs may, at the Board's discretion, be vested in the Primary Committee or a Secondary Committee, or the Board may retain the power to administer those programs with respect to all such persons. However, any discretionary option grants or stock issuances for members of the Primary Committee must be authorized by a disinterested majority of the Board.
B. Members of the Primary Committee or any Secondary Committee shall serve for such period of time as the Board may determine and may be removed by the Board at any time. The Board may also at any time terminate the functions of any Secondary Committee and reassume all powers and authority previously delegated to such committee.
C. Each Plan Administrator shall, within the scope of its administrative functions under the Plan, have full power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Discretionary Option Grant and Stock Issuance Programs and to make such determinations under, and issue such interpretations of, the provisions of those programs and any outstanding options or stock issuances thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator within the scope of its administrative functions under the Plan shall be final and binding on all parties who have an interest in the Discretionary Option Grant and Stock Issuance Programs under its jurisdiction or any stock option or stock issuance thereunder.
D. The Primary Committee shall have the sole and exclusive authority to determine which Section 16 Insiders and other highly compensated Employees shall be eligible for participation in the Salary Investment Option Grant Program for one or more calendar years. However, all option grants under the Salary Investment Option Grant Program shall be made in accordance with the express terms of that program, and the Primary Committee shall not exercise any discretionary functions with respect to the option grants made under that program.
E. Service on the Primary Committee or the Secondary Committee shall constitute service as a Board member, and members of each such committee shall accordingly be entitled to full indemnification and reimbursement as Board members for their service on such committee. No member of the Primary Committee or the Secondary Committee shall be liable for any act or omission made in good faith with respect to the Plan or any option grants or stock issuances under the Plan.
F. Administration of the Automatic Option Grant and Director Fee Option Grant Programs shall be self-executing in accordance with the terms of those programs, and no Plan Administrator shall exercise any discretionary functions with respect to any option grants or stock issuances made under those programs.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option Grant and Stock Issuance Programs are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of directors of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary).
B. Only Employees who are Section 16 Insiders or other highly compensated individuals shall be eligible to participate in the Salary Investment Option Grant Program.
C. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority to determine,
(i) with respect to the option grants under the Discretionary Option Grant
Program, which eligible persons are to receive such grants, the time or times
when those grants are to be made, the number of shares to be covered by each
such grant, the status of the granted option as either an Incentive Option or a
Non-Statutory Option, the time or times when each option is to become
exercisable, the vesting schedule (if any) applicable to the option shares and
the maximum term for which the option is to remain outstanding and (ii) with
respect to stock issuances under the Stock Issuance Program, which eligible
persons are to receive such issuances, the time or times when the issuances are
to be made, the number of shares to be issued to each Participant, the vesting
schedule (if any) applicable to the issued shares and the consideration for such
shares.
D. The Plan Administrator shall have the absolute discretion either to grant options in accordance with the Discretionary Option Grant Program or to effect stock issuances in accordance with the Stock Issuance Program.
E. The individuals who shall be eligible to participate in the Automatic Option Grant Program shall be limited to (i) those individuals who first become non-employee Board members on or after the Underwriting Date, whether through appointment by the Board or election by the Corporation's stockholders, and (ii) those individuals who continue to serve as non-employee Board members at one or more Annual Stockholders Meetings held after the Underwriting Date. A non-employee Board member who has previously been in the employ of the Corporation (or any Parent or Subsidiary) shall not be eligible to receive an option grant
under the Automatic Option Grant Program at the time he or she first becomes a non-employee Board member, but shall be eligible to receive periodic option grants under the Automatic Option Grant Program while he or she continues to serve as a non-employee Board member.
F. All non-employee Board members shall be eligible to participate in the Director Fee Option Grant Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Corporation on the open market. The number of shares of Common Stock
initially reserved for issuance over the term of the Plan shall not exceed three
million three hundred thousand (3,300,000) shares. Such reserve shall consist of
(i) the number of shares estimated to remain available for issuance, as of the
Plan Effective Date, under the Predecessor Plan as last approved by the
Corporation's stockholders, including the shares subject to outstanding options
under the Predecessor Plan, (ii) plus an additional increase of approximately
one million three hundred thousand (1,300,000) shares to be approved by the
Corporation's stockholders prior to the Underwriting Date.
B. The number of shares of Common Stock available for issuance under the Plan shall automatically increase on the first trading day of January each calendar year during the term of the Plan, beginning with calendar year 2001, by an amount equal to two percent (2%) of the total number of shares of Common Stock outstanding on the last trading day in December of the immediately preceding calendar year, but in no event shall any such annual increase exceed two million (2,000,000) shares.
C. No one person participating in the Plan may receive stock options, separately exercisable stock appreciation rights and direct stock issuances for more than five hundred thousand (500,000) shares of Common Stock in the aggregate per calendar year.
D. Shares of Common Stock subject to outstanding options (including options transferred to this Plan from the Predecessor Plan) shall be available for subsequent issuance under the Plan to the extent (i) those options expire or terminate for any reason prior to exercise in full or (ii) the options are cancelled in accordance with the cancellation-regrant provisions of Article Two. Unvested shares issued under the Plan and subsequently cancelled or repurchased by the Corporation, at the original issue price paid per share, pursuant to the Corporation's repurchase rights under the Plan shall be added back to the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be available for reissuance through one or more subsequent option grants or direct stock issuances under the Plan. However, should the exercise price of an option under the Plan be paid with shares of Common Stock or should shares of Common Stock otherwise issuable under the Plan be withheld by the Corporation in satisfaction of the withholding taxes incurred in connection with the exercise of an option or the vesting of a stock issuance under the Plan, then the number of shares of Common Stock available for issuance under the Plan shall be reduced by the gross number of shares for which the option is exercised or which vest under the stock issuance, and not by the net number of shares of Common Stock issued to the holder of such option or stock
issuance. Shares of Common Stock underlying one or more stock appreciation
rights exercised under Section IV of Article Two, Section III of Article Three,
Section II of Article Five or Section III of Article Six of the Plan shall NOT
be available for subsequent issuance under the Plan.
E. If any change is made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, appropriate adjustments shall be made by the Plan Administrator to (i) the maximum number and/or class of securities issuable under the Plan, (ii) the maximum number and/or class of securities for which any one person may be granted stock options, separately exercisable stock appreciation rights and direct stock issuances under the Plan per calendar year, (iii) the number and/or class of securities for which grants are subsequently to be made under the Automatic Option Grant Program to new and continuing non-employee Board members, (iv) the number and/or class of securities and the exercise price per share in effect under each outstanding option under the Plan, (v) the number and/or class of securities and exercise price per share in effect under each outstanding option transferred to this Plan from the Predecessor Plan and (vi) the maximum number and/or class of securities by which the share reserve is to increase automatically each calendar year pursuant to the provisions of Section V.B of this Article One. Such adjustments to the outstanding options are to be effected in a manner which shall preclude the enlargement or dilution of rights and benefits under such options. The adjustments determined by the Plan Administrator shall be final, binding and conclusive.
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that each such document shall comply with the terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such options.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the Plan Administrator but shall not be less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon exercise of the option and shall, subject to the provisions of Section I of Article Seven and the documents evidencing the option, be payable in one or more of the forms specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite period necessary to avoid a charge to the Corporation's earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date, or
(iii) to the extent the option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable instructions to (a) a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Corporation by reason of such exercise and (b) the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date.
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable
at such time or times, during such period and for such number of shares as shall
be determined by the Plan Administrator and set forth in the documents
evidencing the option. However, no option shall have a term in excess of ten
(10) years measured from the option grant date.
C. EFFECT OF TERMINATION OF SERVICE.
1. The following provisions shall govern the exercise of any options held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's cessation of Service for any reason shall remain exercisable for such period of time thereafter as shall be determined by the Plan Administrator and set forth in the documents evidencing the option, but no such option shall be exercisable after the expiration of the option term.
(ii) Any option held by the Optionee at the time of death and exercisable in whole or in part at that time may be subsequently exercised by the personal representative of the Optionee's estate or by the person or persons to whom the option is transferred pursuant to the Optionee's will or the laws of inheritance or by the Optionee's designated beneficiary or beneficiaries of that option.
(iii) Should the Optionee's Service be terminated for Misconduct or should the Optionee otherwise engage in Misconduct while holding one or more outstanding options under this Article Two, then all those options shall terminate immediately and cease to be outstanding.
(iv) During the applicable post-Service exercise period, the option may not be exercised in the aggregate for more than the number of vested shares for which the option is exercisable on the date of the Optionee's cessation of Service. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be outstanding for any vested shares for which the option has not been exercised. However, the option shall, immediately upon the Optionee's cessation of Service, terminate and cease to be outstanding to the extent the option is not otherwise at that time exercisable for vested shares.
2. The Plan Administrator shall have complete discretion, exercisable either at the time an option is granted or at any time while the option remains outstanding, to:
(i) extend the period of time for which the option is to remain exercisable following the Optionee's cessation of Service from the limited exercise period otherwise in effect for that option to such greater period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable post-Service exercise period, not only with respect to the number of vested shares of Common Stock for which such option is exercisable at the time of the Optionee's cessation of Service but also with respect to one or more additional installments in which the Optionee would have vested had the Optionee continued in Service.
D. STOCKHOLDER RIGHTS. The holder of an option shall have no stockholder rights with respect to the shares subject to the option until such person shall have exercised the option, paid the exercise price and become a holder of record of the purchased shares.
E. REPURCHASE RIGHTS. The Plan Administrator shall have the discretion to grant options which are exercisable for unvested shares of Common Stock. Should the Optionee cease Service while holding such unvested shares, the Corporation shall have the right to repurchase, at the exercise price paid per share, any or all of those unvested shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right.
F. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, Incentive Options shall be exercisable only by the Optionee and shall not be assignable or transferable other than by will or the laws of inheritance following the Optionee's death. Non-Statutory Options shall be subject to the same restriction, except that a Non-Statutory Option may be assigned in whole or in part during the Optionee's lifetime to one or more members of the Optionee's family or to a trust established exclusively for one or more such family members or to Optionee's former spouse, to the extent such assignment is in connection with the Optionee's estate plan or pursuant to a domestic relations order. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate. Notwithstanding the foregoing, the Optionee may also designate one or more persons as the beneficiary or beneficiaries of his or her outstanding options under this Article Two, and those options shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee's death while holding those options. Such beneficiary or beneficiaries shall take the transferred options subject to all the terms and conditions of the applicable agreement evidencing each such transferred option, including (without limitation) the limited time period during which the option may be exercised following the Optionee's death.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II, all the provisions of Articles One, Two and Seven shall be applicable to Incentive Options. Options which are specifically designated as Non-Statutory Options when issued under the Plan shall not be subject to the terms of this Section II.
A. ELIGIBILITY. Incentive Options may only be granted to Employees.
B. DOLLAR LIMITATION. The aggregate Fair Market Value of the shares of Common Stock (determined as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any one calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted.
C. 10% STOCKHOLDER. If any Employee to whom an Incentive Option
is granted is a 10% Stockholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each outstanding
option under the Discretionary Option Grant Program shall automatically
accelerate so that each such option shall, immediately prior to the effective
date of the Corporate Transaction, become exercisable for all the shares of
Common Stock at the time subject to such option and may be exercised for any or
all of those shares as fully vested shares of Common Stock. However, an
outstanding option shall NOT become exercisable on such an accelerated basis if
and to the extent: (i) such option is, in connection with the Corporate
Transaction, to be assumed by the successor corporation (or parent thereof) or
(ii) such option is to be replaced with a cash incentive program of the
successor corporation which preserves the spread existing at the time of the
Corporate Transaction on any shares for which the option is not otherwise at
that time exercisable and provides for subsequent payout in accordance with the
same exercise/vesting schedule applicable to those option shares or (iii) the
acceleration of such option is subject to other limitations imposed by the Plan
Administrator at the time of the option grant.
B. All outstanding repurchase rights under the Discretionary Option Grant Program shall automatically terminate, and the shares of Common Stock subject to those terminated rights shall immediately vest in full, in the event of any Corporate Transaction, except to the extent: (i) those repurchase rights are to be assigned to the successor corporation (or parent thereof) in connection with such Corporate Transaction or (ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator at the time the repurchase right is issued.
C. Immediately following the consummation of the Corporate Transaction, all outstanding options under the Discretionary Option Grant Program shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof).
D. Each option which is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction. Appropriate adjustments to reflect such Corporate Transaction shall also be made to (i) the exercise price payable per share under each outstanding option, provided the aggregate exercise price payable for such securities shall remain the same, (ii) the maximum number and/or class of securities available for issuance over the remaining term of the Plan and (iii) the maximum number and/or class of securities for which any one person may be granted stock options, separately exercisable stock appreciation rights and direct stock issuances under the Plan per calendar year and (iv) the maximum number and/or class of securities by which the share reserve is to increase automatically each calendar year. To the extent the actual holders of the Corporation's outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Corporate Transaction, the successor corporation may, in connection with the assumption of the outstanding options under the Discretionary Option Grant Program, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Corporate Transaction.
E. The Plan Administrator shall have the discretionary authority to structure one or more outstanding options under the Discretionary Option Grant Program so that those options shall, immediately prior to the effective date of such Corporate Transaction, become exercisable for all the shares of Common Stock at the time subject to those options and may be exercised for any or all of those shares as fully vested shares of Common Stock, whether or not those options are to be assumed in the Corporate Transaction. In addition, the Plan Administrator shall have the discretionary authority to structure one or more of the Corporation's repurchase rights under the Discretionary Option Grant Program so that those rights shall not be assignable in connection with such Corporate Transaction and shall accordingly terminate upon the consummation of such Corporate Transaction, and the shares subject to those terminated rights shall thereupon vest in full.
F. The Plan Administrator shall have full power and authority to structure one or more outstanding options under the Discretionary Option Grant Program so that those options shall become exercisable for all the shares of Common Stock at the time subject to those options in the event the Optionee's Service is subsequently terminated by reason of an Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of any Corporate Transaction in which those options are assumed and do not otherwise accelerate. In addition, the Plan Administrator may structure one or more of the Corporation's repurchase rights so that those rights shall immediately terminate with respect to any shares held by the Optionee at the time of his or her Involuntary Termination, and the shares subject to those terminated repurchase rights shall accordingly vest in full at that time.
G. The Plan Administrator shall have the discretionary authority to structure one or more outstanding options under the Discretionary Option Grant Program so that those options shall, immediately prior to the effective date of a Change in Control, become exercisable for all the shares of Common Stock at the time subject to those options and may be exercised for any or all of those shares as fully vested shares of Common Stock. In addition, the Plan Administrator shall have the discretionary authority to structure one or more of the Corporation's repurchase rights under the Discretionary Option Grant Program so that those rights shall terminate automatically upon the consummation of such Change in Control, and the shares subject to those terminated rights shall thereupon vest in full. Alternatively, the Plan Administrator may condition the automatic acceleration of one or more outstanding options under the Discretionary Option Grant Program and the termination of one or more of the Corporation's outstanding repurchase rights under such program upon the subsequent termination of the Optionee's Service by reason of an Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of such Change in Control.
H. The portion of any Incentive Option accelerated in connection with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Option only to the extent the applicable One Hundred Thousand Dollar ($100,000) limitation is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a Nonstatutory Option under the Federal tax laws.
I. The outstanding options shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time and from time to time, with the consent of the affected option holders, the cancellation of any or all outstanding options under the Discretionary Option Grant Program (including outstanding options incorporated from the Predecessor Plan) and to grant in substitution new options covering the same or a different number of shares of Common Stock but with an exercise price per share based on the Fair Market Value per share of Common Stock on the new grant date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and authority to grant to selected Optionees tandem stock appreciation rights and/or limited stock appreciation rights.
B. The following terms shall govern the grant and exercise of tandem stock appreciation rights:
(i) One or more Optionees may be granted the right, exercisable upon such terms as the Plan Administrator may establish, to elect between the exercise of the underlying option for shares of Common Stock and
the surrender of that option in exchange for a distribution from the Corporation in an amount equal to the excess of (a) the Fair Market Value (on the option surrender date) of the number of shares in which the Optionee is at the time vested under the surrendered option (or surrendered portion thereof) over (b) the aggregate exercise price payable for such shares.
(ii) No such option surrender shall be effective unless it is approved by the Plan Administrator, either at the time of the actual option surrender or at any earlier time. If the surrender is so approved, then the distribution to which the Optionee shall be entitled may be made in shares of Common Stock valued at Fair Market Value on the option surrender date, in cash, or partly in shares and partly in cash, as the Plan Administrator shall in its sole discretion deem appropriate.
(iii) If the surrender of an option is not approved by the Plan Administrator, then the Optionee shall retain whatever rights the Optionee had under the surrendered option (or surrendered portion thereof) on the option surrender date and may exercise such rights at any time prior to the later of (a) five (5) business days after the receipt of the rejection notice or (b) the last day on which the option is otherwise exercisable in accordance with the terms of the documents evidencing such option, but in no event may such rights be exercised more than ten (10) years after the option grant date.
C. The following terms shall govern the grant and exercise of limited stock appreciation rights:
(i) One or more Section 16 Insiders may be granted limited stock appreciation rights with respect to their outstanding options.
(ii) Upon the occurrence of a Hostile Take-Over, each individual holding one or more options with such a limited stock appreciation right shall have the unconditional right (exercisable for a thirty (30)-day period following such Hostile Take-Over) to surrender each such option to the Corporation. In return for the surrendered option, the Optionee shall receive a cash distribution from the Corporation in an amount equal to the excess of (A) the Take-Over Price of the shares of Common Stock at the time subject to such option (whether or not the option is otherwise at that time vested and exercisable for those shares) over (B) the aggregate exercise price payable for those shares. Such cash distribution shall be paid within five (5) days following the option surrender date.
(iii) At the time such limited stock appreciation right is granted, the Plan Administrator shall pre-approve any subsequent exercise of that right in accordance with the terms of this Paragraph C. Accordingly, no further approval of the Plan Administrator or the Board shall be required at the time of the actual option surrender and cash distribution.
ARTICLE THREE
SALARY INVESTMENT OPTION GRANT PROGRAM
I. OPTION GRANTS
The Primary Committee shall have the sole and exclusive authority to determine the calendar year or years (if any) for which the Salary Investment Option Grant Program is to be in effect and to select the Section 16 Insiders and other highly compensated Employees eligible to participate in the Salary Investment Option Grant Program for such calendar year or years. Each selected individual who elects to participate in the Salary Investment Option Grant Program must, prior to the start of each calendar year of participation, file with the Plan Administrator (or its designate) an irrevocable authorization directing the Corporation to reduce his or her base salary for that calendar year by an amount not less than Ten Thousand Dollars ($10,000.00) nor more than Fifty Thousand Dollars ($50,000.00). Each individual who files such a timely authorization shall automatically be granted an option under the Salary Investment Option Grant Program on the first trading day in January of the calendar year for which the salary reduction is to be in effect.
II. OPTION TERMS
Each option shall be a Non-Statutory Option evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that each such document shall comply with the terms specified below.
A. EXERCISE PRICE.
1. The exercise price per share shall be thirty-three and one-third percent (33-1/3%) of the Fair Market Value per share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon exercise of the option and shall be payable in one or more of the alternative forms authorized under the Discretionary Option Grant Program. Except to the extent the sale and remittance procedure specified thereunder is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date.
B. NUMBER OF OPTION SHARES. The number of shares of Common Stock subject to the option shall be determined pursuant to the following formula (rounded down to the nearest whole number):
X = A divided by (B x 66-2/3%), where
X is the number of option shares,
A is the dollar amount by which the Optionee's base salary is to be reduced for the calendar year pursuant to his or her election under the Salary Investment Option Grant Program, and
B is the Fair Market Value per share of Common Stock on the option grant date.
C. EXERCISE AND TERM OF OPTIONS. The option shall become exercisable in a series of twelve (12) successive equal monthly installments upon the Optionee's completion of each calendar month of Service in the calendar year for which the salary reduction is in effect. Each option shall have a maximum term of ten (10) years measured from the option grant date.
D. EFFECT OF TERMINATION OF SERVICE. Should the Optionee cease
Service for any reason while holding one or more options under this Article
Three, then each such option shall remain exercisable, for any or all of the
shares for which the option is exercisable at the time of such cessation of
Service, until the earlier of (i) the expiration of the ten (10)-year option
term or (ii) the expiration of the three (3)-year period measured from the date
of such cessation of Service. Should the Optionee die while holding one or more
options under this Article Three, then each such option may be exercised, for
any or all of the shares for which the option is exercisable at the time of the
Optionee's cessation of Service (less any shares subsequently purchased by
Optionee prior to death), by the personal representative of the Optionee's
estate or by the person or persons to whom the option is transferred pursuant to
the Optionee's will or the laws of inheritance or by the designated beneficiary
or beneficiaries of the option. Such right of exercise shall lapse, and the
option shall terminate, upon the earlier of (i) the expiration of the ten
(10)-year option term or (ii) the three (3)-year period measured from the date
of the Optionee's cessation of Service. However, the option shall, immediately
upon the Optionee's cessation of Service for any reason, terminate and cease to
remain outstanding with respect to any and all shares of Common Stock for which
the option is not otherwise at that time exercisable.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction while the Optionee remains in Service, each outstanding option held by such Optionee under this Salary Investment Option Grant Program shall automatically accelerate so that each such option shall, immediately prior to the effective date of the Corporate Transaction, become exercisable for all the shares of Common Stock at the time subject to such option and may be exercised for any or all of those shares as fully vested shares of Common Stock. Each such outstanding option shall terminate immediately following the Corporate Transaction, except to the extent assumed by the successor corporation (or parent thereof) in such Corporate Transaction. Any option so assumed shall remain exercisable for the fully vested shares until the earlier of (i) the expiration of the ten (10)-year option term or (ii) the expiration of the three (3)-year period measured from the date of the Optionee's cessation of Service.
B. In the event of a Change in Control while the Optionee remains in Service, each outstanding option held by such Optionee under this Salary Investment Option Grant Program shall automatically accelerate so that each such option shall, immediately prior to the effective date of the Change in Control, become exercisable for all the shares of Common Stock at the time subject to such option and may be exercised for any or all of those shares as fully vested shares of Common Stock. The option shall remain so exercisable until the earliest to occur of (i) the expiration of the ten (10)-year option term, (ii) the expiration of the three (3)-year period measured from the date of the Optionee's cessation of Service, (iii) the termination of the option in connection with a Corporate Transaction or (iv) the surrender of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over while the Optionee remains in Service, such Optionee shall have a thirty (30)-day period in which to surrender to the Corporation each outstanding option held by him or her under the Salary Investment Option Grant Program. The Optionee shall in return be entitled to a cash distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price of the shares of Common Stock at the time subject to the surrendered option (whether or not the option is otherwise at the time exercisable for those shares) over (ii) the aggregate exercise price payable for such shares. Such cash distribution shall be paid within five (5) days following the surrender of the option to the Corporation. The Primary Committee shall, at the time the option with such limited stock appreciation right is granted under the Salary Investment Option Grant Program, pre-approve any subsequent exercise of that right in accordance with the terms of this Paragraph C. Accordingly, no further approval of the Primary Committee or the Board shall be required at the time of the actual option surrender and cash distribution.
D. Each option which is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to the exercise price payable per share under each outstanding option, provided the aggregate exercise price payable for such securities shall remain the same. To the extent the actual holders of the Corporation's outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Corporate Transaction, the successor corporation may, in connection with the assumption of the outstanding options under the Salary Investment Option Grant Program, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Corporate Transaction.
E. The grant of options under the Salary Investment Option Grant Program shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
IV. REMAINING TERMS
The remaining terms of each option granted under the Salary Investment Option Grant Program shall be the same as the terms in effect for option grants made under the Discretionary Option Grant Program.
ARTICLE FOUR
STOCK ISSUANCE PROGRAM
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program through direct and immediate issuances without any intervening option grants. Each such stock issuance shall be evidenced by a Stock Issuance Agreement which complies with the terms specified below. Shares of Common Stock may also be issued under the Stock Issuance Program pursuant to share right awards which entitle the recipients to receive those shares upon the attainment of designated performance goals.
A. PURCHASE PRICE.
1. The purchase price per share shall be fixed by the Plan Administrator, but shall not be less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the issuance date.
2. Subject to the provisions of Section I of Article Seven, shares of Common Stock may be issued under the Stock Issuance Program for any of the following items of consideration which the Plan Administrator may deem appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any Parent or Subsidiary).
B. VESTING PROVISIONS.
1. Shares of Common Stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest in one or more installments over the Participant's period of Service or upon attainment of specified performance objectives. The elements of the vesting schedule applicable to any unvested shares of Common Stock issued under the Stock Issuance Program shall be determined by the Plan Administrator and incorporated into the Stock Issuance Agreement. Shares of Common Stock may also be issued under the Stock Issuance Program pursuant to share right awards which entitle the recipients to receive those shares upon the attainment of designated performance goals.
2. Any new, substituted or additional securities or other property (including money paid other than as a regular cash dividend) which the Participant may have the right to receive with respect to the Participant's unvested shares of Common Stock by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration shall be issued subject to (i) the same vesting requirements applicable to the Participant's unvested shares of Common Stock and (ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
3. The Participant shall have full stockholder rights with respect to any shares of Common Stock issued to the Participant under the Stock Issuance Program, whether or not the Participant's interest in those shares is vested. Accordingly, the Participant shall have the right to vote such shares and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while holding one or more unvested shares of Common Stock issued under the Stock Issuance Program or should the performance objectives not be attained with respect to one or more such unvested shares of Common Stock, then those shares shall be immediately surrendered to the Corporation for cancellation, and the Participant shall have no further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the Participant for consideration paid in cash or cash equivalent (including the Participant's purchase-money indebtedness), the Corporation shall repay to the Participant the cash consideration paid for the surrendered shares and shall cancel the unpaid principal balance of any outstanding purchase-money note of the Participant attributable to the surrendered shares.
5. The Plan Administrator may in its discretion waive the surrender and cancellation of one or more unvested shares of Common Stock which would otherwise occur upon the cessation of the Participant's Service or the non-attainment of the performance objectives applicable to those shares. Such waiver shall result in the immediate vesting of the Participant's interest in the shares of Common Stock as to which the waiver applies. Such waiver may be effected at any time, whether before or after the Participant's cessation of Service or the attainment or non-attainment of the applicable performance objectives.
6. Outstanding share right awards under the Stock Issuance Program shall automatically terminate, and no shares of Common Stock shall actually be issued in satisfaction of those awards, if the performance goals established for such awards are not attained. The Plan Administrator, however, shall have the discretionary authority to issue shares of Common Stock under one or more outstanding share right awards as to which the designated performance goals have not been attained.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. All of the Corporation's outstanding repurchase rights under the Stock Issuance Program shall terminate automatically, and all the shares of Common Stock subject to those terminated rights shall immediately vest in full, in the event of any Corporate Transaction, except to the extent (i) those repurchase rights are to be assigned to the successor corporation (or parent thereof) in connection with such Corporate Transaction or (ii) such accelerated vesting is precluded by other limitations imposed in the Stock Issuance Agreement.
B. The Plan Administrator shall have the discretionary authority to structure one or more of the Corporation's repurchase rights under the Stock Issuance Program so that those rights shall automatically terminate in whole or in part, and the shares of Common Stock subject to those terminated rights shall immediately vest, in the event the Participant's Service should subsequently terminate by reason of an Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of any Corporate Transaction in which those repurchase rights are assigned to the successor corporation (or parent thereof).
C. The Plan Administrator shall also have the discretionary authority to structure one or more of the Corporation's repurchase rights under the Stock Issuance Program so that those rights shall automatically terminate in whole or in part, and the shares of Common Stock subject to those terminated rights shall immediately vest, either upon the occurrence of a Change in Control or upon the subsequent termination of the Participant's Service by reason of an Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of that Change in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held in escrow by the Corporation until the Participant's interest in such shares vests or may be issued directly to the Participant with restrictive legends on the certificates evidencing those unvested shares.
ARTICLE FIVE
AUTOMATIC OPTION GRANT PROGRAM
I. OPTION TERMS
A. GRANT DATES. Option grants shall be made on the dates specified below:
1. Each individual who is first elected or appointed as a non-employee Board member at any time on or after the Underwriting Date shall automatically be granted, on the date of such initial election or appointment, a Non-Statutory Option to purchase twenty-five thousand (25,000) shares of Common Stock, provided that individual has not previously been in the employ of the Corporation or any Parent or Subsidiary.
2. On the date of each Annual Stockholders Meeting held after the Underwriting Date, each individual who is to continue to serve as a non-employee Board member, whether or not that individual is standing for re-election to the Board at that particular Annual Meeting, shall automatically be granted a Non-Statutory Option to purchase ten thousand (10,000) shares of Common Stock, provided such individual has served as a non-employee Board member for at least six (6) months. There shall be no limit on the number of such 10,000-share option grants any one non-employee Board member may receive over his or her period of Board service, and non-employee Board members who have previously been in the employ of the Corporation (or any Parent or Subsidiary) or who have otherwise received one or more stock option grants from the Corporation prior to the Underwriting Date shall be eligible to receive one or more such annual option grants over their period of continued Board service.
B. EXERCISE PRICE.
1. The exercise price per share shall be equal to one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option grant date.
2. The exercise price shall be payable in one or more of the alternative forms authorized under the Discretionary Option Grant Program. Except to the extent the sale and remittance procedure specified thereunder is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date.
C. OPTION TERM. Each option shall have a term of ten (10) years measured from the option grant date.
D. EXERCISE AND VESTING OF OPTIONS. Each option shall be immediately exercisable for any or all of the option shares. However, any unvested shares purchased under the option shall be subject to repurchase by the Corporation, at the exercise price paid per share, upon the Optionee's cessation of Board service prior to vesting in those shares. The shares subject to each initial 25,000-share grant shall vest, and the Corporation's repurchase right shall
lapse, in a series of four (4) successive equal annual installments upon the
Optionee's completion of each year of service as a Board member over the four
(4)-year period measured from the option grant date. The shares subject to each
annual 10,000-share option grant shall vest in one installment upon the
Optionee's completion of the one (1)-year period of service measured from the
grant date.
E. LIMITED TRANSFERABILITY OF OPTIONS. Each option under this Article Five may be assigned in whole or in part during the Optionee's lifetime to one or more members of the Optionee's family or to a trust established exclusively for one or more such family members or to Optionee's former spouse, to the extent such assignment is in connection with the Optionee's estate plan or pursuant to a domestic relations order. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate. The Optionee may also designate one or more persons as the beneficiary or beneficiaries of his or her outstanding options under this Article Five, and those options shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee's death while holding those options. Such beneficiary or beneficiaries shall take the transferred options subject to all the terms and conditions of the applicable agreement evidencing each such transferred option, including (without limitation) the limited time period during which the option may be exercised following the Optionee's death.
F. TERMINATION OF BOARD SERVICE. The following provisions shall govern the exercise of any options held by the Optionee at the time the Optionee ceases to serve as a Board member:
(i) The Optionee (or, in the event of Optionee's death, the personal representative of the Optionee's estate or the person or persons to whom the option is transferred pursuant to the Optionee's will or the laws of inheritance or the designated beneficiary or beneficiaries of such option) shall have a twelve (12)-month period following the date of such cessation of Board service in which to exercise each such option.
(ii) During the twelve (12)-month exercise period, the option may not be exercised in the aggregate for more than the number of vested shares of Common Stock for which the option is exercisable at the time of the Optionee's cessation of Board service.
(iii) Should the Optionee cease to serve as a Board member by reason of death or Permanent Disability, then all shares at the time subject to the option shall immediately vest so that such option may, during the twelve (12)-month exercise period following such cessation of Board service, be exercised for any or all of those shares as fully vested shares of Common Stock.
(iv) In no event shall the option remain exercisable after the expiration of the option term. Upon the expiration of the twelve (12)-month exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be outstanding for any vested shares for which the option has not been exercised. However, the option shall, immediately upon the Optionee's cessation of Board service for any reason other than death or Permanent Disability, terminate and cease to be outstanding to the extent the option is not otherwise at that time exercisable for vested shares.
II. CORPORATE TRANSACTION/ CHANGE IN CONTROL/ HOSTILE TAKE-OVER
A. In the event of a Corporate Transaction while the Optionee remains a Board member, the shares of Common Stock at the time subject to each outstanding option held by such Optionee under this Automatic Option Grant Program but not otherwise vested shall automatically vest in full so that each such option shall, immediately prior to the effective date of the Corporate Transaction, become exercisable for all the option shares as fully vested shares of Common Stock and may be exercised for any or all of those vested shares. Immediately following the consummation of the Corporate Transaction, each automatic option grant shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof).
B. In the event of a Change in Control while the Optionee remains a Board member, the shares of Common Stock at the time subject to each outstanding option held by such Optionee under this Automatic Option Grant Program but not otherwise vested shall automatically vest in full so that each such option shall, immediately prior to the effective date of the Change in Control, become exercisable for all the option shares as fully vested shares of Common Stock and may be exercised for any or all of those vested shares. Each such option shall remain exercisable for such fully vested option shares until the expiration or sooner termination of the option term or the surrender of the option in connection with a Hostile Take-Over.
C. All outstanding repurchase rights under this under this Automatic Option Grant Program shall automatically terminate, and the shares of Common Stock subject to those terminated rights shall immediately vest in full, in the event of any Corporate Transaction or Change in Control.
D. Upon the occurrence of a Hostile Take-Over while the Optionee remains a Board member, such Optionee shall have a thirty (30)-day period in which to surrender to the Corporation each of his or her outstanding options under this Automatic Option Grant Program. The Optionee shall in return be entitled to a cash distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price of the shares of Common Stock at the time subject to each surrendered option (whether or not the Optionee is otherwise at the time vested in those
shares) over (ii) the aggregate exercise price payable for such shares. Such cash distribution shall be paid within five (5) days following the surrender of the option to the Corporation. No approval or consent of the Board or any Plan Administrator shall be required at the time of the actual option surrender and cash distribution.
E. Each option which is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to the exercise price payable per share under each outstanding option, provided the aggregate exercise price payable for such securities shall remain the same. To the extent the actual holders of the Corporation's outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Corporate Transaction, the successor corporation may, in connection with the assumption of the outstanding options under the Automatic Option Grant Program, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Corporate Transaction.
F. The grant of options under the Automatic Option Grant Program shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic Option Grant Program shall be the same as the terms in effect for option grants made under the Discretionary Option Grant Program.
ARTICLE SIX
DIRECTOR FEE OPTION GRANT PROGRAM
I. OPTION GRANTS
The Primary Committee shall have the sole and exclusive authority to determine the calendar year or years for which the Director Fee Option Grant Program is to be in effect. For each such calendar year the program is in effect, each non-employee Board member may irrevocably elect to apply all or any portion of the annual retainer fee otherwise payable in cash for his or her service on the Board for that year to the acquisition of a special option grant under this Director Fee Option Grant Program. Such election must be filed with the Corporation's Chief Financial Officer prior to the first day of the calendar year for which the annual retainer fee which is the subject of that election is otherwise payable. Each non-employee Board member who files such a timely election shall automatically be granted an option under this Director Fee Option Grant Program on the first trading day in January in the calendar year for which the retainer fee election is in effect.
II. OPTION TERMS
Each option shall be a Non-Statutory Option governed by the terms and conditions specified below.
A. EXERCISE PRICE.
1. The exercise price per share shall be thirty-three and one-third percent (33-1/3%) of the Fair Market Value per share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon exercise of the option and shall be payable in one or more of the alternative forms authorized under the Discretionary Option Grant Program. Except to the extent the sale and remittance procedure specified thereunder is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date.
B. NUMBER OF OPTION SHARES. The number of shares of Common Stock subject to the option shall be determined pursuant to the following formula (rounded down to the nearest whole number):
X = A divided by (B x 66-2/3%), where
X is the number of option shares,
A is the portion of the annual retainer fee subject to the non-employee Board member's election under this Director Fee Option Grant Program, and
B is the Fair Market Value per share of Common Stock on the option grant date.
C. EXERCISE AND TERM OF OPTIONS. The option shall become exercisable in a series of twelve (12) equal monthly installments upon the Optionee's completion of each calendar month of Board service during the calendar year for which the retainer fee election is in effect. Each option shall have a maximum term of ten (10) years measured from the option grant date.
D. LIMITED TRANSFERABILITY OF OPTIONS. Each option under this Article Six may be assigned in whole or in part during the Optionee's lifetime to one or more members of the Optionee's family or to a trust established exclusively for one or more such family members or to Optionee's former spouse, to the extent such assignment is in connection with Optionee's estate plan or pursuant to a domestic relations order. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate. The Optionee may also designate one or more persons as the beneficiary or beneficiaries of his or her outstanding options under this Article Six, and those options shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee's death while holding those options. Such beneficiary or beneficiaries shall take the transferred options subject to all the terms and conditions of the applicable agreement evidencing each such transferred option, including (without limitation) the limited time period during which the option may be exercised following the Optionee's death.
E. TERMINATION OF BOARD SERVICE. Should the Optionee cease Board service for any reason (other than death or Permanent Disability) while holding one or more options under this Director Fee Option Grant Program, then each such option shall remain exercisable, for any or all of the shares for which the option is exercisable at the time of such cessation of Board service, until the earlier of (i) the expiration of the ten (10)-year option term or (ii) the expiration of the three (3)-year period measured from the date of such cessation of Board service. However, each option held by the Optionee under this Director Fee Option Grant Program at the time of his or her cessation of Board service shall immediately terminate and cease to remain outstanding with respect to any and all shares of Common Stock for which the option is not otherwise at that time exercisable.
F. DEATH OR PERMANENT DISABILITY. Should the Optionee's service
as a Board member cease by reason of death or Permanent Disability, then each
option held by such Optionee under this Director Fee Option Grant Program shall
immediately become exercisable for all the shares of Common Stock at the time
subject to that option, and the option may be exercised for any or all of those
shares as fully vested shares until the earlier of (i) the expiration of the ten
(10)-year option term or (ii) the expiration of the three (3)-year period
measured from
the date of such cessation of Board service. To the extent such option is held by the Optionee at the time of his or death, that option may be exercised by the personal representative of the Optionee's estate or by the person or persons to whom the option is transferred pursuant to the Optionee's will or the laws of inheritance or by the designated beneficiary or beneficiaries of such option.
Should the Optionee die after cessation of Board service but while holding one or more options under this Director Fee Option Grant Program, then each such option may be exercised, for any or all of the shares for which the option is exercisable at the time of the Optionee's cessation of Board service (less any shares subsequently purchased by Optionee prior to death), by the personal representative of the Optionee's estate or by the person or persons to whom the option is transferred pursuant to the Optionee's will or the laws of inheritance or by the designated beneficiary or beneficiaries of such option. Such right of exercise shall lapse, and the option shall terminate, upon the earlier of (i) the expiration of the ten (10)-year option term or (ii) the three (3)-year period measured from the date of the Optionee's cessation of Board service.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction while the Optionee
remains a Board member, each outstanding option held by such Optionee under this
Director Fee Option Grant Program shall automatically accelerate so that each
such option shall, immediately prior to the effective date of the Corporate
Transaction, become exercisable for all the shares of Common Stock at the time
subject to such option and may be exercised for any or all of those shares as
fully vested shares of Common Stock. Each such outstanding option shall
terminate immediately following the Corporate Transaction, except to the extent
assumed by the successor corporation (or parent thereof) in such Corporate
Transaction. Any option so assumed and shall remain exercisable for the fully
vested shares until the earliest to occur of (i) the expiration of the ten
(10)-year option term, (ii) the expiration of the three (3)-year period measured
from the date of the Optionee's cessation of Board service or (iii) the
surrender of the option in connection with a Hostile Take-Over.
B. In the event of a Change in Control while the Optionee remains a Board member, each outstanding option held by such Optionee under this Director Fee Option Grant Program shall automatically accelerate so that each such option shall, immediately prior to the effective date of the Change in Control, become exercisable for all the shares of Common Stock at the time subject to such option and may be exercised for any or all of those shares as fully vested shares of Common Stock. The option shall remain so exercisable until the earliest to occur of (i) the expiration of the ten (10)-year option term, (ii) the expiration of the three (3)-year period measured from the date of the Optionee's cessation of Board service, (iii) the termination of the option in connection with a Corporate Transaction or (iv) the surrender of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over while the Optionee remains a Board member, such Optionee shall have a thirty (30)-day period in which to surrender to the Corporation each outstanding option held by him or her under the Director Fee Option Grant Program. The Optionee shall in return be entitled to a cash distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price of the shares of Common Stock at the time subject to each surrendered option (whether or not the option is otherwise at the time exercisable for those shares) over (ii) the aggregate exercise price payable for such shares. Such cash distribution shall be paid within five (5) days following the surrender of the option to the Corporation. No approval or consent of the Board or any Plan Administrator shall be required at the time of the actual option surrender and cash distribution.
D. Each option which is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to the exercise price payable per share under each outstanding option, provided the aggregate exercise price payable for such securities shall remain the same. To the extent the actual holders of the Corporation's outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Corporate Transaction, the successor corporation may, in connection with the assumption of the outstanding options under the Director Fee Option Grant Program, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Corporate Transaction.
E. The grant of options under the Director Fee Option Grant Program shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
IV. REMAINING TERMS
The remaining terms of each option granted under this Director Fee Option Grant Program shall be the same as the terms in effect for option grants made under the Discretionary Option Grant Program.
ARTICLE SEVEN
MISCELLANEOUS
I. FINANCING
The Plan Administrator may permit any Optionee or Participant to pay the option exercise price under the Discretionary Option Grant Program or the purchase price of shares issued under the Stock Issuance Program by delivering a full-recourse, interest-bearing promissory note payable in one or more installments. The terms of any such promissory note (including the interest rate and the terms of repayment) shall be established by the Plan Administrator in its sole discretion. In no event may the maximum credit available to the Optionee or Participant exceed the sum of (i) the aggregate option exercise price or purchase price payable for the purchased shares (less the par value of such shares) plus (ii) any Federal, state and local income and employment tax liability incurred by the Optionee or the Participant in connection with the option exercise or share purchase.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock upon the exercise of options or the issuance or vesting of such shares under the Plan shall be subject to the satisfaction of all applicable Federal, state and local income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or all holders of Non-Statutory Options or unvested shares of Common Stock under the Plan (other than the options granted or the shares issued under the Automatic Option Grant or Director Fee Option Grant Program) with the right to use shares of Common Stock in satisfaction of all or part of the Withholding Taxes to which such holders may become subject in connection with the exercise of their options or the vesting of their shares. Such right may be provided to any such holder in either or both of the following formats:
Stock Withholding: The election to have the Corporation withhold, from the shares of Common Stock otherwise issuable upon the exercise of such Non-Statutory Option or the vesting of such shares, a portion of those shares with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed one hundred percent (100%)) designated by the holder.
Stock Delivery: The election to deliver to the Corporation, at the time the Non-Statutory Option is exercised or the shares vest, one or more shares of Common Stock previously acquired by such holder (other than in connection with the option exercise or share vesting triggering the Withholding Taxes) with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed one hundred percent (100%)) designated by the holder.
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective immediately on the Plan Effective Date. However, the Salary Investment Option Grant Program and the Director Fee Option Grant Program shall not be implemented until such time as the Primary Committee may deem appropriate. Options may be granted under the Discretionary Option Grant at any time on or after the Plan Effective Date, and the initial option grants under the Automatic Option Grant Program shall also be made on the Plan Effective Date to any non-employee Board members eligible for such grants at that time. However, no options granted under the Plan may be exercised, and no shares shall be issued under the Plan, until the Plan is approved by the Corporation's stockholders. If such stockholder approval is not obtained within twelve (12) months after the Plan Effective Date, then all options previously granted under this Plan shall terminate and cease to be outstanding, and no further options shall be granted and no shares shall be issued under the Plan.
B. The Plan shall serve as the successor to the Predecessor Plan, and no further option grants or direct stock issuances shall be made under the Predecessor Plan after the Plan Effective Date. All options outstanding under the Predecessor Plan on the Plan Effective Date shall be transferred to the Plan at that time and shall be treated as outstanding options under the Plan. However, each outstanding option so transferred shall continue to be governed solely by the terms of the documents evidencing such option, and no provision of the Plan shall be deemed to affect or otherwise modify the rights or obligations of the holders of such transferred options with respect to their acquisition of shares of Common Stock.
C. One or more provisions of the Plan, including (without limitation) the option/vesting acceleration provisions of Article Two relating to Corporate Transactions and Changes in Control, may, in the Plan Administrator's discretion, be extended to one or more options incorporated from the Predecessor Plan which do not otherwise contain such provisions.
D. The Plan shall terminate upon the earliest to occur of (i) June 15, 2010, (ii) the date on which all shares available for issuance under the Plan shall have been issued as fully vested shares or (iii) the termination of all outstanding options in connection with a Corporate Transaction. Should the Plan terminate on June 15, 2010, then all option grants and unvested stock issuances outstanding at that time shall continue to have force and effect in accordance with the provisions of the documents evidencing such grants or issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects. However, no such amendment or modification shall adversely affect the rights and obligations with respect to stock options or unvested stock issuances at the time outstanding under the Plan unless the Optionee or the Participant consents to such amendment or modification. In addition, certain amendments may require stockholder approval pursuant to applicable laws or regulations.
B. Options to purchase shares of Common Stock may be granted under the Discretionary Option Grant and Salary Investment Option Grant Programs and shares of Common Stock may be issued under the Stock Issuance Program that are in each instance in excess of the number of shares then available for issuance under the Plan, provided any excess shares actually issued under those programs shall be held in escrow until there is obtained stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock available for issuance under the Plan. If such stockholder approval is not obtained within twelve (12) months after the date the first such excess issuances are made, then (i) any unexercised options granted on the basis of such excess shares shall terminate and cease to be outstanding and (ii) the Corporation shall promptly refund to the Optionees and the Participants the exercise or purchase price paid for any excess shares issued under the Plan and held in escrow, together with interest (at the applicable Short Term Federal Rate) for the period the shares were held in escrow, and such shares shall thereupon be automatically cancelled and cease to be outstanding.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares of Common Stock under the Plan shall be used for general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock option under the Plan and the issuance of any shares of Common Stock (i) upon the exercise of any granted option or (ii) under the Stock Issuance Program shall be subject to the Corporation's procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the stock options granted under it and the shares of Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or delivered under the Plan unless and until there shall have been compliance with all applicable requirements of Federal and state securities laws, including the filing and effectiveness of the Form S-8 registration statement for the shares of Common Stock issuable under the Plan, and all applicable listing requirements of any stock exchange (or the Nasdaq National Market, if applicable) on which Common Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Optionee or the Participant, which rights are hereby expressly reserved by each, to terminate such person's Service at any time for any reason, with or without cause.
APPENDIX
The following definitions shall be in effect under the Plan:
A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option grant program in effect under Article Five of the Plan.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership or control of the Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities pursuant to a tender or exchange offer made directly to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or substantially all of the Corporation's assets in complete liquidation or dissolution of the Corporation.
A-1.
G. CORPORATION shall mean Discovery Partners International, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of Discovery Partners International, Inc. which shall by appropriate action adopt the Plan.
H. DIRECTOR FEE OPTION GRANT PROGRAM shall mean the special stock option grant in effect for non-employee Board members under Article Six of the Plan.
I. DISCRETIONARY OPTION GRANT PROGRAM shall mean the
discretionary option grant program in effect under Article Two of the Plan.
J. EMPLOYEE shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.
K. EXERCISE DATE shall mean the date on which the Corporation shall have received written notice of the option exercise.
L. FAIR MARKET VALUE per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq National Market and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(iii) For purposes of any option grants made on the Underwriting Date, the Fair Market Value shall be deemed to be equal to the price per share at which the Common Stock is to be sold in the initial public offering pursuant to the Underwriting Agreement.
A-2.
M. HOSTILE TAKE-OVER shall mean the acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities pursuant to a tender or exchange offer made directly to the Corporation's stockholders which the Board does not recommend such stockholders to accept.
N. INCENTIVE OPTION shall mean an option which satisfies the requirements of Code Section 422.
O. INVOLUNTARY TERMINATION shall mean the termination of the Service of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a change in his or her position with the Corporation which materially reduces his or her duties and responsibilities or the level of management to which he or she reports, (B) a reduction in his or her level of compensation (including base salary, fringe benefits and target bonus under any corporate-performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of such individual's place of employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is effected by the Corporation without the individual's consent.
P. MISCONDUCT shall mean the commission of any act of fraud, embezzlement or dishonesty by the Optionee or Participant, any unauthorized use or disclosure by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by such person adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) may consider as grounds for the dismissal or discharge of any Optionee, Participant or other person in the Service of the Corporation (or any Parent or Subsidiary).
Q. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
R. NON-STATUTORY OPTION shall mean an option not intended to satisfy the requirements of Code Section 422.
S. OPTIONEE shall mean any person to whom an option is granted under the Discretionary Option Grant, Salary Investment Option Grant, Automatic Option Grant or Director Fee Option Grant Program.
A-3.
T. PARENT shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
U. PARTICIPANT shall mean any person who is issued shares of Common Stock under the Stock Issuance Program.
V. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more. However, solely for purposes of the Automatic Option Grant
and Director Fee Option Grant Programs, Permanent Disability or Permanently
Disabled shall mean the inability of the non-employee Board member to perform
his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
W. PLAN shall mean the Corporation's 2000 Stock Incentive Plan, as set forth in this document.
X. PLAN ADMINISTRATOR shall mean the particular entity, whether the Primary Committee, the Board or the Secondary Committee, which is authorized to administer the Discretionary Option Grant and Stock Issuance Programs with respect to one or more classes of eligible persons, to the extent such entity is carrying out its administrative functions under those programs with respect to the persons under its jurisdiction.
Y. PLAN EFFECTIVE DATE shall mean the date the Plan shall become effective and shall be coincident with the Underwriting Date.
Z. PREDECESSOR PLAN shall mean the Corporation's 1995 Stock Option/Stock Issuance Plan in effect immediately prior to the Plan Effective Date hereunder.
AA. PRIMARY COMMITTEE shall mean the committee of two (2) or more non-employee Board members appointed by the Board to administer the Discretionary Option Grant and Stock Issuance Programs with respect to Section 16 Insiders and to administer the Salary Investment Option Grant Program solely with respect to the selection of the eligible individuals who may participate in such program.
BB. SALARY INVESTMENT OPTION GRANT PROGRAM shall mean the salary investment option grant program in effect under Article Three of the Plan.
CC. SECONDARY COMMITTEE shall mean a committee of one or more
Board members appointed by the Board to administer the Discretionary Option
Grant and Stock Issuance Programs with respect to eligible persons other than
Section 16 Insiders.
A-4.
DD. SECTION 16 INSIDER shall mean an officer or director of the Corporation subject to the short-swing profit liabilities of Section 16 of the 1934 Act.
EE. SERVICE shall mean the performance of services for the Corporation (or any Parent or Subsidiary) by a person in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor, except to the extent otherwise specifically provided in the documents evidencing the option grant or stock issuance.
FF. STOCK EXCHANGE shall mean either the American Stock Exchange or the New York Stock Exchange.
GG. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by the Corporation and the Participant at the time of issuance of shares of Common Stock under the Stock Issuance Program.
HH. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in effect under Article Four of the Plan.
II. SUBSIDIARY shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
JJ. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market Value per share of Common Stock on the date the option is surrendered to the Corporation in connection with a Hostile Take-Over or (ii) the highest reported price per share of Common Stock paid by the tender offeror in effecting such Hostile Take-Over. However, if the surrendered option is an Incentive Option, the Take-Over Price shall not exceed the clause (i) price per share.
KK. 10% STOCKHOLDER shall mean the owner of stock (as determined under Code Section 424(d)) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary).
LL. UNDERWRITING AGREEMENT shall mean the agreement between the Corporation and the underwriter or underwriters managing the initial public offering of the Common Stock.
MM. UNDERWRITING DATE shall mean the date on which the Underwriting Agreement is executed and priced in connection with an initial public offering of the Common Stock.
NN. WITHHOLDING TAXES shall mean the Federal, state and local income and employment withholding taxes to which the holder of Non-Statutory Options or unvested shares of Common Stock may become subject in connection with the exercise of those options or the vesting of those shares.
A-5.
Document Number: 1220181
A-1.
EXHIBIT 10.60
DISCOVERY PARTNERS INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests of Discovery Partners International, Inc., a Delaware corporation, by providing eligible employees with the opportunity to acquire a proprietary interest in the Corporation through participation in a payroll deduction-based employee stock purchase plan designed to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and construe any provision of the Plan and to adopt such rules and regulations for administering the Plan as it may deem necessary in order to comply with the requirements of Code Section 423. Decisions of the Plan Administrator shall be final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares of Common Stock purchased on the open market. The number of shares of Common Stock initially reserved for issuance over the term of the Plan shall be limited to two hundred fifty thousand (250,000) shares.
B. The number of shares of Common Stock available for issuance under the Plan shall automatically increase on the first trading day of January each calendar year during the term of the Plan, beginning with calendar year 2001, by an amount equal to one and one-half percent (1.5%) of the total number of shares of Common Stock outstanding on the last trading day in December of the immediately preceding calendar year, but in no event shall any such annual increase exceed five hundred thousand (500,000) shares.
C. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and class of securities issuable under
the Plan, (ii) the maximum number and class of securities purchasable per
Participant on any one Purchase Date, (iii) the maximum number and class of
securities purchasable in total by all Participants on any one Purchase Date,
(iv) the maximum number
and/or class of securities by which the share reserve is to increase automatically each calendar year pursuant to the provisions of Section III.B of this Article One and (v) the number and class of securities and the price per share in effect under each outstanding purchase right in order to prevent the dilution or enlargement of benefits thereunder.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the Plan through a series of overlapping offering periods until such time as (i) the maximum number of shares of Common Stock available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated.
B. Each offering period shall be of such duration (not to exceed twenty-four (24) months) as determined by the Plan Administrator prior to the start date of such offering period. Offering periods shall commence at semi-annual intervals on the first business day of February and August each year over the term of the Plan. Accordingly, two (2) separate offering periods shall commence in each calendar year the Plan remains in existence. However, the initial offering period shall commence at the Effective Time and terminate on the last business day in July 2002.
C. Each offering period shall consist of a series of one or more successive Purchase Intervals. Purchase Intervals shall run from the first business day in February to the last business day in July each year and from the first business day in August each year to the last business day in January in the following year. However, the first Purchase Interval in effect under the initial offering period shall commence at the Effective Time and terminate on the last business day in January 2001.
D. Should the Fair Market Value per share of Common Stock on any Purchase Date within a particular offering period be less than the Fair Market Value per share of Common Stock on the start date of that offering period, then that offering period shall automatically terminate immediately after the purchase of shares of Common Stock on such Purchase Date, and a new offering period shall commence on the next business day following such Purchase Date. The new offering period shall have a duration of twenty-four (24) months, unless a shorter duration is established by the Plan Administrator within five (5) business days following the start date of that offering period. All individuals participating in the terminated offering period shall automatically be transferred to the new offering period.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date of any offering period under the Plan may enter that offering period on such start date. However, an Eligible Employees may participate in only one offering period at a time.
2.
B. Except as provided in Section IV.D. above, an Eligible Employee must, in order to participate in a particular offering period, complete the enrollment forms prescribed by the Plan Administrator (including a stock purchase agreement and a payroll deduction authorization) and file such forms with the Plan Administrator (or its designate) on or before the start date of that offering period.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes of acquiring shares of Common Stock during an offering period may be any multiple of one percent (1%) of the Base Salary paid to the Participant during each Purchase Interval within that offering period, up to a maximum of ten percent (10%). The deduction rate so authorized shall continue in effect throughout the offering period, except to the extent such rate is changed in accordance with the following guidelines:
(i) The Participant may, at any time during the offering
period, reduce his or her rate of payroll deduction to become effective
as soon as possible after filing the appropriate form with the Plan
Administrator. The Participant may not, however, effect more than one
(1) such reduction per Purchase Interval.
(ii) The Participant may, prior to the commencement of any new Purchase Interval within the offering period, increase the rate of his or her payroll deduction by filing the appropriate form with the Plan Administrator. The new rate (which may not exceed the ten percent (10%) maximum) shall become effective on the start date of the first Purchase Interval following the filing of such form.
B. Payroll deductions shall begin on the first pay day administratively feasible following the start date of the offering period and shall (unless sooner terminated by the Participant) continue through the pay day ending with or immediately prior to the last day of that offering period. The amounts so collected shall be credited to the Participant's book account under the Plan, but no interest shall be paid on the balance from time to time outstanding in such account. The amounts collected from the Participant shall not be required to be held in any segregated account or trust fund and may be commingled with the general assets of the Corporation and used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination of the Participant's purchase right in accordance with the provisions of the Plan.
D. The Participant's acquisition of Common Stock under the Plan on any Purchase Date shall neither limit nor require the Participant's acquisition of Common Stock on any subsequent Purchase Date, whether within the same or a different offering period.
3.
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHTS. A Participant shall be granted a separate purchase right for each offering period in which he or she is enrolled. The purchase right shall be granted on the start date of the offering period and shall provide the Participant with the right to purchase shares of Common Stock, in a series of successive installments during that offering period, upon the terms set forth below. The Participant shall execute a stock purchase agreement embodying such terms and such other provisions (not inconsistent with the Plan) as the Plan Administrator may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan to any Eligible Employee if such individual would, immediately after the grant, own (within the meaning of Code Section 424(d)) or hold outstanding options or other rights to purchase, stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Corporation or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be automatically exercised in installments on each successive Purchase Date within the offering period, and shares of Common Stock shall accordingly be purchased on behalf of each Participant on each such Purchase Date. The purchase shall be effected by applying the Participant's payroll deductions for the Purchase Interval ending on such Purchase Date to the purchase of whole shares of Common Stock at the purchase price in effect for the Participant for that Purchase Date.
C. PURCHASE PRICE. The purchase price per share at which Common Stock will be purchased on the Participant's behalf on each Purchase Date within the particular offering period in which he or she is enrolled shall be equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of Common Stock on the start date of that offering period or (ii) the Fair Market Value per share of Common Stock on that Purchase Date.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common Stock purchasable by a Participant on each Purchase Date during the particular offering period in which he or she is enrolled shall be the number of whole shares obtained by dividing the amount collected from the Participant through payroll deductions during the Purchase Interval ending with that Purchase Date by the purchase price in effect for the Participant for that Purchase Date. However, the maximum number of shares of Common Stock purchasable per Participant on any one Purchase Date shall not exceed one thousand (1,000) shares, subject to periodic adjustments in the event of certain changes in the Corporation's capitalization. In addition, the maximum number of shares of Common Stock purchasable in total by all Participants in the Plan on any one Purchase Date shall not exceed three hundred thousand (300,000) shares, subject to periodic adjustments in the event of certain changes in the Corporation's capitalization. However, the Plan Administrator shall have the discretionary authority, exercisable prior to the start of any offering period under the Plan, to increase or decrease the limitations to be in effect for the number of shares purchasable per Participant and in total by all Participants enrolled in that particular offering period on each Purchase Date which occurs during that offering period.
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E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to the purchase of shares of Common Stock on any Purchase Date because they are not sufficient to purchase a whole share of Common Stock shall be held for the purchase of Common Stock on the next Purchase Date. However, any payroll deductions not applied to the purchase of Common Stock by reason of the limitation on the maximum number of shares purchasable per Participant or in total by all Participants on the Purchase Date shall be promptly refunded.
F. TERMINATION OF PURCHASE RIGHT. The following provisions shall govern the termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the next scheduled Purchase Date in the offering period in which he or she is enrolled, terminate his or her outstanding purchase right by filing the appropriate form with the Plan Administrator (or its designate), and no further payroll deductions shall be collected from the Participant with respect to the terminated purchase right. Any payroll deductions collected during the Purchase Interval in which such termination occurs shall, at the Participant's election, be immediately refunded or held for the purchase of shares on the next Purchase Date. If no such election is made at the time such purchase right is terminated, then the payroll deductions collected with respect to the terminated right shall be refunded as soon as possible.
(ii) The termination of such purchase right shall be irrevocable, and the Participant may not subsequently rejoin the offering period for which the terminated purchase right was granted. In order to resume participation in any subsequent offering period, such individual must re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before the start date of that offering period.
(iii) Should the Participant cease to remain an Eligible Employee for any reason (including death, disability or change in status) while his or her purchase right remains outstanding, then that purchase right shall immediately terminate, and all of the Participant's payroll deductions for the Purchase Interval in which the purchase right so terminates shall be immediately refunded. However, should the Participant cease to remain in active service by reason of an approved unpaid leave of absence, then the Participant shall have the right, exercisable up until the last business day of the Purchase Interval in which such leave commences, to (a) withdraw all the payroll deductions collected to date on his or her behalf for that Purchase Interval or (b) have such funds held for the purchase of shares on his or her behalf on the next scheduled Purchase Date. In no event, however, shall any further payroll deductions be collected on the Participant's behalf during such leave. Upon the Participant's return to active service (x) within ninety (90) days following the commencement of such leave or (y) prior to the expiration of any longer period for which such Participant's right
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to reemployment with the Corporation is guaranteed by statute or contract, his or her payroll deductions under the Plan shall automatically resume at the rate in effect at the time the leave began, unless the Participant withdraws from the Plan prior to his or her return. An individual who returns to active employment following a leave of absence that exceeds in duration the applicable (x) or (y) time period will be treated as a new Employee for purposes of subsequent participation in the Plan and must accordingly re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before the start date of any subsequent offering period in which he or she wishes to participate.
G. CHANGE IN CONTROL. Each outstanding purchase right shall automatically be exercised, immediately prior to the effective date of any Change in Control, by applying the payroll deductions of each Participant for the Purchase Interval in which such Change in Control occurs to the purchase of whole shares of Common Stock at a purchase price per share equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of Common Stock on the start date of the offering period in which such individual is enrolled at the time of such Change in Control or (ii) the Fair Market Value per share of Common Stock immediately prior to the effective date of such Change in Control. However, the applicable limitation on the number of shares of Common Stock purchasable per Participant shall continue to apply to any such purchase, but not the limitation applicable to the maximum number of shares of Common Stock purchasable in total by all Participants on any one Purchase Date.
The Corporation shall use its best efforts to provide at least ten (10) days' prior written notice of the occurrence of any Change in Control, and Participants shall, following the receipt of such notice, have the right to terminate their outstanding purchase rights prior to the effective date of the Change in Control.
H. PRORATION OF PURCHASE RIGHTS. Should the total number of shares of Common Stock to be purchased pursuant to outstanding purchase rights on any particular date exceed the number of shares then available for issuance under the Plan, the Plan Administrator shall make a pro-rata allocation of the available shares on a uniform and nondiscriminatory basis, and the payroll deductions of each Participant, to the extent in excess of the aggregate purchase price payable for the Common Stock pro-rated to such individual, shall be refunded.
I. ASSIGNABILITY. The purchase right shall be exercisable only by the Participant and shall not be assignable or transferable by the Participant.
J. STOCKHOLDER RIGHTS. A Participant shall have no stockholder rights with respect to the shares subject to his or her outstanding purchase right until the shares are purchased on the Participant's behalf in accordance with the provisions of the Plan and the Participant has become a holder of record of the purchased shares.
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VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire Common Stock pursuant to any purchase right outstanding under this Plan if and to the extent such accrual, when aggregated with (i) rights to purchase Common Stock accrued under any other purchase right granted under this Plan and (ii) similar rights accrued under other employee stock purchase plans (within the meaning of Code Section 423)) of the Corporation or any Corporate Affiliate, would otherwise permit such Participant to purchase more than Twenty-Five Thousand Dollars ($25,000.00) worth of stock of the Corporation or any Corporate Affiliate (determined on the basis of the Fair Market Value per share on the date or dates such rights are granted) for each calendar year such rights are at any time outstanding.
B. For purposes of applying such accrual limitations to the purchase rights granted under the Plan, the following provisions shall be in effect:
(i) The right to acquire Common Stock under each outstanding purchase right shall accrue in a series of installments on each successive Purchase Date during the offering period in which such right remains outstanding.
(ii) No right to acquire Common Stock under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire Common Stock under one or more other purchase rights at a rate equal to Twenty-Five Thousand Dollars ($25,000.00) worth of Common Stock (determined on the basis of the Fair Market Value per share on the date or dates of grant) for each calendar year such rights were at any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a Participant does not accrue for a particular Purchase Interval, then the payroll deductions that the Participant made during that Purchase Interval with respect to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of this Article and one or more provisions of the Plan or any instrument issued thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on June 15, 2000, and shall become effective at the Effective Time, provided no purchase rights granted under the Plan shall be exercised, and no shares of Common Stock shall be issued hereunder, until (i) the Plan shall have been approved by the stockholders of the Corporation and (ii) the Corporation shall have complied with all applicable requirements of the 1933 Act (including the registration of the shares of Common Stock issuable under the Plan on a Form S-8 registration statement filed with the Securities and Exchange Commission), all applicable listing requirements of any stock
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exchange (or the Nasdaq National Market, if applicable) on which the Common Stock is listed for trading and all other applicable requirements established by law or regulation. In the event such stockholder approval is not obtained, or such compliance is not effected, within twelve (12) months after the date on which the Plan is adopted by the Board, the Plan shall terminate and have no further force or effect, and all sums collected from Participants during the initial offering period hereunder shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate upon the earliest of (i) the last business day in July 2010, (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan or (iii) the date on which all purchase rights are exercised in connection with a Change in Control. No further purchase rights shall be granted or exercised, and no further payroll deductions shall be collected, under the Plan following such termination.
X. AMENDMENT OF THE PLAN
A. The Board may alter, amend, suspend or terminate the Plan at any time to become effective immediately following the close of any Purchase Interval. However, the Plan may be amended or terminated immediately upon Board action, if and to the extent necessary to assure that the Corporation will not recognize, for financial reporting purposes, any compensation expense in connection with the shares of Common Stock offered for purchase under the Plan, should the financial accounting rules applicable to the Plan at the Effective Time be subsequently revised so as to require the Corporation to recognize compensation expense in the absence of such amendment or termination.
B. In no event may the Board effect any of the following amendments or revisions to the Plan without the approval of the Corporation's stockholders: (i) increase the number of shares of Common Stock issuable under the Plan, except for permissible adjustments in the event of certain changes in the Corporation's capitalization, (ii) alter the purchase price formula so as to reduce the purchase price payable for the shares of Common Stock purchasable under the Plan or (iii) modify the eligibility requirements for participation in the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan shall be paid by the Corporation; however, each Plan Participant shall bear all costs and expenses incurred by such individual in the sale or other disposition of any shares purchased under the Plan.
B. Nothing in the Plan shall confer upon the Participant any right to continue in the employ of the Corporation or any Corporate Affiliate for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Corporate Affiliate employing such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such person's employment at any time for any reason, with or without cause.
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C. The provisions of the Plan shall be governed by the laws of the State of California without resort to that State's conflict-of-laws rules.
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SCHEDULE A
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE TIME
Discovery Partners International, Inc.
Discovery Technologies Ltd.
IRORI, Inc.
ChemRx Advanced Technologies, Inc.
Structural Proteomics, Inc.
APPENDIX
The following definitions shall be in effect under the Plan:
A. BASE SALARY shall mean the regular base salary paid to a Participant by one or more Participating Companies during such individual's period of participation in one or more offering periods under the Plan and shall be calculated before deduction of (A) any income or employment tax withholdings or (B) any contributions made by the Participant to any Code Section 401(k) salary deferral plan or any Code Section 125 cafeteria benefit program now or hereafter established by the Corporation or any Corporate Affiliate. Base Salary shall not include (i) any overtime payments, bonuses, commissions, profit-sharing distributions or other incentive-type payments or (ii) any contributions made by the Corporation or any Corporate Affiliate on the Participant's behalf to any employee benefit or welfare plan now or hereafter established (other than Code Section 401(k) or Code Section 125 contributions deducted from such Base Salary).
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership of the Corporation pursuant to any of the following transactions:
(i) a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or substantially all of the assets of the Corporation in complete liquidation or dissolution of the Corporation, or
(iii) the acquisition, directly or indirectly, by a person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by or is under common control with the Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities pursuant to a tender or exchange offer made directly to the Corporation's stockholders.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
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F. CORPORATE AFFILIATE shall mean any parent or subsidiary corporation of the Corporation (as determined in accordance with Code Section 424), whether now existing or subsequently established.
G. CORPORATION shall mean Discovery Partners International, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of Discovery Partners International, Inc. that shall by appropriate action adopt the Plan.
H. EFFECTIVE TIME shall mean the time at which the Underwriting Agreement is executed and the Common Stock priced for the initial public offering of such Common Stock. Any Corporate Affiliate that becomes a Participating Corporation after such Effective Time shall designate a subsequent Effective Time with respect to its employee-Participants.
I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a Participating Corporation on a basis under which he or she is regularly expected to render more than twenty (20) hours of service per week for more than five (5) months per calendar year for earnings considered wages under Code Section 3401 (a).
J. FAIR MARKET VALUE per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq National Market and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(iii) For purposes of the initial offering period that begins at the Effective Time, the Fair Market Value shall be deemed to be equal to the price per share at which the Common Stock is sold in the initial public offering pursuant to the Underwriting Agreement.
K. 1933 ACT shall mean the Securities Act of 1933, as amended.
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L. PARTICIPANT shall mean any Eligible Employee of a Participating Corporation who is actively participating in the Plan.
M. PARTICIPATING CORPORATION shall mean the Corporation and such Corporate Affiliate or Affiliates as may be authorized from time to time by the Board to extend the benefits of the Plan to their Eligible Employees. The Participating Corporations in the Plan are listed in attached Schedule A.
N. PLAN shall mean the Corporation's 2000 Employee Stock Purchase Plan, as set forth in this document.
O. PLAN ADMINISTRATOR shall mean the committee of two (2) or more Board members appointed by the Board to administer the Plan.
P. PURCHASE DATE shall mean the last business day of each Purchase Interval. The initial Purchase Date shall be January 31, 2001.
Q. PURCHASE INTERVAL shall mean each successive six (6)-month period within a particular offering period at the end of which there shall be purchased shares of Common Stock on behalf of each Participant.
R. STOCK EXCHANGE shall mean either the American Stock Exchange or the New York Stock Exchange.
S. UNDERWRITING AGREEMENT shall mean the agreement between the Corporation and the underwriter or underwriters managing the initial public offering of the Common Stock.
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Document Number: 122124
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the use of our report dated March 10, 2000, except for Note 11, as to which the date is , in the Registration Statement (Form S-1) and related Prospectus of Discovery Partners International, Inc. for the registration of shares of its common stock.
ERNST & YOUNG LLP
San Diego, California
The foregoing consent is in the form that will be signed upon the completion of the restatement of capital accounts described in Note 11 to the financial statements.
/s/ ERNST & YOUNG LLP
San Diego, California
July 20, 2000
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EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the use of our report dated April 7, 2000, with respect to the financial statements of Axys Advanced Technologies, Inc. in the Registration Statement (Form S-1) and related Prospectus of Discovery Partners International, Inc. for the registration of shares of its common stock.
ERNST & YOUNG LLP
Palo Alto, California
July 20, 2000